Fundamental Management Principles of Nippon Life

Transcription

1

2 Fundamental Management Principles of Nippon Life Life insurance business based on the philosophy of co-existence, co-prosperity and mutualism is closely connected with the welfare of the public. Because of the nature of the business, public understanding and support are indispensable for the development of life insurance companies. For this reason, we have established the Fundamental Management Principles of Nippon Life under the precepts of Conviction, Sincerity and Endeavor. 1. We will strive sincerely to fulfill our responsibilities to the people by making every effort to offer policies which are truly needed. 2. We will, in recognition of the public service aspects of the life insurance business, strive to contribute to the elevation of the social welfare level through proper investment activities. 3. We will strive to increase further our productivity in every division of our company, with powerful execution, strong conviction and creative imagination. 4. We will strive to raise the living standard of all our employees through the prosperity of Nippon Life. We will strive also to be good citizens of Japan and the world. 5. As a member of the life insurance industry, we will cooperate with other life insurance companies for the development of this industry, and will also cultivate public understanding and support for life insurance. Chairman Kunie Okamoto President Yoshinobu Tsutsui

3 Contents Top Message 2 TOPICS 6 Response to the Great East Japan Earthquake 7 Three-year Management Plan 8 More Advanced Protection 12 More Advanced IT 14 More Advanced Support 16 Strengthening Equity 18 Using Equity to Fund Strategic Investments in Overseas 20 Major Overseas Business Expansion Initiatives and Global Network Development 22 Stable Payout of Dividends 24 Long-term, Stable Investment 26 Developing Human Resources to Create a Better Future and Fostering an Open Corporate Culture 28 Outline of Nippon Life Insurance Company (As of March 31, 2012) Company Name: Nippon Life Insurance Company Location of Head Office: , Imabashi, Chuo-ku, Osaka , Japan President: Yoshinobu Tsutsui Established: July 4, 1889 Offices: Branches 116 Sales offices 1,572 Overseas representative offices 4 Agencies* 11,234 Related Companies: Insurance and insurance-related businesses 9 Asset management-related businesses 30 General affairs-related operations 9 * Agencies include agencies at banks and financial institutions. CHAPTER 1: Business Performance in the Fiscal Year Ended March 31, 2012 Soundness and Profitability of Nippon Life 30 Fiscal Year Ended March 31, 2012 Business Overview and Performance 34 CHAPTER 2: Management of Nippon Life Mutual Company Framework 42 Corporate Governance System 48 Enhancing the Internal Control System 48 Promoting Compliance 49 Strengthening Risk Management 52 Strengthening the Underwriting, Insurance Claims and Benefits Settlement System and Expanding Explanation 56 Measures to Reflect Customer Feedback in Business 60 Contributions to the Environment, Communities and Society 62 Improving Disclosure 66 CHAPTER 3: Nippon Life s Products and Services Products for Individuals 68 From Application to Conclusion of a Policy 72 Provision of Information During the Term of a Policy 74 Requesting Payment of Insurance Claims and Benefits 76 Developing a Variety of Service Channels 79 Products and Services for Corporate Customers 84 CHAPTER 4: Company Information 87 CHAPTER 5: Financial Data 97 CHAPTER 6: Operational Data 151 Policyholder Protection Systems 217 Worldwide Network 219 Head Office The latest information is available on the Nippon Life website. index.html This is an English translation of a disclosure report that was produced in accordance with Article 111 of the Insurance Business Act. 1Business Performance Management of Nippon LifeNippon Life s Products and Services Company Information Financial Data Operational Data

4 Top Message We are dedicated to fulfilling our social mission as a life insurance company by creating a secure future along with our customers. Accomplishments and highlights of the past fiscal year The events of the year reinforced our awareness of the magnitude of our social mission as a life insurance company. When I was named president in April 2011, I said that I want Nippon Life to be a company capable of constantly earning the trust of customers. To accomplish this goal, I stated that Nippon Life must become a life insurer that excels in terms of scale and quality. It has been one year since I first proclaimed that the goal of everyone in our organization is to make Nippon Life a company of excellence in scale, quality and credibility. Our activities following the Great East Japan Earthquake underscored our commitment to this goal. Our sales representatives stepped up face-to-face services, we checked the safety of policyholders, we made insurance payments with reliability and speed, and we extended support to areas that were damaged. Activities of sales representatives in areas damaged by the earthquake clearly demonstrated that our operations are firmly underpinned by the two facets of our corporate culture in which we all take particular pride: discipline and solidarity. I was appointed chairman of The Life Insurance Association of Japan in July In this role, I was involved with measures, affecting the entire life insurance industry, to check the safety of policyholders, make reliable and speedy payments of benefits, and perform other activities. All these activities made me acutely aware of the immense scale of the social mission of life insurance companies following a disaster. Life insurers must always be a source of security for customers and fulfill their obligation to provide protection. Competition among life insurers in Japan is becoming more heated as the population ages and the number of children declines. Some people are inclined to believe that there is no longer any prospect for growth in Japan s life insurance market, but I do not subscribe to this belief at all. For example, there are a number of growing needs among seniors. To be prepared for a long post-retirement life, these individuals require services associated with medical and nursing care as well as with annuities and other categories of asset management. Women are another example of a market sector with growth potential. Lifestyles of women in Japan are shifting as more women pursue careers and marry at a later age. In recent years, the percentage of young people who take out insurance has decreased significantly. Here again, I think there is growth potential because insurers are not adequately explaining the need for policies to this age group. In Japan, there is much talk about how to resolve budget problems, particularly concerning social security programs and taxes. Japan has reached a point where everyone will need to take action on their own to be prepared for various risks. In other words, people must take responsibility for protecting their own lives. In this respect, the role of life insurers will become increasingly greater as a source of security for customers by supplementing the national social security system. Consequently, the responsibilities of Nippon Life are becoming greater as well. 2

5 The Future Creation Project, our new three-year management plan Goals of this plan are increasing new policy sales and building a stronger base for financial soundness and profitability. At the same time, we will upgrade the development of our human resources, which is vital to achieving our goals. For over 16 years, from 1996 to 2012, Nippon Life worked on increasing equity, which represents the basis for the financial soundness and profitability of a life insurance company. Furthermore, we invested 150 billion during the six-year period starting in 2006 to implement the New Integration Plan. I believe that these two initiatives are precisely how we should fulfill our social mission as a life insurance company. The full-scale implementation of the New Integration Plan started in April By taking this step, we completed a reexamination of all operations involving insurance from the standpoint of our customers. We also fundamentally overhauled our IT system infrastructure. We have a strong commitment to creating a secure future along with our customers by providing new comprehensive insurance services supported by the new integrated system and backed by outstanding financial soundness. We started The Future Creation Project, which is our new three-year management plan, for the purpose of accomplishing this goal. The project is centered on the following three components. (1) More advanced protection The first measure is more advanced protection. We started selling a product called Mirai no Katachi on April 2, 2012 in response to social changes and the diversification of our customers needs. The basic concept is to provide simple forms of protection that customers can easily understand. We used this concept to completely revamp the structure of many of our insurance products. In the past, we sold primary policies and added riders as necessary. Now, we are selling each insurance policy as an individual product. Switching to this method gives customers much more flexibility to assemble policies that have exactly the protection they require. As one step to improve services, we are responding to the need among many of our customers to talk to a consultant about nursing care. Customers can now receive information by using our Care Guidance Service, which we started in April We established an alliance with Nichii Gakkan Company, which operates Japan s largest network for senior care services, to provide this service. Customers can talk to a consultant who (1) Increase new policy sales with emphasis on new comprehensive insurance services (2) Build a stronger base for financial soundness and profitability to fulfill our long-term protection responsibilities as a life insurance company while constantly making progress regarding customer services (3) Develop human resources able to fully utilize the innovative IT infrastructure created by the New Integration Plan and take the lead in expanding overseas operations All of our executives and employees are determined to do what is needed to end the decline in our policies in force by fiscal 2014 and return to growth. Measures to increase new policy sales We will use advances regarding protection, IT and support to provide customers with new comprehensive insurance services. Regarding the New Integration Plan, we will incorporate three advances resulting from this plan into our sales activities, chiefly face-to-face sales. These advances involve offering protection that can meet diversifying needs, using IT to supply highly convenient services, and providing support that precisely matches each customer s requirements. 3

6 Top Message visits them at home free of charge about nursing care. The consulting service is available not only for policyholders and beneficiaries but also for spouses and parents with an interest in nursing care. We believe this service provides an opportunity for every member of a family to learn about nursing care that may be needed in the future. (2) More advanced IT The second measure is more advanced IT. We have started using a new wireless device called REVO that uses state-of-the-art technology. This unit, which will further improve customer services, has two major features. The first is more advanced consulting for insurance protection. REVO allows sales representatives to supply customers with information that matches their particular requirements based on family composition, age and other parameters. The ability to create a proposal that is best suited to each customer is another advantage. The second is more convenient administrative operations and services. Until now, customers completed procedures to take out insurance by filling out paper documents. With REVO, applications can be completed with no paper and no personal seal. (3) More advanced support The third measure is more advanced support. Face-to-face services provided by sales representatives will remain our primary means of providing support. But we will also continue to build a multi-channel service framework by strengthening and integrating Nissay Life Plaza customer service centers, corporate sales, agencies, financial institutions and other channels. The Internet is another means we are using to reinforce our support for customers. For example, to expand lines of contact with customers, we have a Facebook page and we have set up a Mirai Factory section on our website. We plan to promote greater integration of our channels by having our face-to-face sales representative channel play a supporting role in sales to individuals who used the Internet to ask for information about our products or register for our campaigns. Measures to strengthen financial soundness and profitability By adopting a medium- to long-term perspective, we will establish an even more powerful foundation for fulfilling our responsibility to provide customers with long-term protection. The series of financial crises triggered by the collapse of Lehman Brothers has created an uncertain outlook for financial markets. To continue fulfilling our obligation to be a source of security and protection for our customers in this difficult environment, we are taking the following four actions to build an even stronger base for financial soundness and profitability. (1) Increase equity We have been increasing our equity consistently over the past 16 years. We believe that this growth in our equity played a major role in enabling us to meet our obligations even after the financial crises in the past few years and the Great East Japan Earthquake. We aim to continue increasing equity (foundation funds (kikin), reserves and other items) so that we can continue to fulfill our responsibility to provide customers with long-term protection. Our goal is to return equity to the 3 trillion level by the end of fiscal Regarding dividends, our goal as a mutual company is to maximize benefits for customers by paying a stable dividend over the medium and long term. At the same time, we will preserve the proper balance between dividend payments and the need to increase equity and other requirements. (2) Strategic overseas investments Nippon Life is using its powerful equity base to make strategic investments in prominent financial institutions and insurance companies in Europe, North America and Asia. Building these long-term partnerships increases opportunities to earn profits that we can use to support the long-term distribution of earnings to our customers. In fiscal 2011, we established alliances with three companies outside Japan that included investments in these partners: Allianz Group, one of the leading integrated financial services providers in the world; Reliance Group, one of the largest business houses in India; and the AIA Group, the largest life insurer in the Asia-Oceania region, serving 15 countries and regions. We will continue to exchange information and personnel with leading financial institutions and insurance companies in other countries. We want to build mutually beneficial relationships for sharing business know-how, giving employees global business skills and achieving other goals. (3) Long-term, stable investment Nippon Life has always managed assets in a manner that enables us to provide customers with long-term, stable benefits while carefully managing the associated risks. We are establishing a global system for investment with offices in New York, London and Singapore and further support from overseas alliance partners and our subsidiary, Nissay Asset Management. In today s uncertain investment climate, Nippon Life will make investment decisions based on rigorous selection and diversification of our investment portfolio and risk management to earn stable and growing returns from a long-term perspective. 4

7 (4) Increase earnings Securing consistent earnings is vital to accomplishing all of these goals: increasing equity, making strategic investments, paying a stable dividend to policyholders and making continuous enhancements to customer services. Nippon Life will strive to further increase earnings power in several ways, including increasing new policy sales, earning stable and growing returns on invested assets, and implementing the New Integration Plan to use costs more efficiently. Measures to Develop Human Resources We are concentrating on giving our people the skills needed to take full advantage of the highly innovative infrastructure we developed by implementing the New Integration Plan. The New Integration Plan is the central strategy of our Future Creation Project. Successfully completing this plan will require the development of human resources with the skills to fully utilize the innovative infrastructure that we have created. The first step is development of sales representatives. To oversee this training, we established the Employee Development Promotion Department in fiscal By combining our activity innovation measures of the past with infrastructure innovation measures, we are better able to nurture the development of the next generation of core personnel. Second is development of non-sales personnel. We want to transform these people into customer service personnel who can draw on their knowledge of administrative procedures and experience. We will enlarge the scope of their activities to include tasks that support services for customers and the activities of sales representatives. Acquiring these skills will enable these employees to back up our new administrative and service systems. Furthermore, giving our people these skills can only be achieved with a firm commitment to maintaining an open corporate culture that encourages all employees to use creativity and innovation. Our Future Creation Project is a prime example. To promote this project, we formed a project team made up of younger employees and gave the team the authority to make all decisions. The team came up with the core concept of the power to create the future, which became the basis for the launch of this project. I strongly believe that promoting such initiatives will enable Nippon Life to continue and build upon its long tradition of fostering an open corporate culture. Human resources development is the foundation for achieving the goal of everyone at Nippon Life: to become a company of excellence in scale, quality and credibility. Our people are our most valuable asset and we will continue to do everything we can to give them opportunities for education and advancement. July 2012 President 5

8 TOPICS Fiscal Year Ended March 31, 2012 July Invested in Allianz Nippon Life purchased convertible subordinated notes issued by Allianz Financial II B.V., a finance subsidiary wholly owned by Allianz SE, one of the world s leading integrated financial services providers. Looking ahead, Nippon Life will continue to seek opportunities to work together in various areas with Allianz through continuous interaction including exchange of personnel. August Launched Official Facebook Page and Smartphone Website Nippon Life launched an official Facebook page and smartphone website to address diversifying customer needs and market conditions. Nippon Life will regularly provide information from its Facebook page and smartphone website to clearly explain its life insurance services and the necessity for such services, along with its activities and other topics. Since June, Nippon Life has been using Twitter and Facebook to provide information to students preparing for job-hunting activities. September Formed Business Alliance with Reliance Capital Limited Nippon Life signed a Memorandum of Understanding on collaboration with Reliance Capital Limited, a financial services company in the Reliance Group, one of the largest business houses in India. Nippon Life and Reliance Capital Limited agreed to increase strategic partnership from a long-term perspective in a range of fields, including areas other than the life insurance business. January Agreed to Invest in Reliance Capital Asset Management Limited Nippon Life reached an agreement to purchase shares of Reliance Capital Asset Management Limited, an asset management subsidiary of Reliance Capital. In October 2011, Nippon Life invested in Reliance Life Insurance Company Limited, a life insurance subsidiary of Reliance Capital. Nippon Life s investment in Reliance Capital Asset Management Limited is aimed at deepening and expanding the cooperative relationship between Nippon Life and the Reliance Group. February Established Mirai Forest Nippon Life established Mirai Forest, a lounge for visitors, inside the Nissay Life Plaza Marunouchi. Mirai Forest is based on the concept of providing a space for rest in the heart of the city one that evokes a forest. Mirai Forest is open to all visitors, who are welcome to casually drop by and enjoy the facility. It is an open lounge offering information about insurance and Nippon Life. March Formed Business Alliance with AIA Group Limited Nippon Life signed a Memorandum of Understanding on a business alliance with AIA Group Limited, one of the largest life insurers in the Asia-Pacific region. Nippon Life has purchased ordinary shares of AIA Group Limited with the objective of further strengthening its relationship with this company while capturing growth opportunities across Asia-Pacific life insurance markets. Unveiled the 3-Year Management Plan Future Creation Project In April 2012, Nippon Life launched a 3-year management plan called the Future Creation Project. The plan embodies Nippon Life s aspiration to create a future together with customers where people can feel secure, backed by its strong financial position and soundness. Through the New Integration Strategy, Nippon Life has completed the development of products and services combining innovation and flexibility (insurance coverage) and cutting-edge IT infrastructure (IT). Nippon Life now seeks to combine these elements with its sales channel mix based on face-to-face sales activities (support), a core strength of the company. Through this approach, Nippon Life aims to provide a new type of comprehensive insurance service. Launch of Mirai no Katachi Announced Mirai no Katachi is a new product that dramatically improves flexibility for customers both at policy enrollment and thereafter by allowing customers to flexibly combine standalone insurance coverage options according to their needs. Each coverage option has been fully revamped based on the concept of providing customers with clear and simple coverage details. Efforts have also been made to enhance services. For example, Nippon Life has introduced the Care Guidance Service, where specialized staff (care managers, etc.) visit customers at their homes and offer consultations free of charge. Nippon Life Executive Advisor Ikuo Uno Received The Insurance Hall of Fame Award Mr. Ikuo Uno, Executive Advisor to the Board of Nippon Life, received The Insurance Hall of Fame Award at The International Insurance Society, Inc. s (IIS) 48th Annual Seminar held on June 18, 2012 in Rio de Janeiro, Brazil. Established in 1957, The Insurance Hall of Fame Award honors distinguished insurance leaders from all over the world for their innovative and creative contributions to the advancement of the insurance industry on both theoretical and practical fronts over a long time. Winners are selected by a vote of IIS members, comprising a total of 900 corporate and individual members. Members include insurance business managers and researchers from more than 90 countries around the world. This is the first time since 2001 that a recipient of The Insurance Hall of Fame Award has been selected from Japan s life insurance industry. IIS noted that Mr. Uno s induction to the Insurance Hall of Fame recognizes his significant contribution to the life insurance industry as a business manager who is committed to long-term, stable business management with the conviction and determination to fulfill responsibilities to provide security to policyholders over the long term in the context of the activities of Nippon Life and the industry as a whole. 6

9 Response to the Great East Japan Earthquake Nippon Life wishes to extend its deepest sympathies to those who were personally affected by the Great East Japan Earthquake, which struck on March 11, Recognizing that many people are still experiencing hardship and suffering, we hope for the speediest possible restoration and recovery of the affected areas. On the day of the earthquake, Nippon Life set up a Disaster Response Headquarters led by Mr. Kunie Okamoto, its Chairman (President at the time), as an emergency response measure. On March 12, Nippon Life Nippon Life s Initiatives Special Treatment for Policyholders Affected by the Earthquake Full payment of benefits for accidental death due to the disaster Special extension of grace period for payment of premiums Fast and simplified payment of claims, benefits and policy loans Reduction or exemption of interest payable on policy loans and new loans through lower interest rates Special treatment of financing-related matters Special treatment of accidental hospitalization benefits Special treatment of insurance policies invalidated in connection with policy loans Measures to Ensure the Fulfillment of All Payments Customer visits Advertisements and television commercials expressing a message of sympathy Launched a special earthquake response website on the corporate website Special earthquake response counters and other facilities established Poster notifications Extension of call center hours and expansion of service (calling charges waived) Checked customers claim-filing status via safety confirmation s and phone calls Customer notices with enclosed return envelopes mailed to policyholders in the affected regions Customer Status Check Activities (March 31, 2012) Number of customers to be checked Approx. 380,000* Check completion ratio 99.9% * Number of customers to be checked in the three prefectures of Iwate, Miyagi and Fukushima decided to provide full payment of benefits for accidental death due to the disaster. Nippon Life also implemented various measures for policyholders, as detailed below. In addition, on March 17, Nippon Life set up the Earthquake Disaster Recovery Bureau within the Sendai Branch. Through this new organization, Nippon Life has worked to rapidly restore customer services and other operations in the affected regions and assist with the reconstruction effort in various ways. Earthquake Recovery Support Activities and Power Conservation Measures Donation of relief money of 100 million through the Japanese Red Cross Society Nippon Life-owned building (the former Sendai Excel Hotel Tokyu) leased gratis to Ishinomaki City, Miyagi Prefecture Delivery of relief supplies Preparing meals at an evacuation shelter with labor unions Implementation of volunteer activities by Nippon Life employees (removal of rubble, cleaning of photographs and other activities) Invitation of children from earthquake-stricken areas to various events (puppet theater, classical music concert, Nissay Inter League (Central-Pacific) baseball games, baseball and table tennis workshops, and tree-planting activities) Cooperation on sales of local products from earthquake-stricken areas (provision of store space at product exhibitions) Donation of Tanabata Festival decorations with message of support from customers Project to Grow Flowers for a Brighter Future in Earthquake-stricken Areas (delivery of flower seeds with messages to people in the affected areas) Power conservation measures Donations to the Great East Japan Earthquake Relief Fund of the Japanese Red Cross Society by Zutto Motto Service policyholders using Thanks Mile points (Donations totaling 173,951,289 for relief money were received from 316,106 people.) Nippon Life has completed almost all of the customer status checks for the target area as of March 31, Nippon Life will continue trying to check the status of customers with whom it has yet to establish contact through continued visits and via telephone, the Nippon Life website and other means. Status of Payment of Insurance Claims and Benefits to Customers (As of March 31, 2012) Amount paid as of March 31, billion* * Total amount of payment for insurance claims and benefits due to the Great East Japan Earthquake Nippon Life has completed the payment of insurance claims and benefits of 31.5 billion as of March 31, Looking ahead, Nippon Life will continue making proper payments to customers along with implementing continued status check activities. The Life Insurance Association of Japan (then Chairman: Yoshinobu Tsutsui) Receives a State Minister s Commendation for Contributors to Consumer Support Based on a Commendation Program of the Consumer Affairs Agency The Life Insurance Association of Japan (LIAJ) has received a State Minister s Commendation for Contributors to Consumer Support in recognition of its response to the Great East Japan Earthquake. The commendation expressed strong appreciation for LIAJ s concerted efforts to promote the prompt payment of insurance claims and benefits. These efforts included the implementation of special treatment of insurance claim procedures and premium payments; the establishment of the Center for Searching for Life Insurance Contracts in Disaster Areas for people who lost all their important insurance policy documents; information sharing throughout the life insurance industry; and requests to the authorities regarding procedures for assisting with swift insurance payments. 7

10 Three-year Management Plan Launch of the Future Creation Project to Create a Secure Future Along With Our Customers To Become a Life Insurer That Excels in Terms of Scale, Quality and Credibility What is the Future Creation Project? Nippon Life has launched the Future Creation Project, a three-year management plan to ensure that it steadily fulfills its social missions as a life insurer amid rapid upheaval in the economic environment and the structure of society. The project embodies Nippon Life s aspirations to create a secure future along with its customers. Backed by outstanding financial soundness, Nippon Life will provide new comprehensive insurance services in order to stop the downturn in the amount of policies in force and achieve a return to growth. More Advanced Protection Increase New Policy Sales More Advanced Support Excellence in Services Management Goals Excellence in Human Resources Development Excellence in Financial Soundness Social Missions Fulfill long-term coverage responsibilities Encourage people to make selfreliant efforts to prepare for risks Respond to diversifying needs Strengthen Human Resources Development Future Creation ~

11 Core concept embodying the combination of More Advanced Protection, More Advanced IT and More Advanced Support Return to Growth New Comprehensive Insurance Services P10 Number of policyholders (insured persons): 11.5 million Nippon Life aims to restore the number of policyholders to 11.5 million as evidence of its excellence in scale, quality and credibility. No. 1 in Share of New Policies Nippon Life is targeting the No. 1 share in new policy sales across all metrics, specifically the number of new policies, the amount of coverage, and annualized premiums on new policies. More Advanced IT Restore Growth in the Number of Policies in Force Strengthening Equity P18 Bolster Financial and Earnings Foundations Ensure Stable Investment Returns P26 Strategic Investment and Business Development Overseas P20~23 Stable Payment of Dividends P24 Nippon Life aims to restore growth in the number of policies in force, following the upturn in the annualized premiums on policies in force in fiscal Restore Equity to 3,000 billion Nippon Life aims to restore equity to 3,000 billion in order to fulfill its long-term coverage responsibilities to customers. Project

12 Three-year Management Plan Supporting Customers Lives Through New Comprehensive Insurance Services Making Enrollment Easy for All Customers and Adapting to Changes in Their Lives After Enrollment Nippon Life has three social missions: fulfill its long-term coverage responsibilities; encourage people to make self-reliant efforts to prepare for risks; and respond to diversifying needs. To fulfill these missions, Nippon Life will fundamentally overhaul its infrastructure through a reexamination of all operations involving insurance from the standpoint of its customers. This is the main thrust of the New Integration Plan, which started officially in April We aim to create a secure future along with our customers. New comprehensive insurance services are essential to achieving this goal. Products With Innovative Features and Flexibility Along With an Enhanced Range of Additional Services P12 More Advanced Protection For Every Individual s Life New Comprehensive Enhanced Range of Additional Services A Sales Channel Mix Based on the Face-to-Face Approach P16 More Advanced Support 10

13 A New Cutting-edge Wireless Device and a Variety of Highly Convenient Procedures P14 Insurance Services More Advanced IT By combining these three elements, Nippon Life will provide an entirely new type of insurance offering easy enrollment for all customers and adapting to changes in their lives after enrollment. 11

14 Three-year Management Plan More Advanced Protection Nippon Life will provide more advanced protection through Mirai no Katachi. The New Mirai no Katachi Product With the aging of the Japanese society with fewer children, there will be an increasingly stronger need for everyone to make self-reliant efforts to ensure their own security with respect to medical and nursing care, retirement and other forms of coverage, as well as death coverage. In light of this trend, Nippon Life seeks to respond to the diversifying needs of customers throughout their lives, while providing customers with additional peace of mind. To this end, in April 2012, Nippon Life launched the new Mirai no Katachi product. Mirai no Katachi changes how we provide insurance to customers. In the past, we sold primary policies and added riders as necessary. Now, we are selling each insurance policy as an individual product. By having customers flexibly choose and combine the insurance they need, Nippon Life can now address diversifying customer needs in greater detail. In addition, we have completely revamped the structure of each type of insurance based on a concept of providing simple forms of protection that customers can easily understand. Nippon Life has also enhanced the range of additional services by introducing the Care Guidance Service, a new nursing care service, following in the footsteps of the Zutto Motto Service and the Best Doctors Service. In these ways, Nippon Life is providing more advanced protection through Mirai no Katachi by completely revamping its products, providing simple forms of protection that customers can easily understand, and enhancing the range of additional services. Combinations are subject to some restrictions. Improved Flexibility During and After Enrollment Nippon Life can now provide protection that precisely matches the needs of many different customers. This is achieved by flexibly combining the necessary coverage according to customer needs when customers enroll in Mirai no Katachi. Whole life insurance Term life insurance with survival benefit General medical insurance Cancer medical insurance Term life insurance Death coverage Medical coverage Limited injury insurance Dread disease insurance Serious disease and nursing care coverage Asset formation and retirement coverage Physical disability insurance Nursing care insurance Annuities Endowment insurance Choose insurance as needed For heads of households seeking comprehensive coverage: Whole life insurance Term life insurance Dread disease insurance Physical disability insurance General medical insurance After enrollment in Mirai no Katachi, customers can freely revise policy details according to changes in their needs and stages of life. For example, customers can add new insurance, increase coverage amounts, and selectively revise only the parts they need to change. Customers can change their policy details to precisely meet their protection needs at any stage of their lives. [Customers can flexibly revise protection according to changes in their needs and stage of life] Single Married Childbirth Children gain independence Male, 20 years Male, 30 years Male, 35 years Male, 60 years Death Add Increase coverage amount Death Revise Nursing care Dread disease Medical Add Dread disease Medical Dread disease Medical Dread disease Services may not be available if Nippon Life does not handle the relevant system when requests are made. 12

15 Upgrading Benefit Details With Mirai no Katachi, Nippon Life has completely revamped various insurance products based on the concept of providing simple forms of insurance that are easy for customers to understand. This approach is readily apparent in insurance products with survival benefits, such as dread disease, physical disability and nursing care insurance. Here, Nippon Life has greatly increased the appeal of products by introducing new services in addition to enlarging the scope of protection and linking the reasons for payment to public insurance systems. Dread disease insurance Physical disability insurance Nursing care insurance Insurance that covers designated malignant neoplasm (cancer), acute myocardial infarction (heart attack), cerebral stroke and death Protection for carcinoma in situ has been newly added. Surgery has been added to the reasons for payment for acute myocardial infarction and cerebral stroke. u The Best Doctors Service has been made available. Insurance that covers physically disabled conditions and death This insurance has been made easier to understand by linking the reasons for payment to the Act on Welfare of Physically Disabled Persons. (Requirement for payment is the issuance of a level 1-3 physical disability certificate) Insurance that covers specified conditions, which require nursing, and death The scope of protection with respect to the public nursing care insurance system has been expanded from nursing care level 3 and higher to nursing care level 2 and higher. u The Care Guidance Service is available. General medical insurance Cancer insurance Insurance that covers hospitalization and surgery, etc. Protection for bone marrow donors and recipients has been newly added. u The Best Doctors Service is available. Insurance that covers hospitalization, surgery, etc., due to cancer Protection for bone marrow recipients has been newly added. Enhanced Range of Additional Services l Care Guidance Service New service launched Since April 2012, the Care Guidance Service (home-visit nursing care consulting service) has been made available to nursing care insurance policyholders and beneficiaries under Mirai no Katachi. With this service, care managers and other specialist staff of Nichii Gakkan Company, which operates Japan s largest network for senior nursing care services, visit customers at home to consult with them about their future nursing care concerns. The Care Guidance Service is promoted and handled by Life Care Partners Co., Ltd. This is not an insurance policy or service of Nippon Life. l Best Doctors Service From April 2012, Nippon Life has expanded the scope of the Best Doctors Service, a specialist physician referral service, which it has offered since April In case customers have concerns about treatment from their primary physicians or want a second opinion, Best Doctors, Inc. introduces suitable Japanese physicians to contact from the specialists selected by Best Doctors, Inc. for its Best Doctors in Japan list. The Best Doctors Service is provided by Best Doctors, Inc. This is not an insurance policy or service of Nippon Life. Best Doctors and Best Doctors in Japan are trademarks of Best Doctors, Inc. in the United States and other countries. l Zutto Motto Service The Zutto Motto Service is a unique Nippon Life service offered to policyholders. This service reflects Nippon Life s commitment to work even harder and longer ( zutto motto ) at providing each policyholder with better after-sales services. Through this service, policyholders and their families provide us with up to date information about their status. In return, we supply timely information that reflects changes in the lives of policyholders. Staying in touch also makes it possible to perform insurance claim and benefit procedures and many other tasks more efficiently. Policyholders Thanks Miles Menu Happy Present Menu Information about status of policyholders and their families Four-item menu to express our appreciation Premium Chance Menu Heartful Support Menu Nippon Life For further details on the Care Guidance Service, Best Doctors Service and Zutto Motto Service, please see Nippon Life s corporate website or various brochures on services. 13

16 Three-year Management Plan More Advanced IT Better consulting, administrative operations and services with the new wireless device, REVO From April 2012, we introduced a new wireless device for sales representatives to use in the field when visiting customers. The new device, called REVO, has two major features as noted on the right. (1) State-of-the-art consulting functions to support more advanced protection (2) Highly convenient administrative operations and services State-of-the-art Consulting Functions to Support More Advanced Protection l Planning for 13 Separate Segments Using the latest information obtained from customers, REVO enables sales representatives to conduct detailed consultations with customers according to their life stage and situation. Based on the consultation, representatives can then propose a plan that matches each customer s individual needs. In this way, REVO enables us to offer customers the maximum benefit of the innovative features and flexibility of Mirai no Katachi. Children Young and single customers Customers who need coverage most Independent singles Function Planning for 13 Separate Segments Working couples with no children Seniors Homemakers l State-of-the-art Consulting Using Statistical Data and Video REVO brings various statistical data and video media to the actual consultation venue, enabling a more sophisticated and illuminating consultation. Sales representatives can use REVO s advanced functions to propose optimal solutions for the customer s individual needs and life stage, or to present a simulation of changing coverage needs based on the customer s family situation. Highly Convenient Administrative Operations and Services l REVO Speeds Up Procedures Previously, customers had to fill in forms and documents by hand. If there was an omission or an error, sales representatives had to ask the customers for more of their time to make corrections. Now, with the introduction of the new REVO wireless device, customers can be given guidance on how to fill out each part in the process, so that procedures can be completed successfully in a single visit. Before After Not needed! Form Document Problem If a problem arose with documents, sales representatives would need to ask customer for another visit. Communication The new REVO wireless device allows all procedures to be completed in a single visit. 14

17 l Paperless, Cashless Transactions ' Paperless Under the paper-based system, enrolling for a policy involved filling out and applying personal seals to a lot of paper forms. Now, customers are able to simply check and confirm previously entered information and policy details on the screen of the REVO device, and record their signature digitally to complete the procedure. Before After ' Cashless Before the introduction of cashless settlements, customers used cash for paying premiums and other fees when signing up for a policy or performing other procedures. Now, insurance premium payments will start after the customer has completed enrollment. This frees customers from having to prepare cash when enrolling for a policy. And, customers can now use cash cards or other means to pay processing fees or premiums arising from various procedures. Cash Before After On enrollment After enrollment Premium payment via debit from designated account l Cash card l Credit card Payments processed by the sales representative through the REVO device l After-sales Life Insurance Services and Procedures Changed for Customers with Customer IDs and Passwords (4-digit PIN codes) Customers who wanted to use services and perform procedures after enrolling in a policy used to have to fill out procedural forms, provide their life insurance policy documents, and registered seals. Under our new system, customers can access services and perform procedures by using their customer ID and password with a REVO wireless Before Procedural documents After Wireless device carried by sales representative or Customer s PC or mobile phone device carried by a sales representative. They can also access services and perform procedures by themselves using the corporate website. Some services and procedures such as application for payment of insurance claims and benefits or name changes cannot be accessed or performed using the customer ID and password. These require a sales representative to prepare documents including identity certification documents. They can be performed without providing an insurance policy document or registered seal however. [Procedures and Services Available Using Customer ID and Password] Customers can check the latest policy content at any time. Life insurance policy document Life insurance policy document Registered seal Customer ID (11 characters) Password (4 digits) Policy details can be confirmed using either the Policy Content Notice (sent by post) or the website, instead of the life insurance policy document. Procedures will no longer require a life insurance policy document Customers are clearly instructed to keep their passwords confidential from other people. Sales representatives will never ask customers to tell them their password. Policy loans and other financial transactions can be performed from customers PCs and mobile phones. If customers apply for loans before 14:30 on weekdays, the funds can be in their transaction account (transfer account) on the same day. Funds may not be transferred on the same day depending on the day of the transaction and the transaction account. Changes of address and various other procedures can be handled swiftly from customers PCs and mobile phones. Customers who answer surveys on a dedicated website can accumulate Thanks Mile points. TOPICS An Industry First Policy Guidance Service to Support Customers When Enrolling To bring peace of mind to customers when they apply for a policy, a customer service representative can be present with the sales representative, either by videophone or physically. The customer service representative offers confirmation of policy content and guidance for the enrollment procedure. Benefits of the Policy Guidance Service (1) Deeper customer understanding of insurance products and important related matters Life insurance policies are a long-term agreement, lasting until the policy term ends or possibly until a claim is to be paid. To ensure that customers understand the policy content correctly before enrolling, specialist customer service representatives are on hand to clarify points or answer questions. This enables customers to deepen their understanding of insurance products and important related matters. (2) Improved after-sales services for customers thanks to accurate customer information The Policy Guidance Service strives to improve services to customers, such as simplifying and expediting procedures, and ensuring swift and reliable payment of claims by collecting accurate customer information. 15

18 Three-year Management Plan More Advanced Support Strengthening and combining channels to take customer support to the next level Nippon Life has a multi-channel sales structure based on a face-to-face approach using sales representatives, including Nissay Life Plazas, the Nissay Call Center and the Internet. Through these channels we offer customers support to match their lifestyles. Supporting Customers Through a Multi-channel Sales Structure Nissay Total Partners (Sales Representatives) Our nationwide network of around 50,000 Nissay Total Partners (sales representatives) provides individual, face-to-face support to meet the needs of each customer. Various Lines of Contact Nippon Life provides a wide range of lines of contact to cater to a diverse range of customer lifestyles and needs. l Policy Details Confirmation Activities Nissay Total Partners make regular visits to policyholders to check up on changes in customers lifestyles, confirm whether any reasons for payment of benefits have occurred, and see whether there are any other services Nippon Life can provide. The visits help to reaffirm a sense of the peace of mind that comes from enrollment in life insurance policies. Nissay Life Plazas Nissay Call Center Agencies Corporate Sales Internet Services Conventional shops that customers can visit throughout Japan Receive telephone calls from customers Tax accountants, professional insurance sales agencies, financial institutions, etc. Consulting on employee benefit services for corporate customers Enables customers to perform various procedures or lodge applications via their PCs or mobile phones Advances in Support 1 More Advanced IT Reform of Working Methods In the face-to-face channel, REVO has reformed the way that sales representatives do their jobs by bringing state-of-the-art consulting functions into play along with efficiency gains in administrative procedures. We will strive to translate the resulting improvements in quality and quantity of sales activities into even better customer services. Advances in Support 2 Face-to-Face Channel Internet When customers have registered their information or requested materials on Nippon Life s website, sales representatives visit them to offer face-to-face consultations. REVO l Reduced paper-work burden l Detailed planning l Easy-to-understand explanations Customers Better Quality of Sales Activities Greater Quantity of Sales Activities Even better customer services Commercials and Other Media Develop Positive Customer Sentiment for Nippon Life Sales channels Internet (dedicated website) Sales promotions, events, etc. 16

19 Advances in Support 3 Sales Representatives Corporate Sales Representatives Sales representatives and corporate sales representatives team up to present employee seminars and to assign representatives to worksites. These initiatives have strengthened our ability to provide support that meets the needs of corporate customers and their employees. Nippon Life provides over 1,800 corporate customer employee seminars each year on various topics such as pensions and life planning. These seminars offer the employees valuable opportunities to think about their life plans. Nippon Life sales representatives each take responsibility for individual worksites. They conduct Policy Details Confirmation Activities for corporate customer employee policyholders and provide various other services. Corporate customer employee seminar on life planning Sales representatives are assigned to worksites TOPICS Providing Various Contact Points for Communication with Customers to Meet Diverse Needs Dedicated Website Mirai Factory Mirai Factory is a community website that forms a tangible record of Nippon Life s communications with customers. Website contents include special sales promotions and information about Nippon Life s latest television commercials. Nissay Life Plaza Marunouchi Mirai Forest Nippon Life established Mirai Forest, a lounge for visitors, inside the Nissay Life Plaza Marunouchi. Mirai Forest is based on the concept of providing a space for rest in the heart of the city one that evokes a forest. Mirai Forest is open to all visitors, who are welcome to drop by and enjoy the facility. It is an open lounge offering information about insurance and Nippon Life. 17

20 Three-year Management Plan Strengthening Equity Our Commitment to Increasing Equity Nippon Life believes that fulfilling the responsibility to provide long-term protection for customers is its primary mission as a life insurance company. Due to the long-term nature of life insurance policies, we must take into account the possibility of a crisis that is worse than we can predict. A major natural disaster or historic drop in stock prices are two examples of such risks. Equity provides the financial foundation for making insurance claims and benefit payments as stipulated in policies even after a crisis of unexpected magnitude. In addition, investment income from equity is one source of funds for dividend payments. This is why we believe that strengthening equity is essential to establishing Nippon Life as a company of excellence in financial soundness. Measures to Increase Equity [Plan for Strengthening Equity] Optimum equity: 4.5 trillion Foundation funds ( kikin), Reserve for redemption of foundation funds About 3.3 trillion Foundation funds ( kikin) reoffering of 50 billion About 2.6 trillion Foundation funds ( kikin) reoffering of 100 billion About 2.8 trillion Foundation funds ( kikin) reoffering of 50 billion About 2.7 trillion Foundation funds ( kikin) reoffering of 100 billion About 2.8 trillion Steady growth mainly from an increase in core capital due to foundation funds ( kikin) offerings and other measures Contingency reserve, Reserve for price fluctuations in investments in securities Reversal of about billion because of the global financial crisis (year ended March 31, 2009) Reversal of about 93.6 billion because of the Great East Japan Earthquake As of March Long-term target Equity is the sum of foundation funds and the reserve for redemption of foundation funds, which are included in net assets on the balance sheets, and the contingency reserve and reserve for price fluctuations in investments in securities, which are included in liabilities on the balance sheets. Equity is also called foundation funds (kikin) and reserves (see p. 31). We have strengthened equity by taking steps such as using annual earnings to increase reserves and conducting issuance of foundation funds, which is the core capital of a mutual company. We believe that these continuous steps have enabled us to strongly rise above emergencies such as the global financial crisis in fiscal 2008 and the Great East Japan Earthquake in fiscal We will continue to take actions to increase foundation funds (kikin) and reserves. Our long-term target is 4,500 billion, which was our optimum equity (see p. 25) as of March 31, This represents our required level of equity based on a stringent evaluation of risk. Foundation Funds (Kikin) The Insurance Business Act allows mutual companies to procure funds by selling foundation funds (kikin). These funds are similar to loans because an interest payment, maturity date and other items must be established when an offering is conducted. If there is a bankruptcy or similar event, repayment of the principal and interest for foundation funds (kikin) is subordinate to the repayment of amounts owed to ordinary creditors and insurance claims and benefit payments owed to policyholders. In addition, upon the redemption of foundation funds (kikin), mutual companies are required to make an addition to the reserve for redemption of foundation funds, which serves as retained earnings, that is equal to the amount redeemed. As a result, the full amount of foundation funds (kikin) remains in equity even after redemption. Foundation funds (kikin) are therefore positioned as a mutual company s core capital, which is equivalent to the capital of a joint-stock company. 18

21 l Foundation Funds (Kikin) Status We solicit foundation funds (kikin) in order to enhance our ability to respond to risk. As a result of reoffering funds ten times since revisions were made to the Insurance Business Act in 1996, our total foundation funds (kikin), including funds and the reserve for redemption of foundation funds, reached 1,200 billion as of the end of the fiscal year ended March 31, Since the fiscal year ended March 31, 2001, Nippon Life has aimed to expand the number of fund contributors by using securitization methods [Fund Redemption] through a special purpose company. In the fiscal year ended March 31, 2003, Nippon Life made a public offering to general individual investors, and in the fiscal year ended March 31, 2006, Nippon Life made an offering to overseas investors, increasing flexibility in funds procurement. In the fiscal year ending March 31, 2013, Nippon Life plans to solicit an additional 50 billion in foundation funds, for a total of 1,250 billion in foundation funds. (Unit: Billions of Yen) Retained External procurement 1996/7 Reserve for fund redemption * /7 Offered fund /9 2002/9 Offered fund /7 Offered fund Offered fund Reserve for fund redemption /8 Offered fund Fund redemption = repayment to contributors 50 Transfer *2 50 Reserve for fund redemption * Transfer Transfer Offered fund /8 2010/8 2011/8 2012/8 Offered fund /9 Offered fund Offered fund Reserve for redemption of foundation funds (kikin) <2002> Reserve for redemption of foundation funds (kikin) <2000> Reserve for redemption of foundation funds (kikin) <1999> Reserve for redemption of foundation funds (kikin) <1997> Reserve for redemption of foundation funds (kikin) <1996> Offered fund (plan) Offered fund Reserve for redemption of foundation funds (kikin) <2005> Reserve for redemption of foundation funds (kikin) <2012> (Unit: Billions of Yen) 50 Reserve for redemption 50 of foundation funds (kikin) <2011> 50 Reserve for redemption of foundation funds (kikin) <2010> 50 Reserve for redemption of foundation funds (kikin) <2009> Reserve for redemption of foundation funds (kikin) <2008> 50 1, /7 1997/7 1998/7 1999/7 2000/7 2001/7 2002/7 2003/7 2004/7 2005/7 2006/7 2007/7 2008/7 2009/7 2010/7 2011/7 2012/7 2013/7 2014/7 2015/7 2016/7 2017/7 2018/7 2019/7 2020/7 *1 As stipulated by the Insurance Business Act, the minimum fund amount is 1 billion. *2 Article 56 of the Insurance Business Act: when redeeming the fund, an amount equivalent to the redemption amount must be accumulated as a reserve for redemption of foundation funds. Reserve for fund redemption is a voluntary reserve and it is transferred to reserve for redemption of foundation funds (kikin) when the foundation funds (kikin) are redeemed. *3 The redemption of 150 billion of reserve for fund redemption expected to occur between the fiscal year ended March 31, 2000 and the fiscal year ended March 31, 2002 was completed earlier than expected. l Fund Contributors (as of March 31, 2012) Amount of Fund Contributions 300 billion Number of Fund Contributors 4 Names of Fund Contributor Fund Contributions to Nippon Life Amount (Billions of Yen) Fund contribution (Percentage) Investments of the Company in Fund Contributors Shares held (Thousands of shares) Voting rights (Percentage) Nippon Life 2009 Fund Special Purpose Company % % Nippon Life 2011 Fund Special Purpose Company Nippon Life 2008 Fund Special Purpose Company Nippon Life 2010 Fund Special Purpose Company Notes: 1. Nippon Life 2008 Fund Special Purpose Company, Nippon Life 2009 Fund Special Purpose Company, Nippon Life 2010 Fund Special Purpose Company and Nippon Life 2011 Fund Special Purpose Company issue special corporate bonds backed by claims on the funds. Issuance proceeds are used to purchase claims on the funds. Nippon Life has no specified investments in the Nippon Life 2008 Fund Special Purpose Company, Nippon Life 2009 Fund Special Purpose Company, Nippon Life 2010 Fund Special Purpose Company or Nippon Life 2011 Fund Special Purpose Company. 2. Fund contributors are the four above-mentioned entities. 19

22 Three-year Management Plan Using Equity to Fund Strategic Investments in Overseas Strategic investments that contribute to long-term growth in earnings are one way in which Nippon Life effectively uses equity. Specifically we make overseas investments based on alliances and other relationships that can make our core life insurance operations even stronger. Overseas insurance operations and overseas asset management operations are also areas where we make strategic investments. By making these investments, we are aiming to increase our opportunities for earning profits. Recent activities include investments in the Allianz Group of Germany (Allianz Financial II B.V.), Reliance Capital Asset Management Limited of India, and AIA Group Limited of Hong Kong. Increasing profitability from these strategic investments will allow us to further increase our distributions to policyholders and create a virtuous cycle in which the returns on these investments lead to more growth in equity. Strengthen Equity Strategic Investments Based on Long-term Perspective Major strategic investments prior to and including fiscal 2010 <September 2009> u Prudential Financial Group (U.S.) <March 2010> u The Northwestern Mutual Life Insurance Company (U.S.) <March 2011> u Reliance Life Insurance Company Limited (India) <July 2011> <January 2012> <March 2012> Major strategic investments in fiscal 2011 u Allianz Group (Germany) u Reliance Capital Asset Management Limited (India) u AIA Group Limited (Hong Kong) Increase Capabilities Further Increase Distributions to Policyholders More Growth in Equity 20 Major Strategic Investments l Allianz Group (Germany) In July 2011, Nippon Life purchased 30-year convertible subordinated notes issued by Allianz Financial II B.V., a finance subsidiary wholly owned by Allianz SE (hereinafter, Allianz ), one of the world s leading integrated financial services providers. The investment totaled 500 million euros (approximately 59.0 billion). Nippon Life and Allianz have a broad relationship spanning top management to the working level, reflecting the two companies shared values and beliefs in the life insurance business. The objective of this investment is to further strengthen the two companies relationship, in order to establish a long-term partnership that is mutually beneficial for both parties. Looking ahead, Nippon Life will continue to seek opportunities to work together in various areas with Allianz through continuous interaction, including the exchange of personnel. Established in 1890, Allianz is one of the world s leading integrated financial services providers. The company is a leading global financial services group providing life insurance, property and casualty insurance, and asset management services to over 76 million customers in about 70 countries around the world. In regard to the convertible subordinated notes, Nippon Life has the option to exercise its exchange right to receive common stock issued by Allianz any time within 10 years after issuance of the notes. In addition, under certain conditions, the notes will be automatically converted into common stock of Allianz within 10 years after issuance.

23 l Reliance Group (India) In September 2011, Nippon Life signed a Memorandum of Understanding (hereinafter, MOU ) on a business alliance with Reliance Capital Limited, a financial services company in the Reliance Group, one of the largest business houses in India. Nippon Life has had a close working relationship with Reliance Capital, including interaction at the top management level. In October 2011, Nippon Life invested in Reliance Life Insurance Company Limited (hereinafter, Reliance Life ), a life insurance subsidiary of Reliance Capital. Nippon Life purchased 26% of the common shares of Reliance Life for INR30.6 billion (approx billion). In addition, in January 2012, Nippon Life reached an agreement to purchase shares of Reliance Capital Asset Management Limited (hereinafter, Reliance Asset ), an asset management subsidiary of Reliance Capital. Nippon Life acquired 26% of the common shares of Reliance Asset for about INR14.5 billion (approx billion*) Looking ahead, Nippon Life will continue to explore measures to build an even stronger business alliance with the Reliance Group. l AIA Group (Hong Kong) In March 2012, Nippon Life signed a Memorandum of Understanding ( MOU ) on a business alliance with AIA Group Limited (hereinafter, AIA ), one of the largest life insurers in the Asia-Pacific region. Nippon Life had established a close working relationship with AIA, including interaction at the top management level. This relationship reflects the two companies shared principles and values in the life insurance business. For example, AIA mainly provides protection products through its core sales agent channel. The MOU was signed by both companies for the purpose of further strengthening our relationship by establishing a long-term partnership that is mutually beneficial to both parties. l Prudential Financial Group (United States) In September 2009, Nippon Life purchased 10-year exchangeable surplus notes issued by The Prudential Insurance Company of America, a U.S. insurance subsidiary of Prudential Financial, Inc. (hereinafter Prudential ), one of the world s largest financial service companies. The investment totaled $500 million (approx. 46 billion). The two companies are expanding their collaboration in many fields. In one development, Nippon Life started selling foreign currencydenominated insurance products of The Gibraltar Life Insurance Co., Ltd., * Exchange rate: INR1 = 1.5 At the signing of the MOU between Nippon Life and Reliance Capital (Left: Mr. Tsutsui, President of Nippon Life; Right: Mr. Ambani, Chairman of Reliance Capital) Reliance Asset has grown steadily since its establishment in It currently ranks second in the Indian mutual fund industry in terms of assets under management. Also, Reliance Asset is one of the few asset management firms to be entrusted with asset management services for India s public pension fund, in addition to managing mutual funds. Reliance Asset is a leading company in India s asset management industry. Nippon Life has also purchased ordinary shares of AIA with the objective of building a stronger relationship between the two companies, while capturing growth opportunities across Asia-Pacific life insurance markets. Looking ahead, Nippon Life and AIA will explore ways of building a concrete cooperative relationship. The two companies will also share business expertise and opinions on the life insurance industry primarily in the Asia-Pacific region through the exchange of personnel and other measures. Established in 1931, AIA is one of Asia s largest life insurance companies. It operates its life insurance business in 15 countries and regions in the Asia and Oceania region excluding Japan. AIA holds a leading position in many of these markets. a Japanese company that belongs to the Prudential Financial Group, in October Prudential is one of the world s largest financial service companies and has a history that dates back to The company is engaged in life insurance, mutual fund, annuity, asset management and other businesses in more than 30 countries. Sales of Foreign Currency-denominated Insurance Products of Gibraltar Life (from October 2010) In October 2010, Nippon Life started selling two insurance products of Gibraltar Life Insurance: an individual annuity policy (no dividend payments) in which the customer can designate the currency and a U.S. dollar-denominated whole life insurance policy (no dividend payments). Demand for foreign currency-denominated insurance products is particularly high in urban areas of Japan. Adding policies from Gibraltar Life Insurance, which has much experience in this field, to the Nippon Life s lineup makes it possible to offer customers even better services. This section presents a summary of the products of Gibraltar Life Insurance and is not intended to contain all information about these products. Always read sales pamphlets and other materials before reaching a purchase decision. 21

24 Three-year Management Plan Major Overseas Business Expansion Initiatives and Global From the standpoint of gaining a variety of earnings opportunities and strengthening its core business, Nippon Life has expanded into a total of seven countries in Europe, North America and Asia, where it has established 17 subsidiary companies and four representative offices. These subsidiaries and offices are engaged in the fields of insurance, asset management and research. Nippon Life s Global Network Europe Allianz Group (Germany) One of the world s leading integrated financial services providers NLI International PLC (U.K.) [Asset management] Schroders (U.K.) A global asset management company with over 200 years of experience in the world s financial markets Nissay Schroders Asset Management Europe Limited (U.K.) [Asset management] Joint venture with Schroders Nippon Life Reliance Life Insurance Company Limited (India) [Insurance] Reliance Group (India) One of India s largest business houses Reliance Capital Asset Management Limited (India) [Asset management] Bangkok Bank Public Company Limited (Thailand) Thailand s largest commercial bank Bangkok Life Assurance Public Company Limited (Thailand) [Insurance] Insurance Business The global life insurance market, of which a major share has been held by Europe, the U.S. and Japan, is now seen to be spreading worldwide along with economic growth and increasing populations in Asia and other newly emerging markets. To make the most of future medium- to long-term earnings opportunities, Nippon Life is expanding its insurance business in the U.S., China, Thailand and India. Reliance Life Insurance Company Limited In October 2011, Nippon Life invested in Reliance Life Insurance Company Limited, a life insurance subsidiary of Reliance Capital, a part of Reliance Group, one of India s largest business houses. Nippon Life now has a shareholding of 26% in Reliance Life. Reliance Life has solid business foundations, highlighted by a nationwide distribution network, highly talented executives, and strong brand recognition throughout India. Nippon Life has provided Reliance Life with experience and expertise through secondment of directors and working-level employees, with the aim of continuing to achieve steady and sustainable growth. Bangkok Life Assurance Public Company Limited Since first acquiring a stake in Bangkok Life Assurance Public Company Limited, one of Thailand s leading life insurance companies, in April 1997, Nippon Life has continued to acquire additional shares to become the largest shareholder of this company, with a shareholding of approximately 25%. Nippon Life has sent a director to Bangkok Life Assurance along with workinglevel employees, mainly to provide business support to Japanese companies and expertise in the insurance business. In the fiscal year ended March 31, 2012, Bangkok Life Assurance achieved record-high earnings, with insurance premiums increasing by roughly 20% from a year earlier. Asset Management Nippon Life conducts global asset management operations from offices in New York, London and Singapore. Through balanced and diversified investment centered on equities, bonds and other instruments, Nippon Life is working to secure a wide variety of profit earning opportunities. We are also strengthening our investment capabilities by acquiring the latest financial techniques from overseas. 22

25 Network Development Furthermore, Nippon Life is building a global network of relationships with prominent companies in Europe, the U.S. and Asia. Improving investment returns and capturing growth opportunities in insurance markets are two objectives. Overseas activities also provide access to advanced expertise in the fields of investment and insurance. Alliance partners Subsidiaries and affiliates The Americas Prudential Financial Group One of the world s largest financial services companies Principal Financial Group A global investment management leader including retirement services The Northwestern Mutual Life Insurance Company One of the largest U.S. mutual life insurers Putnam Investments, LLC A global money management firm with more than 70 years of investment experience Best Doctors, Inc A global clinical advocacy benefits company Nippon Life Insurance Company of America [Insurance] NLI International Inc. [Asset manegement] PanAgora Asset Management, Inc. [Asset management] Joint venture with Putnam Investments Asia China Great Wall Asset Management Corporation (China) One of China s four major national asset management firms Nissay-Greatwall Life Insurance Co., Ltd. (China) [Insurance] AIA Group (Hong Kong) The largest independent publicly listed Pan-Asia life insurance group in the world Nissay Schroders Asset Management Asia Limited (Singapore) [Asset management] Joint venture with Schroders Nissay-Greatwall Life Insurance Co., Ltd. Nippon Life Insurance Company of America Nippon Life entered the Chinese life insurance market through a joint venture, Nissay-SVA Life Insurance Co., Ltd., in September 2003, and has steadily built up business foundations in the Changjiang Delta region spanning Shanghai, Zhejiang Province and Jiangsu Province. In September 2009, the joint venture partner was switched to China Great Wall Asset Management Corporation (CGWAMC), one of China s four major national asset management firms, and the company made a new start as Nissay-Greatwall Life Insurance Co., Ltd. (Nippon Life has an equity interest of 50% in the company). With the opening of a branch office in the Chinese capital Beijing in February 2011, the company has been steadily expanding its business base. Established in December 1991, Nippon Life Insurance Company of America sells insurance products, including group health insurance, to U.S.-based Japanese companies and U.S. corporations through its branches in New York, Los Angeles, Chicago, Atlanta and other cities (Nippon Life has an equity interest of about 97% in the company). Notably, the company has been highly commended by its Japanese corporate clients for its high-quality services centered on customer services offered in Japanese. The company has achieved steady growth in its business performance mainly by expanding its customer base. In recent years, it began providing insurance products to U.S.-based South Korean firms by launching customer services in Korean based on its expertise and experience. Research Nippon Life gathers a wide range of information from representative offices and a subsidiary in New York, London, Frankfurt, Singapore and Beijing regarding the financial and insurance businesses in these areas. This information is put to use in our business activities. New York Representative Office London Representative Office 23

26 Three-year Management Plan Stable Payout of Dividends Making Continuous Efforts to Provide Stable Dividends to Policyholders Nippon Life, as a mutual company, has set the steady enhancement of stable dividend payouts in the medium to long term as one of its business goals. Specifically, we have either maintained or raised dividends for individual insurance and individual annuities in each of the eight consecutive years from the fiscal year ended March 31, 2004 to the fiscal year ended March 31, 2011, amid challenging conditions such as the financial crisis. In regards to the dividend for the fiscal year ended March 31, 2012, we have decided to revise certain yields on which the dividends for individual insurance and individual annuities are based, given the uncertain investment outlook such as persistently low interest rates. By further increasing our equity and taking other steps, we aim to pay out dividends on a stable basis. Policyholder Dividends in Mutual Companies Life insurance premiums are generally calculated based upon expected rates, including rates of interest and mortality. However, because life insurance contracts are long-term agreements, actual conditions may differ from expectations due to changes in the economic environment, increasing management efficiency or other factors. In the event that a surplus is generated by the difference between expectations and actual conditions in participating insurance, the increase is deemed to be cash to be distributed to policyholders based on policy terms as policyholder dividends. In fact, policyholder dividends could be classified, by nature, as the post-settlement of insurance premiums that were originally calculated based upon assumed rates. Life insurance contracts can be broadly classified into two categories, namely participating insurance, where dividend payments are distributed, and non-participating insurance, where no dividend payments are distributed. Nippon Life employs a mutual company format in which all policyholders (excluding non-participating insurance policyholders) are counted as members of the Company. In addition to the accumulation of foundation funds (kikin) and reserves, the majority of the surplus is returned to participating insurance policyholders as policyholder dividends. Dividend Framework The chart below shows the framework for dividends based on assumed rates. Insurance premiums are calculated while discounting investment gains based on assumed rates. Even if actual investment profits are lower than expected, as in Case 1 below, Nippon Life guarantees this discount on insurance premiums to stay the same. Covered by Nippon Life Portion allocated to dividends The amount for payments such as future insurance claims Expected investment gains (assumed interest rates portion) Actual insurance premiums paid Investment return is lower than assumed interest rates Actual investment gains Investment return is higher than assumed interest rates Case 1 Case 2 Please see Transaction Information Notice on page 74, which is sent out each year to every customer. 24

27 Aiming to Maximize Policyholder Interests Life insurance policies are long-term contracts extending from the initial enrollment to the receipt of claims and benefits or other events. Nippon Life is dedicated to fulfilling its responsibility to provide coverage to policyholders in the future by paying claims and benefits. We take steps to increase policyholder dividends, including continuous efforts to strengthen foundation funds (kikin) and reserves (collectively, equity), which is the foundation for future dividends. Increasing dividends and strengthening equity are medium- and long-term goals of Nippon Life. We conduct business operations while maintaining the proper balance between these two items. With respect to these goals, we announce our equity replacement ratio and dividend payout ratio. These two figures show policyholders the progress we have made toward achieving our goals of increasing dividends and strengthening equity. In addition, these figures allow policyholders to confirm that we are not placing too much emphasis on dividends or equity. Nippon Life pays dividends to policyholders in each year while increasing foundation funds (kikin) and reserves, which is the foundation for future dividends. By using this approach, we are determined to maximize total policyholder interests today and in the future. As of March 31, 2012 Equity Replacement Ratio Foundation Funds ( Kikin ) and Reserves Optimum Equity = = 63% 2,824.1 billion 4,500.0 billion The equity replacement ratio is the ratio of foundation funds (kikin) and reserves to optimum equity. Using the broad interpretation of equity, Nippon Life is increasing its foundation funds (kikin) and reserves, which totaled 2,824.1 billion on March 31, This equity gives Nippon Life the sound base of operations needed to pay claims and benefits as stipulated in policies even under unusually difficult operating conditions. Examples of risks include a sharp drop in stock prices, very low interest rates for many years or a major natural disaster. For optimum equity, our medium- and long-term goal as of March 31, 2012 is 4,500.0 billion based on a rigorous evaluation of business risks. Reaching this goal will give Nippon Life one of the highest equity ratios among the world s life insurance companies. The equity replacement ratio, which was 63% on March 31, 2012, shows our progress toward achieving the optimum equity goal. We plan to continue to increase the equity replacement ratio while maintaining the proper balance with measures to increase dividends to policyholders. Optimum Equity: The total amount of risk calculated based on Nippon Life s policies in force and asset portfolio. This calculation takes into account the risk of losses on stocks, assuming stock prices will see further sharp declines from the moment they begin to drop and until unrealized gains on stocks become zero, as well as the present assessed value of the future negative spread based on the assumption that large scale natural disasters will cause the amount of such payments as claims to increase and that tough conditions with low interest rates will prevail. Fiscal year ended March 31, 2012 Dividend Payout Ratio Reserve for Policyholder Dividends Available Financial Resources = 96% billion billion The dividend payout ratio is the ratio of the reserve for policyholder dividends to available financial resources, which is the sum of the reserve for policyholder dividends and the addition to foundation funds = (kikin) and reserves. In each fiscal year, we maintain the proper balance between the reserve for policyholder dividends and foundation funds (kikin) and reserves. To achieve this balance, we take steps to make suitable dividend payments to policyholders each year while increasing foundation funds (kikin) and reserves, which is the foundation for future dividends. We use this approach to maximize total policyholder interests over the present and future. Our medium- and long-term goal is to maintain a high level of dividend payments, although there are shortterm fluctuations in the dividend payout ratio. In the fiscal year ended March 31, 2012, the dividend payout ratio was 96% because we did not increase foundation funds (kikin) and reserves. 25

28 Three-year Management Plan Long-term, Stable Investment To be certain that we can pay future insurance claims and benefits, Nippon Life invests premiums entrusted to it from policyholders with sufficient consideration for safety, profitability, and the public nature of its business, among other factors. By spreading risk and allocating assets properly, Nippon Life aims to secure long-term stable investment returns. Features of Investment Nippon Life s mission is to fulfill its long-term commitment to policyholders under life insurance agreements, and maximize returns to policyholders in a stable manner over the long term. Investment is carried out to achieve this mission. Specifically, to ensure that we provide policyholders with promised returns in a stable manner, we strive to increase equity while implementing stringent risk management. When investing, we give sufficient consideration Nippon Life s Basic Approach to General Account Investment 1. Fulfilling our financial coverage obligations to policyholders is our first priority for investment 2. Achieving long-term stable growth of investment returns through a coherent investment strategy 3. Conducting investment in a way that is acceptable to policyholders, maintaining an awareness of the mission and public nature of the life insurance business to diversifying investments across assets, countries, currencies and other investment targets, while maintaining a well-balanced investment portfolio that is not overly concentrated on any specific asset or country. To enhance medium- to long-term profitability, we intend to replace investments in the portfolio mainly by buying at undervalued prices and selling at higher valuations based on stringent risk management. Through this approach, we seek to increase and stabilize profitability. [Breakdown of General Account Portfolio] ( 49,862.7 billion as of March 31, 2012) Other 3.4% Real estate 3.5% Loans 17.5% Foreign securities 22.6% Cash, deposits and call loans 1.2% Public and corporate domestic bonds 38.4% Monetary receivables purchased 1.8% Domestic stocks 11.7% Market Presence The life insurance business has a highly social and public nature. By utilizing the long-term nature of its funds as a life insurer, Nippon Life has long conducted investment from the standpoint of coexisting with communities and society, and achieving stable growth hand in hand with Japan s companies and economy at large. For example, in equities investment, Nippon Life is counted among the top ten shareholders of around 20% of all publicly listed Japanese companies. In addition, together with Group company Nissay Capital Co., Ltd., Nippon Life is a large investor in many unlisted companies around the country that are aiming for future initial public offerings. Additionally, in loan transactions, we strive to support the development of industry by extending loans to customers across Japan, not just large corporations. In the field of personal loans, we provide the financing needed for sound and enriched life planning through housing loans and other means. We are also active in real estate investment. Through a broad range of investments in office buildings nationwide, we are contributing to regional development. [Market Presence] Domestic stocks Loans Real estate l Number of publicly listed Japanese companies in which Nippon Life is a top ten shareholder: 665 (20% of all publicly listed Japanese companies) l Balance: 8,721.6 billion l Balance of real estate for leasing: 1,083.3 billion l Number of buildings held for leasing: 386 Domestic stocks are as of September 30, 2011 Loans (sum of industrial and consumer loans and policy loans) and real estate are as of March 31, 2012 [Regional Breakdown of Domestic Corporate Loans and Buildings for Leasing] (3.1%) Kyushu 28 (7.3%) (2.0%) 11 (2.8%) Shikoku (2.4%) (15.2%) 20 (5.2%) Chugoku Kinki 98 (25.4%) (8.3%) Chubu 3,774.2 (65.8%) 47 (12.2%) Kanto 148 (38.3%) (2.4%) Tohoku 19 (4.9%) 52.8 (0.9%) 15 (3.9%) Hokkaido Loans extended to domestic corporations ( billion) 5,733.4 (100.0%) Buildings for leasing (No. of buildings) 386 (100.0%) 26

29 Stringent Investment Risk Management As financial products become increasingly diverse and complex, investment risk management is becoming more and more important. At Nippon Life, investment departments strive to limit exposure to risk by strictly selecting and diversifying investments, while risk management and assessment management units provide checks by measuring the amount of risk in the portfolio and performing individual credit [Checking System for Investment Departments] Investment Departments assessments and other tasks. Through these measures, Nippon Life strives to secure stable investment returns. In addition, Nippon Life has put a system in place that enables rapid responses to changes in the market environment by closely monitoring individual investees and market conditions. Risk Management and Assessment Management Units Finance & Investment Planning Department (Formulation, execution and administration of investment and financing plans across all assets, etc.) Each Investment Department (Execution of investment and financing for specific assets, etc.) Portfolio management Monitoring Checks Individual transaction management Investment Risk Management Department (Measurement of risk amounts and establishment of investment limits, etc.) Credit Department (Individual credit assessment of investment and financing and administration of internal ratings, etc.) Execution of investment and financing Investment Market (stocks, loans, bonds, real estate, etc.) Global Investment Network Nippon Life has a global investment network comprising investment bases in New York, London, and Singapore, in addition to Nissay Asset Management Corporation, a Nippon Life Group asset management company. As global investment and finance have come to the fore in recent years, Nippon Life has striven to invest in countries and regions with growth potential in order to diversify and multiply its earnings sources. We are also working to enhance our global investment capabilities through alliances and investments, as well as personnel exchanges and other joint initiatives with leading overseas financial institutions. [Global Investment Network] Nippon Life Nissay Asset Management Europe Nissay Schroders Asset Management Europe Limited NLI International PLC (London) Asia Nissay Schroders Asset Management Asia Limited (Singapore) America NLI International Inc. (New York) Nissay Schroders Asset Management Europe Limited NLI International Inc. Nissay Schroders Asset Management Asia Limited 27

30 Three-year Management Plan Developing Human Resources to Create a Better Future and Fostering an Open Corporate Culture Nippon Life is dedicated to giving employees the skills needed to help create a future free of worries for our customers. We have a job rotation program that covers our entire organization to give people experience in sales and non-sales positions along with other fields. In addition, our human resources development activities include measures to maintain an open corporate culture that encourages younger employees and female employees to take on new jobs and other challenges. Sales Representatives Nissay Total Partners Corporate and Worksite Financial Coordinators Life Plaza Service Coordinators Education and job rotation program by the Employee Development Promotion Department covering the entire organization Giving Employees the Skills to Create a Better Future Non-sales Personnel Administrative Clerks CS Managerial Track Managerial Track Use on-the-job training to give employees the skills to become business professionals 28 l Sales Representatives Reinforcing Training For Diversified Sales Representative Channels Face-to-face consulting is the basis for the activities of Nippon Life s sales representatives. In response to the rapid diversification of customers needs, we are expanding sales representative channels to reflect the changes taking place in our markets. To further improve customer services, we are placing even more emphasis on training. Sales representatives must have a broad range of knowledge associated with the sale of insurance. For example, training covers Nippon Life s new product Mirai no Katachi and enables representatives to fully utilize the capabilities of the new REVO wireless device. Education also includes financial planner certification and other subjects. Job Rotations by the Employee Development Promotion Department Allow Sharing Skills and Know-how The Employee Development Promotion Department was formed in fiscal 2011 to cultivate the next generation of core personnel at Nippon Life by collecting information and conducting job rotations across the entire organization. The Hatsuratsu Training Promotion Office functions as the secretariat for the Employee Development Promotion Department. This office has prepared a textbook called Dream Note for training corporate and worksite financial coordinators, Life Plaza service coordinators and other specialists in the skills and know-how they require. CS Managerial track personnel are assigned to the Hatsuratsu Training Promotion Office. These people create a more effective human resources development framework by providing training based on their own sales and other experience for sales representatives who have been at Nippon Life for up to five years. l Initiatives to Foster an Open Corporate Culture Young Employees The Young Employee Project that Encompasses All Job Categories A project team made up of young employees was given responsibility for all aspects of the strategy for sales promotions under the New Integration Plan, including TV commercials, magazine ads, Internet advertising and other activities. Team members were from the managerial track, operations track, CS managerial track, and sales managerial track, as well as corporate worksite finance coordinators and many other job categories. The project team came up with the key concept of the power to create the future. After holding further discussions based on this concept, the team launched the Future Creation Project. Projects like this upgrade the skills of employees by creating the opportunity to participate in management. These activities help preserve Nippon Life s open corporate culture, too. We will continue to use many initiatives to incorporate the original ideas of younger employees in our operations. l Non-sales Personnel Developing Business Professionals To upgrade training for the next generation of employees to create the future, Nippon Life aims to cultivate non-sales personnel as business professionals. The basis for these activities are Nippon Life s three precepts of conviction, sincerity and endeavor. We want non-sales personnel to have a wide range of knowledge and perspectives as well as specialized skills along with the initiative needed to apply these capabilities to produce results. Furthermore, on-the-job training is the core of human resources development at each workplace. Managerial track positions cover the broadest range of duties. People in this track are the next generation of candidates for management positions. Consequently, Nippon Life aims to develop management track personnel into business professionals who command highly advanced expertise and skills with market value in fields such as the development and execution of management strategies, sales and management, investment, and overseas business. Mutual Upgrading of Customer Service Skills With Sales Representatives Assigning non-sales personnel to jobs that involve directly interacting with customers alongside sales representatives improves the skills of both classes of employees through the process of mutual development. At Life Plazas, sales and non-sales personnel work together to serve customers. This enables them to combine the consulting skills of sales representatives with the extensive administrative knowledge of non-sales personnel, particularly with respect to the coverage of policies. Sales representatives benefit from this initiative by learning more about administrative processes and non-sales personnel benefit by acquiring a sales-oriented mindset, including a dedication to putting customers first. The result is further improvements in services for customers. We will continue to make this mutual improvement process part of our human resources development activities. Female Employees The Kagayaki Promotion Office The Kagayaki Promotion Office was established in 2008 with the aim of making Nippon Life an organization where all employees can perform their jobs with vigor and a positive attitude so that both the company and individuals can grow continuously. One activity of the office is holding seminars to alter the thinking of female employees, managers and others. The office has also prepared a handbook about working at Nippon Life while meeting child care, nursing care and other personal responsibilities. Through these activities, the office is helping to create an environment in which all employees can continue to take on new challenges. All Executives and Employees Nippon Life holds Branch Caravan meetings at branches throughout Japan and meetings on management issues at every department in the first and second half of each year. Management and employees from every job category and level participate in these meetings. Managers speak directly with employees about management strategies and both sides openly exchange their thoughts.

31 CHAPTER 1 Business Performance in the Fiscal Year Ended March 31, 2012 Business Performance Soundness and Profitability of Nippon Life 30 Fiscal Year Ended March 31, 2012 Business Overview and Performance 34 [Key Performance Financial Highlights (Non-Consolidated Basis)] (Unit: Billions of Yen or as Noted) For the years ended March Ordinary income 7, , ,594.6 Ordinary profit Core operating profit Net surplus Dividend reserves as a percentage of surplus available for disposition 1 [%] 98.27% 99.96% % Total assets 51, , ,684.8 Separate account assets 1, , ,449.7 Investments in securities 37, , ,949.3 Loans 8, , ,770.8 Policy reserves 44, , ,014.3 Foundation funds (kikin) and reserves 2, , ,805.8 Total foundation funds (kikin) 2 1, , ,050.0 Solvency margin ratio 3 [%] 567.0% (529.1%) 966.2% 1,006.0% Policies in force 4 272, , ,079.4 Individual insurance 162, , ,524.2 Individual annuities 19, , ,935.2 Group insurance 91, , ,619.8 Policies in force for group annuities 5 10, , ,621.8 Number of customers [number of insured persons, etc.] 6 11,618,068 Number of customers [number of policyholders, etc.] 7 9,915,994 9,954,059 10,014,230 Number of company members 8 9,216,162 9,348,926 9,505,773 Number of employees 9 69,620 70,002 67,438 Negative spread 10 [approximate] 60.0 Notes: 1. Dividend reserves as a percentage of surplus available for disposition refer to the percentage of the amount calculated according to Article 30-4 of the Ordinance for Enforcement of the Insurance Business Act and include the total of provisions for reserve for dividends to policyholders and the equalized reserve for dividends to policyholders. The percentage, according to Article 30-6 of the same regulation is 20% or more. For the purposes of this calculation, undisposed current-term surplus less the surplus carried forward from the previous term is used as the denominator (See p. 134). 2. Total foundation funds (kikin) includes the reserve for redemption of foundation funds (See p. 19). 3. In accordance with Cabinet Office Ordinance No. 23 of 2010 and Financial Services Agency Public Notice No. 48 of 2010, part of the calculation standard for the solvency margin gross amount and the total amount of risk has been changed (tightening of margin calculations, tightening and refining of risk measurements, etc.). As a result of this change, the above results for fiscal 2010 to fiscal 2011 have been calculated using a different standard to the results for fiscal Moreover, the figure given in brackets for the fiscal 2011 year-end was disclosed during fiscal 2011 as the figure that would have resulted if the fiscal 2012 calculation standard had been used at the fiscal 2011 year-end. 4. Policies in force are the total of individual insurance, individual annuities and group insurance policies in force. Individual annuities are the total of annuity resources at the start of annuities for policies prior to the start of annuity payments and policy reserves for policies after the start of them. 5. Policies in force for group annuities indicate the amount of policy reserves. 6. The number of customers (number of insured persons, etc.) is the number of insured persons enrolled in individual insurance and individual annuities, plus customers who have deferred maturity benefits and other payments, plus customers who have enrolled in policies offered by Aioi Nissay Dowa Insurance Co., Ltd. From the current fiscal year, Nippon Life will disclose the number of customers based on insured persons, along with the number of customers based on policyholders, which was disclosed previously. 7. The number of customers (number of policyholders, etc.) is the number of policyholders enrolled in individual insurance and individual annuity insurance. Furthermore, as Nippon Life expands the range of customers to whom services are provided, from the fiscal year ended March 31, 2010, the number of customers includes customers who have deferred maturity benefits and other payments, and customers who have enrolled in policies offered by Aioi Nissay Dowa Insurance Co., Ltd. (prior to September 2010, Nissay Dowa General Insurance Company, Limited). 8. In the case of a mutual company, company members refers to policyholders (excluding non-participating insurance policyholders). 9. The number of employees includes staff increases resulting from the direct employment of temporary employees implemented as of April 1, 2010 in the fiscal year ended March 31, In the fiscal year ended March 31, 2012 and 2011, there was no negative spread. 29

32 Business Performance Soundness and Profitability of Nippon Life A life insurance policy is an agreement with a customer that spans many years from the time of enrollment in a policy until receipt of insurance claims or benefits. Nippon Life will take steps to strengthen its financial foundation so that it will be able to reliably pay insurance claims and benefits into the future, thus fulfilling its responsibility to policyholders. Fiscal Soundness and Profitability Benchmarks 1 Foundation funds (kikin) and reserves 2 Policy reserves 3 Unrealized gain on securities 4 Solvency margin ratio 5 Real net assets 6 Core operating profit In order to properly understand what makes a life insurance company fiscally sound and profitable, Nippon Life believes it is necessary to comprehensively review the characteristics of a variety of indicators. Fiscal Soundness and Profitability Benchmarks (image) (Assets) Balance Sheets (Liabilities) Policy reserves and others Policy reserves (include contingency reserve) Reserve for price fluctuations in investments in securities (Net assets) Foundation funds (kikin) Reserve for redemption of foundation funds [Major Components of Soundness and Profitability Benchmarks 1 5] Policy reserves (Applicable items are marked with ) Balance Sheet Accounting Items Contingency reserve Reserve for price fluctuations in investments in securities Foundation funds (kikin) Reserve for redemption of foundation funds Unrealized gain on securities 1 Foundation funds (kikin) and reserves (p. 31) 2 Policy reserves (p. 31) 3 Unrealized gain on securities (p. 31) Total solvency margin 4 Solvency margin ratio (p. 32) = total solvency margin / (total amount of risk 3 1/2) Real net assets (p. 32) This table shows the main components of each benchmark. Foundation funds (kikin) and reserves, real net assets and others are not shown directly on the balance sheets. Statement of Income Ordinary income Revenue from insurance and reinsurance Investment income Interest, dividends and other income Gain on sales of securities Gain from separate accounts, net Other ordinary income Ordinary expenses Benefit and other payments Provision for policy reserves Investment expenses Loss on sales of securities Loss on valuation of securities Loss from separate accounts, net Operating expenses Other ordinary expenses Ordinary profit Extraordinary gains (losses) Net surplus 6 Core operating profit Please refer to p. 33 for more details regarding core operating profit. Core operating profit is not shown directly on the statements of income. Core operating profit 1 Capital gain/loss 1 Non-recurring gain/loss 5 Ordinary profit Core operating income* 1 Capital gain* 4 Non-recurring gain Core operating expenses* 2, 3 Capital loss* 5 Non-recurring loss *1 Core operating income = Revenue from insurance and reinsurance + investment income (excluding gain on sales of securities, etc.) + other ordinary income *2 Core operating expenses = insurance claims and other payments + provision for policy reserves + investment expenses (excluding loss on sales of securities, etc.) + operating expenses + other ordinary expenses *3 Provision for policy reserves within core operating expenses excludes provisions (reversals) for contingency reserves. *4 Capital gain is gain on sales of securities within investment income. *5 Capital loss is loss on sales of securities and loss on valuation of securities within investment expenses. The above illustrates the components of Nippon Life s fiscal soundness and profitability benchmarks and is not intended as a definitive explanation. 30

33 Accumulating Foundation Funds (kikin) and Reserves, Nippon Life s Strong Financial Platform Accumulating Foundation Funds (kikin) and Reserves 2,824.1 billion as of March 31, 2012 ( 2,767.3 billion as of March 31, 2011) claims and benefits as stipulated in insurance policies. This equity is also a source of future dividend payments. Consequently, the total foundation funds (kikin) and reserves remain high at 2,824.1 billion as of March 31, 2012, ensuring Nippon Life s continued fiscal soundness. [Trends in Foundation Funds (kikin) and Reserves] (Unit: Billions of Yen) Business Performance Foundation funds (kikin) and reserves include foundation funds and the reserve for redemption of foundation funds under net assets in the balance sheets as well as contingency reserves and reserves for price fluctuations in investments in securities under liabilities in the balance sheets. Nippon Life works to build up foundation funds (kikin) and reserves as equity. This equity is a financial resource for responding to risks that do not include unrealized gain on securities, which is easily affected by the economic environment. More specifically, even if management risks such as a dramatic decline in stock prices or massive natural disaster occur, this financial platform enables Nippon Life to pay out insurance As of March 31 2, , , Sufficient Policy Reserves Policy Reserves 44,448.0 billion as of March 31, 2012 ( 43,106.8 billion as of March 31, 2011) Policy reserves are reserves that must be accumulated under the Insurance Business Act in order to prepare for payments of future insurance claims, annuities and other benefits. Policy reserves are composed of premium reserves and unearned premiums for covering costs in the event of the occurrence of normally foreseeable risk as well as contingency reserves to cover costs in the event of the occurrence of risk that exceeds such predictions (see p. 174). In addition, with respect to the reserve funding method for premium reserves, Nippon Life utilizes the most conservative legal method (the net level premium method) for computing policy reserves (see p. 174 and 175). To ensure the greater financial soundness of individual annuities, we built up policy reserves over a five-year period that began in the fiscal year ended March 31, Unrealized Gain on Securities Unrealized Gain on Securities 2,704.2 billion as of March 31, 2012 ( 1,914.5 billion as of March 31, 2011) [Trends in Unrealized Gain on Securities] (Unit: Billions of Yen) 2, , ,704.2 Unrealized gain on securities indicates the positive difference that exists when the market value of securities exceeds the book value. Unrealized gain on securities, although affected by economic conditions, is one of the indicators for preparing against risk (see p. 157 and 158). As of March

34 Business Performance High-Level Solvency Margin Ratio to Respond to Unforeseeable Risks Solvency Margin Ratio 567.0% as of March 31, 2012 (529.1% as of March 31, 2011) The solvency margin ratio is the total value of the solvency margin (the sum of foundation funds (kikin) and reserves, unrealized gain/loss on securities, etc.) divided by the quantified amount of all risks exceeding those that can normally be forecast, including major natural disasters and a large drop in stock prices. The solvency margin is used by regulatory agencies as an indicator of the amount of surplus capacity available to make payments. When this ratio falls below 200%, an insurance company is subject to an order by the regulatory agencies to improve business. The solvency margin ratio as of March 31, 2012 stood at 567.0%, ensuring a high level of preparedness to pay benefits with enough surplus capacity available to fully cover risk (see p. 154 and 155). [Solvency Margin Ratio] (Unit: Billions of Yen, %) As of March 31, 2012 Total solvency margin (A) 5,892.0 Foundation funds (kikin) and reserves 2,824.1 Unrealized gain/loss on available-for-sale securities 3 90% 1,365.8 Total amount of risk (B) 2,078.2 Solvency margin ratio (A) % (1/2) 3 (B) * In accordance with Cabinet Office Ordinance No. 23 of 2010 and Financial Services Agency Public Notice No. 48 of 2010, part of the calculation standard for the solvency margin gross amount and the total amount of risk has been changed (tightening of margin calculations, tightening and refining of risk measurements, etc.). Moreover, the figures for March 31, 2011 are the figures disclosed for the year ended March 31, 2012, which were calculated as though the change to the calculation standard in fiscal 2012 had been applied in fiscal High Level of Real Net Assets Real Net Assets 7,153.3 billion as of March 31, 2012 [Trends in Real Net Assets] (Unit: Billions of Yen) 6, ,153.3 ( 6,393.3 billion as of March 31, 2011) 6,393.3 Real net assets are calculated by subtracting total liabilities, other than contingency reserves and other liability items highly similar to equity, from total assets at market value. Real net assets are an approximation of an insurance company s liquidation value. If real net assets are negative, the regulatory agencies may judge that liabilities exceed assets in real terms, and an insurance company may be subject to an order by the regulatory agency to suspend business. Real net assets as of March 31, 2012 stood at 7,153.3 billion and the ratio of real net assets (the ratio to general account assets) was 14.3%, ensuring that a high level is continuously maintained. As of March

35 High Level of Core Operating Profit Core Operating Profit billion for the fiscal year ended March 31, 2012 ( billion for the fiscal year ended March 31, 2011) March 31, 2012, core operating profit stood at billion, remaining at a high level (see p. 160). [Trends in Core Operating Profit] (Unit: Billions of Yen) Business Performance Core operating profit mainly consists of income related to insurance (the net of income from premiums less payments for insurance claims and business costs) and investment operations, including interest and dividend income. It is the fundamental index that reflects an insurance company s earnings position on a flow basis. For the fiscal year ended Fiscal years ended March Negative Spread Amid continuing ultra-low interest rate conditions, a deficit is created by the negative difference between the assumed return on insurance premium investments and the actual investment return for some policyholders. This difference is called negative spread. Nippon Life s Response to Negative Spread At the closing of accounts for the fiscal year ended March 31, 2012, Nippon Life recorded no negative spread again, as it did at the closing of accounts for the fiscal year ended March 31, To provide reserves for future large volatility in negative spreads due to various factors, including changes in the operating environment, Nippon Life has taken the following steps: To cover individual annuities that are a principal cause of negative spread, Nippon Life has accumulated and added to the policy reserves in order to amortize the negative spread in advance. Even assuming that severe conditions such as current low interest rates will continue, Nippon Life has accumulated foundation funds (kikin) and reserves to cover numerous risks, including negative spread. ' Calculation of Negative Spread In the life insurance industry, negative spreads are calculated according to the following formula: Negative spread 5 [investment return on core operating profit 2 average assumed interest rate] 3 general account policy reserves The investment return on core operating profit is the return on general account policy reserves after deducting the provision for accumulated interest on policyholder dividends from general account investment revenues included in core operating profit. The average assumed interest rate is the return of assumed interest on general account policy reserves. The general account policy reserves are calculated as follows for policy reserves in the general account, excluding the contingency reserves: (Policy reserves at beginning of period 1 Policy reserves at end of period 2 Assumed interest) 3 1/ 2 Excellent Ratings from Ratings Companies Ratings (as of July 1, 2012) AA R&I (Insurance Claims Paying Ability) A+ S&P (Insurer Financial Strength Rating) Issued by third-party ratings agencies, ratings are an evaluation of an insurance company s ability to pay insurance claims. (Ratings are not a guarantee that claims and other payments will be fulfilled.) Ranking Standard R&I s Definition of AA Rating (Japanese only) AAA A very high degree of capacity for the payment of insurance claims AA and excellence in several key factors of evaluation. A S&P s Definition of A Rating BBB (Japanese only) BB Strong capacity to fulfill insurance policy obligations; but compared B with the top AAA rating, the AA rating is somewhat susceptible to adverse economic conditions and changes in circumstances. The higher rank has the higher capacity to meet payment obligations. The ratings are based on information and data up to the time of each rating and are subject to change in the future. Nippon Life received the ratings from R&I and S&P after officially requesting them and providing detailed information for more accurate evaluation. Plus (+) or minus ( ) signs following the ratings show relative standing within the major rating categories. 33

36 Business Performance Fiscal Year Ended March 31, 2012 Business Overview and Performance l General Overview In the fiscal year ended March 31, 2012, the Japanese economy was heavily impacted by the Great East Japan Earthquake in March 2011, but saw a gradual recovery in production and capital investment as supply chains were reestablished. The outlook for the Japanese economy continues to hold an element of downside risk, however, with a persistently strong yen, the effects of the sovereign debt issue in Europe, rising crude oil prices and other negative influences on the business climate overseas. Nippon Life has set a target for all employees of becoming a company of excellence in scale, quality and credibility. Guided by this objective, all employees have been working together on the critical task of increasing new policies even further. During the fiscal year under review, we increased sales of new policies in the individual market, but policies in force continued to decline. In investment, we continued to secure a positive spread despite a difficult environment. Core operating profit increased year on year, but earnings declined in real terms. The main reason, having discounted the estimated amount of payments relating to the Great East Japan Earthquake, was the decline in policies in force. With respect to equity*, the Company was obliged to reverse its reserves in line with a reduction in the corporate tax rate. Taking this situation into account, Nippon Life formulated a threeyear management plan beginning in the fiscal year ending March 31, 2013 called the Future Creation Project. All Nippon Life s executives and employees have resolved to take responsibility and execute the plan, with the goal of ending the downturn in the number of policies in force and the number of customers, further strengthening earnings power and equity and returning Nippon Life to growth. We are also continuing our initiatives to prevent failures to pay insurance claims, specifically by putting in place a framework for this purpose. Following this effort, in December 2011, Nippon Life was relieved of an obligation to make regular reports under a business improvement order from Japan s regulatory agency. Going forward, we will continue to entrench and disseminate the initiatives we have made in this area and make constant operational improvements from the customer s perspective. * Nippon Life accumulates foundation funds (kikin) and reserves as equity. This figure includes foundation funds (kikin), which are equivalent to the capital of a joint-stock company, the contingency reserve and reserve for price fluctuations in investments in securities, which are established for the corresponding risks. l Responses to the Great East Japan Earthquake As a life insurance business, our mission to society is to be a source of security for customers. Nippon Life recognized this by responding fully to customers affected by the Great East Japan Earthquake. We made full payments of all accidental death benefits and other relevant claims, and quickly implemented various special measures, such as simplifying the process for claiming insurance payments and benefits. Sales representatives made a tremendous effort to check the safety of customers through face-to-face activities, and worked with customers to help them to complete application procedures for payment of insurance claims or benefits according to their situation. Their top priority was to ensure reliable and swift payments. As a result of these efforts, as of March 31, 2012, we had checked on the safety of 99.9% of our customers 380,000 people and had paid out 31.5 billion in insurance payments. At the same time, we extended grace periods for the payment of premiums for 35,000 policies, and conducted individual consultations for each policyholder at the end of the grace period to encourage them to keep up their valuable insurance coverage. In other initiatives to support disaster-hit areas, we called on customers nationwide to cooperate in a program of making donations using their Thanks Mile * points in our Zutto Motto Service program. We also made a variety of other efforts, including making some buildings owned by the Company available for use as emergency shelters free of charge. We will continue our care and support for the psychological well-being of our customers affected by the disaster. * The Thanks Mile menu at the heart of the Zutto Motto Service allows policyholders to earn Thanks Mile points by updating information on the policyholder and their family members. Points can then be exchanged for a variety of products. 34

37 l Individual Market Sales Field ' New Policies Number of Policies Sold For the fiscal year ended March 31, million Annualized Premiums on New Policies For the fiscal year ended March 31, billion Amount of New Policies For the fiscal year ended March 31, ,399.3 billion Business Performance (Unit: Millions of Policies) (Unit: Billions of Yen) (Unit: Billions of Yen) 7, , ,399.3 Fiscal years ended March Fiscal years ended March Fiscal years ended March ' Policies in Force Number of Policies in Force As of March 31, million Annualized Premiums for Policies in Force As of March 31, ,165.7 billion Amount of Policies in Force As of March 31, ,432.5 billion (Unit: Millions of Policies) (Unit: Billions of Yen) 3,165.7 (Unit: Billions of Yen) 181, , , , ,106.2 As of March As of March As of March Notes: 1. Number of policies sold represents the total of new policies and policies after conversions. 2. Annualized premiums, the amount for an entire year, are calculated by applying coefficients based on the premium payment method to a single premium payment amount.(the premium divided by the coverage period is used for single payments.) 3. Amount of new policies and annualized premiums on new policies includes net increase due to conversions. 4. Amount of new policies and policies in force represents the total sum of: individual insurance coverage amount, individual annuity resources amount (in the case of policies prior to the start of annuity payments, amount of future annuity payments is translated to value at the start of annuity payments) and policy reserves total amount (in the case of policies after the start of annuity payments, amount of reserves accumulated for future payments of annuities and others) In the individual market, the number of new policy sales in the fiscal year ended March 31, 2012 rose 9.9% year on year to 1,290,000 and the amount of new policies increased 7.3% to 8,399.3 billion. Annualized net premiums on new policies increased 16.6% to billion. These increases reflect efforts during the fiscal year to reform our activities in the lead up to the full-scale start of the New Integration Strategy by expanding the scale of customer data collection and the volume of proposals. Another factor in the increases was the success of our customer segment-based strategies, focusing on specific segments such as seniors and retirement-age people, women, and so on. The policy retention rate after one year* 1 was 93.6%, an increase of 0.1 of a percentage point from the previous fiscal year, reflecting a steady increase in the quality of new policies. Turning to policies in force, however, the situation remains harsh, as the number of new policies continued to fall below the decline in the number of policies overall. As a result, although annualized premiums on March 31, 2012 had risen 0.8% year on year to 3,165.7 billion, marking the first increase since the disclosure of 2004, the number of policies in force had declined by 0.3% year on year to million, and the amount of policies in force had decreased by 4.1% year on year to 181,432.5 billion. The number of registered sales representatives* 2 on March 31, 2012 had increased by only 126 from the previous fiscal year-end to 47,250. Moreover, core personnel with notably strong sales and service capabilities had declined by 387 from the previous fiscal year to 8,845. We will tackle this issue head on, putting extra effort into recruitment activities and developing long-term, reliable sales representatives through our Employee Development Promotion Department with the goal of rebuilding our sales force to a team 50,000 strong as quickly as possible. In the agency channel, the number of agencies* 3 on March 31, 2012 had increased by 778 from the previous fiscal year-end to 10,712, with a corresponding increase in the number of new policies. We will reinforce the support for our agencies in order to achieve further gains in the productivity of each agent. In the bank assurance channel, premium income for the fiscal year increased 30.5% year on year to billion thanks to sales growth for single-payment whole life insurance policy Yume no Katachi, which is designed to meet customers needs involving inheritance and other matters. We will increase our sales support for financial institutions going forward to widen our customer base even further. *1 The retention rate refers to the ratio of policies that are continued after a certain period without being cancelled. This metric is used to indicate the quality of new policies. The retention rate mentioned in this report is calculated from the policy amount. *2 The number of registered sales representatives does not include sales management or part-time sales staff. *3 Sales agencies do not include banks or financial institutions that perform agency sales. 35

38 Business Performance l Corporate Market Sales Field Amount of Group Insurance Policies in Force As of March 31, ,234.0 billion Amount of Group Annuities in Force (Policy Reserves Amount*) As of March 31, ,476.9 billion General welfare group term life insurance Group credit life insurance Optional group term life insurance Other Separate accounts General account (Unit: Billions of Yen) 88, , , , , ,857.7 (Unit: Billions of Yen) 9, , , , , , , , , , , , ,849.5 As of March In the corporate market, group insurance policies in force as of March 31, 2012 had increased 1.4% year on year to 91,234.0 billion. This firm growth was driven by consulting services that matched the needs of companies. Meanwhile, group annuity assets had increased 5.3% year on year to 10,476.9 billion. Including Nissay Asset Management and other Nippon Life Group companies, group annuity assets for the entire Nippon Life Group had increased 3.0% year on year to 11,898.5 billion. To increase sales in this segment even further, we will promote consulting As of March * Policy reserves amount are reserves for future insurance claims, annuity and benefit payments, accumulated through insurance premiums and investment returns. activities relating to employee benefit and welfare programs in general. Japan terminated the approved retirement annuity system on March 31, To meet its obligations as a company that is responsible for many of these plans, Nippon Life has been diligently consulting with clients on an individual basis about making the transition to different pension plans. We have helped all of the roughly 15,000 customers whose approved annuity plans we had been responsible for to complete their transition by March 31, The Fiscal Year Ended March 31, 2012 Total Payments of Insurance Claims, Annuities and Benefits Total payments of insurance claims, annuities and benefits (total for individuals and companies) were 2,621.2 billion in the fiscal year ended March 31, (The total number of payments stood at 11,212,000.) Nippon Life is committed to continuing to make payments with speed and reliability. [Total amount] 2,621.2 billion [Number of payments] 11,212,000 2,621.2 billion (11,212,000 payments) Insurance claims Annuities Benefits 1,167.3 billion (272,000 payments) billion billion (8,151,000 payments) (2,788,000 payments) 36 l Investment Field The environment for investment was extremely challenging in the fiscal year ended March 31, Interest rates remained low, while stock prices and exchange rates finished the year at roughly the same levels as the start of it. During the year, however, stock prices and exchange rates became highly volatile due to the sovereign debt issue in Europe, concerns of a downturn in the global economy and other factors. Nippon Life replaced and increased investment in domestic and foreign bonds, and achieved interest, dividends and other income for the fiscal year of 1,198.1 billion, substantially the same level year on year at a decrease of 0.5%. We also maintained a positive spread again for a second year running. We recorded an overall capital loss for the fiscal year due to an increase in expenses for responding to highly volatile foreign exchange markets and other factors, even as we carefully timed sales of mainly Japanese stocks to market trends in order to lock in capital gains. [Main Investment-Related Revenues and Expenditures] (Unit: Billions of Yen, %) Fiscal years ended March Rate of increase Investment income 1,459.9 (5.1)% 1, ,555.1 Interest, dividends, and other income 1,198.1 (0.5) 1, ,119.5 Gain on sales of securities (29.3) Gain from separate accounts, net Investment expenses (22.7) Loss on sales of securities (39.1) Loss on valuation of securities 29.3 (79.1) Loss from separate accounts, net 34.8 Net proceeds from investments 1, , ,259.0 Proceeds from investments in the general account 1,026.8 (1.0) 1, ,058.9 Note: Aggregate investment income and investment expenses in the separate accounts are included in either gain or loss from separate accounts, net.

39 l Administrative Operations, IT Systems and Customer Services Nippon Life introduced several initiatives to prepare new administrative systems ahead of the full-scale launch of the New Integration Strategy. We recognized the importance of having administrative and sales functions work together to deliver enhanced customer services. To this end, we promoted cashless payment of premiums, gathered customer information and stepped up our proposals to help increase the quantity and quality of consulting activities. We also set out Company-wide targets for various services and activities, and continued and enhanced various initiatives. We also sought to transform the way that personnel engaged in insurance administrative operations work (please see page 40 for further details). To promote this change we conducted continuous training to give these employees the skills needed to provide customers with the high-added-value services they require. We have thoroughly prepared the systems supporting our New Integration Strategy. From April 2012, we have migrated to a new core IT system, a large system spanning an extensive range of operations. In preparation for this move, a team of around 3,000 people worked on system development at Group company Nissay Information Technology Co., Ltd. At the same time, we also controlled the progress of systems development at the management level. As a result, we achieved a smooth changeover to the new system, which is operating steadily as planned. Business Performance l Overseas Operations and Alliances In July 2011, Nippon Life invested in convertible subordinated notes issued by a wholly owned subsidiary of Allianz SE, one of the leading integrated financial services providers in the world. We were also active in Asia, with its prospects for strong growth in the years ahead. In October 2011, we invested in Reliance Life Insurance Company Limited, which is part of the Reliance Group, one of the largest business houses in India. In January 2012, we concluded an agreement to invest in Reliance Capital l Revenues and Expenditures and Financial Condition Core operating profit for the year ended March 31, 2012 rose 5.4% year on year to billion. However, in real terms income declined. In the end-of-year financial accounts for the previous fiscal year, a reserve of 42.6 billion was set aside as an estimated amount for payments due to the Great East Japan Earthquake. In the event, however, the amount of insurance payments for the fiscal year under review was less than expected, so that part of the reserve amount was reversed, boosting the core operating profit result. In regard to equity, Nippon Life solicited an additional 100 billion of foundation funds (kikin) in August On the other hand, we recorded a combined 59.3 billion reversal of the contingency reserve and the reserve for price fluctuations in investments in securities due to the lowering of the corporate tax rate and other factors. As a result, equity was 2,824.1 billion as of March 31, 2012, an increase of 56.7 billion year on year. Recent events such as the financial crisis and the Great East Japan Earthquake have obliged us to repeatedly reverse our reserves. Meanwhile, deterioration in market conditions since the financial crisis along with global moves to tighten capital restrictions are increasing the need to further strengthen equity to prepare for a variety of risks. With respect to dividends paid on insurance policies for the fiscal year ended March 31, 2012, Nippon Life decided to reduce some [Ordinary Profit] (Unit: Billions of Yen, %) Fiscal years ended March Rate of increase Core operating profit % Capital gain/loss (113.7) (97.8) 14.7 Non-recurring gain/loss 51.0 (187.3) (226.2) Ordinary profit % Notes: 1. Core operating profit + capital gain/loss + non-recurring gain/loss = ordinary profit 2. Capital gain/loss includes gain/loss on sales of securities and loss on valuation of securities and others. 3. Non-recurring gain/loss includes provision for additional policy reserves and reversal of contingency reserves and others. Asset Management Limited. In March 2012, we invested in AIA Group Limited, one of Asia s leading insurance groups, and signed a memorandum of understanding with them regarding a business alliance. We will continue to build relationships of trust with leading companies in each country, and expand our network of alliances in the insurance and asset management businesses through cooperation, personnel exchange and other measures. provisions for the dividend on individual policies for the fiscal year in light of continuing historically low interest rates and uncertainty in the outlook for the investment environment. We maintained dividends on group policies at the same level as the previous fiscal year, and paid dividends on group annuities as dictated by the relevant rules. [Equity Replacement Ratio] (Unit: Billions of Yen, %) As of March Amount of increase Foundation funds (kikin) and reserves 2, , ,805.8 Net assets 1, , ,217.2 Liabilities 1,452.4 (46.8) 1, ,588.5 Contingency reserve (46.1) Reserve for price fluctuations in investments in securities (13.2) Equity replacement ratio 63% 61% 64% Notes: 1. Net assets are shown as the amount after the appropriation of retained earnings after deducting valuations, conversions and others from total net assets on the balance sheets. 2. The equity replacement ratio is the ratio of foundation funds (kikin) and reserves divided by the required level of optimum equity ( 4.5 trillion at the end of March 2012 and 2011, and 4.4 trillion at the end of March 2010), which is the amount of equity required based on a rigorous evaluation of business risk. [Dividend Payout Ratio] (Unit: Billions of Yen, %) Fiscal years ended March Amount of increase Provision for reserve for policyholder dividends (8.2) Increased amount of foundation funds (kikin) and reserves Total (1.4) Dividend payout ratio 1/2 96% 100% 66% Notes: 1. The provision for reserve for policyholder dividends shows the amount after the appropriation of surplus. 2. Increased amount of foundation funds (kikin) and reserves is the amount after deducting the amount of increase or decrease due to the solicitation and repayment of foundation funds (kikin) from the increase in foundation funds (kikin) and reserves (long-dash indicates a negative amount). 37

40 Business Performance 38 l Main Balance Sheet Items (Non-Consolidated Basis) Please see page 128 for Non-Consolidated Balance Sheets. (Unit: Billions of Yen) As of March Total assets 51,009.4 Cash and deposits Call loans Receivables under securities borrowing transactions Monetary receivables purchased Investments in securities: 37,522.7 Domestic bonds 19,470.4 Domestic stocks 6,071.8 Foreign securities 11,608.2 Loans: 8,721.6 Policy loans Industrial and consumer loans 7,825.2 Tangible fixed assets 1,750.4 Intangible fixed assets Reinsurance receivables 0.2 Other assets Deferred tax assets Customers liability for acceptances and guarantees 26.7 Allowance for doubtful accounts (13.8) Total liabilities 48,519.2 Policy reserves and other reserves: 45,775.0 Reserve for outstanding claims Policy reserves 44,448.0 Reserve for dividends to policyholders 1,120.3 Reinsurance payables 0.3 Other liabilities 1,790.4 Accrued bonuses for directors and corporate auditors 0.0 Accrued retirement benefits Accrued retirement benefits for directors and corporate auditors 4.5 Reserve for program points 7.2 Accrued losses from supporting closely related companies 0.3 Reserve for loss on disaster 0.7 Reserve for price fluctuations in investments in securities Deferred tax liabilities for land revaluation Acceptances and guarantees 26.7 Total net assets 2,490.1 Foundation funds Reserve for redemption of foundation funds Reserve for revaluation Total surplus 4: Legal reserve for deficiencies 11.8 Other surplus reserve Unappropriated surplus Total foundation funds and others (= ) 1,542.9 Net unrealized gains on available-for-sale securities, net of tax 5 1,021.7 Deferred losses on derivatives under hedge accounting 6 (6.9) Land revaluation differences 7 (67.5) Total valuations, conversions and others (=5+6+7) Total liabilities and net assets 51,009.4 Total Assets Total assets as of March 31, 2012 were 51,009.4 billion, with total general and separate account assets of 49,862.7 billion and 1,146.6 billion, respectively. Investments in Securities From the standpoint of paying out dividends to policyholders through the medium- and long-term improvement of revenues and profits, Nippon Life particularly holds domestic bonds, including national government bonds, local government bonds, and corporate bonds, all of which present potential for stable yen-denominated return. Also, within the range of allowable risks, Nippon Life invests in domestic stocks, foreign securities and other securities. As of March 31, 2012, total investments in securities amounted to 37,522.7 billion. Nippon Life records the difference between the market value and book value of available-for-sale securities, when the difference is positive, as net unrealized gains on available-for-sale securities, net of tax. As of March 31, 2012, net unrealized gains on available-for-sale securities, net of tax, was 2,704.2 billion. Loans Loans are classified into two major categories. One is policy loans, which comprise policyholder loans and premium loans. The other is industrial and consumer loans, which include international and domestic corporate loans and housing loans. The balance of loans stood at 8,721.6 billion as of March 31, Tangible Fixed Assets Tangible fixed assets include land, buildings, lease assets, construction in progress and movables. As of March 31, 2012, the balance amounted to 1,750.4 billion. Deferred Tax Assets Deferred tax assets arise due to deferred processing of prepaid taxes that belong to a future accounting period. Deferred tax assets have decreased due to a reduction in the corporate tax rate. Policy Reserves Policy reserves are reserves that must be accumulated under the Insurance Business Act in order to prepare for payments of future insurance claims and other benefits. As of March 31, 2012, policy reserves stood at 44,448.0 billion. Reserve for Price Fluctuations in Investments in Securities Reserve for price fluctuations in investments in securities are accumulated in accordance with the Insurance Business Act to cover losses caused by a future decrease in prices of assets whose value is likely to fluctuate, such as stocks. As of March 31, 2012, the reserve for price fluctuations in investments in securities stood at billion. Foundation Funds (Kikin)/Reserve for Redemption of Foundation Funds In accordance with the Insurance Business Act, foundation funds (kikin) serve as the financial base for mutual companies while providing a means of financing granted only for mutual companies and corresponding to the capital of joint stock companies. Meanwhile, the Act stipulates that a mutual company shall provide a reserve for redemption of foundation funds in the same amount as the foundation funds (kikin) to be redeemed. As of March 31, 2012, Nippon Life redeemed 50.0 billion in foundation funds (kikin) that it had solicited and newly solicited billion. As a result, foundation funds (kikin) and reserve for redemption of foundation funds amounted to billion and billion, respectively.

41 l Main Items in Statement of Income (Non-Consolidated Basis) (Unit: Billions of Yen) Fiscal year ended March Ordinary income: 7,074.9 Revenues from insurance and reinsurance: 5,368.2 Insurance premiums 5,367.3 Investment income: 1,459.9 Interest, dividends and other income 1,198.1 Gain on sales of securities Other ordinary income Ordinary expenses: 6,593.4 Benefits and other payments: 3,886.7 Death and other claims 1,167.3 Annuity payments Health and other benefits Surrender benefits 1,011.2 Other refunds Provision for policy reserves: 1,368.2 Provision for policy reserves 1,341.1 Provision for interest on reserve for dividends to policyholders 27.0 Investment expenses: Interest expenses 2.6 Loss on sales of securities Loss on valuation of securities 29.3 Loss on derivative financial instruments, net Operating expenses Other ordinary expenses Ordinary profit (=1 2) Extraordinary gains: 13.7 Gain on disposals of fixed assets 0.0 Reversal of reserve for price fluctuations in investments in securities 13.2 Reversal for reserve for loss on disaster 0.3 5Extraordinary losses: 22.4 Loss on disposals of fixed assets 7.0 Impairment losses 13.9 Contributions for assisting social public welfare 1.4 6Extraordinary gains (losses) (=4 5) (8.7) 7Surplus before income taxes (=3+6): Income taxes, current 28.8 Income taxes, deferred Income tax total Net surplus (=7 8) Revenues from Insurance and Reinsurance Comprising insurance and reinsurance premiums paid by policyholders, revenues from insurance and reinsurance for the fiscal year ended March 31, 2012 was 5,368.2 billion. Investment Income This includes interest, dividends and other income as well as gain on sales of securities. For the fiscal year ended March 31, 2012, investment income totaled 1,459.9 billion. Benefits and Other Payments These consist of payments related to insurance policies, including death and other claims, annuity payments, health and other benefits and surrender benefits. For the fiscal year ended March 31, 2012, benefits and other payments were 3,886.7 billion. Provision for Policy Reserves Provision for policy reserves, which are reserves shown on the balance sheets, is recorded on the statements of income. For the fiscal year ended March 31, 2012, provision for policy reserves totaled 1,341.1 billion. Investment Expenses These are expenses including loss on sales of securities and loss on valuation of securities and others. For the fiscal year ended March 31, 2012, investment expenses amounted to billion. Reversal of Reserve for Price Fluctuations in Investments in Securities The reversal of reserve for price fluctuations in investments in securities, which is a reserve shown on the balance sheet, is recorded on the statements of income. For the fiscal year ended March 31, 2012, reversal of reserve for price fluctuations in investments in securities totaled 13.2 billion. Income Taxes, Deferred Income taxes, deferred were billion, including an impact of billion from the decrease in deferred tax assets due to the reduction in the corporate tax rate. Net Surplus This item represents ordinary profit after accounting for extraordinary gains and losses, income taxes and other items. The net surplus for the fiscal year ended March 31, 2012 totaled billion. Business Performance Please see page 130 for Non-Consolidated Statements of Income. 39

42 Business Performance l Risk Management and Compliance The insurance business is about taking responsibility for covering customers against future events. Risk management plays an integral role in this. Nippon Life takes an integrated approach to risk management, monitoring and managing a variety of risks including underwriting risk and risks associated with investment, operations, and computer systems. l Management Policy Ahead Nippon Life has formulated a three-year management plan for the three years from the fiscal year ending March 31, 2013, called the Future Creation Project. The goals of the plan are to stop the downturn in policies in force and customer numbers, further strengthen earnings power and equity, and achieve a return to growth. The plan is based on three core strategies: 1) increase sales, 2) build a stronger base for financial soundness and profitability, and 3) develop human resources. Increasing Sales Providing Comprehensive Insurance Services Tailored to Individual Customers Needs To prepare for the full-scale start of the New Integration Strategy in April 2012, we undertook a complete reexamination of our insurance-related systems from the customer s standpoint and fundamentally overhauled our IT system infrastructure. We channeled these efforts into the development of new products and services that combine innovation and flexibility. Going forward, we will utilize these new products and services to advance our customer segment-based strategy in the face-to-face channel, with the goal of providing comprehensive insurance services tailored to each life stage of each individual customer. Moreover, while our sales representatives will remain our core channel, we will also strengthen our other sales and service channels, which are developing on multiple fronts including the Nissay Life Plaza, sales agencies and bank assurance channels, by reforming their activities. We will functionally integrate all the channels from the customer s perspective, approaching this task from multiple aspects. Specifically, beginning with products, we simplified each type of protection to make it easy to understand. While enhancing the protection content, we separated out each kind of protection, and allowed them to be combined freely as required* 1. Using this new system, we will propose optimal insurance plans for each customer segment, offer flexibility for adding or changing coverage after enrollment, and propose revisions to the plans in line with customers changing life stages. On the services front, we will offer enhanced services after enrollment, such as the new Care Guidance Service* 2 for nursing care services. In integrating our channels, sales representatives and corporate sales representatives are working together to cultivate the worksite market, while sales representatives have also formed links with the Internet channel to contact new customers, respond to policies reaching maturation in the bank assurance and Life Plaza channels, and take other initiatives from the customer s perspective. In these ways, we will maintain the quality of our policies and achieve a return to the top position in share of new policies and a turnaround in the numbers of policies in force and customers. Nippon Life has also been working to further instill compliance in everyday operations throughout the Company. As part of this, every department formulates implementation plans called compliance programs. Nippon Life will continue its efforts to advance risk management and promote compliance even further. Strengthen Financial Soundness and Profitability Making Nippon Life Even More Reliable The market environment today is harsh and the outlook unclear. Interest rates continue at historic lows, while the financial crisis of 2008 has sent stock prices tumbling while the yen soars. To be prepared for even more events in this chain of calamity, Nippon Life has committed itself to building a foundation for expanding its earnings over the long term. In terms of investment, we aim to secure stable investment returns. To this end, we will continue to take a long-term view in selecting stocks and employ rigorous risk management in structuring our diverse portfolio. And, by enhancing our earning power through the aforementioned expansion of sales volume and increases in operational cost efficiency in every field, we will restore equity to the 3,000 billion level. We will also step up our efforts to expand future earnings, such as using equity to make strategic investments in overseas expansion and strengthening the asset management business. Development of Human Resources The Cornerstone of Customer Trust To realize the full benefits of the infrastructure innovations that have been made in preparation for the full-scale start of the New Integration Strategy, it is vital that we reform the way that all employees approach their work. In the core sales representative channel, we will continue to promote customer segment-based strategies, while pursuing a business activity innovation drive. We will also focus on developing the next generation of core personnel. To this end, we are working particularly with the top echelon of sales representatives who have been recruited within the past five years. We will cultivate them through training programs run by the Employee Development Promotion Department launched in the fiscal year ended March 31, 2012 and sales activities focused mainly on the worksite market. We refer to this segment of high-performing employees as our Hatsuratsu Winds. For personnel engaged in insurance administrative operations, we have revamped the workflow to achieve greater efficiency and shifted these personnel to front-line roles to enhance customer service. For example, they can use their knowledge of administrative operations to provide explanations to customers at the point of enrollment. *1 These new products were launched as Mirai no Katachi on April 2, *2 This service was launched on April 2, 2012 especially for policyholders and persons insured with nursing care insurance. The service involves a visit to the customer at their home by a specialist for a consultation about nursing care. The consultation is not only for policyholders and the person insured, but also for their spouses or parents. 40

43 CHAPTER 2 Management of Nippon Life Mutual Company Framework 42 Corporate Governance System 48 Enhancing the Internal Control System 48 Promoting Compliance 49 Strengthening Risk Management 52 Management of Nippon Life Strengthening the Underwriting, Insurance Claims and Benefits Settlement System and Expanding Explanation 56 Measures to Reflect Customer Feedback in Business 60 Contributions to the Environment, Communities and Society 62 Improving Disclosure 66 41

44 Mutual Company Framework A mutual company is a corporate structure based on the concept of mutual aid where policyholders can help each other. Policyholders* become company members of a mutual company when they purchase insurance policies and the company s management reflects the views of policyholders. *Does not include holders of policies that do not pay dividends [Management Based on the Voice of Company Members Through the Mutual Company Framework] Company members (policyholders) Management of Nippon Life January March: Nissay Konwakai Meetings (see p. 45) l Held every year across Japan since 1975 (total participation of approx. 82,000 people) l Business activities are reported to company members, and a broad range of opinions and requests are received l Representatives report the results of the Meeting of Representatives (Kondankai) to company members July: Meeting of Representatives (see p. 42) l Decision-making body set forth by laws and regulations and the Articles of Incorporation (deliberates and passes resolutions on important management matters) l Representatives report on the results of Nissay Konwakai meetings l A broad range of opinions and requests are sought December: Conference of Representatives (Kondankai) (see p. 43) l Held every year as a unique Nippon Life initiative since 1962 l First-half business results and progress with management issues are reported l Provides another forum for seeking a broad range of opinions and requests in addition to the Meeting of Representatives Board of Trustees (see p. 45) l Meetings held three times a year in March, May and November l Trustees advise on management and provide opinions l Results are reported at the Meeting of Representatives Concrete responses to feedback Voice of company members Nippon Life Meeting of Representatives Established to replace the General Meeting of Members, the Meeting of Representatives comprises policyholders selected to act as representatives. The Meeting of Representatives is equivalent to the general shareholders meeting of a stock corporation and deliberates and passes resolutions, such as those for amending the Articles of Incorporation, approving proposals for the disposal of surplus and nominating directors and auditors. The 64th Meeting of Representatives l Attendance System for the Meeting of Representatives Policyholders may attend the Meeting of Representatives. Information on how to apply for admission is available at our offices and on our website in May and June. Minutes and a summary of the Meeting of Representatives (Q&A summary) are available on the Nippon Life website. (Japanese only) 42

45 Conference of Representatives (Kondankai) The Conference of Representatives (Kondankai) was launched in 1962 as a unique initiative at Nippon Life to further enhance checks over management by the representatives. Held every year, the Conference provides a forum for management to report on first-half business results and progress with management issues to representatives and receive a broad range of opinions. Examples of Opinions Expressed at the Conference of Representatives (Kondankai) for the Fiscal Year Ended March 31, 2012 (Held on December 2, 2011) l What security measures have been taken to protect personal information when using the new wireless devices? l What impact will globalization and deregulation have on Nippon Life? In light of these factors, please explain Nippon Life s management strategy for future business alliances, overseas business expansion and other initiatives. l Please explain Nippon Life s sales strategies for the future. How will Nippon Life sell insurance through channels such as Internetbased sales and telemarketing? How will you compete with other companies in these channels? l What is Nippon Life s policy on developing medical insurance products that cover expensive treatments such as implant and other therapies? l Through the New Integration Strategy, Nippon Life has developed simple, individual products. However, Internet-based life insurers already excel at these sorts of products. To set itself apart from these companies, I believe that it is crucial for Nippon Life to concentrate on nurturing and enhancing the skills of sales representatives. l There is now a public debate about raising the starting age for public pension payments. In this context, what measures is Nippon Life taking to propose retirement planning and related products to customers and to develop such products? l In regard to responding to the Great East Japan Earthquake, I believe that Nippon Life should continue to address every case and make payments carefully. This approach will foster trust in Nippon Life. l How is Nippon Life addressing the yen s sharp appreciation? l By raising administrative efficiency, Nippon Life plans to shift more staff to duties that contribute to better customer service. What specific duties will staff be shifted to? l I believe that face-to-face sales activities are an important asset of Nippon Life. Recently, there has been a trend toward avoiding personal contact. To compete with foreign-based life insurers and those affiliated with non-life insurers, I would like Nippon Life to properly promote the fact that face-to-face explanations produce higher-quality insurance proposals. Management of Nippon Life The results of the Conference of Representatives (Kondankai) are available on Nippon Life s corporate website. 43

46 Representatives and Their Election Management of Nippon Life Representatives According to the Articles of Incorporation, each representative s term of office is generally four years and can extend to eight years if they are selected for a second term. The number of representatives currently stands at 200. Nippon Life selects policyholders as representatives, and, because they check management from a diversity of perspectives, they are Election of Representatives To represent the interests of all policyholders, representatives are chosen who have no ties to the interests of specific policyholders among the approximately 9.21 million policyholders, based on the perspective of fairly reflecting the opinions of policyholders at the Meeting of Representatives. In this context, the Representative Nomination Committee recommends candidates and policyholder voting has been adopted as the means to directly reflect policyholders opinions of the candidates. In addition, representatives are also selected from among policyholders who have participated in Nissay Konwakai (see p. 45), a forum where management receives opinions and requests from policyholders. Although we have not adopted a system in which policyholders desirous of becoming representatives can be directly selected as representative candidates, Nippon Life will continue to promote this method of selecting representative candidates from among policyholders who participate in the Nissay Konwakai and aims to diversify selection methods. chosen from among people in many occupations and ages and from many parts of the country. They participate in the Meeting of Representatives and deliberate with the Company through direct question and answer sessions. From this perspective, Nippon Life believes that the number of representatives is set at an appropriate level. Selection Standards for Representative Candidates 1. Required Qualifications (1) Is a policyholder of Nippon Life (2) Is not a representative of another life insurance company 2. Eligibility Standards (1) Has a strong interest in the life insurance business and the management of Nippon Life and has adequate insight as a representative (2) Can be expected to actively participate as a representative in the Meeting of Representatives and other events (3) Is able to check and advise on operations and management as necessary in addition to making fair decisions at the Meeting of Representatives to promote the interests of all policyholders 3. Selection Representative candidates are selected from a broad base of policyholders with an emphasis placed on their ability to represent policyholders and inspect management. (1) We select representative candidates to ensure well-balanced policyholder representation in terms of geographic region, age and gender. (2) We select representative candidates to ensure checks over management, specifically candidates who are able to check and advise on operations and advise management from diverse viewpoints, including from management, consumer, and specialist perspectives, while giving consideration to occupation, specialties and other factors. ' Representative Nomination Committee The Representative Nomination Committee is composed of members chosen from among policyholders by the Meeting of Representatives. The Representative Nomination Committee decides on selection standards for representative candidates and selects representative candidates from a broad base of policyholders. In addition, the Representative Nomination Committee strives to ensure its independence from the Company, while working to enhance the fairness and transparency of the representative nomination process. Qualifications for Selecting Representative Nomination Committee Members (1) Has a strong interest in and a deep understanding of the life insurance business and mutual company management and adequate insight as a representative (2) Is able to fairly and impartially select representative candidates (3) Is able to participate in the Representative Nomination Committee ' Policyholder Voting All policyholders vote for individual representative candidates selected by the Representative Nomination Committee. If the total number of no-confidence votes for individual candidates is less than 10% of the total number of policyholders, candidates are selected as representatives. Time of Policyholder Voting Voting for representative candidates is held once every two years from August to September. An election by policyholders will be held in the fiscal year ending March 31, (Voting materials shall be sent to all Nippon Life policyholders.) 44

47 Nissay Konwakai Meetings The Nissay Konwakai meetings are held every year throughout Japan. These conferences provide opportunities for Nippon Life to explain its business activities and for policyholders to voice their opinions and requests on overall management as well as products and services. Nissay Konwakai meetings have been held since From among the opinions and requests (see p. 46) that we receive from participants, we identify and respond to those that are most frequently expressed. These items are then reported to the Meeting of Representatives and Board of Trustees. The participants include several representatives and directors, and we continue to work to improve ties between the Nissay Konwakai meetings and the Meeting of Representatives. l Status of the Nissay Konwakai Meetings in the Fiscal Year Ended March 31, 2012 From January through March 2012, we held Nissay Konwakai meetings in 114 locations around Japan, bringing together a total of 150 representatives and 2,486 policyholders and receiving a total of 5,517 opinions and requests. At the Nissay Konwakai meetings, we strove to provide easy-to-understand explanations, using video and other materials, of performance in the first half of the fiscal year ended March 31, 2012, the development of the products and services reflecting opinions A Nissay Konwakai meeting expressed at the Nissay Konwakai meetings, and other topics. Opinions and requests received at the Nissay Konwakai meetings are thoroughly examined by the relevant departments and every effort is made to reflect them in management. The following are some of the main opinions and requests that we received during the fiscal year ended March 31, The results of the Nissay Konwakai meetings are available at the Nippon Life corporate website. Management of Nippon Life [Description of Participants in Fiscal Year Ended March 31, 2012] [Categories of Opinions and Requests in Fiscal Year Ended March 31, 2012] By age 60 and over 44.2% % up to % % By occupation Other 9.4% Company directors 6.4% Housewives 11.5% Self-employed 53.5% Company employees 19.2% Investment 4.9% Social contribution activities 5.2% Insurance underwriting and payments 9.4% Soundness and profitability 10.0% Information to customers 10.3% Products 32.5% Response to the Great East Japan Earthquake 14.5% Marketing network 13.3% In addition to the above, we received 944 comments from participants in the Nissay Konwakai. Board of Trustees Nippon Life has a Board of Trustees that serves as a management advisory body to ensure the appropriateness of management. Trustees are elected at the Meeting of Representatives from among policyholders and academic experts. Trustees give opinions on advisory matters and important management issues and deliberate on policyholder opinions regarding corporate management. The results of these opinions and deliberations are reported at the Meeting of Representatives. 45

48 Major Opinions and Questions at Nissay Konwakai Meetings and Our Responses Q How is the new product different from the product I currently have? Also, can I switch to the new product? Management of Nippon Life A Our recently introduced Mirai no Katachi allows customers to select the types of protection they need from 11 categories of insurance. Offering this flexibility makes it possible to meet the needs of each customer with greater precision. In the past, we sold primary policies and then allowed customers to add riders as needed. But this system was inconvenient for some customers. For example, the riders would end along with the main policy and it was not possible to enroll for a rider alone. Mirai no Katachi eliminates these problems by enabling customers to combine individual coverage components with no restrictions to obtain customized protection. In addition, every insurance product included in Mirai no Katachi has been completely revised in order to make each one simple and easy to understand. In particular, we increased the appeal of insurance policies for personal protection, such as dread disease insurance, disability insurance and nursing care insurance. For example, these policies offer a broader range of protection, and terms and conditions of insurance payments now corresponds with the public sector systems, such as the provisions of the Act on Welfare of Physically Disabled Persons. We have improved services, too. We will continue to offer two services. One is the Zutto Motto Service, based on a points program. The other is the Best Doctors Service for introducing a suitable physician for treatment or a second opinion. In addition, we started offering the Care Guidance Service in April 2012 to individuals who took out or are covered by nursing care insurance. Individuals can receive information at home at no cost from a nursing care specialist from Nichii Gakkan, Japan s largest provider of nursing care services. Furthermore, policyholders can use our system for reviewing the protection* provided by their current policies. Just as before, policyholders can switch to the new product after the completion of any required medical notifications and checkups. * This system allows policyholders to revise their protection by using part of the policy reserves for the existing policy to the premium of the new policy. For customers who took out a policy at any time up to two years prior to the April 2012 launch of Mirai no Katachi, switching to the new product is possible with no medical notifications or checkups for individuals who meet certain requirements. Q I want Nippon Life to continue using its strengths to help people affected by the Great East Japan Earthquake. A After the disaster, we used our entire organization to perform a variety of activities. We checked the safety of all customers in the affected areas, distributed information about submitting insurance claim and benefit requests, provided assistance in damaged areas, and conducted many other activities. Performing these activities reinforced our awareness of the importance of our responsibilities and mission as a life insurance company. Our activities following the earthquake also demonstrated the value of the face-to-face services we offer through our sales representatives. Even now, we have not yet made payments for some policies. For some policies, we have not yet received an insurance claim request from the heirs of a policyholder who died. In other cases, beneficiaries are refraining from submitting a request for personal reasons. We remain dedicated to providing every customer with thorough assistance that matches their needs. Face-to-face activity by sales representatives, which is our main strength, will be the primary channel for this assistance. We will continue until we have distributed claim information to the last eligible policyholder and completed all payments. We also have a commitment to extending emotional support for children in damaged areas as part of our earthquake recovery measures. We continue to conduct a number of activities for this purpose. Examples of fiscal 2012 programs include puppet shows and classical music concerts by the Nissay Culture Foundation, lessons for children by the Nippon Life baseball team and women s table tennis team, and participation by children in tree planting programs of the Nissay Green Foundation. Other Opinions and Requests [Management Overall] I want Nippon Life to continue increasing equity and enhancing its financial soundness. I also want Nippon Life to increase dividends and other returns to policyholders. What is Nippon Life s strategy for Japan in response to the declining and aging of the population? Nippon Life is increasing emphasis on overseas operations. Please explain specific strategies for activities in other countries. [Products and Services] Due to the current discussions in Japan about revising the social security system, I want Nippon Life to increase its lineup of medical care and nursing care products and savings-type products. Young people have little interest in insurance. I want Nippon Life to work harder on educating young people about insurance, developing products for young people, and other activities. Policy Clause Bylaws/Terms and Conditions documents are difficult to read because of the small print and large volume of text. I have heard that Nippon Life is switching to paperless procedures. I still want a paper insurance certificate, which is a very important part of insurance. Also, do you have sufficient security measures for becoming paperless? I want Nippon Life to keep its face-to-face services even as progress with using IT continues. I have heard that Nippon Life s new product allows combining individual policies as needed. I want to receive a thorough explanation of a plan that meets my own requirements. When my sales representative leaves, I want the transition to a new one to be well handled. I want Nippon Life to supply information on a regular basis at my workplace, too. I want Nippon Life to provide more insurance products and consulting with regard to employee benefit programs. Nippon Life should produce TV commercials with the same impact as the commercials of foreign life insurers. I want to perform insurance procedures and receive consultations at a convenient time for me. [Investment] I want Nippon Life to manage assets safely as the European debt issue and other problems create a challenging economic environment. [Social Contribution Activities] Conducting various activities for children is important for their education. I want Nippon Life to further expand and promote these activities. 46

49 What is a Mutual Company? A life insurance company is established as either a joint-stock company or a mutual company as stipulated by the Insurance Business Act. A mutual company is a form of company recognized only in the insurance industry. Based on the concept of mutual aid, it is an incorporated body in which policyholders* are enrolled in insurance policies and at the same time become company members. Nippon Life has been formed as a mutual company. Nippon Life decided to form as a mutual company for the following two practical reasons: l The framework for distributing surplus as a mutual company (through the return of a major portion of surplus from business operations to policyholders,* without the need to consider shareholder dividends) corresponds with Nippon Life s belief that policyholder interests come first and should be maximized. l Life insurance companies have a responsibility to preserve longterm financial soundness and generate a consistent surplus in order to meet obligations for paying claims and benefits to policyholders. We believe that the mutual company structure is best suited to maintaining the long-term stability of business operations. Mutual companies are often compared with joint-stock companies with respect to the flexibility of fund procurement and transparency of corporate governance. For flexibility of fund procurement, by making continuous use of the public securitization of foundation funds (kikin) and other fund procurement schemes, Nippon Life has total foundation funds (kikin) (sum of foundation funds and reserve for redemption of foundation funds) of 1,200 billion. For transparency, we are improving corporate governance to make our management more transparent (see p. 48) and taking actions to reflect input from customers in our management (see p. 60). We are also enhancing public access to information about our operations through financial information meetings and our website. Management of Nippon Life [Primary Differences between a Mutual Company and a Joint-Stock Company in the Insurance Business] Mutual Company Insurance Business Act Non-profit/non-charitable intermediate corporate body Company members (policyholders*) Policyholders* are enrolled in insurance policies and at the same time become company members General Meeting of Members (Meeting of Representatives) Laws governing the insurance industry Characteristics Membership Decision-making body Joint-Stock Company Company Act Profit-making incorporated association Shareholders Become shareholders through the acquisition of stock General Shareholders Meeting Surplus Surplus Implemented based on a resolution to appropriate surplus at General Meeting of Members (Meeting of Representatives) Payout of dividends to members (policyholders*) Dividend distribution This diagram is only meant to explain the dividend distribution system and is not intended to explain amounts of money or advantages and disadvantages. Recorded in the provision for policyholder dividends in the Statements of Income based on a resolution at the Board of Directors Meeting Distribution of dividends to policyholders* Implemented based on a resolution to distribute the surplus at the General Shareholders Meeting Dividends distributed to shareholders *Excluding non-participating insurance policyholders 47

50 Corporate Governance System Nippon Life has constructed a corporate governance system that ensures the appropriateness of management and increases transparency. Specifically, the Company has built a system that more widely reflects policyholder feedback in management through a mutual company framework (see p. 42). In addition, to ensure that external points of view are actively incorporated and that a system of checks and balances is placed on management, we have appointed several outside directors and outside corporate auditors. We have also established an Auditing Department to ensure that operations are sound and carried out properly. [Diagram of Corporate Governance System] Management of Nippon Life Participation Nissay Konwakai Meetings Appoint Board of Trustees Opinions / Requests Advise Report Various Committees Report Advise Auditing Department Company Members (policyholders) Policyholder Voting (election of representatives) Selection Representative Nomination Committee Appoint Meeting of Representatives Conference of Representatives (Kondankai) Opinions / Requests Internal Audit Board of Directors Outside Directors President Management Committee Directors in Charge Executive Officer Executive Officer Executive Officer Operational Organizations Audit Accounting Audit Auditors Outside Auditors Board of Auditors Auditing Office Accounting Auditors Board of Directors The Board of Directors reaches decisions about important affairs concerning business operations based on decisions made at the Meeting of Representatives. The Board of Directors also supervises the performance of the directors. There are 18 directors, of whom four are outside directors (including three who meet the legal requirements for outside directors). Directors who are responsible for business areas are also, in principle, executive officers who are directly responsible for business operations. This structure unifies two functions in the Board of Directors: decision making and supervision for the execution of business operations. With this structure, the Board of Directors is able to directly view the status of activities in each business operation. Auditors and the Board of Auditors Auditors are responsible for auditing the performance of directors by attending meetings of the Board of Directors and other important meetings. In addition, the Board of Auditors discusses significant matters concerning audits and reaches decisions. Nippon Life has six auditors, including four outside auditors. Auditors implement measures to strengthen and expand auditing functions. For example, meetings are held on a regular basis and at other times as necessary to allow the accounting auditors, Auditing Department and auditors to work closely together. Meetings provide an opportunity to exchange opinions and information about audit plans, the status of audits and the results of audits. Enhancing the Internal Control System To ensure that operations are appropriate and to raise corporate value, we established at the Board of Directors meeting a basic policy for the internal control system (a system that ensures appropriateness of Company operations). Based on this policy, we have developed an internal control system that includes the following systems: l Management control system l (Internal) audit system l Rapid decision making and business execution structure based on an executive officer system l Internal control over financial reporting l Information management system l Risk management system l Compliance system l Antisocial activities damage prevention system l Conflicting interests management system l Group company management system 48

51 Promoting Compliance Compliance at Nippon Life goes beyond merely observing relevant laws and regulations, and extends to complying with all social norms, earning the trust of customers and society, and performing our work with sincerity. All directors and employees bear the responsibility of compliance and, considering compliance to be a fundamental operating premise, strive to promote compliance throughout the Company. Compliance System [Diagram of the Compliance System] Insurance Solicitation Management Issues Board of Directors President Management Committee Compliance Committee (Offices: Compliance Department, Corporate Planning Department) Other Compliance Issues Information Asset Protection Section Meeting Anti-social Activities Countermeasures Committee Management of Nippon Life Branches, Sales Offices Person responsible for compliance: General manager of each branch Person in charge of compliance: Deputy general manager of each branch (Management of each branch s compliance program, the branch compliance meeting and liaison meeting) Each Department at Headquarters Person responsible for compliance: General manager of each department Person in charge of compliance: Deputy general manager appointed for each department (Operation of each department s compliance program) Internal Auditing Unit Auditing Department Nippon Life established the Compliance Committee as an advisory body to the Management Committee. The Compliance Committee comprehensively controls and manages the compliance system, including insurance solicitation management, by deliberating on measures related to compliance issues and by monitoring organizational efforts. In addition, the Information Asset Protection Section Meeting and the Antisocial Activities Countermeasures Committee were established as advisory bodies to investigate and implement specific countermeasures for every issue. Their duties include instituting and promoting an information asset protection system primarily for customers and conferring on measures for blocking antisocial activities, such as those of gangs, and promoting internal education. The Compliance Department was established to exert Company-wide control over compliance. The Compliance Department is attempting to instill an understanding of compliance-related information throughout the Company by adopting an integrated system for reporting inappropriate or suspicious behavior. Under this system, such behavior at branches and headquarters departments is reported to the Compliance Department. At the same time, at each branch and headquarters department we have appointed individuals to be in charge of compliance (compliance officers) who are charged with following up on compliance-related efforts. At each branch and headquarters department, general managers are responsible for compliance. Deputy general managers and managers appointed to each branch and department are in charge of compliance. Together, they form a system that rigorously implements compliance programs as part of operational management. Formulating and Implementing the Compliance Program The Board of Directors formulates the compliance programs every year as concrete measures for the promotion of compliance. Each branch and headquarters department also formulates its own branch or divisional compliance programs in response to specific issues arising from its diverse operations and works to implement these programs in daily operations. The formulation and implementation status of these programs is routinely tracked and followed up by the Compliance Department and at the same time new issues are reflected in the programs. 49

52 Teaching and Entrenching Compliance Principles Management of Nippon Life Nippon Life has established a Code of Conduct that sets forth the principles and standards that all directors and employees must abide by in the course of daily business. The Code of Conduct is set out in a small booklet entitled An Employee Booklet that all directors and employees are required to carry so they can refer to it at any time in case they are unable to decide based on the performance of their duties whether they are operating from a customer perspective; if what they have done is legally or socially acceptable; or whether they have infringed on someone s human rights. We have also created a Compliance Manual that explains the Code of Conduct and the operations of each division from a compliance perspective and have thoroughly instilled their teachings in all directors and employees. Nippon Life provides all directors and employees with compliance textbooks and various other training materials. In these materials, proper training on soliciting insurance policies and after-sales services is offered, reflecting an industry-wide educational curriculum standard. Legal and other compliance-related educational programs are provided regularly through internal satellite broadcasts (NICE-NET) for sales representatives who serve customers. Quizzes about compliance matters are given regarding the content of the broadcast compliance programs to ensure that employees have understood the material. Non-sales personnel undergo group training according to job category and receive training based upon the compliance programs of their departments in order to enhance their knowledge of compliance as it relates to their work. An Employee Booklet Dealing with Antisocial Activities l Basic Rules Pertaining to Antisocial Activities In the Code of Conduct, Nippon Life has established rules and standards that all directors and employees must observe when executing their duties. Among them are rules that state that employees must not get involved in antisocial activities that pose a threat to social order and safety, such as those of organized crime. If one has knowingly had contact with antisocial activities, he/she must immediately report this contact to their superior, take a resolute stand and deal with the matter in a methodical manner. l Initiatives against Antisocial Activities In its Corporate Principles and basic policy for the internal control system (a system that ensures appropriateness of Company operations), Nippon Life has made a commitment to resolutely confront antisocial activities that pose a threat to social order and safety. Nippon Life has also established an Antisocial Activities Countermeasure Committee to upgrade its internal system for addressing this issue. The Company promotes partnerships with external organizations, including the Life Insurance Association of Japan and the police, as well as discussions of countermeasures against such antisocial influences as organized crime and internal education. The General Affairs Department has been positioned as the organization to deal with antisocial activities. A system of centralized control has been built to prevent damage from antisocial activities that enables employees to immediately report incidents, such as those involving undue claims, when they arise, to the General Affairs Department. 50

53 Inclusion of Provision to Reject Organized Crime in Policy Terms and Conditions The Life Insurance Association of Japan has written the following reference provision that allows it to cancel an insurance policy for the purposes of preventing any relationships whatsoever with antisocial entities and preventing the receipt of funds associated with antisocial entities and any related entities. A policy can be canceled if a policyholder, insured party or beneficiary of an insurance policy is recognized as an antisocial entity, as well as in certain other cases, while the policy is in force. Nippon Life is reinforcing measures to prevent relationships with antisocial entities, such as by including the association s reference provision in its policy terms and conditions starting in April (1) Nippon Life can cancel an insurance policy at any time in the future in any of the following events (serious matters). (Section omitted) 4. If any of the following items applies to a policyholder, insured party or beneficiary of an insurance policy a. Recognition as an organized crime group, member of the group (including individuals who ceased to be a member within the past five years), a secondary constituent member of or a company associated with the group, or any other antisocial entity (collectively antisocial entities hereafter) b. Recognition of involvement in provision of funds for antisocial entities or any other form of assistance for antisocial entities c. Recognition of improper use of antisocial entities d. When the policyholder or beneficiary is a company, recognition that the company is controlled by an antisocial entity or an antisocial entity is effectively involved in the company s management e. Recognition of any other relationship with an antisocial entity that should be subject to social criticism Management of Nippon Life (Section omitted) In addition, the Life Insurance Association of Japan distributes Say No to Organized Crime posters to further clarify its opposition to member companies having any relationships with antisocial entities. Nippon Life places these posters at the counters of Life Plazas and other offices throughout Japan to demonstrate its refusal to have any relationships with antisocial entities. Say No to Organized Crime poster 51

54 Strengthening Risk Management Importance of Risk Management Life insurance companies operate in an environment of fluctuations in economic conditions, including share prices and interest rates, along with rapid progress in medical technology and the occurrence of major disasters. In order to underwrite the long-term risk of customers in such an environment and to ensure dividends, the correct identification and appropriate management of respective aspects of risk are of utmost importance in Nippon Life s management. For this reason, Nippon Life continues to develop and upgrades its risk management to ensure that it meets its obligations to customers over the long term. Management of Nippon Life Risk Management System Risk management at Nippon Life is based on a risk management framework set forth in the Company s Internal Control System Basic Policy. (The internal control system is for ensuring correct operations within the Company). Under the risk management framework, the Risk Management Committee, an advisory body to the Management Committee, manages each type of risk appropriately according to its profile, and conducts integrated management of the overall impact of the various types of risk on operations. The status of risk management is reported to the Management Committee and the Board of Directors. In addition, there is a system of mutual checks and balances involving the establishment of risk management units that are independent of profit centers. The system also has secondary checks and balances, such as having the Internal Auditing Unit examine the effectiveness of risk management. [Risk Management System] Board of Directors Management Committee Risk Management Committee Integrated Risk Management Insurance Underwriting Risk Liquidity Risk Dedicated Management Committee for Investment Risk Investment Risk Market Risk Credit Risk Real Estate Investment Risk Dedicated Management Committee for Operational Risk Operational Risk Dedicated Management Committee for Computer System Risk Computer System Risk Internal Auditing Unit Integrated Risk Management Nippon Life takes an integrated management approach to the various risks facing the entire Company. We centrally manage each type of risk across our divisions, while also integrating all of the types of risk to manage them as the overall risk status for the entire Company. In this way, we carry out integrated risk management. Stress Tests Nippon Life implements stress tests that assume such scenarios as a dramatic deterioration in the operating environment or increased payments for claims and benefits due to a major earthquake or other disasters. We then analyze the effects of these scenarios on the financial soundness of the Company. The results of the stress tests are reported to the Risk Management Committee and, where appropriate, are useful aids when studying such items as financial soundness. 52

55 Insurance Underwriting Risk Management Insurance underwriting risk can give rise to losses when such factors as economic conditions, the incidence of insured events, investment results and operational expenses do not match the predictions made when premiums were set. A life insurance company must fulfill its responsibility to bear the risk it assumes on behalf of customers for long periods extending over many decades. This requires the setting of reasonable premium rates that enable the stable payment of insurance claims and an appropriate level l Dealing with Risks in Setting Premiums Nippon Life sets insurance premiums after expert staff who hold qualifications as doctors or actuaries (experts who use mathematical techniques to set insurance premiums and ensure financial soundness) have analyzed reliable statistical data indicating the frequency ratios of the incidence of of risk control for upholding our coverage responsibilities based on examination and assessment of the health condition of the insured at the time of insurance underwriting. In addition, we employ an asset liability management (ALM) system, conduct appropriate benefit settlement assessments and adhere to rigorous cost management principles with the aim of responding flexibly to changes in the business environment and other conditions. insurance claims and other payments. We also conduct numerous simulations based on the set premiums to verify whether or not we will be able to meet future coverage obligations for customers. Management of Nippon Life l Responding to Risk Related to Policy Selection and Benefit Settlement Assessments When Nippon Life considers underwriting a new policy, medically-qualified staff or staff with medical expertise conduct a medical examination and assessment while other expert staff perform a more intensive assessment from the perspective of moral risk. Depending on the results of this process, we may choose to impose special conditions, such as increased premiums, that will allow us to offer a wide variety of fairly priced insurance products to as many customers as possible. We are also diligent about managing risks related to paying out insurance claims and benefits. Medically qualified staff or staff with medical expertise are used in the assessment of payments. Nippon Life undertakes rigorous risk management, using outside organizations for verification and other measures. Policy Selection: Life insurance is a system of mutual dependence involving customers paying premiums that are calculated on the basis of the rate of incidence of insured events. The insured party pays premiums based on his or her state of health, and, when the insurance is underwritten, a medical examination and an assessment are made to ensure that all insured parties are treated fairly. Moral Risk: As a system in which payments from many policyholders are used to provide insurance against the unexpected, life insurance is inherently subject to the danger that some parties might make small premium payments and then attempt to illegitimately gain a large payout, an act that denies the very essence of the system. This is what is generally referred to as moral risk. Reinsurance Policies Nippon Life reinsures as one strategy for diversifying risk. In such cases, Nippon Life determines the cede and assume transaction details by means of a review conducted by the Risk Management Committee after considering the types and characteristics of risks. Moreover, in reinsurance transactions, we evaluate the creditworthiness of each reinsurer based on rankings provided by major ranking agencies and other factors and manage accounts so that transactions do not focus excessively on specific reinsurers. Liquidity Risk Management Liquidity risk consists of cash flow risk and market liquidity risk. Cash flow risk refers to the risk of incurring losses from a worsening cash flow caused by a rapid outflow of funds due to an unexpected event, such as a major natural catastrophe, which would force the disposal of assets at extremely low prices. Nippon Life deals with cash flow risk via investment plans and daily cash flow management that together ensure that highly liquid assets exceed a given threshold. In the event that cash flows were actually to deteriorate, we would take countermeasures, such as establishing maximum holding ceilings for less liquid assets. Market liquidity risk refers to the risk of incurring losses from being unable to make transactions due to market confusion or other factors or being forced to make transactions at extremely unfavorable prices. Nippon Life deals with market liquidity risks by establishing appropriate transaction limits for each type of asset in line with market conditions. 53

56 Investment Risk Management Management of Nippon Life Investment risk is the risk of loss arising from changes in the value of the Company s assets and liabilities. It can be categorized into market risk, credit risk and real estate investment risk. The long-term nature of life insurance policies requires a long-term approach based on liability characteristics to managing risks associated with investment. Nippon l Market Risk Management Market risk refers to the risk of losses incurred when the market value of invested assets and liabilities declines due to such factors as fluctuations in interest rates, exchange rates or stock prices. In addition to preventing the occurrence of large-scale losses on individual investment and finance ' Establishing Maximum Holding Ceilings To prevent the occurrence of large-scale losses on individual investment and finance transactions, Nippon Life establishes maximum holding ceilings based on the nature of the assets. The Company also regularly reports the state of compliance to the Dedicated Management Committee for Investment Risk and is developing systems to contain risk within acceptable limits when certain transactions violate these ceilings and rules. l Credit Risk Management Credit risk refers to the risk of incurring losses when the value of assets, primarily loans and bonds, declines or is entirely eliminated due to the deterioration of the financial condition of the party to whom credit has been extended. We believe that in managing credit risk it is important to ' Credit Risk Management in Individual Transactions We have built systems for rigorous examination that involve a Credit Department independent of the departments handling investment and finance activities. We are working to construct a sound portfolio, including loan interest rate guidelines to ensure that the returns we obtain are commensurate with the risk, a system of internal ratings for classifying the creditworthiness of borrowers and credit ceilings to ensure that credit risk is not excessively concentrated in a particular company or group. l Real Estate Investment Risk Management Real estate investment risk refers to the risk of reduced returns caused by such factors as rent fluctuation as well as losses incurred when real estate values decline due to market deterioration and other factors. Our approach to managing real estate investment risk involves the rigorous examination of each investment by the Credit Department, which is Life has therefore established an Investment Risk Management Department within the Risk Management Department, and, by maintaining and upgrading its rigorous system for managing risks, the Company seeks to limit losses to acceptable levels while pursuing stable returns. transactions, it is important to keep risks to the overall portfolio within pre-established boundaries. Portfolio: Holdings of various investment assets under management, including stocks, bonds and loans. ' Measuring and Managing Market Value-at-Risk To control the market risk of our overall portfolio, we use statistical analysis to reasonably calculate market value-at-risk for our entire portfolio and conduct appropriate asset allocation within the level of allowed risk. Market Value-at-Risk: The assumed maximum amount of potential risk due to changes in the external environment, calculated from historical data. examine each transaction rigorously, set terms appropriate to the level of credit risk involved and conduct thorough analyses to accurately evaluate every facet of overall portfolio risk. ' Measurement and Management of Credit Value at Risk Nippon Life measures the credit risk amount for its entire portfolio to calculate the credit value at risk. We monitor this risk amount to ensure that it remains within an appropriate limit. Credit Value at Risk: This is the estimated maximum loss amount that the portfolio could incur due to the deterioration of the financial position of a borrower and other factors, calculated statistically using a simulation based on random variables. independent of the department actually handling the investment. We also adhere to a system involving warning levels for investment returns and prices. This enables us to appropriately focus management efforts on properties with low profitability. 54

57 Operational Risk Management Operational risk refers to the risk of causing problems for our customers or incurring Company losses as a result of administrative error, other untoward action or malfeasance on the part of directors, employees and insurance solicitors. To control operational risk, we are taking steps to clearly understand such risk across the Company by gathering and analyzing information on instances of administrative error based on customer complaints as well as instances of erroneous handling. Based on this, we are formulating measures to avoid the recurrence of such instances and confirming the Computer System Risk Management Computer system risk refers to the risk of losses from computer system defects, faulty computer system operation and illicit use. To deal with the risk of computer system failure, we have developed Company-wide contingency plans to enable quick emergency response. In addition, we have established backup centers at locations other than that of our main computer center to prepare for area-wide disasters. effectiveness of steps taken. Thinking from the perspective of a customer, we also provide administrative training and guidelines to support the accurate and swift processing of administrative tasks. At the same time, headquarters auditing departments and branches carry out multi-tiered inspections to ensure the accuracy of administrative processes and to guide the implementation of improvement measures. Through these measures, we are working to inhibit operational risks. We have also implemented a wide variety of security measures to deal with potential defects, faulty computer system operation, illicit use and data leaks. We are committed to reducing Company-wide risks through compliance with our own safety standards for the planning, development and operation of computer systems, and supervising appropriate use of the systems. Management of Nippon Life Nippon Life Natural Disaster Countermeasures Nippon Life is preparing against disasters by carrying out routine inspections of disaster response training and its stockpiles of goods in case of natural disaster. In addition, Nippon Life is striving to build systems for providing customers with services that give them peace of mind by establishing a Business Continuity Plan (BCP) in the event of an outbreak of a new strain of influenza, the occurrence of a major earthquake. In response to the Great East Japan Earthquake, Nippon Life immediately set up a Disaster Response Headquarters led by the President and rapidly implemented the following measures: l Confirmed the safety of employees and other staff and the extent of damage to sales offices; l Ran advertisements expressing a message of sympathy; and l Delivered emergency relief supplies to the affected regions. 55

58 Management of Nippon Life Strengthening the Underwriting, Insurance Claims and Benefits Settlement System and Expanding Explanation To provide the proper payment of claims and benefits and to gain the trust of customers, Nippon Life makes every effort to ensure the fair and appropriate assessment of policy underwriting, insurance claims and benefits settlements. When underwriting policies, assessments are based upon the health of the insured person. In some cases, Nippon Life secures the agreement of the applicant regarding particular conditions (higher premiums, lower coverage, exclusion of certain areas of the body from coverage, etc.) and underwrites policies under terms and conditions different from those in the original application. In some cases, Nippon Life refuses to underwrite policies. Enhancing the Training of Assessment Specialists Nippon Life has introduced a structured training system for developing assessment specialists responsible for policy underwriting and insurance claims. It also conducts in-house examinations and provides training in essential medical and legal knowledge. Furthermore, we added underwriting as one of our business goal courses for employees from the fiscal year ended March 31, 2008 as we work to develop personnel that have highly specialized skills. When insurance claims and benefits are paid, assessments are made based on the details presented in the claim at the time it is submitted. Payment may be refused depending on the findings of the assessment (see p. 57). In light of requirements for the appropriate assessment of various medical and moral risks, Nippon Life is stepping up its training of assessment specialists and strengthening administrative systems. A total of 1,142 employees passed the Life Insurance Payment Specialist examination offered by the Life Insurance Association of Japan, held in October 2011, bringing the cumulative total of those who have passed the exam to 5,197. Upgrading Administrative Systems In May 2010, Nippon Life s Payment Underwriting System entered operation in order to reinforce payment operations. This follows a series of measures to enable the unification and sharing of systems concerning payments since fiscal Furthermore, in March 2012, we commenced operation of the New Integrated System, which reflects a drastic overhaul of our existing main system and covers all areas and processes pertaining to customer service, from proposing and underwriting an insurance policy to receiving insurance claims and benefits. As a result, we have achieved more accurate and faster underwriting and payment operations. Better Explanations for Customers (See p. 76) To ensure that policyholders receive all claim and benefit payments they are entitled to, Nippon Life has prepared booklets called About the Receipt of Insurance Claims and Benefits. We have also prepared materials that allow customers themselves to confirm that nothing has been overlooked during the claim and benefit payment application process and again when the payment is received. Through these services, we provide better explanations to our customers. These activities demonstrate how we are doing what is needed to give customers full explanations. Nippon Life has a consultation counter for the receipt of payments of insurance claims and benefits by customers. The consultation counter allows customers to check decisions regarding the payment of insurance claims and benefits. Strengthening Medical Research and Development The Medical Research and Development Office analyzes previously compiled medical data and the latest research in the medical and nursing care fields while working to develop new products suited to customer needs and reviewing our underwriting standards. 56

59 Payments of Insurance Claims and Benefits Life insurance is a system in which a large number of people participate in mutual support through insurance coverage in the event of sickness, injury or other unforeseen circumstances. During the fiscal year ended March 31, 2012, Nippon Life made 78,112 payments of insurance claims and 1,308,579 payments of other benefits. In contrast, as a result of appropriate benefit settlement assessment efforts, we determined that the payment of insurance claims should not be made in 4,182 cases and that the payment of other benefits should not be made in 42,323 cases. [Number of Payments of Insurance Claims and Benefits, Payments Denied and Reasons Fiscal year ended March 31, 2012] (Unit: Number of Cases) Insurance claims Other Benefits Serious Total Mortality Accident disability Others Total Mortality Hospitalization Surgery Disability Others Total Total payments made 59,119 2,254 2,465 14,274 78,112 8, , ,671 1, ,362 1,308,579 1,386,691 Cancellation or invalidation due to fraud Invalidation due to illegal acquisition Cancellation of policies due to nondisclosure ,008 Cancellation due to serious matters Categorized as an exemption Not categorized as a reason for payment ,580 3, ,204 36, ,051 40,931 44,579 Others Total payments denied ,590 4, ,054 36, ,088 42,323 46,505 Management of Nippon Life Notes: 1. The above represent the total for individual and group insurance policies upon which claims were filed. 2. Figures do not include policies that require no payment assessment, such as maturity benefits, survival benefits, single payments, annuities and other benefits. 3. The number of payments denied does not include applications for events that are obviously not covered, such as claims for which the number of hospitalization days is less than the minimum prescribed in the policy terms and conditions, and no special payment investigation was performed as a result. 4. Regarding payments for group insurance underwritten by multiple companies, the figures include policies for which Nippon Life is the lead underwriter. In addition, the amount paid is calculated based upon the percentage of policies underwritten by Nippon Life, irrespective of whether or not it is the lead underwriter. 5. Figures in the above table are based on standards of The Life Insurance Association of Japan. [Reasons and Details for Denial of Payment] Reasons and Details for Denial of Payment Cancellation or invalidation due to fraud Invalidation due to illegal acquisition Cancellation of policies due to nondisclosure Cancellation due to serious matters Categorized as an exemption Not categorized as a reason for payment Content Policies are rendered invalid in the event that fraudulent actions were taken by the policyholder or by the insured at the time when the policy was taken out. In such cases, premiums that have already been paid shall not be returned. If a customer enrolls in an insurance policy with the intention of illegally gaining insurance claims, said insurance policy could be invalidated. In such case, insurance premiums already paid shall not be returned. Policies may be cancelled in the event that the policyholder or the insured neglected to disclose important information that should have been disclosed, or disclosed false information at the time when the policy was taken out, whether intentionally or by gross negligence. In such cases, surrender benefits shall be returned to the policyholder. After enrollment, policies shall be cancelled in the event that accidents are caused intentionally for the purpose of fraudulently obtaining insurance claims, or in the event of fraudulent acts, such as falsification of medical certificates to support a request of payment. In such cases, surrender benefits shall be returned to the policyholder. Nippon Life may determine that the content of a claim falls in the category of an exemption under the terms and conditions of the policy. Examples: A claim for mortality insurance claims following a suicide by the insured during the prescribed non-payment period. A claim for mortality insurance claims following an accident caused intentionally by the policyholder or beneficiary or following an accident caused by the insured person s criminal activities. Nippon Life may determine that a claim does not qualify as a reason for payment under the terms and conditions of the policy. Example: A claim for serious disability insurance benefits for a disability that is not categorized as a specific requirement as stipulated in the terms and conditions of the policies. 57

60 Solicitation Policy Always taking a customer-first perspective, Nippon Life believes that the provision of insurance is important and so it works hard to ensure that customers select the insurance most appropriate for them while taking into account the total needs of the customer. Accordingly, the Nippon Life Solicitation Policy sets forth the Company s approach to the sales of insurance and other financial products. Included in this approach is ensuring that our solicitation activities are appropriate, which we achieve through the education and training of all employees and executives, the proper handling of customer information and responsiveness to a variety of customer feedback. Management of Nippon Life Further Advancing Our Customer-First Perspective Nippon Life s Solicitation Policy We sell insurance and other financial products in compliance with all laws, including the Insurance Business Act, Financial Instruments and Exchange Act, Sales of Financial Products Law, the Consumer Contracts Law and other laws and ordinances. The following is the policy under which sales are conducted and was created with the idea that customers come first. <Sales and Appropriate Solicitation based on Customer Needs> Comprehensively taking into account customers knowledge of insurance and other financial products, their purpose for purchasing the policies, their family situation and their asset status, we constantly carry out consultative sales so that customers choose the most appropriate insurance and other financial products while explaining products from the customers standpoint. Nippon Life uses Policy Guides and Reminders to explain policies in an easy-to-understand manner so that customers fully understand the content of insurance products and how they work, and takes steps to confirm that the products match the needs of customers. In particular, for such products as variable annuities, foreign currency-denominated insurance and investment trusts that entail market risk, we recommend those considered most appropriate for each customer s age, knowledge and investment experience while giving appropriate explanations regarding products and their risks. When explaining products over the phone or during customer visits, we take a customer perspective while giving sufficient consideration to time, place and other factors. We are striving to eliminate moral risk and ensure that proper notification is received from customers so that we treat all policyholders impartially and operate a morally sound insurance system. In particular, when underwriting life insurance policies that insure juveniles, we strive for proper solicitation by ensuring that the customers needs are met once proper insurance coverage amounts have been established. <Appropriate Solicitation Activities through Education and Training> Moreover, we are striving to ensure that our solicitation activities are appropriate by educating, managing and instructing all employees and executives through a systematic training program that includes compliance-related training. <Proper Handling of Customer Information> Nippon Life takes steps to properly manage, use and protect customer information. <Responding to Customer Feedback> Nippon Life is constantly gathering a wide range of opinions and suggestions from customers so that it can act on this feedback to increase customer satisfaction. Educating Nissay Total Partners (Sales Representatives) and Reinforcing Principles 58 Nippon Life conducts training programs that provide the knowledge and skills needed by Nissay Total Partners (sales representatives) and sales agencies to offer product proposals that are attuned to the needs of customers. Nippon Life considers it very important that customers enroll in policies only after they have understood the content of the policy. Sales representatives thoroughly confirm the needs of customers by taking time to explain key points using Prospectuses (Policy Guides) and Reminders (see p. 72). These rules are thoroughly reinforced through compliance education, etiquette training and practical hands-on training in life and non-life insurance sales, with the aim of increasing new product sales and further helping to ensure proper sales activities. Nippon Life has the following training programs concerning compliance with laws, regulations and other guidelines: The importance of compliance Knowledge about applicable laws and regulations (Insurance Business Act, Consumer Contract Law, Sales of Financial Products Law, Financial Instruments and Exchange Act, Personal Information Protection Law, Insurance Act, and others) Sales activities that comply with laws and regulations After-sales services for payments of insurance claims and benefits Proper handling of customer information, etc.

61 Efforts Related to the Protection of Personal Information Nippon life is entrusted with the personal information of a large number of individual insurance policyholders as well as sensitive information related to customers health conditions. Customer information is the foundation of insurance policy transactions, and, therefore, Nippon Life protects these customers information assets carefully, recognizing that the handling of this information is an extremely important issue. Nippon Life has established a Personal Information Protection Policy. At the same time, we have implemented measures such as conducting employee training on the protection of personal information, along with improving our information security system infrastructure, starting with the handheld devices of sales representatives. Moving forward, we will continue to provide even more thorough and stronger protection of personal information. Personal Information Protection Policy (Handling a Customers Personal Information) We have established policies regarding the handling of personal information and are working to properly manage, use and protect customer information in order to be a company that customers can Nippon Life Insurance Company trust. In order to realize appropriate protection of personal information, we continue to maintain and improve this policy. Management of Nippon Life 1. Information Collection Customers personal information is collected to the extent required to conduct business, specifically to underwrite various insurance policies, continue and maintain management, and handle payments, such as for insurance claims and benefits. 2. Types of Information Collected We collect information necessary to the conduct of business, underwrite various insurance policies, conduct continuation and maintenance management, and handle payments such as for insurance claims and benefits. This information primarily includes a customer s address, name, date of birth, state of health and occupation. Furthermore, for other types of products and services we offer, customers provide additional information necessary to conduct business. 3. Information Collection Method We collect customer information using legal and impartial methods. The information is mainly collected through policy applications, contracts and surveys. Furthermore, there are times when information is gathered over the Internet and through postcard surveys/mailings when conducting various activities including campaigns. 4. Purposes of Using a Customer s Personal Information A customer s information is used in the following: (1) Underwriting various insurance policies, conducting continuation and maintenance management and handling various types of payments, such as insurance claims and benefits (2) Explaining and providing various products and services, including those of related and affiliated companies and conducting policy maintenance management (3) Providing information concerning our business, managing our operations and expanding our lineup of products and services (4) Other insurance-related business The purposes of these uses are given in our Personal Information Protection Policy, which is available through our website, Disclosure Report and elsewhere. Furthermore, when personal information is collected directly from customers, the purpose of the use to which it will be put is clearly explained to the customer at that time. 5. Information Management In order to guarantee that a customer s personal information is up to date and correct, we take the appropriate steps necessary to conduct business. Furthermore, we implement measures deemed necessary and appropriate for the safe management of a customer s personal information in order to prevent its inappropriate access, leakage, loss or destruction. 6. Provision of Information As a general rule, we do not provide a customer s personal information to third parties without receiving consent from the customer. However, in the following situations, we will provide customer information to third parties without customer consent: (1) When prior approval from the customer has been obtained (2) When the provision of a customer s personal information to a third party without customer consent is permitted by Article 23, Clause 1 of the Law Related to Personal Information Protection (Personal Information Protection Law) or other laws and regulations (3) When the provision of a customer s personal information to firms that Nippon Life has outsourced work to is necessary to Nippon Life s continued business (4) When sharing a customer s personal information as stipulated by the Personal Information Protection Law (5) In other cases where the Personal Information Protection Law permits the provision of a customer s personal information without customer consent 7. Disclosure, Revision or Other Processing of Information In the event that a customer requests that their own personal information be disclosed, revised or otherwise processed, we will respond to the request promptly after confirming the individual s identity, unless there is special reason not to do so. 8. Compliance with Related Laws and Regulations Regarding customers personal information, we conduct business in a manner that adheres to all aspects, such as definition, attitude and handling, of the Personal Information Protection Law, all other related laws, regulations and guidelines, and the Life Insurance Association of Japan s guidelines on handling personal information protection for the life insurance industry. 9. Establishment of and Improvements to the Compliance Program In order to guarantee that customers personal information is being handled appropriately, a compliance program was established that all our employees, the firms to which we have outsourced work and other related parties have been made thoroughly aware of, and we conduct necessary and appropriate supervision. Furthermore, we review and revise the policy and the compliance program when necessary. 10. Customer Requests Regarding Personal Information Customer requests regarding the handling of their personal information are received at the personal information counter and processed in an appropriate and efficient manner. 59

62 Measures to Reflect Customer Feedback in Business Nippon Life treats such customer feedback as opinions, requests and complaints received from customers through Nissay Total Partners (sales representatives), Nissay Life Plazas, call centers and other channels as a precious resource for improving services. Nippon Life is taking steps to improve management and service from a customer point of view based on each and every bit of feedback received from customers. Learning from customer feedback Reflecting customer feedback in service improvements Nissay Konwakai Meetings (See p. 45) Meetings of Representatives, Board of Trustee Meetings Management of Nippon Life Customers Listening directly to customer opinions Understanding customer feedback (consultations, complaints, etc.) Customer Monitor Meetings* 1 External Advisory Board for Life Insurance Application Forms* 2 Customer Satisfaction Survey Branches, Sales offices, Nissay Life Plazas Nissay Call Centers Osaka Head Office, Tokyo Headquarters Listening to Customers to Make Improvements Board of Directors, Management Committee <Examination of improvement measures> Customer Service Enhancement Committee Meeting of General Managers for Enhancing Customer Service Review Meetings at Each Division Improving customer service * 1 At these meetings, Nippon Life hears opinions about all of its customer service activities directly from monitors who have corporate or academic experience in the field of consumer relations. * 2 The members of this board, who are advisory specialists for consumer affairs and other external professionals, provide opinions from a customer s viewpoint regarding customer forms and notices for customers. Number of Customer Complaints For customer feedback, Nippon Life defines a complaint as any expression of dissatisfaction by a customer (regardless of the facts). The purpose of using this definition is to incorporate a broad range of customers opinions and dissatisfaction and then make extensive use of this information for business improvement measures. We work to swiftly resolve customer complaints; for each case, precipitating causes are analyzed, countermeasures are reviewed and steps are taken to prevent a recurrence. To enhance management transparency, in the fiscal year ended March 31, 2006, Nippon Life began disclosing the number of complaints received from customers. From the fiscal year ended March 31, 2007, we began disclosing the number on a quarterly basis. [Number of Complaints Received from Customers in the Fiscal Year Ended March 31, 2012] New policy related (Policy enrollment) Receipt related (Payment of premiums) Maintenance (Procedures after enrollment) Content Number % of total Primary Examples Claims and benefits-related (Payment of insurance claims and benefits) 14, % 13, % 46, % 16, % Others 31, % Total 123, % The application process involves too many documents and they are difficult to understand. I didn t receive sufficient explanation about policy content. I arranged to change the method used for paying premiums to automatic debit from my bank account but it was too late. I requested the cancellation of my policy, but my sales representative s response was slow. I want Nippon Life to explain the Zutto Motto Service in more detail. Notices of whether benefits will be paid or not should be made more rapidly. I inquired about how to file a claim for hospitalization benefits but have not been contacted. The sales representative should be more polite. I wanted to revise my policy but I haven t been told who the sales representative in charge of my policy is. Number of customer communications (Opinions, requests, consultations, dissatisfaction and other communications) 2,244, Notes: 1. Nippon Life defines a complaint as an expression of dissatisfaction by a customer (regardless of factuality). 2. The above shows the classification and number of complaints at the time they were received. 3. The above is classified based on the standards of the Life Insurance Association of Japan. These standards were partly revised in the fiscal year ended March 31, 2011.

63 Improvement Measures Based upon Customer Feedback Customer feedback received every month through branches, Nissay Life Plazas, Nissay Call Centers and other means that could contribute to administrative, system and customer form improvements are reported on by non-sales personnel to the Osaka Head Office and Tokyo Headquarters and, based on the report, the Customer Service Enhancement Committee makes administrative and service improvements. [Proposals Made Internally Based on Customer Feedback] (Fiscal year ended March 31, 2012) (Unit: Number of Cases) Branches, Sales Offices and Nissay Life Plazas 1,414 Osaka Head Office and Tokyo Headquarters 35 Total 1,449 Examples of Improvements Based on Customer Feedback In response to customer feedback gathered at headquarters, Nippon Life formulates countermeasures and works to reflect these measures in its business operations. In the fiscal year ended March 31, 2012, we implemented 226 improvement measures related to administrative procedures and services. Management of Nippon Life [Expansion of Easy-to-Understand Administrative Procedures and Services] Customer Feedback: I wanted information about new products but there was no easy way to obtain this information. Improvement Made: This information can be found on our conventional website and our website for mobile phones. Furthermore, due to the popularity of smartphones, we have set up a website specifically for smartphone users as well in order to make information readily available to as many customers as possible. (August 2011) Customer Feedback: I have several policies. When I submitted a request for the payment of the death benefits of all policies, I had to write the numbers of all policies on my form again and again. Can t you do something about this? Improvement Made: Until now, policyholders had to write the numbers of all policies on both the front and back of a payment request form when asking for payments from two or more policies at once. To speed up and simplify this process, we changed the form so that the numbers are required only on the front. (August 2011) Customer Satisfaction Survey Through outside institutes, annual surveys are mailed out to policyholders, who provide appraisals and opinions regarding Nippon Life products, operations and services. In surveys conducted in the fiscal year ended March 31, 2012, Nippon Life received a customer satisfaction score (the ratio of customers who replied satisfied or somewhat satisfied ) of 85.4%. [Overall Satisfaction as Measured by the Customer Satisfaction Survey] Fiscal years ended March % 83.7% 80.7% 85.4% Survey Overview l Implemented once per year (from September 1st to 20th in the fiscal year ended March 31, 2012) l Survey target: Nearly 9,000 existing policyholders l Specific survey questions Responsiveness of sales representatives Currently held policies Application procedures for new policies Procedures after enrolling in policies Reliability of Nippon Life, etc. l The ratings for indicating level of customer satisfaction were satisfied, somewhat satisfied, somewhat dissatisfied and dissatisfied with regard to the level of customer satisfaction. 61

64 Contributions to the Environment, Communities and Society Together with five foundations (see p. 65) established by Nippon Life, we are conducting continuous and stable social contribution activities addressing the environment, child and teenager development, culture, aging and medicine and other issues. Contributions to Environmental Protection Management of Nippon Life ' Planting Forests for Future Generations In order to nurture abundant greenery as a community asset and hand down our precious natural environment to future generations, the Friends of Nissay Forests Association has been working with the Nissay Green Foundation on forestry projects. Over the past 20 years, since 1992, Nissay forests were planted at 186 locations in 43 cities and prefectures and covered approximately 433 hectares. More than 1,300,000 trees have been planted. Nippon Life employees also voluntarily participate in the annual tree planting activities as well as in the clearing of vines and cutting back of undergrowth so that trees planted in previous years can grow. These activities have also heightened the environmental awareness of employees. In addition, we have been cooperating with municipal authorities in active tree planting efforts in parks and reclaimed land areas and have put substantial effort into the upkeep of abandoned agricultural sites. Tree planting activities at Nissay Yamagata Forest (Yamagata) (Fiscal year ended March 31, 2012) Tree planting activities at Nissay Hidaka Forest (Hokkaido) (Fiscal year ended March 31, 2012) Environmental Contributions of the Nissay Forests Association l The contributions made by the Nissay Forests Association to the environment were assessed by the Forestry Agency to have produced the following results (for the single fiscal year ended March 31, 2011): Absorption and fixation of CO2 emissions equivalent to the annual CO2 emissions of around 4,900 people; Storage and cleansing of drinking water equivalent to the annual drinking water supply for around 168,900 people; Prevention of sediment runoff equivalent to the capacity of around 790 ten-ton trucks; and Total economic value of around 80 million. l The Nissay Forest Association has promoted a diverse array of afforestation projects while working to preserve the environment and ecosystem. It has also worked to enhance forestry resources. Through these efforts, the Nissay Forest Association has also contributed to the preservation of biodiversity. The Friends of Nissay Forests Association l This is a voluntary organization composed mainly of Nippon Life directors and employees. It plants and nurtures trees at Nissay forests and other sites. The costs of tree saplings and operating expenses are funded by donations from the organization s members. The Friends of Nissay Forests Association 62 ' Support for Environment-Related Research Since 1979, the Nissay Life Foundation has supported Research on the Harmonization of Human Activity and Environmental Protection. The Foundation is also cooperating with college researchers and professionals from government, as well as such organizations as NPOs, with the goal of contributing to the understanding of environmental problems and their solutions. The foundation is passing on a better society through the workshops that it sponsors each year and the publication of research results and other benefits. ' Activities at Offices Since 1991, Nippon Life has promoted a reduction in the volume of paper it uses and the recycling of used paper. In 2001, Nissay established its Environmental Charter, implemented additional measures to conserve energy and resources, including the reduction of electricity and water usage, and took proactive steps to thoroughly separate waste, promote green procurement and provide environmental education to employees. Furthermore, we set up a recycling system whereby used paper is taken from our Osaka head offices and Tokyo headquarters and transported to paper mills. Thanks to these efforts, our Osaka head offices and Tokyo headquarters received ISO certification. Furthermore, from the fiscal year ended March 31, 2012, we have instituted additional permanent power conservation measures, such as the reduction of office lighting, following our responses to power shortages in the summer. At the same time, we have been providing information to promote power conservation measures among employee households and customers. 26th Environmental Issue Research Grant Workshop Recycle station (Tokyo Headquarters)

65 Contributions to Local Communities and Society l Contributions to the Healthy Development of Children and Young People ' Nissay Masterpiece Theater Created in 1964, the Nissay Masterpiece Theater offers free musical performances for elementary school sixth-graders with the hope of fostering an abundant aesthetic sense and new sensitivity in children, the torchbearers of the next generation. The Nissay Culture Foundation, with our support, sponsors the performances. The shows are created and performed by the Shiki Theatre Company and, over the past 48 years, they have nurtured the dreams of and given inspiration to over 7.46 million children, including approximately 150,000 children in fiscal Nippon Life is cooperating with the Nissay Culture Foundation as the main sponsor of Kokoro no Gekijo, a program started by the Shiki Theatre Company (musical performances by invitation for elementary and junior high school students in cities nationwide; around 380,000 children were invited in fiscal 2011). [Nissay Masterpiece Theater Shows in the Fiscal Year Ended March 31, 2012] Show Name (Locations) Number of Children Snow Child (Tokyo) Yuta s Enchanting Friends (Yokohama, Nagoya, Osaka, Kobe) 152,813 (7.46 million cumulative) Fiscal 2011 Nissay Masterpiece Theater Yuta s Enchanting Friends (Photograph: Takeshi Arai) Management of Nippon Life ' Supporting the Healthy Development of Children and Teenagers The Nippon Life Foundation has been working since 1979 to promote the healthy development of children and teenagers. The Foundation has supported governor-recommended private organizations that conduct local childrearing activities and child-focused activities (nature and lifestyle experiences, friendship building and cultural preservation activities and other programs in which children play a main role, in cooperation with local residents) in all prefectures. The Foundation has contributed to 11,299 organizations over the past 33 years. Miki Nature Enthusiasts Research Club (Hyogo Prefecture) Traditional Japanese drum performance group (Ishikawa Prefecture) ' Providing Insurance-Related Educational Materials and Opportunities Summer Vacation Insurance Seminar for Elementary School Students Summer Vacation Insurance Seminars were held at 37 Nissay Life Plazas throughout Japan. About 480 elementary school students and their guardians took part in the seminars, which offered a fun way to find out about how insurance works and why it is important. Participants received a comic book called The Insurance Secrets, which explains insurance in an easy-to-understand manner. Summer Vacation Insurance Seminar (Nissay Life Plaza Toyohashi) ' Providing Environmental Education and Opportunities to Get Close to Nature Nissay Forest Seminars At 79 Nissay Life Plazas throughout Japan, we held Forest Seminars where participants learn how forests work to prevent global warming, preserve water resources, and support living things. 1,708 children and their guardians attended. Activities for Junior and Senior High School Students Nippon Life has produced My Plan for the Future, an educational tool for use in schools that encourages students to think about their future goals, and an accompanying teachers guidebook. Every year, we make these materials available to junior high schools nationwide. Since 2009, Nippon Life has supplied around 650,000 copies of My Plan for the Future on a cumulative basis to schools with a desire to use the materials in lessons. From the fiscal year ended March 31, 2012, we have visited schools to provide lessons for junior and senior high school students, and have accepted students seeking to visit our worksites. Students at a school in Fukuoka using Nippon Life s educational materials Nissay Forest Explorers In the Nissay Forest Explorers program, participants first gain a closer affinity with forests through nature observation and other activities before trying a hands-on experience of the work needed to protect them. The program was held in Hyogo Prefecture with 45 children and guardians attending. Nissay Forest Seminar Nissay Forest Explorers (Nissay Life Plaza Kyoto) (Hyogo Prefecture) 63

66 Management of Nippon Life l Abundant Cultural Development ' Nissay Theater The Nissay Theater was created in 1963 to aid in the development of a fulfilling and enriching society through the promotion and expansion of performing arts. The Nissay Culture Foundation, which operates the Nissay Theater, presents the Nissay Masterpiece Theatre, the Nissay International Family Festival, which provides families with the opportunity to experience the performing arts, and the NISSAY OPERA. The Opera Clinic for Young People presents opera performances to junior and high school students. Also, a Stage Forum is held using the stage set of the opera clinic. l Contributions to the Fields of Aging and Medicine ' Nissay Hospital The Nissay Hospital in Osaka was founded by the Nippon Life Saiseikai Foundation and opened in This general hospital of 18 departments and 350 beds provides high-quality medical care for the local community, while functioning as a designated training facility and serving as a cancer diagnosis and treatment center for Osaka. In addition, the Nissay Hospital aims to further contribute to medical care and welfare services for the community by providing comprehensive medical care combining prevention, treatment, and home nursing care through the Nissay Preventive Medicine Center, which conducts health check services, and the Nissay Visiting- Nurse Station, which provides in-home nursing care services. In 1995, the Nissay Culture Foundation created the Nissay Backstage Awards, given in recognition of outstanding achievements by backstage technicians in support of the performing arts. Nissay Theater (Tokyo) Nissay Backstage Awards ceremony Nissay Hospital (Osaka) ' Nissay Eden-no-Sono Operated by Nissay Seirei Health & Welfare Foundation, Nissay Eden-no-Sono are comprehensive health and welfare facilities (Opened in 1992 in Nara and 1997 in Matsudo) for senior citizens that include such provisions as retirement homes (fee-based), illness prevention centers, general welfare centers and home nursing service centers. Both facilities have been recognized as exemplifying the Ministry of Health, Labour and Welfare s policy of Promoting health and longevity in 21st century hometowns. Through activities firmly rooted in communities, both facilities aim to promote the health and vitality of senior citizens. Nara Nissay Eden-no-Sono ' Supporting an Aging Society The Nippon Life Foundation has been supporting Japan s aging society since 1983 by helping researchers who conduct practical research and local groups that perform cutting-edge work. Furthermore, the Foundation holds symposiums and workshops on supporting an aging society in order to spread information on achievements in these areas. l Contributions to Local Communities and Society through Volunteer Activities Nippon Life conducted volunteer activities by employees at all branches nationwide. These activities included cleaning up local communities, assisting orphans, sports clinics and other programs. Nippon Life supports these activities by providing financial assistance for their running costs, supplying information and offering other forms of support. 25th Symposium on Supporting an Aging Society Cleanup activity (Osaka City) Table tennis training by Nippon Life s women s table tennis club (Hokkaido) 64 [Examples of Volunteer Activities in the Fiscal Year Ended March 31, 2012] Examples of Volunteer Activities Community cleanup activities Number of Participating Departments Type of Activity Conducted clean-up activities voluntarily in areas near business sites, including local public streets, parks, train stations and beaches. 67 Actively participated in community clean-up activities in cooperation with local governments and the Life Insurance Association of Japan. Ashinaga P-Walk Ashinaga P-Walk 10 (a walk-a-thon to assist orphans) held at locations throughout Japan. Sports clinics 25 Nippon Life s baseball and table tennis clubs collaborate with local branches nationwide to hold sports clinics.

67 Contributions to the Environment, Local Communities and Society Through Investment, Products and Services l Initiatives Through Investment A life insurance company s assets are entrusted by policyholders, and, as such, are highly social and public in nature. Nippon Life has long conducted investment based on this understanding, aiming to coexist with communities and society, and achieve stable growth hand in hand with Japan s companies and economy at large. For example, in financing services, Nippon Life strives to contribute to the development of local industries by lending not only to large corporations, but also to individual customers and small- and medium-sized enterprises throughout Japan. We even have a system for offering [Specific Examples of Initiatives in Investment] Initiatives Description Finance CSR loans System of preferential long-term interest rates for homebuyers purchasing units with superior energy conservation (from January 2010) (Extension of the system of preferential long-term interest rates for homebuyers purchasing units with solar energy generation systems (from September 2008)) System of preferential loan interest rates for buyers of homes identified as long-term excellent houses (from June 2009) System of preferential loan interest rates for companies that support child raising (from October 2008) System of preferential loan interest rates for eco-friendly companies (from October 2007) System of preferential loan interest rates for homebuyers purchasing units with superior energy conservation and earthquake protection (from October 2007) Real Estate Making environmentally friendly buildings (Awards recently received by Nippon Life Buildings) [Environment-related Awards Recently Won by Nippon Life Buildings] Year Building Award California* LEED Platinum, the highest environmental certification of the U.S. Green Building Council 2011 Nissay Hibiya Building AAA rating for Global Warming Countermeasures Plan under the Tokyo Metropolitan Environmental Security Ordinance 2007 Nissay Marunouchi Building preferential interest terms to support individual and corporate customers who are conducting environmentally friendly projects. We are also active in real estate investment. Through a broad range of investments in office buildings nationwide, we are contributing to regional development. In these investments, we work to beautify landscapes and blend in with surrounding areas. At the same time, we work to protect the environment by taking opportunities to renew building facilities so as to reduce CO2 emissions. Environment and Energy Conservation Architecture Award from the Institute for Building Environment and Energy Conservation 2006 Nissay Yokkaichi Building Special Award from Society of Heating, Air-Conditioning and Sanitary Engineers of Japan *An office building owned through U.S. subsidiary (NLI Properties West, Inc.) in San Francisco. Management of Nippon Life l Initiatives Through Zutto Motto Service From fiscal 2010, policyholders using the Zutto Motto Service have had the option to use their Thanks Mile points to donate to the following organizations that contribute to society: World Wide Fund for Nature Japan, the Japan Committee for UNICEF, ASHINAGA, and the Japanese Red Cross Society. Please see page 7 for information about donations to the Great East Japan Earthquake Relief Fund of the Japanese Red Cross Society. For Children in Areas Directly Affected by the Great East Japan Earthquake l Sports Clinics Nippon Life s baseball club and women s table tennis club conducted sports clinics in Iwate, Miyagi and Fukushima prefectures, inviting 372 children to these events. Baseball training by Nippon Life s baseball club (Miyagi Prefecture) l Puppet Theater Performances and Classical Music Concerts The Nissay Culture Foundation hosted puppet theater performances and classical music concerts in Iwate, Miyagi and Fukushima prefectures, inviting 1,537 children and their guardians to attend these events. Classical music concert Alice s Concert! (Iwate Prefecture) Please see page 7 for Nippon Life s overall responses to the Great East Japan Earthquake. The Following Five Foundations Established by Nippon Life Work Exclusively in Each Field Name of Foundation Established Location Main Activities Nippon Life Saiseikai Foundation* July 1924 Osaka Social welfare work, management of the Nissay Hospital (As of June 30, 2012) Nissay Culture Foundation Nov Tokyo Hosting theatrical performances for children and general audiences, management and operation of the Nissay Theater Nissay Life Foundation (Nippon Life Foundation) Nissay Seirei Health & Welfare Foundation July 1979 July 1989 Osaka Osaka Support for businesses and research that contribute to the building of a truly prosperous society filled with humanity and culture Surveys, research and services related to the aging of the population, and support for the education of qualified nursing care workers Nissay Green Foundation July 1993 Tokyo Protection of forests through tree-planting and nurturing activities *The Nissay Life Saiseikai Foundation became a Public Interest Incorporated Foundation in April

68 Improving Disclosure Nippon Life is working to enhance its various disclosure initiatives in order to better help customers gain a clear and timely understanding of its business information. Preparation of Disclosure Materials So that a broad range of customers may view them, Nippon Life disclosure reports are available at the service counters of branches, sales offices and agencies nationwide. In addition, Nippon Life prepares various disclosure materials in response to customer needs. Management of Nippon Life Disclosure Materials Produced in the Fiscal Year Ended March 31, 2012 Nissay Disclosure Disclosure report produced in accordance with Article 111 of the Insurance Business Act (in Japanese) [Available at all service counters throughout Japan] NISSAY NOW Nissay disclosure, digest version (in Japanese) Nissay Disclosure Disclosure report for semiannual version (in Japanese) Annual Report (in English) Variable Amount Insurance (Separate Account) Results Notification Results report for individual variable amount insurance policyholders* 1 (in Japanese) Variable Amount Annuities (Separate Account) Results Notification Results report for variable amount annuities policyholders* 2 (in Japanese) Results Report for Group Annuities Results report material for policyholders of group annuities (defined benefit corporate pension plans, welfare pension fund insurance, etc)* 3 Nippon Life, a Financial Organization Material related to the investment business and results for corporate customers (in Japanese) *1 Information on individual variable amount insurance investments can be obtained at the head office, branch and Life Plaza service counters. *2 For the latest performance summary of the variable annuities (separate account), please see the Nippon Life investment annuity page of the Nippon Life website. *3 A quarterly disclosure magazine is issued to all policyholders of group annuities (separate account). Information Provided on the Website Nippon Life issues timely information on its website. In addition to press releases, minutes and outlines of resolutions presented at the Meeting of Representatives, visitors can find material about the history of Nippon Life and its CSR activities. Some disclosure materials including financial results are also available for viewing or download. (Japanese only) Nippon Life website Financial Results Meetings We hold financial results meetings for analysts and institutional investors twice a year. Also during these meetings, we report on management policies as well as the strategies of each division in order to promote the greater understanding of our operations. Materials from meetings are posted and available on the Nippon Life website after the meetings are held. (Japanese only) 66

69 CHAPTER 3 Nippon Life s Products and Services Products for Individuals 68 From Application to Conclusion of a Policy 72 Provision of Information During the Term of a Policy 74 Requesting Payment of Insurance Claims and Benefits 76 Developing a Variety of Service Channels 79 Products and Services for Corporate Customers 84 Nippon Life s Products and Services 67

70 Products for Individuals Nippon Life strives to offer services and develop products with primary emphasis on providing truly useful coverage for customers. The areas that customers want to prioritize when choosing coverage vary according to their life stages. Furthermore, lifestyles have been diversifying in recent years; people are getting married later in life and an increasing number of people are remaining single, leading to growth in the number of double-income households. To respond thoroughly to such diversifying customer needs, Nippon Life has reviewed and, where appropriate, improved its product lineup. We combine coverage for death, medical and nursing care, savings and retirement, and children with other products to supply customers with comprehensive, well-balanced coverage according to their needs. Life Insurance Products Nippon Life s Products and Services Our new product Mirai no Katachi provides protection that perfectly fits the needs of a variety of customers. When they enroll, customers can flexibly combine 11 types of insurance as needed. This insurance can be divided into four categories: death coverage, serious diseases and nursing care coverage, medical coverage and asset formation and retirement coverage. After enrollment, customers can freely revise policy Four Categories of Mirai no Katachi Many different combinations of insurance are possible! Death Coverage Serious Diseases and Nursing Care Coverage details according to changes in their needs and stages of life. For example, customers can add new insurance, increase coverage amounts, and selectively revise only the parts they need to change. Customers can change their policy details to precisely meet their protection needs at any time. In this manner, the Mirai no Katachi product provides customers with lifelong support by allowing them to make up different combinations of insurance. These can also be altered after enrollment. Combinations are subject to certain restrictions. Services may not be available if Nippon Life does not handle the relevant system when requests are made. Medical Coverage Asset Formation and Retirement Coverage Death Coverage Insurance to Prepare for Unexpected Events Whole Life Insurance Insurance providing death protection over the insured s whole life POINT 1 2 Surrender benefits will increase over time elapsed since enrollment, providing a means of asset formation. After the premium payment period ends, policyholders may opt to receive annuities instead of a death benefit payment. This service may not be available if Nippon Life does not handle the relevant system when requests are made. Term Life Insurance Insurance with death protection for a set period POINT 1 2 Policyholders can secure a large amount of death protection with inexpensive* premiums. * For example, premiums will be lower relative to those for a whole life insurance policy provided under the same conditions, such as age, gender, coverage amount, and payment method. Policyholders may also switch to a whole life insurance policy with an equivalent coverage amount or less, irrespective of health condition, on anniversary dates of policies or when renewing policies. This service may not be available if Nippon Life does not handle the relevant system when requests are made. Conditions may differ for policies with an insurance premium waiver rider. Term Life Insurance with Survival Benefits Insurance that provides special payouts in addition to death protection for a set period POINT 1 Insurance that provides special payouts (survival benefits) every three years and at maturity The special payouts provided every three years are automatically deferred. Every three years Coverage amount x 3% At maturity (at end of coverage period) Coverage amount x 30% 2 3 Deferred special payouts may be withdrawn by request. Deferred special payouts will earn interest at a prescribed rate. 68

71 Serious Diseases and Nursing Care Coverage Insurance That Provides Protection for Serious Diseases and Nursing Care, Etc. Dread Disease Insurance Insurance that covers cancer, acute myocardial infarction and cerebral stroke, as well as death POINT POINT 1 2 Insurance provides 10% of the insurance payment for dread diseases in case of specified types of cancer (such as carcinoma in situ). The Best Doctors Service is available to persons insured by dread disease insurance. 1 2 Insurance provides a lump-sum payment in cases of designated cancer (malignant neoplasm), acute myocardial infarction and cerebral stroke. Physical Disability Insurance Insurance that covers physical disability and death Term Whole Life Term Easy-to-understand policies linked to the physical disability certificate system Insurance provides a lump-sum payment in case the insured person is issued a level 1 3 physical disability certificate after becoming physically disabled as stipulated by the Act on Welfare of Physically Disabled Persons. Besides treatment expenses, insurance payments may be used to cover other costs or supplement a decline in income. Medical Coverage 1 Easy-to-understand policies linked to the Term public nursing care insurance system Insurance provides a lump-sum payment or annuity in case the insured person is designated as requiring nursing care at level 2 5 under the public nursing care insurance system, or requires nursing care as stipulated by our standards. Payment via annuities may not be available if Nippon Life does not handle the relevant system when requests are made. Nursing Care Insurance Insurance that covers specified conditions that require nursing, as well as death POINT Insurance That Covers Hospitalization and Surgery, Etc. General Medical Insurance 2 Besides nursing care costs, insurance payments may be used to cover other costs or supplement a decline in income. The Care Guidance Service is available to policyholders and persons insured by nursing care insurance. Insurance that covers hospitalization and surgery, etc. Hospitalization coverage details are selected at enrollment. Whole life Term Easy-to-understand policies linked to the public medical insurance system Nippon Life s Products and Services (Women) Optional additional protection for hospitalization due to specified diseases Basic Select Select Twice the amount of protection for specified diseases Twice the amount of protection for specified women s diseases Limit on number of payment days per hospitalization 62 days Select 124 days Optional lump-sum payment to cover initial expenses, etc., for hospitalization With hospitalization and care benefits Select Without hospitalization and care benefits POINT 1 2 <With hospitalization and care benefit> <Hospitalization and care benefit> Five days worth of daily hospitalization benefit Payment of 7 days worth of daily hospitalization benefit in case of hospitalization of one night and two days <Hospitalization benefit> Two days worth of daily hospitalization benefit <Total> Seven days worth of daily hospitalization benefit <With twice the amount of protection for specified diseases> In case of hospitalization due to the seven major lifestyle-related diseases and certain other conditions, a hospitalization benefit equivalent to twice the amount of the daily hospitalization benefit will be paid per day. <With twice the amount of protection for specified women s diseases> In case of hospitalization due to designated cancers, specified women s diseases or certain other conditions, a hospitalization benefit equivalent to twice the amount of the daily hospitalization benefit will be paid per day. Cancer Medical Insurance Insurance that covers hospitalization, surgery, etc. due to cancer POINT 3 In case of surgery and certain other procedures covered by the public medical insurance system (including certain surgical procedures and other advanced medical procedures), a surgery benefit will be paid. Some surgical procedures are excluded. The Best Doctors Service is available to persons covered by general medical insurance. 1 2 Protection is provided for an unlimited number of days for hospitalization due to cancer. In case of surgery and other procedures covered by the public medical insurance system (including certain surgical procedures and other advanced medical procedures), a surgery benefit will be paid. Some surgical procedures are excluded. Whole life Term Easy-to-understand policies linked to the public medical insurance system Limited Injury Insurance Insurance that covers treatment for broken bones, joint dislocation, severed tendons due to an accident POINT 1 A lump-sum payment is provided in case of treatment for broken bones, joint dislocation, severed tendons due to an accident. (Payment of 50,000 or 100,000 may be selected at enrollment.) Payments also cover cracked bones and avulsion fractures. Insurance provides up to 10 lump-sum payments. Term 69

72 Asset Formation and Retirement Coverage Insurance That Enables Systematic Planning of Asset Formation and Retirement Annuities Insurance that enables systematic planning of living expenses after retirement POINT POINT Endowment Insurance Insurance that enables asset formation over a set period while providing death protection 1 Stable annuities that supplement post-retirement living expenses are provided. A tax deduction for individual annuity premiums is available separately from the tax deduction for general life insurance premiums. Subject to attachment of the tax-qualified individual annuity premium rider. The start date for annuity payments can be postponed or the payment period may be changed when annuity payments commence. This service may not be available if Nippon Life does not handle the relevant system when requests are made. Maturity payments (the same amount as mortality claims) are provided at maturity. Information About Riders [Obtain additional peace of mind by attaching riders to your combination of insurance] Nippon Life s Products and Services Insurance Premium Waiver Rider One of the three dread diseases Designated physical disability Designated condition requiring nursing care Future premium payments will be waived in situations where there is a risk of a decline or loss of income, such as the situations above. For policies subject to renewal, policies will be renewed automatically up to a specified age. In this case, premiums will be waived even after policies are renewed. Future premium payments will also be waived when conditions apply that are equivalent to the reasons for payment due to the three dread diseases, physical disability insurance payment, or nursing care insurance payment. [Excluding diagnosis with cancer (carcinoma in situ)] Living Needs Rider Rider is free of charge Automatically attached When the insured is pronounced to have six months or less to live, full or partial mortality insurance claims are paid. The Living Needs Rider is not attached to general medical insurance, cancer medical insurance, limited injury insurance or annuities. The Living Needs Rider benefit is not paid for annuities or for the following insurance policies maturing in one year or less: endowment insurance, term life insurance, term life insurance with survival benefits, dread disease insurance, physical disability insurance, and nursing care insurance (excluding cases where these policies can be renewed). The amount to be paid is an amount of insurance selected by the policyholder, within the amount of the mortality insurance claim and for lump-sum payments no more than 30 million, minus an amount equivalent to six months of interest and premiums. ' Examples of Policies For heads of households seeking comprehensive coverage to protect their families against unexpected events: For women seeking coverage for themselves and post-retirement living expenses: <Schematic diagram> Whole life insurance <Schematic diagram> Dread disease insurance Renewal Term life insurance Renewal Nursing care insurance Renewal Dread disease insurance Renewal General medical insurance Renewal Physical disability insurance General medical insurance Renewal Renewal Annuities Enrollment Premium payment period Renewal End of premium payment and renewal Enrollment Premium payment period Renewal End of premium payment and start of annunity payments For young people seeking coverage for serious illnesses or injuries while keeping premiums as low as possible For seniors seeking to provide for nursing care rather than secure death protection <Schematic diagram> Dread disease insurance Physical disability insurance Renewal Renewal <Schematic diagram> Nursing care insurance Renewal General medical insurance (whole life) 70 Enrollment Premium payment period Renewal End of premium payment and renewal Enrollment Premium payment period Renewal

73 l Other Products Products for Children Protection for children Type of Insurance Summary Product Name Juvenile insurance * Policy must be combined with juvenile insurance. Children s general medical insurance* Insurance that provides for children s education expenses and wedding costs, etc. Insurance that covers children s hospitalization and surgery, etc. The Best Doctors Service is available to persons insured by children s general medical insurance. Nissay Juvenile Insurance (Genki) Single-payment Products Asset formation and retirement coverage Type of Insurance Summary Product Name Single-payment whole life insurance Single-payment annuities Single-payment endowment insurance ' In addition to the above, Nippon Life offers the following products mainly through the bank assurance channel. <Type of Insurance> lsingle-payment whole life insurance lsingle-payment whole life insurance lsingle-payment annuities Insurance provides death coverage for life while enabling asset formation, with a single premium payment Supplement post-retirement living expenses, with a single premium payment Insurance provides death protection for a set period while enabling asset formation, with a single premium payment. Nissay Single-payment Whole Life Insurance (My Stage) Nissay Single-payment Annuities Nissay Single-payment Endowment Insurance <Product Name> Nissay Variable Interest Rate Single-payment Increasing-cover Whole Life Insurance Nissay Variable Accumulation Rate Type Single-Payment Whole Life Insurance (yen or U.S. dollar denominated) Nissay Variable Accumulation Rate Annuities (fixed interest rate type) Nippon Life s Products and Services The foregoing statements provide an overview of products (riders) and do not include all information related to the policy. When considering a policy, please be sure to confirm by reading the Guide to Types of Insurance, pamphlets, Prospectuses (Policy Guides), Reminders, Policy Clause Bylaws/Terms and Conditions and other materials. Guide to Types of Insurance Non-life Insurance Products Nippon Life handles non-life insurance products centered on the Tough brand as an agency for Aioi Nissay Dowa Insurance Company Limited. From policies starting in October 2011, Nippon Life has launched sales of Long, a long-term automobile insurance product with special payouts. Long offers special accident-free payouts to policyholders who have no accidents during the coverage period of three years. Premiums are effectively lower than when continuing a one-year policy for three consecutive years. The product offers many other advantages to customers. For example, the premium rate determined at enrollment stays fixed at its original annual rate for each year, even if the policyholder has an accident during that time. Also, policyholders need not undertake annual renewal procedures during the coverage period. The above statements provide an overview of products (riders). When considering a policy, please be sure to confirm details by reading pamphlets, the Explanations of Important Matters, Policy Overview and Reminders, the Ordinary Insurance Policy Clause Terms and Conditions and Riders, and other materials. 71

74 From Application to Conclusion of a Policy General procedures and information disclosure at the time of enrollment in an individual insurance policy are mainly as follows. Processes may not necessarily follow the pattern below due to policy details, the scheduling of various procedures and other factors. Considering a Plan Tell us what kind of coverage you want. Application Disclosure Nippon Life s Products and Services Nippon Life Customers Examine the plans by referring to the prospectuses (policy guides) and product pamphlets. Please be sure to read prospectuses (policy guides) when considering an insurance policy application, as they contain important matters regarding coverage details, situations in which insurance claims and benefits cannot be paid and other information. Product pamphlet Cooling Off System ' Under what is known as the cooling off system, applicants and policyholders may withdraw their applications or cancel their policies by submitting a written request within eight days from the later date of either the application date or the date they received the Policy Clause Bylaws/Terms and Conditions. In this case, written requests are considered active from the time they are sent (the postmark date) and must be be postmarked within eight days of the abovementioned period and sent to the sales offices or Nissay Life Plazas that handled the application or policy. ' If the customer decides to change their mind under the provisions of the cooling off system, Nippon Life will return in full any premiums received during the cooling off period. (If the coverage revision system is utilized, then policies will be returned to the policies in force before coverage was revised.) ' The cooling off system does not apply after an examination by a doctor designated by Nippon Life or when the customer is a corporate client. To prevent unreasonable loss for customers due to a lack of information, Nippon Life has prepared a pamphlet entitled Especially Important Notifications* that explains items we would especially like customers to confirm, such as product details, disclosure obligations, examples of when insurance claims and benefits cannot be paid and other items. The pamphlet is given to customers along with the Policy Clause Bylaws/Terms and Conditions. * Especially Important Notifications includes prospectuses (policy guides) and reminders. We ask the policyholder and insured person to reconfirm before applying that the product is what they really want, and then enter these details via the REVO customer intention confirmation screen. The policyholder and insured person should enter their data and provide the digital signature by inputting it into the REVO wireless terminal. We also ask them to certify with their signature that they have received the Especially Important Notifications and Policy Clause Bylaws/ Terms and Conditions. Application procedure screens When entering information about the insured s medical history and current state of health via the REVO disclosure screen, or when answering questions posed by a doctor designated by Nippon Life during an examination, please provide accurate and complete answers. Duty of Disclosure and Penalties for Nondisclosure Policyholders and insured persons are required to disclose accurate and complete information regarding their health condition. Please be aware that in the event that facts are not disclosed or inaccurate information is provided, whether intentionally or by gross negligence, the policy or rider may be cancelled on the grounds of nondisclosure, and Nippon Life might not pay insurance claims and benefits. Disclosure screen Before proceeding with the application procedure, we clearly explain important matters and demerit information. 72 Prospectuses (policy guides) Reminders

75 Guidance on Policies and Services Conclusion of a Policy Payment of Premiums To ensure greater peace of mind for customers, in addition to sales representatives, customer service representatives also conduct meetings with customers to provide explanations via video conference or an actual visit. They confirm application details and provide guidance on policy procedures in order to help customers to understand insurance products and important matters more clearly, as well as to improve after-sales services based on accurate customer information. Commencement of Policy Coverage Once a customer agrees to have Nippon Life underwrite their insurance policy, policy coverage commences upon the completion of the application and disclosure process. (Processes differ for singlepayment insurance policies.) Confirmation of Policy Content Notice Once a policy is underwritten, Nippon Life sends the Policy Content Notice to the policyholder. We ask the customer whether or not there are discrepancies between the information provided on the Policy Content Notice with that provided at the time of application. In the event that the policy content differs, or if you have any questions, please contact a Nissay call center using the contact details provided on the reverse side of the Policy Conclusion Notice. Customer ID Notice Nippon Life will send you a customer ID, which is necessary to complete various services and procedures. When you have received the Customer ID Notice, please promptly register your password (a 4-digit PIN code). In principle, Nippon Life will not deliver a Customer ID Notice to customers who already have such an ID. These customers are asked to log in to their account from the Nippon Life website, and confirm whether their customer ID and password (4-digit PIN code) are valid. Payment of Premiums After the conclusion of a policy, Nippon Life requests that customers pay premiums using the method that they designated at the time of application. After Enrollment, Keep the Policy Clause Bylaws/Terms and Conditions Within Easy Reach The Policy Clause Bylaws/Terms and Conditions contain critical information about the policy and various procedures. As such, it is an extremely important set of documents that must be consulted not only during the application process, but during the term of the policy. Terms and conditions of the policy dictate the agreement from policy enrollment to expiration and contain information about claims receiving as well as the processing of premium payments and also explain about the invalidation of the policy in the event of premium nonpayment and the handling of policy cancellations. As a means of lowering its environmental impact by reducing the volume of paper it uses, Nippon Life has begun providing policy clauses in CD-ROM format beginning with new products launched in April (Printed policy clauses containing the data recorded on the CD-ROM are provided to customers requesting printed copies and to policyholders 70 years of age or over.) Nippon Life s Products and Services Decisions About Underwriting (at Nippon Life) Life insurance is a system wherein a large number of people, through insurance payments, mutually support one another. In order to maintain fairness between policyholders, decisions about underwriting are made based upon the content of the application and disclosure forms. Confirmation of Policy Content Nippon Life employees or parties entrusted by Nippon Life may phone or visit policyholders, the insured and beneficiaries in order to confirm the content of application forms, disclosure forms or content of requests for insurance claims and benefits payments. Regarding the medical condition of the insured, Nippon Life may also make inquiries and otherwise seek confirmation through the doctor who examined the insured. 73

76 Provision of Information During the Term of a Policy The term of a life insurance policy is long. To ensure that insurance claims and benefits are filed for without error after an unexpected event, it is important to confirm the content of the policy during its term and ensure that not only the policyholder, but also both the insured person and the beneficiary (or designated proxy (see p. 77)) understand the content through the policyholder. In this section, we explain how policy content is confirmed during the policy term. l Policy Details Confirmation Activities Nissay Total Partners (sales representatives) visit customers and use the new REVO wireless device to confirm the details of their policies and note whether customers have had any surgeries or other medical procedures. Sales representatives also provide customers with useful information regarding healthcare and other topics Policy details The following details are confirmed: Nippon Life s Products and Services l Premiums, claims and benefits, and the coverage period, as well as reasons for payment of claims and benefits and amounts receivable for each reason l Use of services and riders that are available free of charge, introduction to procedures, and other useful information for policyholders l Surrender benefits and policy loan limits l Use of Zutto Motto Service, etc. l Transaction Information Notice Once a year, transaction information regarding the insurance policies in which customers are enrolled, policyholder dividends and other topics is sent to customers by post. Customers can view the details of their policies on the Nippon Life website. Nippon Life also uses its Policy Details Confirmation Activities to explain policy details to policyholders. Notices from Nippon Life Information on Consistent Protection and Superior Services. Transaction Information Notice (for an individual policyholder) l Provision of Information When Using the Coverage Revision System When considering an insurance plan using the coverage revision system, we provide explanations about other methods for revising coverage details, and use materials to clearly show how insurance plans will differ before and after using this system. In addition, Nippon Life also explains the key points of the coverage revision system and points to consider when using this system. Materials for customers to use when using the coverage revision system l Other Important Notices In addition to the above, Nippon Life provides a variety of notices including Certification of Life Insurance Premium Deduction, and depending on the policy, the Guidance on Policy Maturity and the Guidance on Payment of Survival Benefits (Automatic Deferral). Each of these are important notices, so we kindly request that our customers carefully confirm the content. Certification of Life Insurance Premium Deduction 74

77 l Confirmation of Policy Content via the Internet Policyholders can access a variety of services by logging on to the Nippon Life website, such as confirming their policy content, changing addresses and conducting financial transactions, including policy loans, as well as performing procedures related to the Zutto Motto Service. From April 2012, we have revamped the Nippon Life website to increase the lineup of procedures, so that policyholders can easily carry out a wider variety of procedures on their own, at any time, and from anywhere. [The Home Page of the Nippon Life Website] Confirming Policy Content Using Policyholder Services When policyholders log on to policyholder services they can confirm their customer information and family information, including addresses, telephone numbers, addresses as well as their policy content, including details of coverage and beneficiary information. They can also add or change information. [Policy Content Details Confirmation Webpage] [Screen for Policyholder Services] Available Services n Inquiries regarding the contents of life insurance and non-life insurance policies n Various procedures l Change of address or telephone number l Registration or change of mobile phone number, place of work, or address l Registration or change of family information l Requests to change riders l Registration or change of password (4-digit PIN code) l Issue of provisional password l Reissue of Certificate of Life Insurance Premium Deduction l Termination of automatic transaction services l Confirmation of claim procedures n Fund transactions l Withdrawals for policy loans, accumulated dividends, Withdrawal deferred insurance payments, etc. l Repayment of policy loans Payment l Payment of premiums n Zutto Motto Service procedures and other items * Customers may pay by bank transfer via a Net banking service or at a convenience store after completing online procedures on the Nippon Life website. Nippon Life s Products and Services Available Net Banking Services The Net banking services of the following banks may be used: Japan Net Bank, Limited, Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Japan Post Bank Co., Ltd. Available Convenience Stores The following convenience stores may be used: Seven-Eleven Japan Co., Ltd., Lawson, Inc. and Seicomart Company, Ltd. Certain procedures can be carried out using the Internet via mobile phones (see p. 81). 75

78 Requesting Payment of Insurance Claims and Benefits In the event of hospitalization, surgery or other unexpected events that may warrant the payment of insurance claims or benefits, the first thing to do is to contact us through your Nissay Total Partner (sales representative), visit a nearby Nissay Life Plaza or other service counter, or telephone one of our call centers. To prepare for the unexpected, please confirm the details of your policy and make sure that the insured person and the beneficiary (or designated proxy) also understands the details of the policy. An Event Occurs That Is a Reason for Payment of Claims or Benefits Receiving Claim Processing Documents Nippon Life s Products and Services Procedure Flow When an event occurs that is a reason for payment of claims or benefits, please contact us through your Nissay Total Partner (Sales representative), visit a nearby Nissay Life Plaza or other service counter, or telephone a Nissay call center. Nissay call centers (Toll-free in Japan) Filing a Mortality Insurance Claim The beneficiary himself or herself should file a mortality insurance claim. Filing a Claim for Hospitalization and/or Surgery The insured person should personally file any claim for hospitalization and/or surgery benefits. In the event of the death of the insured, his/her lawful heir(s) should submit the payment request. However, in the event that such heir(s) is (are) unable to submit a payment request of their own volition, a designated proxy may submit the claim. We will provide you with a set of claim processing documents, either in person or by post. In the case of sending by post, the forms will be dispatched around one week after you contact us. We may be unable to process claims by post in some cases. Documents Required for Processing Claims Please confirm the documents required for processing claims shown on the guidance sheet provided to you when filing claims. l Guidance for Application Procedures To ensure that customers receive full payments of claims and benefits, Nippon Life delivers documents with information about the application procedure and related matters and prepares various booklets and pamphlets. Information Provided When Applying for Payment of a Claim or Benefit After receiving an application for the payment of a claim or benefit, Nippon Life sends the policyholder a document with information about the application procedure. The document informs policyholders of the documents required to submit a claim. Policyholders can also use this document to reconfirm the content of their applications and the coverage of the applicable policy or policies. With this service, policyholders can confirm themselves that nothing has been overlooked in their claim applications. About the Receipt of Insurance Claims and Benefits This booklet explains the procedures for requesting insurance claims and benefits, as well as examples of circumstances in which payments may or may not be received. Information Provided When a Claim or Benefit Payment Is Received To ensure that customers receive all claim and benefit payments they are entitled to, Nippon Life encloses materials about various points to check payment statements, when policyholders receive claim or benefit payments. These materials have been selected specifically to match the type of policy and payment for each policyholder. Guidance for All Steps Involved in Processing Claims and Benefits Payments Customers can use the Nippon Life website to view an outline of their coverage content and confirm examples of common errors made when filing claims, along with confirming the contents of their policies. Information contained in About the Receipt of Insurance Claims and Benefits is also available on Nippon Life s website. 76

79 Submitting Claim Processing Documents Payment Assessment Receiving Payment of Claims or Benefits After filling out the required sections of the claim processing documents, submit them to your Nissay Total Partner (sales representative) either in person or by post. You can also bring them to a service counter yourself. We will perform a payment assessment based on the claim processing documents you provide. If the payment assessment results in a decision to make a payment, you will be asked to carry out payment procedures. Once the payment procedures are complete, we will send you a Payment Statement by post. Please confirm the details of the statement. In cases where we cannot make a payment for a claim, we will notify you of the reason. Nippon Life s Products and Services l Designated Proxy System The Designated Proxy System is a system whereby a designated proxy may request the payment of benefits on behalf of the beneficiary in the event that the beneficiary is unable to request payment of his/her own volition, or in the event that circumstances designated by policy clauses occur. A designated proxy must be selected in advance through prescribed procedures. This system may also be applied to your existing policy. Because the registration of a proxy must be performed in advance, please ask your Nissay Total Partner (sales representative) or local service counter (service not applicable to corporate policies). l In the Event That the Policy Is Invalidated, Customers Will be Unable to Receive Insurance Claims, Annuities and Benefits Please pay your premiums by the monthly deadline using the designated payment method. In the event that no premium payment is made, Nippon Life will send a notice to the policyholder. However, if the premium payment is not made within a designated period, the policy will be invalidated.* If the policy is invalidated, customers will be unable to receive insurance claims, annuities, and benefits even if there is a reason for payment. * Procedures differ depending on the type of policy, enrollment period, and other factors, so please confirm the Policy Clause Bylaws/Terms and Conditions for the policy you are enrolled in. 77

80 Consultation Counter for the Receipt of Payments of Insurance Claims and Benefits Nippon Life has a consultation counter exclusively for the receipt of payments of insurance claims and benefits by customers. For customers who are dissatisfied with the explanation provided by the sales representative and wish to consult with a third party, we have [Use of the Request System in the Fiscal Year Ended March 31, 2012] Number Number of cases where Request System was used 11 Number of cases deliberated at the Claims-Related Services Review Session due to requests for review arising from the 6 Request System Number of cases where a review decision or other appraisal was changed after advice was received as a result of 0 deliberations at the Claims-Related Services Review Session also established the Request System (outside lawyer consultation system), whereby we introduce these customers to lawyers outside of the Company, with whom Nippon Life has not concluded advisory agreements, for free consultations. Claims-Related Services Review Session: When a customer files an objection regarding the payment of insurance claims or benefits, the Claims-Related Services Review Session, which was established in June 2006 and serves as an advisory body, reviews the appropriateness of the claim and makes recommendations to the payment divisions based on its findings. Two lawyers from outside of the Company (operating outside the Request System) are appointed as the chair and vice-chair of this committee, which meets, regularly. Nippon Life s Products and Services Financial ADR System A Financial Alternative Dispute Resolution (ADR) system was launched on October 1, The financial ADR system is a procedure for out-of-court settlement of disputes* in the field of finance. The system can be used when policyholders and other customers cannot satisfactorily resolve a problem between themselves and a financial institution, including a life insurance company, despite much dialogue. In the life insurance industry, the Life Insurance Association of Japan has been designated by the Ministry of Finance as a Designated Dispute Resolution Organization for implementing out-of-court settlement procedures relating to life insurance based on the ADR system. Nippon Life has concluded a basic contract with the Life Insurance Association of Japan for implementing procedures relating to conflict resolution services. * ADR procedures use a neutral and fair third party to help achieve a flexible solution to problems rather than making a judgment. 78

81 Developing a Variety of Service Channels Nippon Life is continually developing a variety of service channels to match customer needs. There are personnel readily available to consult with customers on a range of issues. Inquiries about insurance may be directed to Nissay Total Partners (sales representatives) or by contacting an agency. Our sales representatives provide consultation and support to customers in such areas as finding products that match their lifestyle needs to policy enrollment and amendment procedures and how to file for insurance claims and benefits when unexpected events occur. Nippon Life is always ready to offer customers any assistance needed. Nissay Life Plaza service counters also provide consulting services. In addition to consulting on a range of procedures, Nissay Life Plazas present regular seminars about public pensions, post-retirement asset investment, taxation, inheritance and other topics. We offer a range of highly specialized consulting services to match customer needs. Also, our trained operators are always waiting to assist you at Nissay Call Centers. We are also expanding services available via the Internet. In addition to providing information about Nippon Life and our products and accepting customers requests for materials, by logging in to Policyholder Services on the Nippon Life website, customers can access information regarding their policies and use a wide range of services. For example, they can process changes of address, perform financial transactions such as taking out policy loans, and carry out procedures relating to the Zutto Motto Service. We hope that you will make full use of our Automatic Phone Services and ATMs. We will continue to expand our network of sales representatives to cover customers throughout Japan while working to create new service channels in response to diversifying customer needs. We invite you to contact your nearest Nippon Life sales representative. Procedures and consulting performed through visits to customers Nissay Total Partners (Sales Representatives) P80 Nippon Life s Products and Services Procedures and consulting performed through visits to customers and customers visits to shops Nissay Life Plazas P81 Procedures, consulting, seminars on pensions and asset formation, etc. Customer Nissay Call Centers P81 Procedures, consulting, requests for visits from sales representatives, received by specialist operators, etc. Providing more precise consulting services by promoting links with Nissay Total Partners (sales representatives) Procedures and consulting carried out by customers themselves Internet P82 Providing information, requesting materials, procedures, inquiries about policy terms and conditions, etc., on the corporate website without restrictions on time or location Automatic Phone Services & ATMs P81 P82 Taking out policy loans, withdrawing accumulated dividends, etc. Procedures and consulting performed through visits to customers and customers visits to shops Agencies and Financial Institutions P83 Procedures, consulting, asset formation seminars, etc. 79

82 Nippon Life s Products and Services Nissay Total Partners (Sales Representatives) Nippon Life has a network of approximately 50,000 Nissay Total Partners (sales representatives) at 107 nationwide branches. Through this network, Nippon Life is able to respond to the needs of each and every one of its customers throughout Japan. Nissay Total Partners seek to visit every customer at least once a year to help them with a variety of policy-related procedures and provide them with the information they need. We are also striving to enhance the abilities of personnel in order to provide precisely tailored consulting services. We encourage our Nissay Total Partners to obtain national certifications from the Ministry of Health, Labour and Welfare as financial planners as well as the Japan Association of Financial Planners certification (AFP certification). These certifications require in-depth knowledge of not only life insurance, but also financial products, the social insurance system, real estate, taxation and inheritance. At the end of March 2012, approximately 23,500 Nissay Total Partners had obtained qualification as financial planners. Nissay Total Partners now use the new REVO wireless device. REVO assists in providing consulting services for using Mirai no Katachi to offer customers more advanced forms of protection. The new device also Education of the Nissay Total Partners Through sincere, personal one-on-one consulting, Nissay Total Partners work to assist customers with all of their insurance needs, from recommending and reviewing insurance plans to the payment of insurance claims and benefits. Nippon Life places a special emphasis on rigorous training required for after-sales service. We strive to provide all policyholders with a full range of after sales services in our Policy Details Confirmation Activities held once each year. The curriculum for training personnel at all levels, including new sales representatives, has lessons on consulting sales that use the new allows for performing administrative tasks and offering services in an extremely convenient manner. With these capabilities, REVO enables Nissay Total Partners to meet insurance requirements with even greater accuracy while facilitating immediate responses to customers requests. New REVO wireless device Nissay Total Partners: Nippon Life sales representatives are referred to as Nissay Total Partners. The title embodies the concept of total service and total support for customers and their families. Financial Planner (FP): A financial planner is a specialist who analyzes a customer s situation, including insurance, assets, liabilities, composition of income and expenditures, and composition of family. When necessary, he or she seeks the support of attorneys, tax accountants and various other specialists in such fields as insurance and real estate. Based on the analysis, the financial planner helps the customers create and implement comprehensive plans, including tax strategies, insurance plans, investment strategies and savings plans to enable customers to reach their life-plan goals. REVO terminal and the recently introduced Mirai no Katachi. In addition, we have required knowledge and skill levels for sales representatives depending on how long they have been at Nippon Life. Information about employees progress with training activities at each branch and sales office is shared every month and follow-up actions are taken as necessary. Nissay Total Partners training [Education and Training Curriculum for the Fiscal Year Ended March 31, 2012] Join company First year Second year Third year and thereafter Basic education necessary for insurance sales and after-sales service Business manners Basic life insurance knowledge Nissay s insurance product knowledge Basic knowledge of payment-related matters Compliance Practical sales training (role playing) Basic sales training Customer service training Sales activity training in local areas/worksites Education for payment-related matters Knowledge acquisition Public pension system Public medical insurance system Knowledge of products Insurance certificate diagnosis Advanced consulting training Preparation course for advanced certification course Training by subject A class on consulting sales that utilizes the new REVO terminal and the recently introduced Mirai no Katachi Qualifications/ Tests Tests for general course Tests for applied courses Tests for specialized courses Financial Planner Level 3 Financial Planner Level 2 Non-life Insurance Solicitor Test (Basic Knowledge, Product Knowledge) Uniform nationwide confirmation test (Nippon Life test) 80

83 Nissay Life Plazas Nissay Life Plazas are designed to make people feel welcome to walk in and obtain a variety of information. Procedures and consultations involving insurance policies are an important activity of these plazas. To meet a broad range of customers needs, there are also specialized consulting services covering asset management, health care, nursing care and other subjects. They also work to build people s familiarity with insurance by offering a wide range of services including free seminars on a variety of themes, tax accountant consultation services (at some plazas), and giving out information related to life events. There are 97 Nissay Life Plazas throughout Japan, receiving around 440,000 visitors each year (as of July 2012). A consultation A seminar at the new Mirai Forest lounge area of the Marunouchi Nissay Life Plaza in central Tokyo Telephone l Nissay Call Centers We are working to have specialist operators, who answer calls from customers throughout Japan, handle all requests, such as for changing addresses and PIN numbers as well as requests for insurance claims and benefits in a simple, convenient and efficient manner. Nissay Call Center Nippon Life s Products and Services l Automatic Phone Services Customers who have received a customer ID can make use of this service to change PIN numbers, take out policy loans and withdraw accumulated dividends through an automated telephone voice directory. l Nissay Customer Centers* Staff at Nissay Customer Centers contact customers by phone directly, including on Saturdays and Sundays, for a wide range of reasons, including to confirm customer policy content and to handle various policy maintenance procedures. The centers also provide guidance on various insurance-related systems. The sales representatives in charge respond to policyholder s request for personal visits or other inquiries. *Implemented in some regions. 81

84 Internet l For Policyholders Customers with a customer ID may use the Policyholder Services on the Nippon Life website to use a wide range of services. For example they can confirm policy content, perform financial transactions such as taking our policy loans and carry out procedures, including changes of address and procedures for the Zutto Motto Service (see p. 75). Customers who register their addresses receive an e-magazine on a regular basis containing useful information about the Zutto Motto Service, sales promotions and other subjects. l For Customers Considering Enrollment in a Policy or Review of a Policy The website also caters to customers who are considering enrolling in a policy or who wish to review an existing policy with content that introduces insurance products that meet their needs by having them answer a few questions. Visitors to the website can also use simulations that help them to understand how much coverage they need for unexpected events and the premiums for each product. To provide more ways to access information about our insurance products and services, this information has been available on the Nippon Life CLUB STAR S e-book library website since April 2011 and on Nippon Life s official Facebook page since August We will continue to add service channels so that information about our activities is readily available to as many people as possible. Nippon Life s Products and Services Simulations of Required Insurance Coverage Customers use these simulations to determine how much coverage they need based on their age and family composition and how much money they will need to enjoy their retirement years. Nippon Life s Official Facebook Page Nippon Life has set up an official Facebook page that serves as a forum for the easy exchange of information. This is a convenient way for people to learn more about us and feel closer to us. Visitors to this page can learn about special campaigns and view our latest TV commercials. We also use Facebook to supply information, including images and photos, about topics involving the lives of Nippon Life s official Facebook page Nippon Life employees. Estimated Medical Expense Simulation This simulation produces estimates of out-of-pocket expenses for specific medical problems such as cancer, a stroke or a broken bone. CLUB STAR S On the CLUB STAR S e-book library website of Nippon Life, visitors can read essays and other content written by wellknown authors, artists and other contributors. Wisdom about Songs, an essay by Chie Ayado ATMs Customers possessing Nissay Cards may use them at any one of 58,000 ATMs nationwide. They can take out or repay policy loans, withdraw accumulated dividends, deferred special payments and deferred insurance amounts.* In addition to Nippon Life ATMs installed at Nissay Life Plazas and other locations, customers can also perform various procedures at the ATMs of Japan Post Bank Co., Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Sumitomo Mitsui Banking Corporation (as of April 2012). *ATMs can be used for only certain policies that were purchased on or before April 1,

85 Agencies Forming agency consignment agreements, we have developed a network of agencies centered on tax accountants; professional life and non-life insurance sales agencies; agencies related to major financial institutions throughout Japan; Japan Post Insurance Co., Ltd.; Japan Post Network Co., Ltd.; and other organizations. The number of agencies topped 10,000 to reach 10,712* as of March 31, 2012, (increasing by 778 from a year earlier). Agencies sell our products while providing consultations about such topics as estate planning, transferring a company to new owners, protection for business activities, asset formation, and other subjects, mainly with corporate managers. Nippon Life is dedicated to supplying the best possible services in order to meet the increasingly complex and diverse needs of customers. To offer these services, we are constantly upgrading sales support for agencies. We have about 500 agency support personnel who are stationed in all areas of Japan. Furthermore, we conduct a training program that systematically covers the knowledge and skills needed to enable these individuals to assist agencies at an even higher level. Other measures include expanding the Nissay Marketing Station, a website exclusively for agencies, and upgrading the functions of the [Agency Education Program] Agency Support Center, which directly answers questions from agencies. All these activities assist agencies to offer consulting required to meet customers increasingly complex and diverse needs. Agencies do not include banks and other financial institutions that sell Nippon Life products. Nissay Marketing Station: Nissay Marketing Station is a Nippon Life website used exclusively by its agencies. This site has the A-Net (Nissay Agency Net) proposal preparation function, supplies up-to-date information about life insurance, has a life insurance tax consultation service and financial planning simulation services, and many other capabilities to support the activities of agencies. Compliance System: Based on a compliance program formulated in response to specific Agency Management Sector issues, Nippon Life implements self inspections of the internal organization in charge of agency sales, provides education and training for the personnel at Nippon Life in charge of agency sales, and conducts inspections, education and training for agencies. STEP 1 STEP 2 STEP 3 Nippon Life s Products and Services Orientation (Explanation of the content of the agency s business) Agency business overview Nippon Life overview Industry-wide training (Training before and after registration) Product training Policy sales practical training Compliance training Monthly training FP basics Compliance training FP training Executive retirement benefits, treasury stock, etc. for corporate policies Inheritance tax, lifetime transfer of wealth, etc. for individual policies Financial Institutions Nippon Life has agency agreements with financial institutions throughout Japan for the sale of single-payment whole life insurance and single-payment annuities. After customers have signed up for a policy, Nippon Life provides after-sales services. Once a year, we send customers a Policy Details Reminder by mail. We also provide dedicated call centers for products sold at financial institution service counters. Through these centers, policyholders can check their policy details and account status and conduct processing of insurance claims and benefits. Moreover, in order to provide a wide array of in-depth services for customers, Nippon Life is working hard to improve the education and training of insurance sales-related personnel at these institutions with respect to product knowledge, sales skills, and compliance. [Number of Cooperating Financial Institutions (as of April 1, 2012)] City banks/trust banks 8 Regional banks 94 Credit unions/credit cooperatives 196 Securities companies/other 16 Total 314 [Products Sold at Financial Institution Service Counters and Financial Institutions Handling These Products (as of April 1, 2012)] Single-payment whole life insurance 139 Single-payment annuities

86 Products and Services for Corporate Customers Nippon Life offers a broad range of products and consulting services to match the needs of corporate managers and company owners who are working to enhance benefit plans for their employees. Nippon Life s Main Corporate Products (as of July 2012) Self-reliant products: Insurance premiums that are borne not by the corporation or organization, but by the executives and employees themselves. Company and Organization Benefit Systems Products That Meet the Needs of Company and Organization Benefit Systems Nippon Life s Products and Services Provision for executives and employees Provision for owners Survivor coverage Disability coverage Medical coverage Retirement coverage Survivor coverage Retirement coverage Plan for retirement funds payable on employee s death and condolence payments Non-statutory workers accident compensation plan Plan providing pensions for surviving family/children Plan for executive/employee self-reliant aid Disability coverage plan Medical coverage plan Plan for executive/employee self-reliant aid Plan for retirement allowance and old-age pensions Single retirement allowance system Plan for executive/employee self-reliant aid Plan for retirement funds, death coverage and condolence payments for executives Executive retirement allowance plan General Welfare Group Term Life Insurance Group Term Life Insurance (Optional Group Term Life Insurance) New Group Disability Income Insurance General Medical Life Insurance (Group Type) General Medical Life Insurance (Group Type) Dread Disease Term Insurance Defined Benefit Corporate Pension Plans Employees Pension Fund Insurance New Insured Pension Plans Defined Contribution Pension Plans Insured Contributory Pension Plans (Happy Life Plan) Nissay Key Man Insurance* 1 * 3 Nissay Long-term Insurance* 2 * 3 Nissay Increasing Term Insurance* 3 Preparation for buying one s own house Asset formation promotion plan Home loan plan Workers Asset-Formation Housing Funding Insurance (Nissay Workers Asset-Formation Housing Plans) Group Credit Life Insurance Asset formation Retirement coverage Various life plans Asset formation promotion plan Asset formation promotion plan Asset formation incentive plan Workers Asset-Formation Pension Fund Insurance (Nissay Asset-Formation Pension Fund Insurance) Workers Asset-Formation Savings Insurance (Nissay Asset-Formation Savings Plans) Workers Asset-Formation Benefits Savings Insurance (Nissay Workers Asset-Formation Benefits Savings Insurance) Workers Asset-Formation Fund Savings Insurance (Nissay Workers Asset-Formation Fund Savings Insurance) *1 The Key Man plan is an individual insurance and annuities policy handled by a corporation. *2 Also sold to individuals. *3 Individuals covered by Mirai no Katachi (only policies that include dread disease insurance or general medical insurance) or long term insurance or increasing term insurance (only increasing term insurance (with 2012 participating-type policies)) can use the Best Doctors Service. Although the above lists the names of Nippon Life products that pertain to company and organization benefit systems, it does not cover all the particulars pertaining to policies. When reviewing a policy, always confirm details by reading pamphlets, Policy Clauses Bylaws/Terms and Conditions, pre-contract documents based on Article 37-3 of the Financial Instruments and Exchange Act, Especially Important Notifications and other information. 84

87 Expansion of Corporate Services l Zutto Motto Service Nippon Life has offered the Corporate Zutto Motto Service since April 2010 as a means of further expanding and upgrading corporate services. Available at no cost to registered customers, the service has two components: the Nissay Corporate Internet Service and the Management Consultation and Employee Benefit Service. Corporate clients can use the Nissay Corporate Internet Service to check the content of a policy in force, obtain accounting information about premiums paid in a fiscal year, and perform other tasks. The Management Consultation and Employee Benefit Service provides access to specialists for questions about management. There is also a large selection of services, ranging from stays at resort hotels to fitness and health services, that are available at special rates. Available Services [Nissay Corporate Internet Service] Inquiries about policy content Inquiries about accounting-related information Information on future receipts Various financial transactions (application for policy loans and withdrawal of deferred special payments and deferred insurance amounts) [Management Consultation and Employee Benefit Service] Consultation service (accounting, insurance tax accounting, etc.) Discounted rates for hotel accommodation (approx. 12,000 hotels in Japan and approx. 70,000 hotels in other countries) Discounted rates for fitness and health services (approx. 50,000 facilities) Services for Establishing and Upgrading Employee Benefit Plans l Implementation of Total Consulting for Employee Benefits Companies need to adopt new styles of management in response to major changes in society, the economy and the labor environment of Japan, such as the declining birthrate and the aging population, economic globalization and employment mobility. These changes also influence how companies employ workers and how employees lead and think about their own lives. Companies have to reexamine their employee benefit plans in order to reflect these events. To meet highly sophisticated and diversified needs that have come about following the evolving climate for employee benefit plans, we have begun to offer interactive solutions by providing information and identifying issues concerning overall employee benefits, in addition to our conventional proposals based on corporate insurance products. All of these activities are collectively positioned as Employee Benefit Total Consulting services. Our Employee Benefits Consulting Team helps design overall systems for these benefits. The Pension Program Consulting [Total Consulting for Employee Benefits] Post-retirement coverage Team provides assistance for everything from designing corporate pension plans to offering proposals for the plan s investment portfolio. And the Workplace Consulting Team assists employees in planning for their futures based on their employer s benefit program. Based on this framework, we provide information through employee benefits reports and other media, perform surveys by distributing questionnaires, hold seminars, and propose ways to support system design and implementation. In this way, we help our corporate clients to rebuild their employee benefit systems. We are actively promoting comprehensive consulting on employee benefits, in order to work with companies to solve issues as a primary partner in employee benefits and support the life planning of each employee. Working years coverage Nissay Employee Benefits Survey Reports Other items Nippon Life s Products and Services Employee contribution Company contribution Individual coverage Self-reliant coverage Corporate coverage Social security coverage Group annuities Individual annuities Insured contributory pension plans (Happy Life Plan) Defined benefit corporate pension plans Defined contribution pension plans, others Employees pension fund insurance, others Assist individual employees in creating life plans Group insurance Consulting based on social security Individual insurance Group term life insurance (optional group term life insurance) General medical insurance (group type), others General welfare group term life insurance New group disability income insurance, others Workers compensation insurance Health insurance, others Consulting for overall employee benefit framework Provision of information about changes in employee benefit systems Assistance for childcare and nursing care for seniors Employee housing and subsidies for buying a home Mental health programs Reforms for corporate management systems Others Post-retirement coverage consulting Working years coverage consulting Consulting in other areas Employee Benefits Consulting Team Pension Program Consulting Team Workplace Consulting Team Employee Benefits Consulting Team 85

88 Nippon Life s Products and Services ' Group Insurance Activities The Employee Benefits Consulting Team uses specialists from research institutions to reinforce capabilities for performing surveys and gathering information associated with all aspects of employee benefits. Team activities also include designing benefit programs by specialists, developing content for consulting services, and training and educational programs for our corporate sales representatives. Group insurance activities also include administrative operations and services. In the field of self-reliant products, Nippon Life has a call center to answer questions from policyholders, and makes its affiliated companies available to its corporate customers for outsourcing of administrative tasks. In this manner, Nippon Life improves convenience for employees through its operations and services. Providing these services also reduces the amount of work that a company s personnel staff needs to perform to operate employee benefit programs. In response to the push for corporate IT systems, we offer the Nissay Life Navigation System, which each individual policyholder and new customer can access online. This includes such functions as checking the ' Group Annuity Activities The Pension Program Consulting Team uses specialists from Nippon Life s investment operations and investment advisory companies to extend a variety of consulting support to companies. Assistance covers the design of corporate pension plans, establishment of defined contribution pension plans, effect of new accounting standards on retirement benefit accounting, and other items. Companies also rely on us for adjusting asset allocations to match changes in market conditions and customized proposals including its simulations concerning specific investments. All status of policies, performing various simulations, and applying for insurance policies. As well as making proposals for insurance products for survivor, disability, medical and other types of coverage, we also want to meet the needs of companies and their employees by supplying a diverse array of employee benefit program solutions that extend to administrative operations and services. [Nissay Life Navigation System] Company (Customer) Inquiries about purchased products Accumulated annuity amount simulations, etc. Employees Person responsible for administration Company (Customer) Intranet Internet Nippon Life of these capabilities allow the team to offer consulting services from a broad perspective that includes both corporate pension plans and their operation. Nissay Group will mobilize all available resources to offer high quality services in all aspects of the design and management of corporate pension plans and administration and management of plan assets as a commissioned organization able to provide a combination of defined benefit corporate pension plans and defined contribution pension plans. ' Activities in the Workplace Market Nippon Life formed the Workplace Consulting Team as part of measures to improve services in the workplace market. The new Mirai no Katachi insurance product allows employees to create policies with customized protection based on their employer s benefits. Using this product makes it possible to offer consulting that can precisely target customers diversifying needs. To offer this consulting, we are using a variety of seminars for employees (insurance information meetings for new employees, annuity seminars and other events) to provide more information and enhance content about the workplace market. In addition, we have strengthened training for sales representatives in the workplace market. We will use activities like these to reinforce our ability to supply protection that is best suited for each client company employee. Three-star Rating for Defined Contribution Pension Plan Call Center (Third Consecutive Year) Our Defined Contribution Plan Call Center received a three-star rating from the Help Desk Institute for the third consecutive year. The three-star rating is the highest rating from this institute in the Ratings of Inquiry Support Services. The institute comprehensively evaluated the call center on ten criteria, five related to quality, such as the response skill of the call center, and five related to performance, including average response time. We are the only company to have received an award for a defined contribution pension plan call center. 86 Support for Transition from Tax-qualified Pension Plans Ended on March 31, 2012 Preferential tax treatment for tax-qualified pension plans ended on March 31, As a result, companies had to switch to a different pension plan (defined benefit pension plan, defined contribution pension plan, smaller enterprise retirement allowance mutual aid system) or take some other action. As a tax-qualified pension plan institution, we provided thorough pension plan transition consulting for each company. By supplying this assistance, we have completed our support for transitions for the approximately 15,000 tax-qualified pension plans where we were the managing pension plan institution.

89 Chapter 4 Company Information Organization 88 Directors, Executive Officers and Auditors 90 Employee Highlights 91 Company History 92 Business Structure 93 Subsidiaries and Affiliates 94 Alliances to Strengthen the Life Insurance Business 95 Nippon Life s Major Areas of Business Company Purpose Article 2 of the Articles of Incorporation stipulates the Company s purpose as pursuing business in the following areas: a) life insurance business, b) provision of agency service or administration services to other insurance companies (including foreign insurers) or financial institutions, giving of guarantees for liabilities, and other businesses incidental to the businesses of the preceding items, c) sale and purchase of government bonds, local government bonds or government-guaranteed bonds, handling of the offering or administration and other businesses permitted under the Insurance Business Act of local government bonds, corporate bonds or other debentures, and other businesses which life insurance companies may conduct under the laws other than the Insurance Business Act and d) other activities incidental to or relating to the matters referred to in each of the foregoing paragraphs Company Information Outline of Business Life insurance business a. Underwriting insurance based on life insurance business licenses (see p and 84 for details regarding main insurance products.) b. Investment Assets, such as monies received as premiums, are mainly invested in the following: 1) Loans Call loans and loans extended to corporations and individuals 2) Securities investment Investment in securities (including foreign securities) and securities lending 3) Real estate investment Investment in real estate, including office buildings Auxiliary and other business a. Acting as a proxy for other insurance companies and other financial institutions b. Provision of credit guarantees c. Sales of investment trust beneficiary securities d. Management and administration of defined contribution pension plans 87

90 Organization (As of July 3, 2012) Retail Sector/Service Network Development Sector Metropolitan Area Headquarters Branch (27) Metropolitan Area Development Office Metropolitan Area Corporate & Worksite Sales Office (2) Corporate & Worksite Sales Office (5) Corporate Marketing Dept. (3) [Life Plaza (19)] Tokai Regional Headquarters Branch (10) Metropolitan Area Development Office Tokai Regional Corporate & Worksite Sales Office [Life Plaza (10)] Kinki Regional Headquarters Branch (21) Customer Service Promotion Office Metropolitan Area Development Office Osaka Corporate & Worksite Sales Office [Life Plaza (14)] Secretarial Dept. Corporate Planning Dept. Public Affairs Dept. CSR Promotion Office Public & Investors Relations Dept. Planning and Research Dept. International Accounting and Actuarial Affairs Office Affiliated Business Dept. Actuarial Dept. (Chief Actuary) Personnel Dept. Human Resource Development Office Kagayaki Promotion Office General Affairs Dept. Health Management Dept. Legal Office Compliance Dept. Sound Business Promotion Office Information Management Office Risk Management Dept. Administrative Risk Management Dept. System Risk Management Dept. Investment Risk Management Dept. Auditing Dept. Loan & Investment Auditing Office Claims Examination Management Office Information System Auditing Office Auditing Office Board of Auditors Auditors Company Information 88 Customer Agency Management Sector Financial Institution Relations Sector Corporate Marketing Sector International Sector Investment Management Sector (Regional Branch Administration Senior Manager) Branch (49) [Life Plaza (51)] Agency Operations Dept. Agency Marketing Headquarters Agency Relations Dept. (10) *1 Financial Institution Relations Operations Office Financial Institution Relations Headquarters Financial Institution Relations and Marketing Dept. (2) *2 Head Office Corporate Marketing Dept. (7) *3 Corporate Relations Management Dept. (23) Corporate Marketing Dept. (3) Public Sector Marketing Dept. (4) Corporate and Collective Marketing Dept. (2) International Planning & Operations Dept. China Dept. Overseas Representative Office (4) International Investment Dept. Finance & Investment Planning Dept. Credit Dept. Securities Operations Dept. Finance Planning & Management Dept. Corporate Finance Structuring Office Consumer Loan Planning Office Corporate Finance Dept. (9) *4 Real Estate Investment Dept. Treasury & Capital Markets Dept. Equity Investment Dept. Credit and Alternative Investment Dept. Separate Account Investment Dept. *Notes with additional information are provided at the top of the adjacent page. Product Planning Dept. Marketing Planning Dept. Channel Earnings Management Office Sales Manager Personnel Dept. Sales Human Resource Development Office Sales Representatives Training Dept. Business School for Sales Managers Hatsuratsu Training Promotion Office Sales Material Inspection Office (General Manager of Nissay Training Center) (General Manager of Business School for Sales Managers) Sales Representatives Operations Management Dept. New Sales Operations Development Office General Insurance Planning & Operation Office Service Network Development Dept. Life Plaza Promotion Office Life Plaza (3) GLAD Promotion Office Corporate & Worksite Marketing Dept. Sales Area Management Office Corporate & Worksite Development Office Public Sector Management Office Tokyo Area Corporate & Worksite Development Office Osaka Area Corporate & Worksite Development Office Corporate Marketing Planning Dept. Corporate Product Planning Office Group Life & Pension Actuarial Office Corporate Sales Planning & Product Development Office Defined Contribution Plans Dept. Corporate Sales Promotion Dept. Group Marketing Information Center Customer Service Headquarters Business Process and Information Systems Planning Dept. (New Integrated System Project Office) Service Planning Office Medical Research and Development Office Policy Dept. Policy Management Dept. Call Center Claims-related Services Dept. Claims-related Services Center Group Life & Pension Dept. Corporate Service Center New Infrastructure Product Management Dept. Customer Service Dept. (Chief Medical Director) President Representative Nomination Committee Secretariat Board of Directors Board of Trustees Representative Nomination Committee Meeting of Representatives

91 *1: Ten Agency Relations Departments 1st Metropolitan Agency Relations Dept. (Tokyo) 2nd Metropolitan Agency Relations Dept. (Tokyo) 3rd Metropolitan Agency Relations Dept. (Tokyo) 4th Metropolitan Agency Relations Dept. (Tokyo) 5th Metropolitan Agency Relations Dept. (Yokohama) Tokai Agency Relations Dept. (Nagoya) 1st Kinki Agency Relations Dept. (Osaka) 2nd Kinki Agency Relations Dept. (Osaka) West Japan Agency Relations Dept. (Okayama) Kyushu Agency Relations Dept. (Fukuoka) *2: Two Financial Institution Relations Departments 1st Financial Institutions Relations Dept. (Tokyo) 2nd Financial Institutions Relations Dept. (Osaka, Tokyo) *3: Seven Head Office Corporate Marketing Departments Head Office 1st Corporate Marketing Dept. (Tokyo) 1st Corporate Relations Management Dept. (Tokyo) 2nd Corporate Relations Management Dept. (Tokyo) 3rd Corporate Relations Management Dept. (Tokyo) 4th Corporate Relations Management Dept. (Tokyo) 9th Corporate Relations Management Dept. (Tokyo) Head Office 2nd Corporate Marketing Dept. (Tokyo) 5th Corporate Relations Management Dept. (Tokyo) 6th Corporate Relations Management Dept. (Tokyo) 7th Corporate Relations Management Dept. (Tokyo) 8th Corporate Relations Management Dept. (Tokyo) 10th Corporate Relations Management Dept. (Tokyo) 11th Corporate Relations Management Dept. (Tokyo) 12th Corporate Relations Management Dept. (Tokyo) Head Office 3rd Corporate Marketing Dept. (Tokyo) 1st Public Sector Marketing Dept. (Tokyo) 2nd Public Sector Marketing Dept. (Tokyo) 3rd Public Sector Marketing Dept. (Tokyo) 1st Corporate and Collective Marketing Dept. (Tokyo) 2nd Corporate and Collective Marketing Dept. (Tokyo) Head Office East Japan Corporate Marketing Dept. (Sapporo) Hokkaido Corporate Relations Management Dept. (Sapporo) Tohoku Corporate Relations Management Dept. (Sendai) Head Office Tokai Corporate Marketing Dept. (Nagoya) 1st Tokai Corporate Relations Management Dept. (Nagoya) 2nd Tokai Corporate Relations Management Dept. (Kariya) Tokai Corporate Sales Dept. (Nagoya) Head Office Osaka Corporate Marketing Dept. (Osaka) 1st Osaka Corporate Relations Management Dept. (Osaka) 2nd Osaka Corporate Relations Management Dept. (Osaka) 3rd Osaka Corporate Relations Management Dept. (Osaka) Kyoto Corporate Relations Management Dept. (Kyoto) Kobe Corporate Relations Management Dept. (Osaka) Hiroshima Corporate Relations Management Dept. (Hiroshima) 1st Osaka Corporate Sales Dept. (Osaka) 2nd Osaka Corporate Sales Dept. (Osaka) Osaka Public Sector Marketing Dept. (Osaka) Head Office Kyushu Corporate Marketing Dept. (Fukuoka) Kyushu Corporate Relations Management Dept. (Fukuoka) *4: Nine Corporate Finance Departments 1st Corporate Finance Dept. (Tokyo) 2nd Corporate Finance Dept. (Tokyo) 3rd Corporate Finance Dept. (Tokyo) Metropolitan Area Corporate Finance Dept. (Tokyo) East Japan Corporate Finance Dept. (Tokyo) Tokai Area Corporate Finance Dept. (Nagoya) 1st Osaka Corporate Finance Dept. (Osaka) 2nd Osaka Corporate Finance Dept. (Osaka) Kyushu Area Corporate Finance Dept. (Fukuoka) u Headquarters Organization (Unit: Number) Earthquake Disaster Recovery Bureau 1 Regional Headquarters Corporate & Worksite Sales Headquarters 1 1 Agency Marketing Headquarters Financial Institution Relations Headquarters Head Office Corporate Marketing Departments Customer Service Headquarters Departments Offices, Centers Sections (known as Group ) Promotion Office (established in Sales Headquarters) Metropolitan Area Development Offices Metropolitan Area Corporate & Worksite Sales Offices Corporate & Worksite Sales Offices Agency Relations Departments Financial Institution Relations Departments Corporate Relations Management Departments Corporate Marketing Departments Public Sector Marketing Departments Corporate and Collective Marketing Departments Corporate Finance Departments Note: Figures were compiled as of April 1. Company Information u Branch Organization (Unit: Number) Branches Branch Offices Sales Offices 1,572 1,294 1,338 Sales Suboffices Overseas Representative Offices Agencies 11,233 10,467 9,749 Notes: 1. Figures were compiled as of April About Branches: Branches are organizations that mainly specialize in sales activities targeting urban corporate worksite sales locations. 3. From fiscal 2012, Sales Offices and Sales Suboffices have been merged into a single category. Sales Suboffice numbers are therefore not presented for this fiscal year. 4. Agencies include sales agencies at banks and other financial institutions. 89

92 Directors, executive officers and auditors Chairman Kunie Okamoto President Yoshinobu Tsutsui Vice Chairman Sadao Kato Director and Executive Vice President Kenichi Kobayashi Director and Executive Vice President Takeshi Furuichi Director and Senior Managing Executive Officer Yasuomi Matsuyama Company Information Director and Senior Managing Executive Officer Kazuo Kobayashi Director and Senior Managing Executive Officer Masami Kuroda Director and Managing Executive Officer Takashi Motoyama Director and Managing Executive Officer Yoshinori Terajima Director and Managing Executive Officer Nobusuke Matsui Director and Managing Executive Officer Takeshi Hayashi Director and Executive Officer Hiroyuki Nishi Director and Executive Officer Kazuhiro Kojima Officers Auditors Directors Yoshihisa Akiyama Akito Arima Shin Ushijima Kazuo Imai Senior Managing Executive Officer Koji Aiba Managing Executive Officers Toshifumi Terada Katsuya Hirai Shohei Miki Hiroshi Shimizu Executive Officers Keishi Kai Nobuya Amabe Tsuneaki Teshima Ichiro Shimizu Masaru Nakamura Tetsuo Kushibe Takeshi Yabe Tomiji Akabayashi Kazuyoshi Watanabe Seiji Kito Yosuke Matsunaga Takashi Imai Kantaro Toyoizumi Keiichi Tadaki Yukimasa Okuno Koji Miyazaki (Senior Corporate Auditor) Osamu Kubotani (as of July 3, 2012) 90

93 EMPLOYEE HIGHLIGHTS u Number of Employees by Job Function Number of Employees (As of March 31) Number of New Employees (Fiscal years ended March 31) Total non-sales personnel 18,457 18,957 14,242 1,099 5,320 1,752 Male 5,228 5,284 5, Female 13,229 13,673 9, ,000 1,262 Managerial track 4,281 4,288 4, CS managerial track Administrative clerk 6,702 6,807 6, Clerk 720 Total sales representatives 51,163 51,045 53,196 11,945 10,289 12,960 Male 2,646 2,829 2, Female 48,517 48,216 50,242 11,871 10,152 12,633 Sales management positions 2,173 1,703 1,784 Male 2,029 1,553 1,628 Female Sales representatives 48,990 48,787 50,894 11,897 10,203 12,734 Male Female 48,373 48,066 50,086 11,871 10,152 12,633 Sales management track Total 69,620 70,002 67,438 13,044 15,609 14,712 Male 7,874 8,113 8, Female 61,746 61,889 59,281 12,701 15,152 13,895 Notes: 1. All figures were calculated on March 31 of each fiscal year. 2. Non-sales personnel is the total number of non-sales representatives, medical staff, labor service staff, special contract employees, conservation affairs advisors, specified staff, non- managerial employees and temporary staff. 3. The number of sales representatives includes employees that were registered as life insurance solicitors prior to employment. (1,041 employees as of March 31, 2012, 973 employees as of March 31, 2011 and 814 employees as of March 31, 2010.) 4. The number of sales management track personnel includes sales general manager trainees. 5. Following a reclassification of job functions, the clerk position has been grouped into the administrative clerk position (as of March 25, 2010). 6. The number of non-sales personnel as of March 31, 2011 increased by 4,715 from March 31, Most of this increase was attributable to the direct employment of temporary staff implemented on April 1, Due to a revision in the human resources system, sales management track personnel and sales managers have been grouped together and renamed sales general managers (as of March 25, 2012). u Average Age and Years of Service Average Age (years) Average Number of Years of Service (years) As of March Total non-sales personnel Male Female Managerial track CS managerial track Administrative clerk Clerk Total sales representatives Male Female Sales management positions Male Female Sales representatives Male Female Sales management track Total Male Female Notes: 1. All figures were calculated on March 31 of each fiscal year, and rounded to the nearest decimal place. 2. Non-sales personnel is the total number of non-sales representatives, medical staff, labor service staff, special contract employees, conservation affairs advisors, specified staff, non-managerial employees and temporary staff. 3. The number of non-sales personnel includes temporary staff, following the direct employment of temporary staff in the fiscal year ended March 31, 2011 (implemented on April 1, 2010). 4. The number of sales representatives includes employees that were registered as life insurance solicitors prior to employment. (1,041 employees as of March 31, 2012, 973 employees as of March 31, 2011 and 814 employees as of March 31, 2010.) 5. The number of sales management track personnel includes sales general manager trainees. 6. Following a reclassification of job functions, the clerk position has been grouped into the administrative clerk position (as of March 25, 2010). 7. Due to a revision in the human resources system, sales management track personnel and sales managers have been grouped together and renamed sales general managers (as of March 25, 2012). Company Information u Average Monthly Salary of Non-Sales Personnel (Unit: Thousands of Yen) For March Non-sales personnel Notes: 1. The average monthly salary is the tax-inclusive standard salary in March, excluding bonuses and overtime pay. 2. Non-sales personnel is the total number of non-sales representatives, medical staff, labor service staff, special contract employees, conservation affairs advisors, specified staff, non-managerial employees and temporary staff. 3. The number of non-sales personnel includes temporary staff, following the direct employment of temporary staff in the fiscal year ended March 31, 2011 (implemented on April 1, 2010). u Average Monthly Salary of Sales Representatives (Unit: Thousands of Yen) Fiscal years ended March Sales representatives Notes: 1. The average monthly salary for each fiscal year is based on tax-inclusive standard salary and excludes bonuses and overtime pay. 2. Excludes site managers, training managers, special subbranch advisors, training center trainers, training assistant managers, sales general managers, senior planning partners, specially commended sales representatives, specially qualified sales representatives, life agents, sales representative trainees, life insurance agencies, part-time sales staff and service support staff. 91

94 Company History Nippon Life was founded as Nippon Life Assurance Co., Inc. in July 1889, and in 1891 the name was changed to Nippon Life Assurance Co., Ltd. When the Company was founded, the first premium table based on Japanese mortality statistics was created. At the same time, Nippon Life decided to offer profit dividends to policyholders, which was not a common practice in the life insurance industry at the time. As a life insurance company, Nippon Life was the first in Japan to embody the spirit of mutual aid and was the first in the industry to pay policyholder dividends after its first major closing of books in After World War II, the Company was reborn as Nippon Life Insurance Company in 1947, and continues to work to realize mutual aid and cooperative prosperity as a mutual company. Company Information u History 1889 Nippon Life Assurance Co., Inc. established 1891 Changed name to Nippon Life Assurance Co., Ltd Paid out the first profit dividends to policyholders in Japan 1899 Top in industry for amount of policies in force 1902 Moved to newly built headquarters at present location 1924 Nippon Life Saiseikai Foundation established 1931 Nissay Hospital opened, attached to the Nippon Life Saiseikai Foundation 1940 Japan s first Ordinary insurance with dividend by profit source launched 1942 Full transfer of Fuji Life Insurance 1945 Full transfer of Aikoku Life Insurance 1947 Company reemerged as Nippon Life Insurance Company 1950 Opening of the Nippon Life Insurance Baseball Stadium 1959 Endowment Insurance with Term Rider Kurashi no Hoken launched 1963 Nissay Theater established 1964 The Nissay Masterpiece Theater Series was launched 1973 Nissay Children s Culture Promotion Foundation established (name changed to Nissay Culture Foundation in 1993 and foundation converted to a public interest incorporated foundation in 2009) 1975 New York liaison office established (name changed to New York representative office in 1977) Full transfer of Ryukyu Life Insurance 1979 Nippon Life Foundation established (foundation converted to a public interest incorporated foundation in 2010) 1981 Whole life insurance with profit dividends and term insurance riders (given the nickname Long Run in 1983) and whole life insurance with profit dividends launched London representative office opened 1982 Frankfurt representative office opened 1984 Nissay Leasing Co., Ltd. established 1985 Nissay BOT Investing Advisors established (name changed to Nissay Investment Advisors in 1989) 1987 Beijing representative office opened Opening of Nissay Life Plaza Shinjuku (1st outlet) 1988 Nissay Research Institute established Corporate identity (CI) introduced th Anniversary NLI Research Institute (NLIRI) established Nissay Seirei Health & Welfare Foundation established 1991 Nissay Capital Co., Ltd. established Nippon Life Insurance Company of America established 1992 Athlete (Dread Disease Term Rider) launched Nissay Million Tree-Planting Campaign began 1993 NISSAY NEW CREATION CO., LTD. established Nissay Green Foundation established 1994 Living benefit rider launched 1995 Nissay Investment Trust Co., Ltd. established 1996 Nissay General Insurance Company, Limited established 1997 Acquired an equity stake in Bangkok Life Assurance Limited Forward (illness & disability term rider) launched Tie-up with Putnam Investments, LLC (U.S.A.) Former corporate headquarters (circa ) 1998 Nice Care (nursing care rider) launched Nissay Asset Management Corporation in merger of Nissay Investment Advisors Co., Ltd. and Nissay Investment Trust Co., Ltd. established Tie-up with Deutsche Bank th Anniversary Nissay Insurance Accounts was launched Nissay Information Technology Co., Ltd. established 2000 Separate Account Management Division spun off, then integrated with Investment Trust Advisors subsidiary (name changed to Nissay Asset Management Corporation) The Master Trust Bank of Japan, Ltd. began operation Foundation funds (kikin) fundraising using securitization through Special Purpose Company (SPC) 2001 Formed Nissay Dowa General Insurance Company, Limited in merger of Dowa Fire & Marine Insurance Co., Ltd. and Nissay General Insurance Co., Ltd. Began sales of Ikiru Chikara Nissay Medical Life Insurance Life Care Partners Co., Ltd. established in cooperation with Nichii Gakkan Group and Hitachi, Ltd. Corporate-pension Business Service Co., Ltd., a joint venture with Daiichi Mutual Life Insurance Company, established Nissay Call Center launched 2002 Nissay Million Tree-Planting Campaign goal of one million trees reached Individual variable annuities that are sold in banks launched 2003 Nissay Planting and Nurturing Forests for Future Generations Campaign, forest protection campaign, began Nissay-SVA Life Insurance Co., Ltd. began operation 2004 Bangkok Life becomes Group Company Tokyo Headquarters moved to Marunouchi area My Dream (annuity with variable accumulation rate) launched 2005 Iryo Meijin EX (hospitalization and medical life insurance) launched Nissay Key Man Plus Super Phoenix 100EX (term life insurance) launched Long Dream (single-payment whole life insurance with variable accumulation rate) launched 2006 Three dread disease term riders for group credit life insurance launched 2007 Singapore representative office opened (changed to a local corporation in 2010) 2008 Obtained approval to operate bank agency business Formed business alliance with Northwestern Mutual Mirai Support launched Platina Dream Equity Indexed Annuity launched More than seven million children benefited from the Nissay Masterpiece Theater Series th Anniversary My Medical Ex launched Nissay-SVA Life Insurance Co., Ltd. changed its joint venture partner to China Great Wall Asset Management Corporation, and renamed Nissay-Greatwall Life Insurance Co., Ltd Zutto Motto Service launched Sales of Yume no Katachi started 2011 Invested in Reliance Life Insurance Company Limited and made it into a Group company 92

95 Business structure (As of March 31, 2012) Insurance and Related Businesses: 9 companies In the insurance business, Nippon Life and its subsidiaries engage in the life insurance business. Meanwhile, company subsidiaries and affiliates that handle insurance-related operations engage in corporate pension system management work, life insurance policy confirmation work, life insurance policy solicitation and non-life insurance agency work, as well as life insurance brokerage agency work in the United States. Insurance business 4 companies: 1 subsidiary and 3 affiliates Insurance-related operations 5 companies: 3 subsidiaries and 2 affiliates Nippon Life Insurance Company of America <U.S.A.> (Life insurance business) Reliance Life Insurance Company Limited <India> (Life insurance business) Nissay-Greatwall Life Insurance Co., Ltd. <China> (Life insurance business) Corporate-Pension Business Service Co., Ltd. (Corporate pension system management) Nippon Insurance Service (Life insurance policy verification services) The Tokyo Agency of Nippon Life Insurance Co., Ltd. (Life insurance policy solicitation and non-life insurance agency services) NLI Insurance Agency, Inc. <U.S.A.> (Life insurance brokerage agency services) Subsidiaries in asset management-related operations engage in investment management, investment advisory, type II financial instruments services, trust and custody services, credit guarantee services, leasing, venture capital, building management, real estate investment, mortgage loans, and finance agency services. Nippon Life Insurance Company Asset Management-Related Businesses: 30 companies Investment advisory services 1 company: 1 subsidiary Trust banking 1 company: 1 affiliate Investment financing services 7 companies: 7 subsidiaries Real estate-related businesses 10 companies: 3 subsidiaries and 7 affiliates Overseas asset management services 11 companies: 10 subsidiaries and 1 affiliate Nissay Asset Management Corporation (Investment management, investment advisory, and type II financial instruments services) The Master Trust Bank of Japan, Ltd. (Trust and custody services) Nissay Credit Guarantee Co., Ltd. (Credit guarantee services) Nissay Leasing Co., Ltd. (Leasing services) Nissay Capital Co., Ltd. (Venture capital services) Shinjuku NS Building Co., Ltd. (Building management services) NLI Properties West, Inc. <U.S.A.> (Real estate investment) NLI Commercial Mortgage Fund, LLC <U.S.A.> (Mortgage loans) NLI Commercial Mortgage Fund II, LLC <U.S.A.> (Mortgage loans) NLI International PLC <England> (Loans and investment on behalf of Nippon Life) NLI International Inc. <U.S.A.> (Loans and investment on behalf of Nippon Life) Nissay Schroders Asset Management Europe Limited <England> (Investment management and investment advisory services) Nissay Schroders Asset Management Asia Limited <Singapore> (Investment management and investment advisory services) Company Information General Affairs-Related Operations: 9 companies Subsidiaries in general affairs-related operations engage in temporary staffing services, mediation and sales of goods, printing and bookbinding services, software development, information processing services, system administration and management, receiving agency, survey and research services as well as information services. General affairs-related operations 3 companies: 3 subsidiaries Accounting-related operations 2 companies: 2 subsidiaries Other operations 4 companies: 3 subsidiaries and 1 affiliate Nissay Business Service Co., Ltd. (Temporary staffing services) NISSAY NEW CREATION CO., LTD. (Printing and bookbinding services) Nissay Information Technology Co., Ltd. (Software development, information processing services) Nissay Computer Co., Ltd. (Information processing service, system administration and management) Nissay Card Service Co., Ltd. (Receiving agency) NLI Research Institute (Survey and research) NLI International Asia Pte. Ltd. <Singapore> (Research and information provision services) Bold text indicates consolidated companies. Notes: 1. Indicates consolidated subsidiaries 2. Major company names shown Indicates affiliates accounted for by the equity method 93

96 SUBSIDIARIES AND AFFILIATES The following table shows Nippon Life s consolidated subsidiaries, both direct and indirect, as well as its equity method affiliates as of March 31, (14 consolidated companies from a total of 48 subsidiaries and affiliate companies) Name Country Main business Issued capital Percentage of voting rights held by Nippon Life Percentage of voting rights held by Nippon Life subsidiary or affiliate companies (millions) (percent) (percent) Consolidated Subsidiaries Nissay Computer Co., Ltd. Japan Information processing services and 220 % % systems administration and management Nissay Credit Guarantee Co., Ltd. Japan Credit guarantee services Nissay Leasing Co., Ltd. Japan Leasing services 3, Nissay Capital Co., Ltd. Japan Venture capital services 3, Nissay Asset Management Corporation Japan Investment management, investment advisory and type II financial instruments services 10, Nissay Information Technology Co., Ltd. Japan Software development and information processing services 4, Nippon Life Insurance Company of America U.S.A. Life Insurance business $ NLI Properties West., Inc. U.S.A. Real estate investment $ NLI Commercial Mortgage Fund, LLC U.S.A. Mortgage loans $ NLI Commercial Mortgage Fund II, LLC U.S.A. Mortgage loans $ Company Information Affiliates The Master Trust Bank of Japan, Ltd. Japan Trust and custody services 10, Corporate-Pension Business Service Co., Ltd. Japan Corporate pension system management 6, Reliance Life Insurance Company Limited India Life Insurance business 11,963 INR Nissay-Greatwall Life Insurance Co., Ltd. China Life Insurance business 1,300 RMB Notes: 1. The Company s percentage of voting rights shows the number of voting rights held by Nippon Life divided by the total number of voting rights. 2. The percentage of voting rights held by Nippon Life s subsidiary and affiliate companies shows the number of voting rights held by Nippon Life s subsidiary or affiliate companies divided by the total number of voting rights. Major subsidiaries and affiliates are shown. u Business Sales, Acquisitions and Other Activities Date October 7, 2011 Description Nippon Life acquired shares of Reliance Life Insurance Company Limited bringing its share of voting rights to 26.00%. 94

97 Alliances to Strengthen the Life Insurance Business Nippon Life has established a base for the speedy provision of innovative, high-quality services from the perspective of customers by forming alliances with companies in the non-life insurance, asset formation, medical and nursing care, and other industries that are closely linked to life insurance, to further strengthen our core life insurance business. We are working to earn the trust of customers by meeting their increasingly sophisticated and diversified requirements. [Alliances for Strengthening the Life Insurance Business] Customers Life insurance Nippon Life Combined life and non-life insurance services based on alliances Unified group management Alliances for specific functions Non-life insurance Asset formation, system infrastructure development, others Overseas business Nippon Life Insurance Company of America (U.S.A.), Nissay-Greatwall Life Insurance Co., Ltd. (China), Bangkok Life Assurance Public Company Limited (Thailand), Reliance Life Insurance Company Limited (India) and other companies Other fields Aioi Nissay Dowa Insurance Co., Ltd. Nissay Asset Management Corporation, Nissay Information Technology Co., Ltd., and other companies Alliances with companies in Japan and other countries Combined Life and Non-Life Insurance Services l Aioi Nissay Dowa Insurance Co., Ltd. In addition to life insurance, Nippon Life also supports its customers with non-life insurance services. In an effort to increase convenience to customers, we provide combined life and non-life insurance services and have made a business alliance with Aioi Nissay Dowa Insurance Co., Ltd. Aioi Nissay Dowa Insurance was established in October 2010 through the merger of Nissay Dowa General Insurance Co., Ltd. with Aioi Insurance Co., Ltd. Until that time, Nippon Life had promoted the combined life and non-life insurance strategy with Nissay Dowa General Insurance. As a sales agency for Aioi Nissay Dowa Insurance, Nippon Life will offer customer high-quality non-life insurance products and services through its sales representatives. Company Information Aioi Nissay Dowa Insurance Head Office Unified Group Operations for Asset Formation, System Infrastructure Development and Other Activities The Nissay Group is working as one to offer various services including the provision of asset formation services taking full advantage of expertise gained as a life insurance company. These services involve the long-term management of investments funded by customers premiums, and the development of advanced system infrastructures to support new services. l Nissay Asset Management Corporation This company is an asset management firm that brings together the asset management capabilities of Nippon Life and all its group companies. Through discretionary management, advisory services and investment trust products, Nissay Asset Management provides high-quality asset management services for corporate and individual customers. In asset management operations, Nissay Asset Management joins overseas Nissay Group bases in New York, London and Singapore to form a unified global framework. For corporate pension plans, the company provides a range of global asset management products that utilize Nissay Group expertise acquired over many years to meet customers needs. For individual customers, we offer a wide range of financial products for long-term asset formation. These include stable income products such as the Nissay Japan Income Open Fund (nickname: J Bond), Ashita no Nihon (Japan Equity Fund) for investing in Japanese stocks, and the Nissay Next-generation Medical Fund, which invests in stocks worldwide. Nissay Asset Management gathering of analysts 95

98 As one element of CSR activities, Nissay Asset Management in July 2006 became the first asset management firm affiliated with a Japanese life insurer to sign the United Nations Principles for Responsible Investment* (PRI). Nissay Asset Management is focusing its efforts on operating a number of socially responsible investment (SRI) funds. * The United Nations Principles for Responsible Investment (PRI) propose that environmental, social and corporate governance issues should be incorporated in the investment decision-making process. l Nissay Information Technology Co., Ltd. As the company responsible for the IT strategy of the Nissay Group, Nissay Information Technology develops core business systems by using its knowledge of insurance and associated areas. In the fiscal year ended March 31, 2012, Nippon Information Technology continued to develop the New Integrated System with Nippon Life. This involves a comprehensive restructuring of core IT systems to upgrade services from the viewpoint of customers. For system operations, Nissay Information Technology and Nissay Computer are cooperating to achieve even higher levels of sophistication and efficiency. In areas outside of Nippon Life, Nissay Information Technology developed i-win MICHL, the next generation solution of the i-win insurance policy management software for the life insurance industry. Another goal is increasing sales of the MEDI-Papyrus medical certificate preparation support software to medical institutions. Sales were 58.5 billion in the fiscal year ended March 31, Nissay Information Technology Co., Ltd. developing systems Business Alliances for Specific Functions Company Information In addition to the above activities, Nippon Life s basic policy is to establish alliances with companies in Japan and overseas for specific functions. This policy has the following two elements: (1) Establish alliances with leading companies in their respective fields in order to provide the functions required to offer the finest services of the highest quality. (2) Undertake joint activities with a broad range of companies around the world in fields where shared social infrastructure is being developed and in those business areas where cost reductions must be prioritized. 96

99 Chapter 5 Financial Data Consolidated Financial Review 1. Consolidated Balance Sheets Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Changes in Net Assets Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements 107 Non-Consolidated Financial Review 6. Non-Consolidated Balance Sheets Non-Consolidated Statements of Income Non-Consolidated Statements of Changes in Net Assets The Non-Consolidated Proposed Appropriations of Surplus Notes to the Non-Consolidated Financial Statements 135 All figures are rounded down to the nearest unit. Independent Auditor s Report 149 Financial Data 97

100 CONSOLIDateD FINANCIAL REVIEW 1. Consolidated Balance Sheets Nippon Life Insurance Company and Consolidated Subsidiaries Millions of U.S. Dollars As of March ASSETS: Cash and deposits (Notes 3 and 4) 479, , ,836 $ 5,829 Call loans (Note 3) 212, , ,100 2,583 Receivables under securities borrowing transactions 211, , ,689 2,579 Monetary receivables purchased (Notes 3 and 4) 883,070 1,021,145 1,152,229 10,744 Assets held in trust (Note 4) 10,670 Investments in securities (Notes 3, 4, 6, 13 and 14) 37,465,182 35,617,542 34,919, ,836 Loans (Notes 4, 15 and 16) 8,639,833 8,659,163 8,694, ,120 Tangible fixed assets (Notes 5, 7, 13 and 18): 1,770,412 1,787,239 1,808,633 21,540 Land 1,199,239 1,203,352 1,209,743 14,591 Buildings 523, , ,400 6,371 Lease assets 3,353 4,568 2, Construction in progress 13,500 23,014 26, Other tangible fixed assets 30,683 23,746 25, Intangible fixed assets: 196, , ,285 2,389 Software 105,885 67,849 70,130 1,288 Lease assets 0 0 Other intangible fixed assets 90, , ,154 1,101 Reinsurance receivables Other assets 822, , ,542 10,004 Deferred tax assets (Note 19) 476, , ,865 5,798 Customers liability for acceptances and guarantees 27,037 21,377 15, Allowance for doubtful accounts (17,569) (26,769) (29,403) (214) Financial Data Total assets 51,166,914 49,950,141 48,850,343 $622,544 The accompanying notes are an integral part of the consolidated financial statements. 98

101 Millions of U.S. Dollars As of March LIABILITIES: Policy reserves and other reserves: Reserve for outstanding claims 208, , ,766 $ 2,539 Policy reserves 44,449,394 43,108,223 42,015, ,813 Reserve for dividends to policyholders (Note 9) 1,120,336 1,144,330 1,150,140 13,631 Subtotal 45,778,374 44,502,877 43,390, ,982 Reinsurance payables Other liabilities 1,960,751 2,364,231 1,904,609 23,856 Accrued bonuses for directors and corporate auditors Accrued retirement benefits (Note 10) 439, , ,157 5,352 Accrued retirement benefits for directors and corporate auditors 4,681 5,215 6, Reserve for program points 7,238 4, Accrued losses from supporting closely related companies Reserve for loss on disaster 739 1,826 9 Reserve for price fluctuations in investments in securities 333, , ,011 4,060 Deferred tax liabilities (Note 19) Deferred tax liabilities for land revaluation 142, , ,013 1,734 Acceptances and guarantees 27,037 21,377 15, Total liabilities 48,695,744 47,862,633 46,342, ,478 NET ASSETS: Foundation funds (Note 12) 300, , ,000 3,650 Reserve for redemption of foundation funds (Note 12) 900, , ,000 10,950 Reserve for revaluation Consolidated surplus 379, , ,964 4,615 Total foundation funds and others 1,579,962 1,481,099 1,460,616 19,223 Net unrealized gains on available-for-sale securities, net of tax 1,022, ,362 1,178,311 12,437 Deferred (losses) gains on derivatives under hedge accounting (6,969) 6,832 (602) (85) Land revaluation differences (67,515) (89,985) (91,111) (821) Foreign currency translation adjustments (68,619) (67,197) (50,640) (835) Total accumulated other comprehensive income 879, ,012 1,035,956 10,696 Minority interests 12,141 11,395 11, Total net assets 2,471,169 2,087,507 2,507,953 30,067 Total liabilities and net assets 51,166,914 49,950,141 48,850,343 $622,544 The accompanying notes are an integral part of the consolidated financial statements. Financial Data 99

102 2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Loss) [Consolidated Statements of Income] Nippon Life Insurance Company and Consolidated Subsidiaries Millions of U.S. Dollars For the years ended March ORDINARY INCOME: Revenues from insurance and reinsurance 5,388,618 4,917,047 4,837,897 $65,563 Investment income: Interest, dividends, and other income 1,203,934 1,212,295 1,128,229 14,648 Gain from assets held in trust, net 16 28,657 0 Gain on sales of securities 233, , ,840 2,847 Gain on redemptions of securities 239 2,121 1,259 3 Gain on derivative financial instruments, net 16,436 Reversal of allowance for doubtful accounts 5, Other investment income 3,422 1,582 1, Gain from separate accounts, net 18, , Subtotal 1,465,316 1,533,957 1,560,274 17,828 Other ordinary income 313, , ,700 3,820 Total ordinary income 7,167,921 6,729,612 6,689,872 87,212 Financial Data ORDINARY EXPENSES: Benefits and other payments: Death and other claims 1,167,552 1,135,479 1,174,213 14,206 Annuity payments 649, , ,285 7,901 Health and other benefits 819, , ,253 9,965 Surrender benefits 1,011,204 1,014,833 1,059,647 12,303 Other refunds 252, , ,455 3,077 Reinsurance premiums 1,506 1,586 1, Subtotal 3,901,575 3,829,140 3,899,580 47,470 Provision for policy reserves: Provision for reserve for outstanding claims 25, Provision for policy reserves 1,341,572 1,092,497 1,134,090 16,323 Provision for interest on reserve for dividends to policyholders (Note 9) 27,087 29,228 31, Subtotal 1,368,660 1,147,569 1,165,881 16,652 Investment expenses: Interest expenses 3,190 3,866 3, Loss from assets held in trust, net 605 Loss on sales of securities 154, , ,083 1,876 Loss on valuation of securities 29, ,460 89, Loss on redemptions of securities 16,352 16,547 12, Loss on derivative financial instruments, net 159,834 29,732 1,945 Foreign exchange losses, net 6,292 7,631 12, Provision for allowance for doubtful accounts 14,779 Write-off of loans Depreciation of rental real estate and other assets 25,211 25,561 26, Other investment expenses 23,350 28,910 25, Loss from separate accounts, net 34,818 Subtotal 417, , ,397 5,085 Operating expenses (Note 17) 590, , ,238 7,181 Other ordinary expenses 401, , ,223 4,888 Total ordinary expenses 6,680,080 6,505,624 6,398,320 81,276 Ordinary profit 487, , ,552 $ 5,

103 Millions of U.S. Dollars For the years ended March Extraordinary gains: Gain on disposals of fixed assets 72 1,588 1,324 $ 1 Gain on negative goodwill 234 Reversal of reserve for price fluctuations in investments in securities 13,293 51, Reversal of allowance for doubtful accounts 2,757 Reversal of reserve for loss on disaster Other extraordinary gains 92 1 Subtotal 13,793 55,587 1, Extraordinary losses: Loss on disposals of fixed assets 7,055 6,558 5, Impairment losses (Note 18) 13,903 11,756 6, Provision for reserve for price fluctuations in investments in securities 25,998 Loss on reduction entry of real estate Contributions for assisting social public welfare 1, Provision for reserve for loss on disaster 1,826 Loss from change in accounting standard for asset retirement obligations 1,172 Other extraordinary losses (Note 20) 4,158 2,577 Subtotal 22,493 25,869 40, Surplus before income taxes and minority interests 479, , ,249 5,830 Income taxes (Note 19): Current 32, ,726 5, Deferred 220,896 (92,893) 2,541 2,688 Total income taxes 253,417 27,833 7,894 3,083 Surplus before minority interests 225, ,872 2,746 Minority interests Net surplus 224, , ,663 $ 2,736 The accompanying notes are an integral part of the consolidated financial statements. Financial Data 101

104 [Consolidated Statements of Comprehensive Income (Loss)] Nippon Life Insurance Company and Consolidated Subsidiaries Millions of U.S. Dollars For the years ended March Surplus before minority interests 225, ,872 $2,746 Other comprehensive income (loss) (Note 21): 287,002 (442,966) 3,492 Net unrealized gains on available-for-sale securities, net of tax 276,778 (428,958) 3,368 Deferred (losses) gains on derivatives under hedge accounting (13,802) 7,435 (168) Land revaluation differences 25,450 (869) 310 Foreign currency translation adjustments (2,671) (15,993) (32) Share of other comprehensive income (loss) of associates accounted for under the equity method 1,246 (4,580) 15 Comprehensive income (loss): 512,725 (217,094) 6,238 Comprehensive income (loss) attributable to the Parent Company 511,938 (217,619) 6,229 Comprehensive income attributable to minority interests $ 10 The accompanying notes are an integral part of the consolidated financial statements. Financial Data 102

105 3. Consolidated Statements of Changes in Net Assets Nippon Life Insurance Company and Consolidated Subsidiaries Millions of U.S. Dollars For the years ended March FOUNDATION FUNDS AND OTHERS: Foundation funds (Note 12): Beginning balance 250, , ,000 $ 3,042 Increase/decrease: Issuance of foundation funds 100,000 50, ,000 1,217 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Net change 50,000 50, Ending balance 300, , ,000 3,650 Reserve for redemption of foundation funds (Note 12): Beginning balance 850, , ,000 10,342 Increase/decrease: Additions to reserve for redemption of foundation funds 50,000 50,000 50, Net change 50,000 50,000 50, Ending balance 900, , ,000 10,950 Reserve for revaluation: Beginning balance Increase/decrease Net change Ending balance Consolidated surplus: Beginning balance 380, , ,344 4,629 Increase/decrease: Additions to reserve for dividends to policyholders (Note 9) (175,513) (199,189) (130,634) (2,135) Additions to reserve for redemption of foundation funds (50,000) (50,000) (50,000) (608) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 224, , ,663 2,736 Reversal of land revaluation differences 2,981 (1,995) Net change (1,137) (29,516) 60,620 (14) Ending balance 379, , ,964 4,615 Total foundation funds and others: Beginning balance 1,481,099 1,460,616 1,299,995 18,020 Increase/decrease: Issuance of foundation funds 100,000 50, ,000 1,217 Additions to reserve for dividends to policyholders (175,513) (199,189) (130,634) (2,135) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 224, , ,663 2,736 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Reversal of land revaluation differences 2,981 (1,995) Net change 98,862 20, ,620 1,203 Ending balance 1,579,962 1,481,099 1,460,616 19,223 Financial Data 103

106 Financial Data Millions of U.S. Dollars For the years ended March Accumulated other comprehensive income (loss): Net unrealized gains on available-for-sale securities, net of tax: Beginning balance 745,362 1,178, ,693 $ 9,069 Increase/decrease: Net change, excluding foundation funds and others 276,808 (432,948) 924,617 3,368 Net change 276,808 (432,948) 924,617 3,368 Ending balance 1,022, ,362 1,178,311 12,437 Deferred (losses) gains on derivatives under hedge accounting: Beginning balance 6,832 (602) 6 83 Increase/decrease: Net change, excluding foundation funds and others (13,802) 7,435 (608) (168) Net change (13,802) 7,435 (608) (168) Ending balance (6,969) 6,832 (602) (85) Land revaluation differences: Beginning balance (89,985) (91,111) (91,006) (1,095) Increase/decrease: Net change, excluding foundation funds and others 22,469 1,126 (104) 273 Net change 22,469 1,126 (104) 273 Ending balance (67,515) (89,985) (91,111) (821) Foreign currency translation adjustments: Beginning balance (67,197) (50,640) (46,148) (818) Increase/decrease: Net change, excluding foundation funds and others (1,422) (16,556) (4,492) (17) Net change (1,422) (16,556) (4,492) (17) Ending balance (68,619) (67,197) (50,640) (835) Total accumulated other comprehensive income: Beginning balance 595,012 1,035, ,544 7,239 Increase/decrease: Net change, excluding foundation funds and others 284,053 (440,943) 919,411 3,456 Net change 284,053 (440,943) 919,411 3,456 Ending balance 879, ,012 1,035,956 10,696 Minority interests: Beginning balance 11,395 11,381 10, Increase/decrease: Net change, excluding foundation funds and others ,178 9 Net change ,178 9 Ending balance 12,141 11,395 11, Total net assets: Beginning balance 2,087,507 2,507,953 1,426,743 25,399 Increase/decrease: Issuance of foundation funds 100,000 50, ,000 1,217 Additions to reserve for dividends to policyholders (175,513) (199,189) (130,634) (2,135) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 224, , ,663 2,736 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Reversal of land revaluation differences 2,981 (1,995) Net change, excluding foundation funds and others 284,799 (440,929) 920,590 3,465 Net change 383,662 (420,446) 1,081,210 4,668 Ending balance 2,471,169 2,087,507 2,507,953 $30,067 The accompanying notes are an integral part of the consolidated financial statements. 104

107 4. Consolidated Statements of Cash Flows Nippon Life Insurance Company and Consolidated Subsidiaries Millions of U.S. Dollars For the years ended March I Cash flows from operating activities: Surplus before income taxes and minority interests 479, , ,249 $ 5,830 Depreciation of rental real estate and other assets 25,211 25,561 26, Depreciation 51,787 49,001 45, Impairment losses 13,903 11,756 6, Net (decrease) increase in reserve for outstanding claims (41,590) 25, (506) Net increase in policy reserves 1,341,233 1,092,652 1,134,209 16,319 Provision for interest on reserve for dividends to policyholders 27,087 29,228 31, Net (decrease) increase in allowance for doubtful accounts (5,403) (3,767) 14,108 (66) Net (decrease) increase in accrued bonuses for directors and corporate auditors (4) 1 (14) (0) Net (decrease) increase in accrued retirement benefits (2,786) (10,520) 12,352 (34) Net decrease in accrued retirement benefits for directors and corporate auditors (533) (813) (94) (6) Net (decrease) increase in reserve for price fluctuations in investments in securities (13,293) (51,008) 25,998 (162) Interest, dividends, and other income (1,203,934) (1,212,295) (1,128,229) (14,648) Net (gains) losses from assets held in trust (16) 605 (28,657) (0) Net (gains) losses on investments in securities (34,304) 92,430 41,218 (417) Net loss on policy loans 198, , ,322 2,417 Loss (gain) on derivative financial instruments, net 159,834 29,732 (16,436) 1,945 Interest expenses 3,190 3,866 3, Net foreign exchange losses 6,201 7,465 12, Net losses on tangible fixed assets 6,495 5,367 4, Investment loss (gain) on equity method (1,408) 7 (Gain) loss from separate accounts, net (18,640) 34,818 (200,643) (227) Net increase in reinsurance receivables (172) (18) (25) (2) Net (increase) decrease in other assets (excluding those related to investing activities and financial activities) (8,448) 15,101 1,194 (103) Net increase (decrease) in reinsurance payables 34 (0) (14) 0 Net decrease in other liabilities (excluding those related to investing activities and financing activities) (6,331) (2,122) (5,825) (77) Others, net (2,347) 10,935 20,017 (30) Subtotal 975, , ,247 11,869 Interest, dividends, and other income received 1,212,575 1,209,417 1,123,829 14,753 Interest paid (3,308) (3,840) (3,297) (40) Dividends to policyholders paid (202,602) (210,196) (222,643) (2,465) Others, net 508 1,335 1,769 7 Income taxes paid/refund (167,235) (8,062) 44,475 (2,035) Net cash provided by operating activities 1,815,460 1,613,134 1,428,380 $ 22,089 Financial Data 105

108 Millions of U.S. Dollars For the years ended March II Cash flows from investing activities: Net increase in deposits (2,100) (200) (400) $ (26) Net decrease (increase) in receivables under securities borrowing transactions 180,597 (240,836) (151,689) 2,197 Purchases of monetary receivables purchased (8,000) (34,623) (19,343) (97) Proceeds from sales and redemptions of monetary receivables purchased 84,009 89,481 49,824 1,022 Proceeds from decrease in assets held in trust 10, ,048 Purchases of securities (12,567,926) (19,093,872) (11,315,842) (152,913) Proceeds from sales and redemptions of securities 11,019,846 16,774,520 9,505, ,078 Disbursements for loans (1,515,105) (1,500,532) (1,397,314) (18,434) Proceeds from collections of loans 1,351,797 1,331,800 1,538,025 16,447 Net income from the settlement of derivative financial instruments 11, , , Net (decrease) increase in cash received as collateral under securities lending transactions (361,667) 272, ,562 (4,400) Others, net (23,286) 25,049 (8,903) (283) a Total of investment activities (1,830,732) (2,038,462) (946,503) (22,274) [I + IIa] [(15,271)] [(425,327)] [481,877] [(186)] Purchases of tangible fixed assets (55,966) (43,899) (184,399) (681) Proceeds from sales of tangible fixed assets 3,075 7,707 3, Others, net (30,711) (38,649) (37,465) (374) Net cash used in investing activities (1,914,335) (2,113,303) (1,164,619) (23,292) III Cash flows from financing activities: Proceeds from debt borrowing 219, , ,795 2,671 Repayments of debt (212,112) (204,508) (167,064) (2,581) Proceeds from issuance of foundation funds 100,000 50, ,000 1,217 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Interest on foundation funds (3,508) (3,650) (2,489) (43) Others, net 19,573 4,616 13, Net cash provided by (used in) financing activities 73,452 (11,242) 43, Financial Data IV Effect of exchange rate changes on cash and cash equivalents (4,085) (2,035) (9,394) (50) V Net (decrease) increase in cash and cash equivalents (29,507) (513,447) 297,619 (359) VI Cash and cash equivalents at the beginning of the year 736,931 1,250, ,759 8,966 VII Cash and cash equivalents at the end of the year 707, ,931 1,250,378 $ 8,607 The accompanying notes are an integral part of the consolidated financial statements. 106

109 5. Notes to the Consolidated Financial Statements Nippon Life Insurance Company and Consolidated Subsidiaries 1. Basis of Presenting the Consolidated Financial Statements (1) Accounting principles and presentation The accompanying consolidated financial statements have been prepared from the accounts and records maintained by NIPPON LIFE INSURANCE COMPANY ( Nippon Life or the Company ) and its consolidated subsidiaries in accordance with the provisions set forth in the Japanese Commercial Act, the Insurance Business Act and the related rules and regulations applicable to the mutual life insurance industry in general, and in conformity with accounting principles generally accepted in Japan, which are different in certain respects from the application and disclosure requirements of International Financial Reporting Standards. Certain accounting and reporting practices required to be followed by the industry are regulated by the Financial Services Agency and the related ministry by means of ministerial ordinances and guidance. The accompanying consolidated financial statements of the Company and its consolidated subsidiaries are in compliance with such requirements. The information provided in the consolidated financial statements including the notes to the consolidated financial statements is limited to that required by Japanese laws and regulations. Amounts of less than one million yen have been eliminated. As a result, totals may not add up exactly. Owing to a revision of the Ordinance for Enforcement of the Insurance Business Act, the methods of presentation in the consolidated balance sheet and the consolidated statement of changes in net assets have been changed from the fiscal year ended March 31, The main details are as follows: 1) The item that was previously presented as valuations, conversions, and others is now presented as accumulated other comprehensive income. 2) The item that was previously presented as total valuations, conversions, and others is now presented as total accumulated other comprehensive income. As of March 31, 2010, a consolidated statement of comprehensive income is not required as a part of the basic financial statements under the Companies Act of Japan and, accordingly, is not presented herein. Beginning from the fiscal year ended March 31, 2011, surplus before minority interests is presented as a separate item pursuant to the revision of the Ordinance for Enforcement of the Insurance Business Act. (2) United States dollar amounts Nippon Life prepares its consolidated financial statements in Japanese yen. The U.S. dollar amounts included in the consolidated financial statements and notes thereto represent the arithmetical results of translating Japanese yen to U.S. dollars on the basis of 82.19=U.S.$1, the effective rate of exchange at the balance sheet date of March 31, The inclusion of such U.S. dollar amounts is solely for convenience and is not intended to imply that Japanese yen amounts have been or could be readily converted, realized or settled in U.S. dollars at 82.19=U.S.$1 or at any other rate. 2. Summary of Significant Accounting Policies (1) Principles of consolidation i) Consolidated subsidiaries The consolidated financial statements include the accounts of Nippon Life and its subsidiaries. Consolidated subsidiaries as of March 31, 2012, 2011 and 2010 are listed as follows: Nissay Computer Co., Ltd. (Japan) Nissay Asset Management Corporation (Japan) Nissay Information Technology Co., Ltd. (Japan) Nissay Capital Co., Ltd. (Japan) Nissay Leasing Co., Ltd. (Japan) Nissay Credit Guarantee Co., Ltd. (Japan) Nippon Life Insurance Company of America (U.S.A.) NLI Properties West, Inc. (U.S.A.) NLI Commercial Mortgage Fund, LLC (U.S.A.) NLI Commercial Mortgage Fund II, LLC (U.S.A.) The major subsidiaries excluded from consolidation are Nissay Card Service Co., Ltd., Nissay Business Service Co., Ltd. and the Tokyo Agency of Nippon Life Insurance Co., Ltd. The respective and aggregate effects of the companies which are excluded from consolidation, based on total assets, revenues, net income and surplus for the fiscal year ended March 31, 2012, 2011 and 2010 are immaterial. This exclusion from consolidation does not prevent a reasonable judgment of the consolidated financial position of Nippon Life and its subsidiaries and the results of their operations. ii) Affiliates Affiliates accounted for under the equity method as of March 31, 2012, 2011 and 2010 are listed as follows: The Master Trust Bank of Japan, Ltd. (Japan) Corporate-Pension Business Service Co., Ltd. (Japan) Nissay-Greatwall Life Insurance Co., Ltd. (China) Reliance Life Insurance Company Limited (India) From the fiscal year ended March 31, 2012, Reliance Life Insurance Company Limited became an affiliate accounted for under the equity method because of the Company s acquisition of shares of said company. The subsidiaries not consolidated, e.g., Nissay Card Service Co., Ltd., Nissay Business Service Co., Ltd. and others, and affiliates other than those listed above, e.g., Bangkok Life Assurance Public Company Limited, are not accounted for under the equity method. The respective and aggregate effects of such companies on consolidated net income and surplus for the fiscal year ended March 31, 2012 are immaterial. Financial Data 107

110 Financial Data Additionally, Nissay Dowa General Insurance Co., Ltd. was included as an affiliate until the fiscal year ended March 31, 2010, which was removed in 2011 due to the fact of decrease in the percentage of holding shares. The number of consolidated subsidiaries and affiliates as of March 31, 2012, 2011 and 2010 was as follows: Consolidated subsidiaries Subsidiaries not consolidated but accounted for under the equity method Affiliates accounted for under the equity method iii) The fiscal year end dates of consolidated subsidiaries and affiliates The fiscal years of consolidated overseas subsidiaries and affiliates end on December 31. The consolidated financial statements are prepared using data as of the date of preparation and necessary adjustments are made to reflect important transactions that occurred between the fiscal year end date and the preparation date. iv) Valuation of assets and liabilities of consolidated subsidiaries and affiliates The Company applies the mark to market method. v) Amortization of goodwill Goodwill and the equivalent amount of goodwill from affiliates accounted for under the equity method are amortized under the straight-line method over 20 years. However, for items that are immaterial, the total amount of goodwill is fully amortized as incurred. vi) All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profits/losses included in assets/liabilities resulting from transactions within the Group is eliminated. (2) Cash and cash equivalents Cash and cash equivalents, for the purpose of reporting consolidated cash flows, are composed of cash in hand, deposits held at call with banks and all highly liquid short-term investments with a maturity of three months or less when purchased, which are readily convertible into cash and present insignificant risk of change in value. (3) Securities and hedging activities Securities of the Company (including items such as deposits and monetary receivables purchased which are treated as securities based on the Accounting Standard for Financial Instruments (The Accounting Standards Board of Japan (ASBJ) Statement No. 10) and securities within assets held in trust) are valued as follows: i) Trading securities are stated at market value on the balance sheet date. The moving average method is used for calculating cost of sales. ii) Held-to-maturity debt securities are valued using the moving average method, net of accumulated amortization (straight-line). iii) Policy-reserve-matching bonds are valued using the moving average method, net of accumulated amortization (straight-line) in accordance with the Industry Audit Committee Report No. 21, Temporary Treatment of Accounting and Auditing Concerning Policy-Reserve-Matching Bonds in the Insurance Industry, issued by the Japanese Institute of Certified Public Accountants (JICPA). iv) Investments in subsidiaries and affiliates that are not consolidated nor accounted for by the equity method (stocks issued by subsidiaries prescribed in Article 2, Paragraph 12 of the Insurance Business Act excluding subsidiaries prescribed in Article , Paragraph 3 of the Order for Enforcement of the Insurance Business Act and stocks issued by affiliates prescribed in Article , Paragraph 4 of the Order for Enforcement of the Insurance Business Act) are valued using the moving average method. v) Available-for-sale securities 1) For securities with a market value, stocks (including foreign stocks) are valued by using the average market value during the period of one month before the balance sheet date (cost of sales is calculated by using the moving average method). Other securities with a market value are valued by using the market value on the balance sheet date (cost of sales is calculated by using the moving average method). 2) For securities of which the market value is extremely difficult to determine, public and corporate bonds (including foreign bonds) for which the difference between the purchase price and face value is due to an interest rate adjustment are valued using the moving average method, net of accumulated amortization (straight-line). Other securities are valued using the moving average amount. Unrealized gains/losses, net of applicable taxes, are recorded in a separate component of net assets. 108

111 Hedge accounting of the Company is applied based on the following method: 1) The Company mainly applies the mark-to-market method of hedge accounting and deferred hedge accounting for hedging activities related to foreign exchange rate fluctuation exposures on certain bonds denominated in foreign currencies. The Company also applies the exceptional accounting treatment ( Tokurei-shori ) for interest rate swaps to hedge the cash flow volatility of certain loans and applies designated hedge accounting ( Furiate-shori ) for foreign exchange forward contracts and currency swaps for certain financial assets denominated in foreign currencies. 2) Effectiveness of hedging activities is mainly evaluated by performing a ratio analysis of market value movement comparisons based on the hedging instruments and hedging methods taken, which is in accordance with the Company s internal risk management policies. 3) Derivative financial instruments utilized for other than hedging purposes are stated at market value. (4) Policy-reserve-matching bonds Securities that are held for the purpose of matching the duration of outstanding liabilities within the sub-groups (insurance type, remaining period, and investment policy) of insurance products, such as individual insurance and annuities, workers asset-formation insurance and annuities, and group insurance and annuities are classified as policy-reserve-matching bonds in accordance with the Industry Audit Committee Report No. 21, Temporary Treatment of Accounting and Auditing Concerning Policy-Reserve-Matching Bonds in the Insurance Industry, issued by the JICPA. Note that effective from the fiscal year ended March 31, 2011, the specification of subject policy sub-groups was changed for the purpose of meeting changes in the bond investment environment and enhancing asset/ liability management. There was no impact of these changes on the consolidated balance sheet as of March 31, 2011 or the consolidated statement of income for the fiscal year ended March 31, The changes were as follows: 1) Regarding policies other than lump-sum payment products and group annuities, policies previously specified and sub-grouped as those with a remaining period of within 30 years have been changed to a sub-group corresponding to all relevant policies. 2) Regarding group annuities other than guaranteed fixed term rate products, policies previously specified and sub-grouped as having cash outflows projected within the next 15 years have been changed to a sub-group with cash outflows projected for the entire period. (5) Foreign currency translation Assets and liabilities denominated in foreign currencies are translated into Japanese yen using the Accounting Standards for Foreign Currency Transactions (Business Accounting Council). Foreign currency-denominated available-for-sale securities of the Company, with exchange rates which have significantly fluctuated and recovery where is not expected, are converted to Japanese yen using either the rate on the balance sheet date or the average one month rate prior to the balance sheet date, whichever indicates a weaker yen. This translation difference is recorded as a loss on valuation of securities. (6) Tangible fixed assets 1) Tangible fixed assets of the Company (except for lease assets related to financial leases where ownership is not transferred and buildings acquired on or after April 1, 1998) are depreciated based on the declining balance method. Buildings acquired on or after April 1, 1998 are depreciated based on the straight-line method. Tangible fixed assets of consolidated subsidiaries are depreciated based mainly on the straight-line method. Tangible fixed assets are stated at cost, net of accumulated depreciation and impairment losses. The estimated useful lives of major items are as follows: Buildings 2 to 50 years Other tangible fixed assets 2 to 20 years 2) The straight-line method based on lease period is used to calculate the depreciation of lease assets related to financial leases where ownership is not transferred. 3) Revaluation of land used in the operations of the Company is performed based on the Act on Revaluation of Land. The tax effect on the amount related to the valuation difference between the previous and the revalued amount for land revaluation is recognized as deferred tax liabilities within the liability section. The valuation differences, excluding tax, are recognized as land revaluation differences within the net assets section. Revaluation Date March 31, 2002 Revaluation Methodology The amount is rationally calculated by using the land listed value and road rate as prescribed by Article 2, Items 1 and 4, respectively, of the Order for Enforcement of the Act on Revaluation of Land. (7) Software Capitalized software for internal use, which is included within intangible fixed assets, is amortized using the straight-line method over their estimated useful lives as internally determined (3 to 5 years). Financial Data 109

112 Financial Data 110 (8) Leases Financial leases, other than from the transfer of ownership, are capitalized based on the Accounting Standard for Lease Transactions (ASBJ Statement No. 13). Financial leases where the Company or a consolidated subsidiary is the lessee, ownership is not transferred, and the lease start date is March 31, 2008 or prior, are accounted for under the accounting treatment applied to ordinary operating leases. For financial leases where the Company or a consolidated subsidiary is the lessor, and ownership is not transferred, if any, the Company recognizes the sales amount and cost of sales at the time of receiving the lease fee. (9) Allowance for doubtful accounts 1) An allowance for doubtful accounts of the Company is recognized in accordance with the Company s internal Asset Valuation Regulation and Write-Off/Provision Rule. i) The allowance for loans from borrowers who are legally or substantially bankrupt, such as being bankrupt or being in the process of civil rehabilitation proceedings, is recognized based on the amount of credit remaining after directly deducting amounts expected to be collected through disposal of collateral or execution of guarantees from the balance of loans (as mentioned at 4) below). ii) The allowance for loans from borrowers who are not currently legally bankrupt but have a significant possibility of bankruptcy is recognized at the amounts deemed necessary considering an assessment of the borrowers overall solvency and the amounts remaining after deduction of amounts expected to be collected through the disposal of collateral or the execution of guarantees. iii) The allowance for loans from borrowers other than the above is provided based on the borrowers balance multiplied by the historical average (of a certain period) percentage of bad debt. 2) All credits of the Company are assessed by responsible sections in accordance with the Company s internal Asset Valuation Regulation. The assessments are verified by the independent Asset Auditing Department. The results of the assessments are reflected in the calculation of the allowance for doubtful accounts. 3) For consolidated subsidiaries, the Company records amounts deemed necessary in accordance mainly with the Company s internal Asset Valuation Regulation and Write-Off/Provision Rule. 4) The estimated uncollectible amount calculated by subtracting the amount of collateral value or the amount collectible by the execution of guarantees from the balance of loans is directly deducted from the balance of loans (including loans with credits secured and/or guaranteed) made to legally or substantially bankrupt borrowers. The estimated uncollectible amounts were 2,668 million (U.S.$32 million) (including 1,761 million (U.S.$21 million) of credits secured and/or guaranteed), 3,953 million (including 2,507 million of credits secured and/or guaranteed) and 14,732 million (including 8,327 million of credits secured and/or guaranteed) as of March 31, 2012, 2011 and 2010, respectively. (10) Accrued bonuses for directors and corporate auditors Accrued bonuses for directors and corporate auditors are recognized based on amounts estimated to be paid. (11) Accrued retirement benefits 1) Accrued retirement benefits of the Company are recognized based on the estimated amount of projected benefit obligations in excess of the market value of pension plan assets for future severance payments to employees on the balance sheet date. 2) The Partial Amendments to Accounting Standard for Retirement Benefits (Part 3) (ASBJ Statement No. 19) has been applied from the fiscal year ended March 31, As it was decided that the same discount rate as previously applied would be used, there was no effect on operating income or surplus before income taxes and minority interests. (12) Aaccrued retirement benefits for directors and corporate auditors Accrued retirement benefits for directors and corporate auditors are recognized based on estimated payment amounts under internal rules. (13) Reserve for program points From the fiscal year ended March 31, 2011, following the introduction of the points system, a reserve for program points was recognized based on the amount projected to be incurred for expenses from the use of points granted to policyholders. (14) Accrued losses from supporting closely related companies Accrued losses from supporting closely related companies are recognized based on estimated amounts required in the future for supporting the restructurings of closely related companies. (15) Reserve for loss on disaster Reserve for loss on disaster is recognized based on estimated expenditures associated with the Great East Japan Earthquake, such as expenditures for the repair of tangible fixed assets. (16) Reserve for price fluctuations in investments in securities Reserve for price fluctuations in investments in securities is recognized based on Article 115 of the Insurance Business Act. (17) Accounting for consumption taxes Consumption taxes and local consumption taxes of the Company are accounted for by the tax exclusion method. However, consumption taxes paid on certain asset transactions, which are not deductible from consumption taxes withheld and that are stipulated to be deferred under the Consumption Tax Act, are deferred as prepaid expenses and amortized over a 5 year period on a straight-line basis. Consumption taxes other than deferred consumption taxes are expensed as incurred.

113 (18) Policy reserves Policy reserves of the Company are reserves set forth in accordance with Article 116 of the Insurance Business Act. Policy reserves are recognized based on the following methodology: 1) Reserves for contracts concluded in or after April 1996, other than those in which factors used as a basis for computing policy reserves and insurance premiums are alterable and those for variable insurance, are computed by the net level premium method based on the assumption rates locked in at the sales and renewal prescribed by the Insurance Business Act and the statement of calculation procedures*. 2) Reserves for other contracts are determined by the net level premium method using the assumption rates locked in at the sales and renewal prescribed by the statement of calculation procedures*. * Documents approved by the Financial Services Agency that describe the specific calculation methods for insurance premiums and policy reserves. Since the fiscal year ended March 31, 2007, additional amounts to the policy reserves had been accumulated over 5 years to cover a possible deficiency in the amount of the reserve for certain individual annuity policyholders. Such treatment is in accordance with Article 69, Paragraph 5 of the Ordinance for Enforcement of the Insurance Business Act. As a result, the amount of policy reserves accumulated during the fiscal years ended March 31, 2011 and 2010 were 230,037 million and 207,970 million, respectively. (19) Revenue recognition Regarding revenues of the Company, insurance premiums are recognized when cash is received, and insurance premiums due but not collected are not recognized as revenues. Unearned insurance premiums are recognized as policy reserves. (20) Policy acquisition costs Policy acquisition costs are recorded to expense as incurred. (21) New accounting standards The Accounting Standard for Asset Retirement Obligations (ASBJ Statement No. 18) and the Guidance on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21) have been applied from the fiscal year ended March 31, As a result, tangible fixed assets and other assets increased by 552 million and 1,802 million was recorded as asset retirement obligations within other liabilities as of March 31, Furthermore, ordinary profit decreased by 130 million and surplus before income taxes and minority interests decreased by 1,250 million for the fiscal year ended March 31, The Accounting Standard for Business Combination (ASBJ Statement No. 21) and the Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10) have been applied from the fiscal year ended March 31, The Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No. 24), the Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No. 24), and the Practical Guidelines on Accounting Standards for Financial Instruments (JICPA Accounting Practice Committee Statement No. 14), which was amended to respond to the Accounting Standard and the Guidance, have been applied from the fiscal year ended March 31, Due to the resulting revisions to the Ordinance for Enforcement of the Insurance Business Act, the reversal of allowance for doubtful accounts, which had previously been presented under extraordinary gains on the consolidated statement of income, was included in investment income. As a result, ordinary profit increased by 5,083 million (U.S.$62 million) but there was no impact on net surplus. (22) New accounting pronouncements Accounting Standard for Retirement Benefits On May 17, 2012, the ASBJ issued ASBJ Statement No. 26, Accounting Standard for Retirement Benefits and ASBJ Guidance No. 25, Guidance on Accounting Standard for Retirement Benefits, which replaced the Accounting Standard for Retirement Benefits that had been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000 and the other related practical guidances, being followed by partial amendments from time to time through The major changes are as follows: (a) Treatment in the balance sheet Under the current requirements, actuarial gains and losses and past service costs that have yet to be recognized in profit or loss are not recognized in the balance sheet, and the difference between retirement benefit obligations and plan assets (hereinafter, deficit or surplus ), adjusted by such unrecognized amounts, is recognized as a liability or asset. Under the revised accounting standard, actuarial gains and losses and past service costs that have yet to be recognized in profit or loss shall be recognized within net assets (accumulated other comprehensive income), after adjusting for tax effects, and the deficit or surplus shall be recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits). (b) Treatment in the statement of income and the statement of comprehensive income (or the statement of income and comprehensive income) The revised accounting standard will not change how to recognize actuarial gains and losses and past service costs in profit or loss. Those amounts will be recognized in profit or loss over a certain period no longer than the expected average remaining working lives of the employees. However, actuarial gains and losses and past service costs that arose in the current period and have yet to be recognized in profit or loss shall be included in other comprehensive income and actuarial gains and losses and past service costs that were recognized in other comprehensive income in prior periods and then recognized in profit or loss in the current period shall be treated as reclassification adjustments. 111 Financial Data

114 Financial Data This accounting standard and the guidance are effective for the end of annual periods beginning on or after April 1, 2013 with earlier application being permitted from the beginning of annual periods beginning on or after April 1, However, no retrospective application of this accounting standard to consolidated financial statements in prior periods is required. The Company expects to apply the revised accounting standard from the end of the annual period beginning on April 1, 2013 and is in the process of measuring the effects of applying the revised accounting standard for the year ending March 31, Cash and Cash Equivalents The reconciliation of Cash and cash equivalents in the consolidated statements of cash flows and Cash and deposits in the consolidated balance sheets as of March 31, 2012, 2011 and 2010 was as follows: Millions of U.S. Dollars Cash and deposits 479, , ,836 $5,829 Call loans 212, , ,100 2,583 Monetary receivables purchased 71,991 27,996 85, Investments in securities 261 5, ,360 3 Time deposits with initial term over 3 months to maturity and others (56,200) (104,100) (3,900) (684) Cash and cash equivalents 707, ,931 1,250,378 $8, Financial Instruments Regarding the investment of the Company s general accounts (except separate accounts as provided in Article 118, Paragraph 1 of the Insurance Business Act), in light of the characteristics of life insurance policies, the Company built a portfolio geared towards mid- to long-term investment and formulated an investment plan considering the outlook of the investment environment. Based on this, in order to reliably pay benefits and other payments in the future, the Company positioned yen-denominated assets that can be expected to provide stable income, such as bonds and loans, as the Company s core assets, and from the viewpoint of improving profit in the mid- to long-term, the Company invested in stocks and foreign securities. Also, from the viewpoint of effective investment, the Company mainly uses derivative transactions for controlling asset investment risks. Specifically, the Company uses interest rate swaps for the Company s interest rate related investments, foreign exchange forward contracts and currency options and swaps for the Company s currency related investments, and hedge accounting is applied with respect to a portion thereof. The Company mainly applies the mark-to-market method of hedge accounting and deferred hedge accounting for hedging activities against foreign exchange rate fluctuation exposures on certain bonds denominated in foreign currencies. The Company also applies the exceptional accounting treatment ( Tokurei-shori ) for interest rate swaps to hedge the cash flow volatility of certain loans and applies designated hedge accounting ( Furiateshori ) for foreign exchange forward contracts and currency swaps for certain financial assets denominated in foreign currencies. The effectiveness of hedging activities is mainly evaluated by performing a ratio analysis of market value movement comparisons based on the hedging instruments and hedging methods taken, which is in accordance with the Company s internal risk management policies. Securities are mainly exposed to market risk and credit risk, loans are exposed to credit risk, and derivative transactions are exposed to market risk and credit risk. Market risk refers to the risk of losses incurred when the market value of investment assets declines due to such factors as fluctuations in interest rates, exchange rates or stock prices. Credit risk refers to the risk of incurring losses when the value of assets, primarily loans and bonds, declines due to deterioration of the financial condition of the party to whom credit has been extended. These risks are managed according to rules and regulations regarding investment risks. To manage market risk, the Company has implemented investment limits based on the nature of the assets in order to avoid excessive losses from financing and investment transactions. In addition, the Company regularly reports on the status of compliance to the Risk Management Committee, the advisory body of the Management Committee and has prepared a system to control risk to acceptable levels when there is a breach of rules. Also, to control market risk in the Company s portfolio, the Company uses a statistical analysis method to rationally calculate the market value-atrisk of the portfolio as a whole and conducts appropriate asset allocation within acceptable boundaries of risk. To manage credit risk, the Company has built a thorough monitoring system involving the Assessment Management Department independent of the departments handling investment and finance activities. The Company also continues to build a sound portfolio through the establishment of interest guidelines to ensure the returns the Company obtained are commensurate with the risk, a system of internal ratings for classifying the creditworthiness of borrowers, and credit ceilings to ensure that credit risk is not excessively concentrated in a particular company or group. In addition, the Company calculates credit value-at-risk as a measurement of the magnitude of credit risk across the Company s portfolio as a whole, and monitors whether the magnitude of risk stays within an appropriate range. 112

115 (1) Balance sheet amounts and market values of major financial instruments and their differences are as follows: Millions of U.S. Dollars As of March Balance sheet amount (*1) Market value (*2) Difference Balance sheet amount ( * 1) Market value ( * 2) Difference Balance sheet amount ( * 1) Market value ( * 2) Difference Balance sheet amount (*1) Cash and deposits (negotiable certificates of deposit) 250, , , , , ,994 $ 3,054 $ 3,054 $ Available-for-sale securities 250, , , , , ,994 3,054 3,054 Monetary receivables purchased 883, ,722 43,652 1,021,145 1,055,755 34,610 1,152,229 1,162,774 10,545 10,744 11, Policy-reserve-matching bonds 806, ,341 43, ,555 1,021,165 34,610 1,055,131 1,065,677 10,545 9,815 10, Available-for-sale securities 76,381 76,381 34,589 34,589 97,097 97, Assets held in trust 10,670 10,670 Trading securities 10,670 10,670 Securities 36,312,157 37,446,444 1,134,286 34,391,805 35,074, ,095 33,622,413 34,151, , , ,608 13,801 Trading securities 1,041,876 1,041,876 1,182,649 1,182,649 1,343,425 1,343,425 12,676 12,676 Held-to-maturity debt securities 46,921 47, ,136 43, ,860 45, Policy-reserve-matching bonds 17,421,958 18,542,260 1,120,301 16,428,921 17,085, ,352 15,780,403 16,304, , , ,602 13,631 Investments in subsidiaries and affiliates 7,711 21,406 13,695 7,711 34,062 26,351 81,446 86,172 4, Available-for-sale securities 17,793,689 17,793,689 16,729,385 16,729,385 16,372,276 16,372, , ,495 Loans (*3) 8,626,894 8,889, ,253 8,645,321 8,877, ,320 8,680,081 8,861, , , ,154 3,191 Policy loans 896, , , ,614 1,025,475 1,025,475 10,904 10,904 Industrial and consumer loans 7,730,733 7,992, ,253 7,679,707 7,912, ,320 7,654,606 7,835, ,332 94,059 97,250 3,191 Derivative financial instruments (*4) (190,224) (190,224) (81,099) (81,099) (101,963) (101,963) (2,314) (2,314) Hedge accounting not applied (81,081) (81,081) (649) (649) (987) (987) Hedge accounting applied (109,143) (109,143) (81,201) (81,201) (101,313) (101,313) (1,328) (1,328) Cash received as collateral under securities lending contracts (*5) (935,584) (935,584) (1,297,252) (1,297,252) (1,025,057) (1,025,057) $ (11,383) $ (11,383) $ (*1) For transactions for which an allowance for doubtful accounts was recorded, the amount of the allowance is deducted. (*2) For securities for which impairment losses were recognized in the fiscal years ended March 31, 2012, 2011 and 2010, the market value is the balance sheet amount after the impairment losses are deducted. (*3) The market values of derivative financial instruments that are interest rate swaps under exceptional accounting treatment ( Tokurei-shori ) or currency swaps under designated hedge accounting ( Furiate-shori ), are included in the market values of loans because they are accounted for as an integral part of loans that are hedged items. (*4) Assets and liabilities generated by derivative financial instruments are offset and presented net. Net liabilities in total are presented in brackets. (*5) Cash received as collateral under securities lending contracts is recorded in liabilities and presented in brackets. Market value (*2) Difference (2) Market value measurement methods for the Company s major financial instruments are as follows: 1) Securities, deposits and monetary receivables purchased are treated as securities based on the Accounting Standard for Financial Instruments (ASBJ Statement No. 10) a. Items with a market price Market value is measured based on the closing market price on the balance sheet date. However, the market values of availablefor-sale domestic and foreign equity securities are based on the average market price over a one-month period prior to the balance sheet date. b. Items without a market price Market value is measured mainly by discounting future cash flows to the present value. 2) Loans a. Policy loans Market value is deemed to approximate book value, due to no repayment deadlines based on characteristics such as limiting loans to the surrender benefits range, and expected reimbursement period and interest rate requirements, and others. Thus, the book value is used as the market value of the policy loans. b. Industrial and consumer loans Market value of variable interest rate loans is deemed to approximate book value, because market interest rates are reflected in future cash flows over the short term. Thus, the book value is used as the market value of the variable interest rate loans. Market value of fixed interest rate loans is measured mainly by discounting future cash flows to the present value. Loans from legally or substantially bankrupt borrowers or borrowers who are not currently legally bankrupt but have a high probability of bankruptcy are measured by deducting the estimated uncollectable amount from the book value directly prior to the decrease. Financial Data 113

116 3) Derivative financial instruments a. Market value of futures and other market transactions is measured by the liquidation value or closing market price on the balance sheet date. b. Market value of exchange contracts and currency options is measured based on theoretical values calculated by the Company using Telegraphic Transfer Middle rate (TTM) and discount rates obtained from brokers. c. Market value of interest rate swaps and currency swaps is measured based on theoretical present values calculated by discounting future cash flows using published market interest rates, and others. 4) Assets held in trust Market value is measured based on the price rationally calculated by the trustee of assets held in trust, pursuant to 1) and 3) above. 5) Cash received as collateral under securities lending contracts The book value is used as market value due to their short-term settlement. (3) Unlisted equity securities, investments in partnerships whereby partnership assets consist of unlisted equity securities, and other items without market value are not included in the securities in the table (1). Balance sheet amounts by holding purpose were 121,871 million (U.S.$1,483 million), 57,320 million and 54,955 million for stocks of subsidiaries and affiliates, and 1,031,153 million (U.S.$12,546 million), 1,160,417 million and 1,233,647 million for available-for-sale securities as of March 31, 2012, 2011 and 2010, respectively. (4) Matters regarding securities, and others by holding purpose are as follows: 1) Trading securities Investments in securities for separate accounts are classified as trading securities as of March 31, 2012, 2011, and In addition, securities managed as trust assets in assets held in trust are also classified as trading securities as of March 31, Valuation differences included in profit were losses of 11,977 million (U.S.$146 million), 32,320 million and 9,996 million for securities related to separate accounts for the fiscal years ended March 31, 2012, 2011 and 2010, respectively, and losses of 2,479 million for assets held in trust for the fiscal year ended March 31, Assets held in trust included derivative financial instruments held in the trust as of March 31, ) Held-to-maturity debt securities Balance sheet amounts, market values and their differences by type are as follows: Financial Data Millions of U.S. Dollars As of March Type Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Market value exceeds the balance sheet amount Domestic bonds 35,947 36, ,128 29, ,172 36, $437 $440 $ 2 Foreign securities 7,012 7, ,194 7, ,669 4, Subtotal 42,959 43, ,323 36, ,842 41, Market value does not exceed the balance sheet amount Domestic bonds 3,533 3,450 (82) 5,033 4,986 (46) 2,021 2,018 (2) (1) Foreign securities (3) 1,779 1,767 (12) 1,997 1,748 (248) 5 5 (0) Subtotal 3,962 3,876 (85) 6,813 6,754 (58) 4,018 3,767 (251) (1) Total 46,921 47, ,136 43, ,860 45, $571 $574 $ 4 114

117 3) Policy-reserve-matching bonds Balance sheet amounts, market values and their differences by type are as follows: Millions of U.S. Dollars As of March Type Market value exceeds the balance sheet amount Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Monetary receivables purchased 748, ,984 44, , ,471 35, , ,991 14,833 $ 9,111 $ 9,648 $ 537 Domestic bonds 17,108,566 18,250,757 1,142,191 14,690,166 15,371, ,228 14,092,476 14,642, , , ,056 13,897 Foreign securities 68,973 71,780 2,806 80,912 83,598 2,685 37,850 38,957 1, Subtotal 17,926,383 19,115,522 1,189,139 15,669,707 16,389, ,757 14,925,486 15,491, , , ,577 14,468 Market value does not exceed the balance sheet amount Monetary receivables purchased 57,846 57,357 (488) 87,926 86,693 (1,232) 259, ,685 (4,287) (6) Domestic bonds 231, ,831 (24,360) 1,651,047 1,623,521 (27,525) 1,595,851 1,571,991 (23,860) 2,813 2,516 (296) Foreign securities 13,226 12,890 (336) 6,795 6,758 (36) 54,224 51,719 (2,504) (4) Subtotal 302, ,079 (25,185) 1,745,768 1,716,974 (28,794) 1,910,049 1,879,396 (30,653) 3,678 3,371 (306) Total 18,228,648 19,392,601 1,163,953 17,415,476 18,106, ,962 16,835,535 17,370, ,041 $221,787 $235,948 $14,162 4) Available-for-sale securities Acquisition cost or amortized cost, balance sheet amounts and their differences by type are as follows: Millions of U.S. Dollars As of March Type Balance sheet amount exceeds acquisition cost or amortized cost Acquisition cost or amortized cost Balance sheet amount Difference Acquisition cost or amortized cost Balance sheet amount Difference Acquisition cost or amortized cost Balance sheet amount Difference Acquisition cost or amortized cost Balance sheet amount Difference Cash and deposits (negotiable certificates of deposit) 10,000 10, ,000 15,000 0 $ $ $ Monetary receivables purchased 2,855 2, ,283 4, ,968 5, Domestic bonds 1,674,703 1,730,635 55,932 1,164,003 1,202,049 38,046 1,144,171 1,179,679 35,508 20,376 21, Domestic stocks 2,656,417 4,045,867 1,389,449 3,148,031 4,688,174 1,540,143 3,678,202 5,581,643 1,903,440 32,320 49,226 16,905 Foreign securities 7,948,252 8,564, ,255 4,021,520 4,264, ,106 4,914,184 5,175, ,400 96, ,204 7,498 Other securities 173, ,974 8, , ,442 7, , ,518 9,237 2,113 2, Subtotal 12,455,879 14,525,846 2,069,967 8,562,366 10,392,069 1,829,702 9,935,808 12,145,725 2,209, , ,735 25,185 Balance sheet amount does not exceed acquisition cost or amortized cost Cash and deposits (negotiable certificates of deposit) 251, ,997 (2) 413, ,495 (4) 355, ,494 (5) 3,054 3,054 (0) Monetary receivables purchased 73,540 73,521 (19) 29,843 29,813 (30) 92,359 91,798 (561) (0) Domestic bonds 55,089 47,378 (7,711) 289, ,039 (3,553) 521, ,958 (575) (94) Domestic stocks 1,996,221 1,551,305 (444,915) 1,570,642 1,218,335 (352,306) 1,089, ,505 (231,019) 24,288 18,875 (5,413) Foreign securities 1,699,706 1,626,024 (73,682) 5,007,772 4,756,572 (251,200) 2,860,434 2,749,976 (110,458) 20,680 19,784 (896) Other securities 61,946 45,994 (15,951) 115,617 91,145 (24,472) 141, ,910 (25,065) (194) Subtotal 4,137,504 3,595,221 (542,282) 7,426,969 6,795,402 (631,566) 5,061,329 4,693,643 (367,686) 50,341 43,743 (6,598) Total 16,593,383 18,121,068 1,527,684 15,989,335 17,187,471 1,198,135 14,997,138 16,839,368 1,842,230 $201,891 $220,478 $18,587 * Items with 1,031,153 million (U.S.$12,546 million), 1,160,417 million and 1,233,647 million, whose market values are extremely difficult to determine, as of March 31, 2012, 2011 and 2010, respectively, are not included. Financial Data 115

118 25,760 million (U.S.$313 million) and 118,932 million in impairment losses were recognized for items with a market value during the fiscal years ended March 31, 2012 and 2011, respectively. Regarding stocks (including foreign stocks) with market values of the Company, impairment losses are recognized for stocks whose market value has fallen significantly from the acquisition price based on the average market value in the month preceding the final day of the fiscal year, in principle. However, in the case of a security that meets certain criteria, such as those for which the market value falls substantially and the fall in the market value in the month preceding the final day of the fiscal year is substantial, impairment losses are recognized based on the market value on the final day of the fiscal year. The criteria by which the market value of a stock is judged to have fallen significantly is as follows: a. A security for which the ratio of the average market value in the month preceding the final day of the fiscal year to the acquisition cost is 50% or less. b. A security that meets both of the following criteria: 1. Average market value in the month preceding the final day of the fiscal year is between 50% and 70% of its acquisition cost. 2. The historical market value, the business conditions of the issuing company and other aspects are subject to certain requirements. (5) Scheduled repayment amounts for the main monetary claims and liabilities and redemption amounts for securities with maturities are as follows: As of March 31, 2012 Millions of U.S. Dollars 1 year or under Over 1 year under 5 years Over 5 years under 10 years Over 10 years 1 year or under Over 1 year under 5 years Over 5 years under 10 years Over 10 years Cash and deposits (negotiable certificates of deposit) 251,000 $3,054 $ $ $ Available-for-sale securities 251,000 3,054 Monetary receivables purchased 80,750 11,467 58, , ,899 Policy-reserve-matching bonds 5,865 11,467 57, , ,890 Available-for-sale securities 74, Securities 486,042 4,392,223 4,864,014 18,533,837 5,914 53,440 59, ,500 Held-to-maturity debt securities 19,580 22, Policy-reserve-matching bonds 317,551 2,834,695 1,824,754 12,328,463 3,864 34,490 22, ,000 Available-for-sale securities 148,909 1,535,059 3,038,760 6,205,374 1,812 18,677 36,972 75,500 Loans 1,015,587 2,977,544 2,262,187 1,473,539 12,357 36,228 27,524 17,928 Cash received as collateral under securities lending contracts 935,584 11,383 * Assets such as policy loans, for which a period is not stipulated, are not included. Also, 15,033 million (U.S.$183 million) in loans from legally or substantially bankrupt borrowers or borrowers who are not currently legally bankrupt but have a high probability of bankruptcy is not included. Financial Data As of March 31, year or under Over 1 year under 5 years Over 5 years under 10 years Over 10 years Cash and deposits (negotiable certificates of deposit) 423,500 Available-for-sale securities 423,500 Monetary receivables purchased 46,156 24,737 40, ,141 Policy-reserve-matching bonds 18,156 19,360 39, ,304 Available-for-sale securities 28,000 5, Securities 877,326 3,125,378 6,061,760 16,505,466 Held-to-maturity debt securities 9,313 32, Policy-reserve-matching bonds 720,605 1,832,566 3,452,955 10,350,619 Available-for-sale securities 147,407 1,260,165 2,607,976 6,154,846 Loans 1,081,478 3,122,473 2,246,670 1,226,417 Cash received as collateral under securities lending contracts 1,297,252 * Assets such as policy loans, for which a period is not stipulated, are not included. Also, 25,720 million in loans from legally or substantially bankrupt borrowers or borrowers who are not currently legally bankrupt but have a high probability of bankruptcy is not included. 116

119 (6) Data on Market Value of Derivative Transactions a. Hedge accounting not applied (i) Interest-rate related No ending balance as of March 31, 2012, March 31, 2011 or March 31, (ii) Currency-related Millions of U.S. Dollars As of March Over-the- Foreign Sold U.S. Dollar Contract amount 889, , ,512 $10,823 counter exchange Over 1 year forward Market value 915, , ,657 11,143 contracts Net losses (26,319) (5,618) (16,144) (320) Euro Contract amount 826, , ,451 10,054 Over 1 year Market value 857, , ,515 10,433 Net losses (31,185) (9,234) (3,064) (379) Total including others Contract amount 2,031, , ,378 24,711 Over 1 year Market value 2,101, , ,858 25,572 Net losses (70,753) (17,432) (19,479) (861) Purchased U.S. Dollar Contract amount 645, , ,930 7,848 Over 1 year Market value 638, , ,713 7,769 Net (losses) gains (6,484) 8,691 6,782 (79) Euro Contract amount 574, , ,072 6,986 Over 1 year Market value 572, , ,481 6,968 Net (losses) gains (1,451) 5,767 3,409 (18) Total including others Contract amount 1,510, ,409 1,045,417 18,377 Over 1 year Market value 1,499, ,853 1,056,385 18,250 Net (losses) gains (10,434) 18,444 10,968 (127) Currency Sold Call U.S. Dollar Contract amount 124,725 options [ ] [149] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value 126 Net gains 23 Euro Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount 124,725 including [ ] [149] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value 126 Net gains 23 Put U.S. Dollar Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Euro Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount including [ ] [ ] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Financial Data 117

120 Financial Data (ii) Currency-related, continued Millions of U.S. Dollars As of March Over-thecounter Currency Purchased Call U.S. Dollar Contract amount $ options [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Euro Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount including [ ] [ ] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Put U.S. Dollar Contract amount 124, ,080 [ ] [149] [4,497] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value 46 3,623 Net losses (103) (873) Euro Contract amount 124,920 [ ] [ ] [4,109] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value 3,275 Net losses (834) Total Contract amount 124, ,000 including [ ] [149] [8,607] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value 46 6,899 Net gains (losses) (103) (1,708) Currency U.S. Dollar Contract amount swaps Over 1 year Market value Net gains (losses) Euro Contract amount Over 1 year Market value Net gains (losses) Total Contract amount including Over 1 year others Market value Net gains (losses) Total Net (losses) gains (81,187) 931 (10,220) $ (988) Notes: 1. [ ] show option fees recorded on balance sheets. However, these option fees already include contracted options as of the balance sheet date. 2. Net gains (losses) shows the difference between the contract amount and market value for forward agreements, the difference between the option fees and market value for option transactions, and the current market value (present value) for swap transactions. 118

121 (iii) Stock-related Millions of U.S. Dollars As of March Exchange Stock Sold Contract amount $ price Over 1 year index futures Market value Net gains (losses) Purchased Contract amount 5,132 15,341 15, Over 1 year Market value 5,193 14,465 16, Net gains (losses) 60 (876) Over-the-counter Stock Sold Call Contract amount options [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Put Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Purchased Call Contract amount [65] [65] [28] [1] Over 1 year [65] [65] [28] [1] Market value Net (losses) gains (18) (18) 1 (0) Put Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Net gains (losses) 41 (894) 934 $ 0 Notes: 1. [ ] show option fees recorded on balance sheets. However, these option fees already include contracted options as of the balance sheet date. 2. Net gains (losses) shows the difference between the contract amount and market value for forward agreements and the difference between the option fees and market value for option transactions. (iv) Bond-related No ending balance as of March 31, 2012, March 31, 2011 or March 31, (v) Others No ending balance as of March 31, 2012, March 31, 2011 or March 31, Financial Data b. Hedge accounting applied (i) Interest-rate related No ending balance as of March 31, 2012, March 31, 2011 or March 31,

122 Financial Data (ii) Currency-related Millions of U.S. Dollars As of March Over-the- Mark-to- Foreign Sold U.S. Dollar Foreign Contract amount 3,426,983 2,959,283 2,442,746 $41,696 counter market exchange currency- Over 1 year hedge forward denomi- Market value 3,457,044 2,983,723 2,512,911 42,062 accounting contracts nated Net losses (30,060) (24,439) (70,164) (366) Euro bonds Contract amount 380, , ,793 4,632 (main Over 1 year hedged Market value 391, , ,001 4,767 items) Net (losses) gains (11,028) (26,035) 1,792 (134) Total Contract amount 5,105,036 4,817,511 4,298,880 62,113 including Over 1 year others Market value 5,204,129 4,909,407 4,399,250 63,318 Net losses (99,093) (91,895) (100,370) (1,206) Purchased U.S. Dollar Contract amount Over 1 year Market value Net gains (losses) Euro Contract amount Over 1 year Market value Net gains (losses) Total Contract amount including Over 1 year others Market value Net gains (losses) Currency Sold Call U.S. Dollar Contract amount options [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Euro Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount including [ ] [ ] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Put U.S. Dollar Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Euro Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount including [ ] [ ] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) 120

123 (ii) Currency-related, continued Millions of U.S. Dollars As of March Over-the- Mark-to- Currency Purchased Call U.S. Dollar Foreign Contract amount $ counter market options currency- [ ] [ ] [ ] [ ] hedge denomi- Over 1 year accounting nated [ ] [ ] [ ] [ ] bonds Market value (main Net gains (losses) Euro hedged Contract amount items) [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount including [ ] [ ] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Put U.S. Dollar Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Euro Contract amount [ ] [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Total Contract amount including [ ] [ ] [ ] [ ] others Over 1 year [ ] [ ] [ ] [ ] Market value Net gains (losses) Deferred Currency U.S. Dollar Contract amount 200,645 64,469 14,694 2,441 hedge swaps Over 1 year 199,602 64,469 14,694 2,429 accounting Market value (6,257) 3,446 (943) (76) Net (losses) gains (6,257) 3,446 (943) (76) Euro Contract amount 174,072 88,869 2,118 Over 1 year 174,072 88,869 2,118 Market value (3,607) 7,277 (44) Net (losses) gains (3,607) 7,277 (44) Total Contract amount 377, ,987 14,694 4,591 including Over 1 year 376, ,987 14,694 4,579 others Market value (10,049) 10,694 (943) (122) Net (losses) gains (10,049) 10,694 (943) (122) Total Net losses (109,143) (81,201) (101,313) $ (1,328) Financial Data Notes: 1. [ ] show option fees recorded on balance sheets. However, these option fees already include contracted options as of the balance sheet date. 2. Net gains (losses) shows the difference between the contract amount and market value for forward agreements, the difference between the option fee and market value for option transactions, and the current market value (present value) for swap transactions. (iii) Stock-related No ending balance as of March 31, 2012, March 31, 2011 or March 31, (iv) Bond-related No ending balance as of March 31, 2012, March 31, 2011 or March 31, (v) Others No ending balance as of March 31, 2012, March 31, 2011 or March 31,

124 Financial Data 5. disclosures about Market Value of Investment and Rental Property The balance sheet amounts for investment and rental properties were 1,150,417 million (U.S.$13,997 million), 1,178,321 million and 1,202,151 million, with a market value of 1,174,168 million (U.S.$14,286 million), 1,211,351 million and 1,261,479 million as of March 31, 2012, 2011 and 2010, respectively. The Company and certain subsidiary companies own rental office buildings and commercial facilities, the market value of which at year end is the amount measured based mainly on the Real Estate Appraisal Standards. Asset retirement obligations that were included in the balance sheet amounts of investment and rental properties were 504 million (U.S.$6 million) and 461 million as of March 31, 2012 and 2011, respectively. 6. Securities Loaned and Borrowed The amounts of securities lent under lending agreements were 2,816,579 million (U.S.$34,269 million), 2,541,150 million and 1,865,306 million as of March 31, 2012, 2011 and 2010, respectively. Assets that can be sold or re-secured are marketable securities lent under lending agreements. These assets were being held without disposal totaling 709,179 million (U.S.$8,629 million), 1,173,504 million and 595,913 million at market value as of March 31, 2012, 2011 and 2010, respectively. 7. Accumulated Depreciation The amounts of accumulated depreciation of tangible fixed assets were 1,164,173 million (U.S.$14,164 million), 1,154,920 million and 1,124,281 million as of March 31, 2012, 2011 and 2010, respectively. 8. Separate Accounts Separate account assets as provided for in Article 118, Paragraph 1 of the Insurance Business Act were 1,146,686 million (U.S.$13,952 million), 1,311,321 million and 1,449,753 million as of March 31, 2012, 2011 and 2010, respectively, and a corresponding liability is recorded in the same amount. The amounts of separate accounts are included in each account balance of consolidated balance sheets. 9. Reserve for Dividends to Policyholders Changes in the reserve for dividends to policyholders included in policy reserves for the fiscal years ended March 31, 2012, 2011 and 2010 were as follows: Millions of U.S. Dollars Balance at the beginning of the fiscal year 1,144,330 1,150,140 1,215,391 $13,923 Transfer to reserve from surplus in the previous fiscal year 175, , ,634 2,135 Dividends to policyholders paid out during the fiscal year (226,595) (234,228) (227,044) (2,757) Increase in interest 27,087 29,228 31, Balance at the end of the fiscal year 1,120,336 1,144,330 1,150,140 $13, Accrued Retirement Benefits For non-sales personnel, sales management positions, and others, the Company has in place a defined benefit corporate pension plan and a retirement allowance system, which distributes a lump sum payment on retirement (hereinafter the same), as defined benefit plans, and a defined contribution pension plan as a defined contribution plan. For sales representatives and others, the Company has in place a retirement allowance system and a corporate pension plan as defined benefit plans. Furthermore, certain consolidated subsidiaries have in place retirement allowance systems and defined contribution pension plans. Accrued retirement benefits as of March 31, 2012, 2011 and 2010 consisted of the following: Millions of U.S. Dollars Retirement benefit obligations (698,196) (712,494) (773,186) $(8,495) Pension plan assets 267, , ,021 3,257 Accrued retirement benefit cost (430,487) (438,532) (488,164) (5,238) Unrecognized actuarial differences 9,300 19,324 35, Unrecognized prior service cost (18,663) (23,428) (227) Accrued retirement benefits (439,850) (442,637) (453,157) $(5,352) 122

125 Basic information for the calculation of accrued retirement benefits is as follows: Periodic allocation method of estimated retirement benefits Discount rate 1.6% Straight-line Expected rate of return on plan assets 2012: 1.6% 2011 and 2010: 2.5% Method of amortizing actuarial differences Method of amortizing prior service cost Amortization occurs over a certain period (5 years) using the straight-line method within the average remaining years of service of employees one year after the accrual of liabilities. Amortization occurs over a certain period (5 years) using the straight-line method within the average remaining years of service of employees upon accrual of liabilities. In March 2011, the Company made revisions to the retirement benefit system for in-house employees, and others, including the expansion of the scope of the defined contribution retirement pension plan and the reduction of the payment period for the retirement pension plan. As a result of the reduction in retirement benefit obligations accompanying these revisions, a negative figure of 23,825 million in unrecognized prior service costs arose. Additionally, the abolishment of part of the retirement benefit system resulted in the recording of 2,677 million in losses as extraordinary losses. Benefit cost of accrued retirement benefits for the fiscal years ended March 31, 2012, 2011 and 2010 was analyzed as follows: Millions of U.S. Dollars Service cost 25,812 27,246 26,338 $314 Interest cost 11,352 12,349 12, Expected return on plan assets (4,370) (7,115) (6,781) (53) Amortization of actuarial differences 8,472 17,242 25, Amortization of prior service cost (4,765) (397) (6,861) (58) (Income) losses from abolishment of part of the retirement benefit system (92) 2,677 (1) Others 3,108 2,019 1, Net periodic benefit cost 39,516 54,022 52,747 $ Income Taxes The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying the enacted statutory tax rates to the temporary differences. 12. Foundation Funds Foundation funds serve as the primary source of capital for Japanese mutual life insurance companies. These funds are similar to loans, as interest payments, maturity dates and other items must be established at the time of the offering. In the event of a bankruptcy or similar development, repayment of the principal and interest of foundation funds is subordinated to the repayment of amounts owed to ordinary creditors and insurance claims and benefit payments owed to policyholders. Upon redemption of foundation funds, mutual companies are required to make an addition to the reserve for redemption of foundation funds, which serves as retained earnings, equal to the amount redeemed. As a result, the full amount of foundation funds remains in net assets even after redemption. Foundation funds are therefore positioned as a mutual company s core capital, which is equivalent to the stated capital of a joint-stock company. The Company redeemed 50,000 million (U.S.$608 million), 50,000 million and 50,000 million of foundation funds and credited the same amount to reserve for redemption of foundation funds prescribed in Article 56 of the Insurance Business Act as of March 31, 2012, 2011 and 2010, respectively. 100,000 million (U.S.$1,217 million), 50,000 million and 100,000 million of foundation funds were offered pursuant to Article 60 of the Insurance Business Act during the fiscal years ended March 31, 2012, 2011 and 2010, respectively. In addition, a resolution was made at the meeting of the Board of Directors on May 23, 2012, to propose to the annual meeting of the representatives of policyholders to be on July 3 to change a part of the Articles of Incorporation to allow an offering of 50,000 million (U.S.$608 million) of foundation funds during the fiscal year ending March 31, Pledged Assets Assets pledged as collateral by securities, lease assets, land and buildings as of March 31, 2012 were 1,260,121 million (U.S.$15,332 million), 6,755 million (U.S.$82 million), 2,952 million (U.S.$36 million), and 274 million (U.S.$3 million), respectively. The total amount of loans covered by the aforementioned assets was 951,867 million (U.S.$11,581 million) as of March 31, These amounts included 1,083,818 million (U.S.$13,187 million) of securities deposited and 946,476 million (U.S.$11,516 million) of cash received as collateral under the securities lending contracts secured by cash as of March 31, Assets pledged as collateral by securities, lease assets, land and buildings as of March 31, 2011 were 1,351,346 million, 8,204 million, 2,952 million, and 293 million, respectively. The total amount of loans covered by the aforementioned assets was 1,309,029 million as of March 31, These amounts included 1,281,496 million of securities deposited and 1,301,029 million of cash received as collateral under the securities lending contracts secured by cash as of March 31, Financial Data 123

126 Financial Data Assets pledged as collateral by securities, lease assets, land and buildings as of March 31, 2010 were 1,072,156 million, 16,855 million, 2,952 million and 308 million, respectively. The total amount of loans covered by the aforementioned assets was 1,052,759 million as of March 31, These amounts included 1,039,219 million of securities deposited and 1,036,250 million of cash received as collateral under the securities lending contracts secured by cash as of March 31, Investments in Non-Consolidated Subsidiaries The total amount of stocks and investments in non-consolidated subsidiaries and affiliates were 129,583 million (U.S.$1,577 million), 65,031 million and 136,401 million as of March 31, 2012, 2011 and 2010, respectively. On March 22, 2012, the Company reached an agreement with Reliance Capital Limited, which is the parent company of Reliance Capital Asset Management Limited, an affiliate of the Reliance Group, to acquire 26% of the shares of Reliance Capital Asset Management Limited. On March 14, 2011, the Company agreed to acquire 26% of the shares of Reliance Life Insurance Company Limited, which is an affiliate of the Reliance Anil Dhirubhai Ambani Group. Nissay Dowa General Insurance Co., Ltd., an affiliate, effected a stock swap with MS&AD Insurance Group Holdings, Inc. following its business integration with Aioi Insurance Co., Ltd. and Mitsui Sumitomo Insurance Group Holdings, Inc. on April 1, This stock swap resulted in the recording of a 2,415 million loss on sales of securities for the fiscal year ended March 31, Loans 1) The total amount of loans to bankrupt borrowers, delinquent loans, loans that are delinquent for over three months and restructured loans, which were included in loans, was 49,883 million (U.S.$607 million), 51,078 million and 52,700 million as of March 31, 2012, 2011 and 2010, respectively. i) The balances of loans to bankrupt borrowers and delinquent loans were 3,042 million (U.S.$37 million) and 34,561 million (U.S.$421 million) as of March 31, 2012, 3,138 million and 36,640 million as of March 31, 2011 and 3,250 million and 38,915 million as of March 31, Loans to bankrupt borrowers are loans for which interest is not accrued as income, except for a portion of loans written off, and to which any event specified in Article 96, Paragraph 1, Item 3 (a) to (e) or Item 4 of the Order for Enforcement of the Corporation Tax Act has occurred. Interest is not accrued as income for the loans since the recovery of principal or interest on the loans is unlikely due to the fact that principal repayments and interest payments are overdue for a significant period of time or for other reasons. Delinquent loans are loans with interest not accrued and exclude loans to bankrupt borrowers and loans with interest payments extended with the objective of restructuring or supporting the borrowers. ii) There were no loans delinquent for over three months as of March 31, 2012, 2011 and Loans that are delinquent for over three months are loans with principal or interest unpaid for over three months beginning one day after the due date based on the loan agreement. These loans exclude loans classified as loans to bankrupt borrowers and delinquent loans. iii) The balances of restructured loans were 12,278 million (U.S.$149 million), 11,298 million and 10,534 million as of March 31, 2012, 2011 and 2010, respectively. Restructured loans are loans that provide certain concessions favorable to borrowers with the intent of supporting the borrowers restructuring, such as by reducing or exempting interest, postponing principal or interest payments, releasing credits, or providing other benefits to the borrowers. These loans exclude loans classified as loans to bankrupt borrowers, delinquent loans, and loans delinquent for over three months. 2) Direct write-offs of loans decreased the balances of loans to bankrupt borrowers and delinquent loans by 808 million (U.S.$10 million) and 1,860 million (U.S.$23 million) as of March 31, 2012, 1,180 million and 2,772 million as of March 31, 2011 and 11,008 million and 3,723 million as of March 31, Loan Commitments The amounts of commitments related to loans and loans outstanding were 67,988 million (U.S.$827 million), 92,666 million and 96,680 million as of March 31, 2012, 2011 and 2010, respectively. 17. Contributions to the Life Insurance Policyholder Protection Fund and Organization Of the maximum borrowing amount from the Life Insurance Policyholders Protection Corporation of Japan, which is provided for in Article 37-4 of the Order for Enforcement of the Insurance Business Act, the amounts applied to the Company were estimated to be 84,947 million (U.S.$1,034 million), 85,971 million and 86,842 million as of March 31, 2012, 2011 and 2010, respectively. The amounts contributed to said corporation were recorded within operating expenses for the fiscal year. 18. Impairment Losses i) Method for grouping the assets Leased property and idle property are classified as one asset group per structure. Assets utilized for insurance business operations are classified into one asset group. 124

127 ii) Circumstances causing impairment losses The Company observed a marked decrease in profitability or market value in some of the fixed asset groups. The book value of fixed assets was reduced to the recoverable amount and impairment losses were recognized as extraordinary losses. iii) Breakdown of asset groups that recognized impairment losses: For the year ended March 31, 2012 Purpose of use Land Land lease rights Buildings Total Leased property 6, ,472 11,119 Idle property 2, ,781 Total 9, ,789 13,900 For the year ended March 31, 2011 Purpose of use Land Land lease rights Buildings Total Leased property ,571 2,722 Idle property 3,507 5,526 9,033 Total 4, ,097 11,756 For the year ended March 31, 2010 Purpose of use Land Land lease rights Buildings Total Leased property 1, ,539 Idle property 3, ,111 Total 5,128 1,522 6,650 For the year ended March 31, 2012 Millions of U.S. Dollars Purpose of use Land Land lease rights Buildings Total Leased property $ 81 $ 0 $54 $135 Idle property Total $111 $ 0 $58 $169 iv) Calculation method of recoverable amount The recoverable amount used for the measurement of impairment losses is based on the net realizable value upon sales of the assets or the discounted future cash flows. The discount rate used in the calculation of future cash flows is in principle 4.0%. Net realizable values are determined based on appraisals performed in accordance with the Real Estate Appraisal Standards or posted land prices. 19. Deferred Tax Assets and Liabilities (1) Deferred tax assets/liabilities consisted of the following: Millions of U.S. Dollars Deferred tax assets 1,093,007 1,317,105 1,204,069 $13,299 Valuation allowance for deferred tax assets (81,538) (77,409) (57,395) (992) Subtotal 1,011,469 1,239,696 1,146,674 12,306 Deferred tax liabilities (534,997) (489,190) (706,808) (6,509) Net deferred tax assets/(liabilities) 476, , ,865 $ 5,797 The major components causing deferred tax assets/liabilities were as follows: Millions of U.S. Dollars Deferred tax assets: Policy reserves and other reserves 712, , ,731 $8,668 Reserve for price fluctuations in investments in securities 106, , ,737 1,292 Accrued retirement benefits 137, , ,740 1,670 Allowance for doubtful accounts 6,618 10,995 13, Deferred tax liabilities: Net unrealized gains on available-for-sale securities 494, , ,165 $6,022 (2) The statutory tax rate was 36.1% for the fiscal years ended March 31, 2012, 2011 and The main factors in the difference between the statutory tax rate and the effective income tax rate were as follows: Reserve for dividends to policyholders (12.6)% (25.0)% (28.5)% Impact from a change in the tax rate 31.0 % (3) In line with the promulgation of the Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating Taxation System Responding to Changes in Economic and Social Structures (Act No. 114 of 2011) and the Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake (Act No. 117 of 2011), the statutory tax rate applied to measure deferred tax assets and liabilities was changed from 36.1%. For items that are expected to be collected or paid during the period from April 1, 2012 to March 31, 2015, the rate was changed to 33.2%, and for items that are expected to be collected or paid on or after April 1, 2015, the rate was changed to 30.7%. Financial Data 125

128 Financial Data As a result of this change, as of March 31, 2012, deferred tax assets and deferred tax liabilities for land revaluation decreased by 61,556 million (U.S.$749 million) and 25,001 million (U.S.$304 million), respectively, net unrealized gains on available-for-sale securities and land revaluation differences increased by 87,324 million (U.S.$1,062 million) and 25,001 million (U.S.$304 million), respectively, and income taxes deferred increased by 148,332 million (U.S.$1,805 million). 20. Other Extraordinary Losses In the fiscal year ended March 31, 2011, other extraordinary losses include 2,677 million of losses from the abolishment of part of the retirement benefit system of the Company associated with revisions in the retirement benefit system for in-house employees, etc. 21. Other Comprehensive Income The components of other comprehensive income for the year ended March 31, 2012 were as follows: (1) Reclassification adjustments relating to other comprehensive income Millions of U.S. Dollars Net unrealized gains on available-for-sale securities, net of tax: Gains arising during the year 326,676 $3,975 Reclassification adjustments to profit or loss 6, , $4,048 Deferred (losses) gains on derivatives under hedge accounting: Losses arising during the year (20,743) (252) Reclassification adjustments to profit or loss (20,743) (252) Foreign currency translation adjustments: Losses arising during the year (2,671) (32) Reclassification adjustments to profit or loss (2,671) (32) Share of other comprehensive income of associates accounted for under the equity method: Gains arising during the year 1, Reclassification adjustments to profit or loss (95) 1,246 (1) 15 Amount before income tax effect 310,545 3,778 Income tax effect (23,543) (286) Total other comprehensive income 287,002 $3,492 (2) Income tax effect relating to other comprehensive income Before income tax effect Income tax effect After income tax effect Before income tax effect Millions of U.S. Dollars Income tax effect After income tax effect Net unrealized gains on available-for-sale securities, net of tax 332,713 (55,934) 276,778 $4,048 $(681) $3,368 Deferred (losses) gains on derivatives under hedge accounting (20,743) 6,941 (13,802) (252) 84 (168) Land revaluation differences 25,450 25, Foreign currency translation adjustments (2,671) (2,671) (32) (32) Share of other comprehensive income of associates accounted for under the equity method 1,246 1, Total other comprehensive income 310,545 (23,543) 287,002 $3,778 $(286) $3,492 The components for other comprehensive loss for the year ended March 31, 2011 were not required to be disclosed by the Japanese Insurance Business Act. Comprehensive income for the year ended March 31, 2010 consists of the following: 2010 Comprehensive income attributable to the Parent Company 1,163,155 Comprehensive income attributable to minority interests 899 Total 1,164,054 Other comprehensive income for the year ended March 31, 2010 consists of the following: 2010 Net unrealized gains on available-for-sale securities, net of tax 917,532 Deferred losses on derivatives under hedge accounting (608) Land revaluation differences (24) Foreign currency translation adjustments (4,560) Share of other comprehensive income of associates accounted for under the equity method 7,360 Total 919,

129 22. Others The following items are disclosed in the non-consolidated statements and not required to be disclosed in the consolidated statements by the Japanese Insurance Business Act. Net Assets Provided for in the Ordinance for Enforcement of the Insurance Business Act Policy Reserves for Reinsurance Contracts Provided in Accordance with Article 71, Paragraph 1 of the Ordinance for Enforcement of the Insurance Business Act Investment Income and Expenses Policy Reserves for Ceded Reinsurance Monetary Receivables from/and Monetary Liabilities to Subsidiaries Transactions with Subsidiaries 23. Subsequent Events 1) Approval of proposed appropriation of surplus by the annual meeting of the representatives of policyholders The non-consolidated proposed appropriations of surplus for the fiscal year ended March 31, 2012 were approved as planned at the annual meeting of the representatives of policyholders held on July 3, ) Foundation funds offering of 50,000 million Following the approval of changes to the Articles of Incorporation at the annual meeting of the representatives of policyholders held on July 3, 2012, in accordance with Article 60 of the Insurance Business Act, foundation funds were offered and payments were made on August 3, 2012, as described below: a. Total amount of offering 50,000 million (U.S.$608 million) b. Interest rate From August 4, 2012 to August 3, 2018: 0.87% annually c. Redemption date 50,000 million (U.S.$608 million) to be redeemed on the two business days prior to August 3, 2018 d. Use of funds Foundation funds for mutual company 3) Completed investment in Reliance Capital Asset Management Limited The Company made an investment in Reliance Capital Asset Management Limited of 20,679 million (U.S.$252 million)) on August 17, 2012 after completing all relevant procedures, including obtaining approval by the Securities and Exchange Board of India. Financial Data 127

130 NON-CONSOLIDateD FINANCIAL REVIEW 6. Non-Consolidated Balance Sheets Nippon Life Insurance Company Millions of U.S. Dollars As of March ASSETS: Cash and deposits (Note 3): 422, , ,855 $ 5,137 Cash ,150 7 Deposits 421, , ,705 5,130 Call loans 212, , ,100 2,583 Receivables under securities borrowing transactions 211, , ,689 2,579 Monetary receivables purchased (Note 3) 883,070 1,021,145 1,152,229 10,744 Assets held in trust (Note 3) 10,670 Investments in securities (Notes 3, 5, 14 and 15): National government bonds 14,668,001 13,360,956 12,490, ,465 Local government bonds 1,583,685 1,667,879 1,775,404 19,269 Corporate bonds 3,218,751 3,228,114 3,573,079 39,162 Domestic stocks 6,071,844 6,497,618 7,214,491 73,876 Foreign securities 11,608,261 10,452,770 9,421, ,237 Other securities 372, , ,099 4,529 Subtotal 37,522,761 35,674,745 34,949, ,537 Loans (Notes 3, 16 and 17): Policy loans 896, ,794 1,025,658 10,906 Industrial and consumer loans 7,825,262 7,777,595 7,745,149 95,209 Subtotal 8,721,609 8,743,389 8,770, ,115 Tangible fixed assets (Notes 4, 6, 14 and 22): Land 1,198,419 1,202,499 1,208,797 14,581 Buildings 515, , ,557 6,267 Lease assets 3,205 4,652 2, Construction in progress 13,500 23,014 26, Other tangible fixed assets 20,163 13,659 16, Subtotal 1,750,402 1,767,242 1,788,915 21,297 Intangible fixed assets: Software 110,219 72,718 74,367 1,341 Other intangible fixed assets 89, , ,940 1,094 Subtotal 200, , ,307 2,435 Reinsurance receivables Financial Data Other assets: Accounts receivable 268, , ,633 3,265 Prepaid expenses 9,822 10,079 9, Accrued income 220, , ,189 2,684 Money on deposit 39,638 40,926 42, Deposits for futures transactions 5,182 5, Futures transactions variation margin Derivative financial instruments 28,718 29,747 39, Suspense 13,446 11,165 23, Other assets 19,049 21,531 21, Subtotal 604, , ,486 7,360 Deferred tax assets (Note 23) 466, , ,027 5,681 Customers liability for acceptances and guarantees 26,755 21,038 14, Allowance for doubtful accounts (13,885) (23,484) (24,606) (169) Total assets 51,009,414 49,826,117 48,684,846 $620, The accompanying notes are an integral part of the non-consolidated financial statements.

131 Millions of U.S. Dollars As of March LIABILITIES: Policy reserves and other reserves: Reserve for outstanding claims 206, , ,724 $ 2,514 Policy reserves (Notes 18 and 21) 44,448,079 43,106,896 42,014, ,797 Reserve for dividends to policyholders (Note 9) 1,120,336 1,144,330 1,150,140 13,631 Subtotal 45,775,051 44,499,795 43,387, ,942 Reinsurance payables Other liabilities: Cash received as collateral under securities lending transactions 935,584 1,297,252 1,025,057 11,383 Loans payable Income taxes payable 102,181 Accounts payable 332, , ,758 4,043 Accrued expenses 62,518 60,365 56, Deferred income 21,730 21,538 22, Deposits received 101, , ,744 1,231 Guarantee deposits received 88,442 91,005 97,222 1,076 Futures transactions variation margin ,051 1 Derivative financial instruments 218, , ,214 2,664 Lease obligations 4,565 4,974 2, Asset retirement obligations 2,012 1, Suspense receipts 12,201 13,230 10, Other liabilities 10,891 36,242 11, Subtotal 1,790,476 2,224,448 1,748,605 21,785 Accrued bonuses for directors and corporate auditors Accrued retirement benefits (Note 11) 437, , ,091 5,322 Accrued retirement benefits for directors and corporate auditors 4,564 5,118 5, Reserve for program points 7,238 4, Accrued losses from supporting closely related companies Reserve for loss on disaster 739 1,826 9 Reserve for price fluctuations in investments in securities 333, , ,011 4,060 Deferred tax liabilities for land revaluation 142, , ,013 1,734 Acceptances and guarantees 26,755 21,038 14, Total liabilities 48,519,242 47,717,146 46,180, ,330 NET ASSETS: Foundation funds (Note 13) 300, , ,000 3,650 Reserve for redemption of foundation funds (Note 13) 900, , ,000 10,950 Reserve for revaluation Surplus: Legal reserve for deficiencies 11,889 11,193 10, Other surplus reserves: 330, , ,064 4,020 Contingency funds 71,917 71,917 71, Reserve for social public welfare assistance Reserve for reduction entry of real estate 31,746 31,701 32, Other reserves Unappropriated surplus 226, , ,669 2,754 Total surplus 342, , ,489 4,165 Total foundation funds and others 1,542,932 1,447,086 1,420,140 18,773 Net unrealized gains on available-for-sale securities, net of tax 1,021, ,036 1,176,023 12,431 Deferred (losses) gains on derivatives under hedge accounting (6,969) 6,832 (602) (85) Land revaluation differences (67,515) (89,985) (91,111) (821) Total valuations, conversions, and others 947, ,884 1,084,309 11,525 Total net assets 2,490,171 2,108,971 2,504,449 30,298 Total liabilities and net assets 51,009,414 49,826,117 48,684,846 $620,628 The accompanying notes are an integral part of the non-consolidated financial statements. 129 Financial Data

132 7. Non-Consolidated Statements of Income Nippon Life Insurance Company Millions of U.S. Dollars For the years ended March ORDINARY INCOME: Revenues from insurance and reinsurance: Insurance premiums 5,367,387 4,895,562 4,816,612 $65,305 Reinsurance revenue Subtotal 5,368,272 4,896,413 4,817,479 65,315 Investment income (Note 20): Interest, dividends, and other income: 1,198,148 1,204,606 1,119,518 14,578 Interest on deposits and savings Interest on securities and dividends 904, , ,883 11,002 Interest on loans 185, , ,283 2,254 Real estate rental income 85,868 92, ,067 1,045 Other income 22,434 25,526 26, Gain from assets held in trust, net 16 27,911 0 Gain on sales of securities 233, , ,497 2,846 Gain on redemptions of securities 239 2,120 1,226 3 Gain on derivative financial instruments, net 19,659 Reversal of allowance for doubtful accounts 5, Other investment income 2, , Gain from separate accounts, net 18, , Subtotal 1,459,929 1,538,398 1,555,160 17,763 Other ordinary income: Income from annuity riders 10,328 12,842 8, Income from deferred benefits 171, , ,839 2,085 Reversal of reserve for outstanding claims 41, Other ordinary income 23,187 20,903 19, Subtotal 246, , ,985 3,003 Total ordinary income 7,074,986 6,646,851 6,594,626 86,081 Financial Data 130 ORDINARY EXPENSES: Benefits and other payments: Death and other claims 1,167,385 1,135,052 1,173,840 14,203 Annuity payments 649, , ,285 7,901 Health and other benefits 804, , ,421 9,788 Surrender benefits 1,011,204 1,014,833 1,059,647 12,303 Other refunds 252, , ,455 3,077 Reinsurance premiums 1,337 1,296 1, Subtotal 3,886,720 3,813,023 3,882,981 47,289 Provision for policy reserves: Provision for reserve for outstanding claims 25, Provision for policy reserves 1,341,183 1,092,521 1,134,253 16,318 Provision for interest on reserve for dividends to policyholders (Note 9) 27,087 29,228 31, Subtotal 1,368,270 1,147,592 1,166,043 16,648 Investment expenses (Note 20): Interest expenses 2,658 2,839 2, Loss from assets held in trust, net 605 Loss on sales of securities 154, , ,658 1,874 Loss on valuation of securities 29, ,243 81, Loss on redemptions of securities 16,265 16,191 12, Loss on derivative financial instruments, net 157,980 27,178 1,922 Foreign exchange losses, net 6,282 7,619 12, Provision for allowance for doubtful accounts 13,377 Write-off of loans Depreciation of rental real estate and other assets 25,848 26,045 26, Other investment expenses 21,993 27,296 23, Loss from separate accounts, net 34,818 Subtotal 414, , ,078 5,043 Operating expenses (Note 19) 572, , ,633 6,960 Other ordinary expenses: Deferred benefit payments 248, , ,138 3,023 Taxes 37,392 34,972 35, Depreciation 50,511 48,035 44, Provision for accrued retirement benefits 9,469 12,142 Other ordinary expenses 15,573 15,687 14, Subtotal 351, , ,374 4,282 Total ordinary expenses 6,593,418 6,415,755 6,301,112 80,222 Ordinary profit 481, , ,513 $ 5,859

133 Millions of U.S. Dollars For the years ended March Extraordinary gains: Gain on disposals of fixed assets 72 1,588 1,324 $ 1 Reversal of reserve for price fluctuations in investments in securities 13,293 51, Reversal of allowance for doubtful accounts 2,256 Reversal of reverse for loss on disaster Subtotal 13,700 54,852 1, Extraordinary losses: Loss on disposals of fixed assets 7,013 6,476 5, Impairment losses (Note 22) 13,900 11,756 6, Provision for reserve for price fluctuations in investments in securities 25,998 Loss on reduction entry of real estate Contributions for assisting social public welfare 1,477 1,477 2, Provision for reserve for loss on disaster 1,826 Loss from change in accounting standard for asset retirement obligations 1,172 Other extraordinary losses (Note 26) 2,677 Subtotal 22,449 25,782 40, Surplus before income taxes 472, , ,224 5,753 Income taxes (Notes 12 and 23): Current 28, ,384 1, Deferred 222,112 (90,000) 892 2,702 Total income taxes 250,933 28,383 2,212 3,053 Net surplus 221, , ,011 $ 2,700 The accompanying notes are an integral part of the non-consolidated financial statements. Financial Data 131

134 8. Non-Consolidated Statements of Changes in Net Assets Nippon Life Insurance Company Financial Data Millions of U.S. Dollars For the years ended March FOUNDATION FUNDS AND OTHERS: Foundation funds (Note 13): Beginning balance 250, , ,000 $ 3,042 Increase/decrease: Issuance of foundation funds 100,000 50, ,000 1,217 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Net change 50,000 50, Ending balance 300, , ,000 3,650 Reserve for redemption of foundation funds (Note 13): Beginning balance 850, , ,000 10,342 Increase/decrease: Additions to reserve for redemption of foundation funds 50,000 50,000 50, Net change 50,000 50,000 50, Ending balance 900, , ,000 10,950 Reserve for revaluation: Beginning balance Increase/decrease Net change Ending balance Surplus: Legal reserve for deficiencies: Beginning balance 11,193 10,425 9, Increase/decrease: Additions to legal reserve for deficiencies Net change Ending balance 11,889 11,193 10, Other surplus reserves: Contingency funds: Beginning balance 71,917 71,917 71, Increase/decrease Net change Ending balance 71,917 71,917 71, Reserve for social public welfare assistance: Beginning balance ,244 2 Increase/decrease: Additions to reserve for social public welfare assistance 1,500 1,500 1, Reversal of reserve for social public welfare assistance (1,477) (1,477) (2,577) (18) Net change (1,077) 0 Ending balance Reserve for reduction entry of real estate: Beginning balance 31,701 32,140 32, Increase/decrease: Additions to reserve for reduction entry of real estate Reversal of reserve for reduction entry of real estate (668) (1,029) (710) (8) Net change 45 (439) (141) 1 Ending balance 31,746 31,701 32, Other reserves: Beginning balance Increase/decrease Net change Ending balance Unappropriated surplus: Beginning balance 231, , ,040 2,814 Increase/decrease: Additions to reserve for dividends to policyholders (Note 9) (175,513) (199,189) (130,634) (2,135) Additions to legal reserve for deficiencies (696) (768) (558) (8) Additions to reserve for redemption of foundation funds (50,000) (50,000) (50,000) (608) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 221, , ,011 2,700 Additions to reserve for social public welfare assistance (1,500) (1,500) (1,500) (18) Reversal of reserve for social public welfare assistance 1,477 1,477 2, Additions to reserve for reduction entry of real estate (714) (590) (569) (9) Reversal of reserve for reduction entry of real estate 668 1, Reversal of land revaluation differences 2,981 (1,995) Net change (4,919) (23,405) 69,629 (60) Ending balance 226, , ,669 2,

135 Millions of U.S. Dollars For the years ended March Total surplus: Beginning balance 346, , ,520 $ 4,215 Increase/decrease: Additions to reserve for dividends to policyholders (175,513) (199,189) (130,634) (2,135) Additions to reserve for redemption of foundation funds (50,000) (50,000) (50,000) (608) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 221, , ,011 2,700 Reversal of land revaluation differences 2,981 (1,995) Net change (4,154) (23,053) 68,969 (51) Ending balance 342, , ,489 4,165 Total foundation funds and others: Beginning balance 1,447,086 1,420,140 1,251,171 17,607 Increase/decrease: Issuance of foundation funds 100,000 50, ,000 1,217 Additions to reserve for dividends to policyholders (175,513) (199,189) (130,634) (2,135) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 221, , ,011 2,700 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Reversal of land revaluation differences 2,981 (1,995) Net change 95,845 26, ,969 1,166 Ending balance 1,542,932 1,447,086 1,420,140 18,773 Valuations, conversions, and others: Net unrealized gains on available-for-sale securities, net of tax: Beginning balance 745,036 1,176, ,636 9,065 Increase/decrease: Net change, excluding foundation funds and others 276,688 (430,986) 916,386 3,366 Net change 276,688 (430,986) 916,386 3,366 Ending balance 1,021, ,036 1,176,023 12,431 Deferred (losses) gains on derivatives under hedge accounting: Beginning balance 6,832 (602) 6 83 Increase/decrease: Net change, excluding foundation funds and others (13,802) 7,435 (608) (168) Net change (13,802) 7,435 (608) (168) Ending balance (6,969) 6,832 (602) (85) Land revaluation differences: Beginning balance (89,985) (91,111) (91,006) (1,095) Increase/decrease: Net change, excluding foundation funds and others 22,469 1,126 (104) 273 Net change 22,469 1,126 (104) 273 Ending balance (67,515) (89,985) (91,111) (821) Total valuations, conversions, and others: Beginning balance 661,884 1,084, ,636 8,053 Increase/decrease: Net change, excluding foundation funds and others 285,355 (422,425) 915,672 3,472 Net change 285,355 (422,425) 915,672 3,472 Ending balance 947, ,884 1,084,309 11,525 Total net assets: Beginning balance 2,108,971 2,504,449 1,419,807 25,660 Increase/decrease: Issuance of foundation funds 100,000 50, ,000 1,217 Additions to reserve for dividends to policyholders (175,513) (199,189) (130,634) (2,135) Interest on foundation funds (3,508) (3,650) (2,489) (43) Net surplus 221, , ,011 2,700 Redemption of foundation funds (50,000) (50,000) (50,000) (608) Reversal of land revaluation differences 2,981 (1,995) Net change, excluding foundation funds and others 285,355 (422,425) 915,672 3,472 Net change 381,200 (395,478) 1,084,641 4,638 Ending balance 2,490,171 2,108,971 2,504,449 $30,298 Financial Data The accompanying notes are an integral part of the non-consolidated financial statements. 133

136 9. The Non-Consolidated Proposed Appropriations of Surplus Nippon Life Insurance Company Thousands of Yen Millions of U.S. Dollars For the years ended March Unappropriated surplus (1) 226,344, ,264, ,669,357 $2,753,918 Reversal from voluntary surplus reserves: 685, ,543 1,029,560 8,338 Reversal of reserve for reduction entry of real estate 685, ,543 1,029,560 8,338 Total 227,029, ,932, ,698,917 $2,762,256 Appropriations: 227,029, ,932, ,698,917 $2,762,256 Reserve for dividends to policyholders (2) 167,313, ,513, ,189,981 2,035,689 Net surplus 59,716,550 56,418,678 56,508, ,567 Legal reserve for deficiencies (3) 682, , ,000 8,298 Reserve for redemption of foundation funds (4) 50,000,000 50,000,000 50,000, ,347 Interest on foundation funds (5) 3,930,000 3,508,250 3,650,500 47,816 Voluntary surplus reserves: 5,104,550 2,214,428 2,090,435 62,107 Reserve for social public welfare assistance 1,500,000 1,500,000 1,500,000 18,250 Reserve for reduction entry of real estate 3,604, , ,435 43,856 Surplus carried forward Of the surplus available for disposition, a minimum ratio (see formula below) for the reserve for dividends to policyholders needs to be established in the Articles of Incorporation. Nippon Life applies mutatis mutandis Article 30-6 of the Ordinance for Enforcement of the Insurance Business Act in the Articles of Incorporation and has established the ratio (20/100) stipulated in said Article 30-6 as the minimum ratio in the Articles of Incorporation. The ratio of provision of the appropriation of surplus in the fiscal year ended March 31, 2012 was 98.27%. Financial Data 134

137 10. Notes to the Non-Consolidated Financial Statements Nippon Life Insurance Company 1. Basis of Presenting the Non-Consolidated Financial Statements (1) Accounting principles and presentation The accompanying non-consolidated financial statements have been prepared from the accounts and records maintained by NIPPON LIFE INSURANCE COMPANY ( Nippon Life or the Company ) in accordance with the provisions set forth in the Japanese Commercial Act, the Insurance Business Act and the related rules and regulations applicable to the mutual life insurance industry in general, and in conformity with accounting principles generally accepted in Japan, which are different in certain respects from the application and disclosure requirements of International Financial Reporting Standards. Certain accounting and reporting practices required to be followed by the industry are regulated by the Financial Services Agency and the related ministry by means of ministerial ordinances and guidance. The accompanying non-consolidated financial statements of Nippon Life are in compliance with such requirements. However, while the business report and supporting schedules have been prepared by the management of Nippon Life as a part of the disclosure required by the Japanese Commercial Code and the Insurance Business Act, they are not provided herein. The information provided in the non-consolidated financial statements including the notes to the nonconsolidated financial statements is limited to that required by Japanese laws and regulations. Amounts of less than one million yen have been eliminated. As a result, totals may not add up exactly. As consolidated statements of cash flows and certain disclosures are presented in the consolidated financial statements of the Company, non-consolidated statements of cash flows and certain disclosures are not presented herein in accordance with accounting principles generally accepted in Japan. (2) United States dollar amounts Nippon Life prepares its non-consolidated financial statements in Japanese yen. The U.S. dollar amounts included in the non-consolidated financial statements and notes thereto represent the arithmetical results of translating Japanese yen to U.S. dollars on the basis of 82.19=U.S.$1, the effective rate of exchange at the balance sheet date of March 31, The inclusion of such U.S. dollar amounts is solely for convenience and is not intended to imply that Japanese yen amounts have been or could be readily converted, realized or settled in U.S. dollars at 82.19=U.S.$1 or at any other rate. 2. Summary of Significant Accounting Policies (1) Securities and hedging activities Securities (including items such as deposits and monetary receivables purchased which are treated as securities based on the Accounting Standard for Financial Instruments (The Accounting Standards Board of Japan (ASBJ) Statement No. 10) and securities within assets held in trust) are valued as follows: i) Trading securities are stated at market value on the balance sheet date. The moving average method is used for calculating cost of sales. ii) Held-to-maturity debt securities are valued using the moving average method, net of accumulated amortization (straight-line). iii) Policy-reserve-matching bonds are valued using the moving average method, net of accumulated amortization (straight-line) in accordance with the Industry Audit Committee Report No. 21, Temporary Treatment of Accounting and Auditing Concerning Policy-Reserve-Matching Bonds in the Insurance Industry, issued by the Japanese Institute of Certified Public Accountants (JICPA). iv) Investments in subsidiaries and affiliates (stocks issued by subsidiaries prescribed in Article 2, Paragraph 12 of the Insurance Business Act excluding subsidiaries prescribed in Article , Paragraph 3 of the Order for Enforcement of the Insurance Business Act and stocks issued by affiliates prescribed in Article , Paragraph 4 of the Order for Enforcement of the Insurance Business Act) are valued using the moving average method. v) Available-for-sale securities 1) For securities with a market value, stocks (including foreign stocks) are valued by using the average market value during the period of one month before the balance sheet date (cost of sales is calculated by using the moving average method). Other securities with a market value are valued by using the market value on the balance sheet date (cost of sales is calculated by using the moving average method). 2) For securities of which the market value is extremely difficult to determine, public and corporate bonds (including foreign bonds) for which the difference between the purchase price and face value is due to an interest rate adjustment are valued using the moving average method, net of accumulated amortization (straight-line). Other securities are valued using the moving average amount. Unrealized gains/losses, net of applicable taxes, are recorded in a separate component of net assets. Hedge accounting is applied based on the following method: 1) The Company mainly applies the mark-to-market method of hedge accounting and deferred hedge accounting for hedging activities related to foreign exchange rate fluctuation exposures on certain bonds denominated in foreign currencies. The Company also applies the exceptional accounting treatment ( Tokurei-shori ) for interest rate swaps to hedge the cash flow volatility of certain loans and applies designated hedge accounting ( Furiate-shori ) for foreign exchange forward contracts and currency swaps for certain financial assets denominated in foreign currencies. 2) Effectiveness of hedging activities is mainly evaluated by performing a ratio analysis of market value movement comparisons based on the hedging instruments and hedging methods taken, which is in accordance with the Company s internal risk management policies. 3) Derivative financial instruments utilized for other than hedging purposes are stated at market value. Financial Data 135

138 Financial Data (2) Policy-reserve-matching bonds Securities that are held for the purpose of matching the duration of outstanding liabilities within the sub-groups (insurance type, remaining period, and investment policy) of insurance products, such as individual insurance and annuities, workers asset-formation insurance and annuities, and group insurance and annuities are classified as policy-reserve-matching bonds in accordance with the Industry Audit Committee Report No. 21, Temporary Treatment of Accounting and Auditing Concerning Policy-Reserve-Matching Bonds in the Insurance Industry, issued by the JICPA. Note that effective from the fiscal year ended March 31, 2011, the specification of subject policy sub-groups was changed for the purpose of meeting changes in the bond investment environment and enhancing asset/ liability management. There was no impact of these changes on the nonconsolidated balance sheet as of March 31, 2011 or the non-consolidated statement of income for the fiscal year ended March 31, The changes were as follows: 1) Regarding policies other than lump-sum payment products and group annuities, policies previously specified and sub-grouped as those with a remaining period of within 30 years have been changed to a sub-group corresponding to all relevant policies. 2) Regarding group annuities other than guaranteed fixed term rate products, policies previously specified and sub-grouped as having cash outflows projected within the next 15 years have been changed to a sub-group with cash outflows projected for the entire period. (3) Foreign currency translation Assets and liabilities denominated in foreign currencies are translated into Japanese yen using the Accounting Standards for Foreign Currency Transactions (Business Accounting Council). Foreign currency-denominated available-for-sale securities of the Company, with exchange rates which have significantly fluctuated and where recovery is not expected, are converted to Japanese yen using either the rate on the balance sheet date or the average one month rate prior to the balance sheet date, whichever indicates a weaker yen. This translation difference is recorded as a loss on valuation of securities. (4) Tangible fixed assets 1) Tangible fixed assets (except for lease assets related to financial leases where ownership is not transferred and buildings acquired on or after April 1, 1998) are depreciated based on the declining balance method. Buildings acquired on or after April 1, 1998 are depreciated based on the straight-line method. Tangible fixed assets are stated at cost, net of accumulated depreciation and impairment losses. The estimated useful lives of major items are as follows: Buildings 2 to 50 years Other tangible fixed assets 2 to 20 years 2) The straight-line method based on lease period is used to calculate the depreciation of lease assets related to financial leases where ownership is not transferred. 3) Revaluation of land used in the operations is performed based on the Act on Revaluation of Land. The tax effect on the amount related to the valuation difference between the previous and the revalued amount for land revaluation is recognized as deferred tax liabilities within the liability section. The valuation differences, excluding tax, are recognized as land revaluation differences within the net assets section. Revaluation Date: March 31, 2002 Revaluation Methodology: The amount is rationally calculated by using the land listed value and road rate as prescribed by Article 2, Items 1 and 4, respectively, of the Order for Enforcement of the Act on Revaluation of Land. (5) Software Capitalized software for internal use, which is included within intangible fixed assets, is amortized using the straight-line method over their estimated useful lives as internally determined (3 to 5 years). (6) Leases Financial leases, other than from the transfer of ownership, are capitalized based on the Accounting Standard for Lease Transactions (ASBJ Statement No. 13). Financial leases where the Company is the lessee, ownership is not transferred, and the lease start date is March 31, 2008 or prior, are accounted for under the accounting treatment applied to ordinary operating leases. (7) Allowance for doubtful accounts 1) An allowance for doubtful accounts is recognized in accordance with the Company s internal Asset Valuation Regulation and Write-Off/Provision Rule. i) The allowance for loans from borrowers who are legally or substantially bankrupt, such as being bankrupt or being in the process of civil rehabilitation proceedings, is recognized based on the amount of credit remaining after directly deducting amounts expected to be collected through disposal of collateral or execution of guarantees from the balance of loans (as mentioned at 3) below). ii) The allowance for loans from borrowers who are not currently legally bankrupt but have a significant possibility of bankruptcy is recognized at the amounts deemed necessary considering an assessment of the borrowers overall solvency and the amounts remaining after deduction of amounts expected to be collected through the disposal of collateral or the execution of guarantees. iii) The allowance for loans from borrowers other than the above is provided based on the borrowers balance multiplied by the historical average (of a certain period) percentage of bad debt. 136

139 2) All credits are assessed by responsible sections in accordance with the Company s internal Asset Valuation Regulation. The assessments are verified by the independent Asset Auditing Department. The results of the assessments are reflected in the calculation of the allowance for doubtful accounts. 3) The estimated uncollectible amount calculated by subtracting the amount of collateral value or the amount collectible by the execution of guarantees from the balance of loans is directly deducted from the balance of loans (including loans with credits secured and/or guaranteed) made to legally or substantially bankrupt borrowers. The estimated uncollectible amounts were 1,754 million (U.S.$21 million) (including 1,114 million (U.S.$14 million) of credits secured and/or guaranteed), 2,996 million (including 1,961 million of credits secured and/or guaranteed) and 13,660 million (including 7,760 million of credits secured and/or guaranteed), as of March 31, 2012, 2011 and 2010, respectively. (8) Accrued bonuses for directors and corporate auditors Accrued bonuses for directors and corporate auditors are recognized based on amounts estimated to be paid. (9) Accrued retirement benefits 1) Accrued retirement benefits are recognized based on the estimated amount of projected benefit obligations in excess of the market value of pension plan assets for future severance payments to employees on the balance sheet date. 2) The Partial Amendments to Accounting Standard for Retirement Benefits (Part 3) (ASBJ Statement No. 19) has been applied from the fiscal year ended March 31, As it was decided that the same discount rate as previously applied would be used, there was no effect on operating income or surplus before income taxes. (10) Aaccrued retirement benefits for directors and corporate auditors Accrued retirement benefits for directors and corporate auditors are recognized based on estimated payment amounts under internal rules. (11) Reserve for program points From the fiscal year ended March 31, 2011, following the introduction of the points system, a reserve for program points was recognized based on the amount projected to be incurred for expenses from the use of points granted to policyholders. (12) Accrued losses from supporting closely related companies Accrued losses from supporting closely related companies are recognized based on estimated amounts required in the future for supporting the restructurings of closely related companies. (13) Reserve for loss on disaster Reserve for loss on disaster is recognized based on estimated expenditures associated with the Great East Japan Earthquake, such as expenditures for the repair of tangible fixed assets. (14) Reserve for price fluctuations in investments in securities Reserve for price fluctuations in investments in securities is recognized based on Article 115 of the Insurance Business Act. (15) Accounting for consumption taxes Consumption taxes and local consumption taxes are accounted for by the tax exclusion method. However, consumption taxes paid on certain asset transactions, which are not deductible from consumption taxes withheld and that are stipulated to be deferred under the Consumption Tax Act, are deferred as prepaid expenses and amortized over a 5 year period on a straight-line basis. Consumption taxes other than deferred consumption taxes are expensed as incurred. (16) Policy reserves Policy reserves of the Company are reserves set forth in accordance with Article 116 of the Insurance Business Act. Policy reserves are recognized based on the following methodology: 1) Reserves for contracts concluded in or after April 1996, other than those in which factors used as a basis for computing policy reserves and insurance premiums are alterable and those for variable insurance, are computed by the net level premium method based on the assumption rates locked in at the sales and renewal prescribed by the Insurance Business Act and the statement of calculation procedures*. 2) Reserves for other contracts are determined by the net level premium method using the assumption rates locked in at the sales and renewal prescribed by the statement of calculation procedures*. * Documents approved by the Financial Services Agency that describe the specific calculation methods for insurance premiums and policy reserves. Since the fiscal year ended March 31, 2007, additional amounts to the policy reserves had been accumulated over 5 years to cover a possible deficiency in the amount of the reserve for certain individual annuity policyholders. Such treatment is in accordance with Article 69, Paragraph 5 of the Ordinance for Enforcement of the Insurance Business Act. As a result, the amount of policy reserves accumulated during the fiscal years ended March 31, 2011 and 2010 were 230,037 million and 207,970 million, respectively. (17) Revenue recognition Regarding revenues, insurance premiums are recognized when cash is received, and insurance premiums due but not collected are not recognized as revenues. Unearned insurance premiums are recognized as policy reserves. Financial Data 137

140 Financial Data (18) Policy acquisition costs Policy acquisition costs are recorded to expense as incurred. (19) New accounting standards The Accounting Standard for Asset Retirement Obligations (ASBJ Statement No. 18) and the Guidance on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21) have been applied from the fiscal year ended March 31, As a result, tangible fixed assets and other assets increased by 554 million and 1,802 million was recorded as asset retirement obligations as of March 31, Furthermore, ordinary profit decreased by 128 million and surplus before income taxes decreased by 1,248 million for the fiscal year ended March 31, The Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No. 24), the Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No. 24), and the Practical Guidelines on Accounting Standards for Financial Instruments (JICPA Accounting Practice Committee Statement No. 14), which was amended to respond to the Accounting Standard and the Guidance, have been applied from the fiscal year ended March 31, Due to the resulting revisions to the Ordinance for Enforcement of the Insurance Business Act, the reversal of allowance for doubtful accounts, which had previously been presented under extraordinary gains on the nonconsolidated statement of income, was included in investment income. As a result, ordinary profit increased by 5,964 million (U.S.$73 million) but there was no impact on net surplus. 3. Financial Instruments Regarding the investment of general accounts (except separate accounts as provided in Article 118, Paragraph 1 of the Insurance Business Act), in light of the characteristics of life insurance policies, the Company built a portfolio geared towards mid- to long-term investment and formulated an investment plan considering the outlook of the investment environment. Based on this, in order to reliably pay benefits and other payments in the future, the Company positioned yen-denominated assets that can be expected to provide stable income, such as bonds and loans, as the Company s core assets, and from the viewpoint of improving profit in the mid- to long-term, the Company invested in stocks and foreign securities. Also, from the viewpoint of effective investment, the Company mainly uses derivative transactions for controlling asset investment risks. Specifically, the Company uses interest rate swaps for the Company s interest rate related investments, foreign exchange forward contracts and currency options and swaps for the Company s currency related investments, and hedge accounting is applied with respect to a portion thereof. The Company mainly applies the mark-to-market method of hedge accounting and deferred hedge accounting for hedging activities against foreign exchange rate fluctuation exposures on certain bonds denominated in foreign currencies. The Company also applies the exceptional accounting treatment ( Tokurei-shori ) for interest rate swaps to hedge the cash flow volatility of certain loans and applies designated hedge accounting ( Furiate-shori ) for foreign exchange forward contracts and currency swaps for certain financial assets denominated in foreign currencies. The effectiveness of hedging activities is mainly evaluated by performing a ratio analysis of market value movement comparisons based on the hedging instruments and hedging methods taken, which is in accordance with the Company s internal risk management policies. Securities are mainly exposed to market risk and credit risk, loans are exposed to credit risk, and derivative transactions are exposed to market risk and credit risk. Market risk refers to the risk of losses incurred when the market value of investment assets declines due to such factors as fluctuations in interest rates, exchange rates or stock prices. Credit risk refers to the risk of incurring losses when the value of assets, primarily loans and bonds, declines due to deterioration of the financial condition of the party to whom credit has been extended. These risks are managed according to rules and regulations regarding investment risks. To manage market risk, the Company has implemented investment limits based on the nature of the assets in order to avoid excessive losses from financing and investment transactions. In addition, the Company regularly reports on the status of compliance to the Risk Management Committee, the advisory body of the Management Committee and has prepared a system to control risk to acceptable levels when there is a breach of rules. Also, to control market risk in the Company s portfolio, the Company uses a statistical analysis method to rationally calculate the market value-at-risk of the portfolio as a whole and conducts appropriate asset allocation within acceptable boundaries of risk. To manage credit risk, the Company has built a thorough monitoring system involving the Assessment Management Department independent of the departments handling investment and finance activities. The Company also continues to build a sound portfolio through the establishment of interest guidelines to ensure the returns the Company obtained are commensurate with the risk, a system of internal ratings for classifying the creditworthiness of borrowers, and credit ceilings to ensure that credit risk is not excessively concentrated in a particular company or group. In addition, the Company calculates credit value-at-risk as a measurement of the magnitude of credit risk across the Company s portfolio as a whole, and monitors whether the magnitude of risk stays within an appropriate range. 138

141 (1) Balance sheet amounts and market values of major financial instruments and their differences are as follows: Millions of U.S. Dollars As of March Balance sheet amount (*1) Market value ( * 2) Difference Balance sheet amount ( * 1) Market value ( * 2) Difference Balance sheet amount ( * 1) Market value ( * 2) Difference Balance sheet amount (*1) Cash and deposits (negotiable certificates of deposit) 250, , , , , ,994 $ 3,054 $ 3,054 $ Available-for-sale securities 250, , , , , ,994 3,054 3,054 Monetary receivables purchased 883, ,722 43,652 1,021,145 1,055,755 34,610 1,152,229 1,162,774 10,545 10,744 11, Policy-reserve-matching bonds 806, ,341 43, ,555 1,021,165 34,610 1,055,131 1,065,677 10,545 9,815 10, Available-for-sale securities 76,381 76,381 34,589 34,589 97,097 97, Assets held in trust 10,670 10,670 Trading securities 10,670 10,670 Securities 36,243,953 37,377,929 1,133,975 34,322,587 35,005, ,840 33,527,343 34,076, , , ,775 13,797 Trading securities 1,041,876 1,041,876 1,182,649 1,182,649 1,320,539 1,320,539 12,676 12,676 Held-to-maturity debt securities 14,500 14,479 (21) 16,511 16, ,522 19, (0) Policy-reserve-matching bonds 17,421,958 18,542,260 1,120,301 16,428,921 17,085, ,352 15,780,403 16,304, , , ,602 13,631 Investments in subsidiaries and affiliates 7,711 21,406 13,695 7,711 34,062 26,351 62,165 86,172 24, Available-for-sale securities 17,757,906 17,757,906 16,686,793 16,686,793 16,344,712 16,344, , ,059 Loans (*3) 8,710,573 8,976, ,301 8,730,667 8,964, ,311 8,757,502 8,947, , , ,221 3,240 Policy loans 896, , , ,614 1,025,475 1,025,475 10,904 10,904 Industrial and consumer loans 7,814,412 8,080, ,301 7,765,053 7,999, ,311 7,732,027 7,922, ,050 95,077 98,317 3,240 Derivative financial instruments (*4) (190,224) (190,224) (81,099) (81,099) (101,963) (101,963) (2,314) (2,314) Hedge accounting not applied (81,081) (81,081) (649) (649) (987) (987) Hedge accounting applied (109,143) (109,143) (81,201) (81,201) (101,313) (101,313) (1,328) (1,328) Cash received as collateral under securities lending contracts (*5) (935,584) (935,584) (1,297,252) (1,297,252) (1,025,057) (1,025,057) $ (11,383) $ (11,383) $ (*1) For transactions for which an allowance for doubtful accounts was recorded, the amount of the allowance is deducted. (*2) For securities for which impairment losses were recognized in the fiscal years ended March 31, 2012, 2011 and 2010, the market value is the balance sheet amount after the impairment losses are deducted. (*3) The market values of derivative financial instruments that are interest rate swaps under exceptional accounting treatment ( Tokurei-shori ) or currency swaps under designated hedge accounting ( Furiate-shori ), are included in the market values of loans because they are accounted for as an integral part of loans that are hedged items. (*4) Assets and liabilities generated by derivative financial instruments are offset and presented net. Net liabilities in total are presented in brackets. (*5) Cash received as collateral under securities lending contracts is recorded in liabilities and presented in brackets. Market value (*2) Difference Financial Data 139

142 Financial Data (2) Market value measurement methods for major financial instruments are as follows: 1) Securities, deposits and monetary receivables purchased are treated as securities based on the Accounting Standard for Financial Instruments (ASBJ Statement No. 10) a. Items with a market price Market value is measured based on the closing market price on the balance sheet date. However, the market values of availablefor-sale domestic and foreign equity securities are based on the average market price over a one-month period prior to the balance sheet date. b. Items without a market price Market value is measured mainly by discounting future cash flows to the present value. 2) Loans a. Policy loans Market value is deemed to approximate book value, due to no repayment deadlines based on characteristics such as limiting loans to the surrender benefits range, and expected reimbursement period and interest rate requirements, and others. Thus, the book value is used as the market value of the policy loans. b. Industrial and consumer loans Market value of variable interest rate loans is deemed to approximate book value, because market interest rates are reflected in future cash flows over the short term. Thus, the book value is used as the market value of the variable interest rate loans. Market value of fixed interest rate loans is measured mainly by discounting future cash flows to the present value. Loans from legally or substantially bankrupt borrowers or borrowers who are not currently legally bankrupt but have a high probability of bankruptcy are measured by deducting the estimated uncollectable amount from the book value directly prior to the decrease. 3) Derivative financial instruments a. Market value of futures and other market transactions is measured by the liquidation value or closing market price on the balance sheet date. b. Market value of exchange contracts and currency options is measured based on theoretical values calculated by the Company using Telegraphic Transfer Middle rate (TTM) and discount rates obtained from brokers. c. Market value of interest rate swaps and currency swaps is measured based on theoretical present values calculated by discounting future cash flows using published market interest rates, and others. 4) Assets held in trust Market value is measured based on the price rationally calculated by the trustee of assets held in trust, pursuant to 1) and 3) above. 5) Cash received as collateral under securities lending contracts The book value is used as market value due to their short-term settlement. (3) Unlisted equity securities, investments in partnerships whereby partnership assets consist of unlisted equity securities, and other items without market value are not included in the securities in the table (1). Balance sheet amounts by holding purpose were 247,911 million (U.S.$3,016 million), 184,081 million and 180,835 million for stocks of subsidiaries and affiliates, and 1,030,896 million (U.S.$12,543 million), 1,160,076 million and 1,233,214 million for available-forsale securities as of March 31, 2012, 2011 and 2010, respectively. (4) Matters regarding securities, and others by holding purpose are as follows: 1) Trading securities Investments in securities for separate accounts are classified as trading securities as of March 31, 2012, 2011, and In addition, securities managed as trust assets in assets held in trust are also classified as trading securities as of March 31, Valuation differences included in profit were losses of 11,977 million (U.S.$146 million), 32,320 million and 9,996 million for securities related to separate accounts for the fiscal years ended March 31, 2012, 2011 and 2010, respectively, and losses of 2,479 million for assets held in trust for the fiscal year ended March 31, Assets held in trust included derivative financial instruments held in the trust as of March 31,

143 2) Held-to-maturity debt securities Balance sheet amounts, market values and their differences by type are as follows: Millions of U.S. Dollars As of March Type Market value exceeds the balance sheet amount Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Domestic bonds 12,000 12, ,012 14, ,522 19, $146 $147 $1 Market value does not exceed the balance sheet amount Domestic bonds 2,499 2,417 (82) 2,499 2,460 (39) (1) Total 14,500 14,479 (21) 16,511 16, ,522 19, $176 $176 $(0) 3) Policy-reserve-matching bonds Balance sheet amounts, market values and their differences by type are as follows: Millions of U.S. Dollars As of March Type Market value exceeds the balance sheet amount Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Monetary receivables purchased 748, ,984 44, , ,471 35, , ,991 14,833 $ 9,111 $ 9,648 $ 537 Domestic bonds 17,108,566 18,250,757 1,142,191 14,690,166 15,371, ,228 14,092,476 14,642, , , ,056 13,897 Foreign securities 68,973 71,780 2,806 80,912 83,598 2,685 37,850 38,957 1, Subtotal 17,926,383 19,115,522 1,189,139 15,669,707 16,389, ,757 14,925,486 15,491, , , ,577 14,468 Market value does not exceed the balance sheet amount Monetary receivables purchased 57,846 57,357 (488) 87,926 86,693 (1,232) 259, ,685 (4,287) (6) Domestic bonds 231, ,831 (24,360) 1,651,047 1,623,521 (27,525) 1,595,851 1,571,991 (23,860) 2,813 2,516 (296) Foreign securities 13,226 12,890 (336) 6,795 6,758 (36) 54,224 51,719 (2,504) (4) Subtotal 302, ,079 (25,185) 1,745,768 1,716,974 (28,794) 1,910,049 1,879,396 (30,653) 3,678 3,371 (306) Total 18,228,648 19,392,601 1,163,953 17,415,476 18,106, ,962 16,835,535 17,370, ,041 $221,787 $235,948 $14,162 Financial Data 141

144 4) Available-for-sale securities Acquisition cost or amortized cost, balance sheet amounts and their differences by type are as follows: Millions of U.S. Dollars As of March Type Balance sheet amount exceeds acquisition cost or amortized cost Acquisition cost or amortized cost Balance sheet amount Difference Acquisition cost or amortized cost Balance sheet amount Difference Acquisition cost or amortized cost Balance sheet amount Difference Acquisition cost or amortized cost Balance sheet amount Difference Cash and deposits (negotiable certificates of deposit) 10,000 10, ,000 15,000 0 $ $ $ Monetary receivables purchased 2,855 2, ,283 4, ,968 5, Domestic bonds 1,669,385 1,725,313 55,928 1,158,509 1,196,553 38,044 1,143,171 1,178,679 35,508 20,311 20, Domestic stocks 2,656,297 4,045,678 1,389,380 3,147,836 4,687,672 1,539,836 3,678,010 5,581,030 1,903,019 32,319 49,223 16,904 Foreign securities 7,936,643 8,551, ,182 4,011,331 4,253, ,325 4,903,840 5,164, ,665 96, ,049 7,485 Other securities 170, ,190 7, , ,393 6, , ,786 8,415 2,078 2, Subtotal 12,435,950 14,503,868 2,067,918 8,544,381 10,372,053 1,827,671 9,921,362 12,129,301 2,207, , ,468 25,160 Balance sheet amount does not exceed acquisition cost or amortized cost Cash and deposits (negotiable certificates of deposit) 251, ,997 (2) 413, ,995 (4) 355, ,994 (5) 3,054 3,054 (0) Monetary receivables purchased 73,540 73,521 (19) 29,843 29,813 (30) 92,359 91,798 (561) (0) Domestic bonds 55,089 47,378 (7,711) 288, ,039 (3,553) 519, ,958 (575) (94) Domestic stocks 1,996,138 1,551,249 (444,889) 1,570,618 1,218,319 (352,299) 1,089, ,490 (231,013) 24,287 18,874 (5,413) Foreign securities 1,688,081 1,614,767 (73,314) 4,988,547 4,737,693 (250,854) 2,854,106 2,744,707 (109,399) 20,539 19,647 (892) Other securities 58,887 43,503 (15,383) 112,281 88,463 (23,817) 137, ,554 (24,246) (187) Subtotal 4,122,738 3,581,417 (541,320) 7,402,885 6,772,326 (630,559) 5,048,304 4,682,502 (365,801) 50,161 43,575 (6,586) Total 16,558,688 18,085,285 1,526,597 15,947,266 17,144,379 1,197,112 14,969,667 16,811,804 1,842,136 $201,468 $220,042 $18,574 * Items with 1,030,896 million (U.S.$12,543 million), 1,160,076 million and 1,233,214 million, whose market values are extremely difficult to determine, as of March 31, 2012, 2011 and 2010, respectively, are not included. Financial Data 25,760 million (U.S.$313 million) and 118,932 million in impairment losses were recognized for items with a market value during the fiscal years ended March 31, 2012 and 2011, respectively. Regarding stocks (including foreign stocks) with market values, impairment losses are recognized for stocks whose market value has fallen significantly from the acquisition price based on the average market value in the month preceding the final day of the fiscal year, in principle. However, in the case of a security that meets certain criteria, such as those for which the market value falls substantially and the fall in the market value in the month preceding the final day of the fiscal year is substantial, impairment losses are recognized based on the market value on the final day of the fiscal year. The criteria by which the market value of a stock is judged to have fallen significantly is as follows: a. A security for which the ratio of the average market value in the month preceding the final day of the fiscal year to the acquisition cost is 50% or less. b. A security that meets both of the following criteria: 1. Average market value in the month preceding the final day of the fiscal year is between 50% and 70% of its acquisition cost. 2. The historical market value, the business conditions of the issuing company and other aspects are subject to certain requirements. 142

145 (5) Scheduled repayment amounts for the main monetary claims and liabilities and redemption amounts for securities with maturities are as follows: As of March 31, 2012 Millions of U.S. Dollars 1 year or under Over 1 year under 5 years Over 5 years under 10 years Over 10 years 1 year or under Over 1 year under 5 years Over 5 years under 10 years Over 10 years Cash and deposits (negotiable certificates of deposit) 251,000 $ 3,054 $ $ $ Available-for-sale securities 251,000 3,054 Monetary receivables purchased 80,750 11,467 58, , ,899 Policy-reserve-matching bonds 5,865 11,467 57, , ,890 Available-for-sale securities 74, Securities 466,975 4,359,385 4,855,700 18,529,429 5,682 53,040 59, ,446 Held-to-maturity debt securities 14, Policy-reserve-matching bonds 317,551 2,834,695 1,824,754 12,328,463 3,864 34,490 22, ,000 Available-for-sale securities 134,923 1,524,689 3,030,946 6,200,965 1,642 18,551 36,877 75,447 Loans 1,035,181 3,030,024 2,273,655 1,476,838 12,595 36,866 27,663 17,969 Cash received as collateral under securities lending contracts 935,584 11,383 * Assets such as policy loans, for which a period is not stipulated, are not included. Also, 9,054 million (U.S.$110 million) in loans from legally or substantially bankrupt borrowers or borrowers who are not currently legally bankrupt but have a high probability of bankruptcy is not included. As of March 31, year or under Over 1 year under 5 years Over 5 years under 10 years Over 10 years Cash and deposits (negotiable certificates of deposit) 423,000 Available-for-sale securities 423,000 Monetary receivables purchased 46,156 24,737 40, ,141 Policy-reserve-matching bonds 18,156 19,360 39, ,304 Available-for-sale securities 28,000 5, Securities 848,760 3,097,062 6,054,484 16,502,070 Held-to-maturity debt securities 2,000 14,500 Policy-reserve-matching bonds 720,605 1,832,566 3,452,955 10,350,619 Available-for-sale securities 126,154 1,249,995 2,601,528 6,151,450 Loans 1,099,703 3,179,704 2,259,429 1,227,933 Cash received as collateral under securities lending contracts 1,297,252 * Assets such as policy loans, for which a period is not stipulated, are not included. Also, 19,257 million in loans from legally or substantially bankrupt borrowers or borrowers who are not currently legally bankrupt but have a high probability of bankruptcy is not included. 4. disclosures about Market Value of Investment and Rental Property The balance sheet amounts for investment and rental properties were 1,164,127 million (U.S.$14,164 million), 1,189,763 million and 1,210,242 million, with a market value of 1,147,794 million (U.S.$13,965 million), 1,189,873 million and 1,239,545 million as of March 31, 2012, 2011 and 2010, respectively. The Company owns rental office buildings and commercial facilities, the market value of which at year end is the amount measured based mainly on the Real Estate Appraisal Standards. Asset retirement obligations that were included in the balance sheet amounts of investment and rental properties were 512 million (U.S.$6 million) and 463 million as of March 31, 2012 and 2011, respectively. 5. Securities Loaned and Borrowed The amounts of securities lent under lending agreements were 2,816,579 million (U.S.$34,269 million), 2,541,150 million and 1,865,306 million as of March 31, 2012, 2011 and 2010, respectively. Assets that can be sold or re-secured are marketable securities lent under lending agreements. These assets were being held without disposal totaling 709,179 million (U.S.$8,629 million), 1,173,504 million and 595,913 million at market value as of March 31, 2012, 2011 and 2010, respectively. 6. Accumulated Depreciation The amounts of accumulated depreciation of tangible fixed assets were 1,141,335 million (U.S.$13,887 million), 1,125,580 million and 1,086,502 million as of March 31, 2012, 2011 and 2010, respectively. 7. Separate Accounts Separate account assets as provided for in Article 118, Paragraph 1 of the Insurance Business Act were 1,146,686 million (U.S.$13,952 million), 1,311,321 million and 1,449,753 million as of March 31, 2012, 2011 and 2010, respectively, and a corresponding liability is recorded in the same amount. The amounts of separate accounts are included in each account balance of nonconsolidated balance sheets. Financial Data 143

146 8. Monetary Receivables from/and Monetary Liabilities to Subsidiaries The total amount of credits and debits to subsidiaries as of March 31, 2012, 2011 and 2010 were as follows: Millions of U.S. Dollars Monetary receivables 167, , ,611 $2,033 Monetary liabilities 3,381 3,933 5, Reserve for Dividends to Policyholders Changes in the reserve for dividends to policyholders included in policy reserves for the fiscal years ended March 31, 2012, 2011 and 2010 were as follows: Basic information for the calculation of accrued retirement benefits is as follows: Periodic allocation method of estimated retirement benefits Straight-line Discount rate 1.6% Expected rate of return on plan assets 2012: 1.6% 2011 and 2010: 2.5% Method of amortizing actuarial differences Amortization occurs over a certain period (5 years) using the straight-line method within the average remaining years of service of employees one year after the accrual of liabilities. Method of amortizing prior service cost Amortization occurs over a certain period (5 years) using the straight-line method within the average remaining years of service of employees upon accrual of liabilities. Millions of U.S. Dollars Balance at the beginning of the fiscal year 1,144,330 1,150,140 1,215,391 $13,923 Transfer to reserve from surplus in the previous fiscal year 175, , ,634 2,135 Dividends to policyholders paid out during the fiscal year (226,595) (234,228) (227,044) (2,757) Increase in interest 27,087 29,228 31, Balance at the end of the fiscal year 1,120,336 1,144,330 1,150,140 $13,631 In March 2011, the Company made revisions to the retirement benefit system for in-house employees, and others, including the expansion of the scope of the defined contribution retirement pension plan and the reduction of the payment period for the retirement pension plan. As a result of the reduction in retirement benefit obligations accompanying these revisions, a negative figure of 23,825 million in unrecognized prior service costs arose. Additionally, the abolishment of a portion of the retirement benefit system resulted in the recording of 2,677 million in losses as extraordinary losses. Financial Data net Assets Provided for in the Ordinance for Enforcement of the Insurance Business Act The amounts per Article 30, Paragraph 2 of the Ordinance for Enforcement of the Insurance Business Act were 1,015,406 million (U.S.$12,354 million), 752,520 million and 1,176,071 million as of March 31, 2012, 2011 and 2010, respectively. 11. Accrued Retirement Benefits Accrued retirement benefits as of March 31, 2012, 2011 and 2010 consisted of the following: Millions of U.S. Dollars Retirement benefit obligations (695,766) (709,533) (770,393) $(8,465) Pension plan assets 267, , ,328 3,257 Accrued retirement benefit cost (428,058) (436,355) (486,064) (5,208) Unrecognized actuarial differences 9,300 19,280 34, Unrecognized prior service cost (18,663) (23,428) (227) Accrued retirement benefits (437,421) (440,503) (451,091) $(5,322) Benefit cost of accrued retirement benefits for the fiscal years ended March 31, 2012, 2011 and 2010 was analyzed as follows: Millions of U.S. Dollars Service cost 25,812 27,198 26,292 $314 Interest cost 11,352 12,326 12, Expected return on plan assets (4,370) (7,108) (6,774) (53) Amortization of actuarial differences 8,472 17,239 25, Amortization of prior service cost (4,765) (397) (6,861) (58) Losses from abolishment of part of the retirement benefit system 2,677 Others 2,403 1,359 1, Net periodic benefit cost 38,905 53,295 52,139 $ Income Taxes The provision for income taxes is computed based on the pretax income included in the non-consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying the enacted statutory tax rates to the temporary differences.

147 13. Foundation Funds Foundation funds serve as the primary source of capital for Japanese mutual life insurance companies. These funds are similar to loans, as interest payments, maturity dates and other items must be established at the time of the offering. In the event of a bankruptcy or similar development, repayment of the principal and interest of foundation funds is subordinated to the repayment of amounts owed to ordinary creditors and insurance claims and benefit payments owed to policyholders. Upon redemption of foundation funds, mutual companies are required to make an addition to the reserve for redemption of foundation funds, which serves as retained earnings, equal to the amount redeemed. As a result, the full amount of foundation funds remains in net assets even after redemption. Foundation funds are therefore positioned as a mutual company s core capital, which is equivalent to the stated capital of a joint-stock company. The Company redeemed 50,000 million (U.S.$608 million), 50,000 million and 50,000 million of foundation funds and credited the same amount to reserve for redemption of foundation funds prescribed in Article 56 of the Insurance Business Act as of March 31, 2012, 2011 and 2010, respectively. 100,000 million (U.S.$1,217 million), 50,000 million and 100,000 million of foundation funds were offered pursuant to Article 60 of the Insurance Business Act during the fiscal years ended March 31, 2012, 2011 and 2010, respectively. 14. Pledged Assets Assets pledged as collateral by securities, land and buildings as of March 31, 2012 were 1,260,121 million (U.S.$15,332 million), 2,952 million (U.S.$36 million), and 274 million (U.S.$3 million), respectively. The total amount of loans covered by the aforementioned assets was 946,508 million (U.S.$11,516 million) as of March 31, These amounts included 1,083,818 million (U.S.$13,187 million) of securities deposited and 946,476 million (U.S.$11,516 million) of cash received as collateral under the securities lending contracts secured by cash as of March 31, Assets pledged as collateral by securities, land and buildings as of March 31, 2011 were 1,351,346 million, 2,952 million, and 293 million, respectively. The total amount of loans covered by the aforementioned assets was 1,301,070 million as of March 31, These amounts included 1,281,496 million of securities deposited and 1,301,029 million of cash received as collateral under the securities lending contracts secured by cash as of March 31, Assets pledged as collateral by securities, land and buildings as of March 31, 2010 were 1,072,156 million, 2,952 million and 308 million, respectively. The total amount of loans covered by the aforementioned assets was 1,036,302 million as of March 31, These amounts included 1,039,219 million of securities deposited and 1,036,250 million of cash received as collateral under securities lending contracts secured by cash as of March 31, Investments in Subsidiaries The total amounts of stocks and investments in subsidiaries were 255,622 million (U.S.$3,110 million), 191,792 million and 243,000 million as of March 31, 2012, 2011 and 2010, respectively. On March 22, 2012, the Company reached an agreement with Reliance Capital Limited, which is the parent company of Reliance Capital Asset Management Limited, an affiliate of the Reliance Group, to acquire 26% of the shares of Reliance Capital Asset Management Limited. On March 14, 2011, the Company agreed to acquire 26% of the shares of Reliance Life Insurance Company Limited, which is an affiliate of the Reliance Anil Dhirubhai Ambani Group. Nissay Dowa General Insurance Co., Ltd., the then affiliate, effected a stock swap with MS&AD Insurance Group Holdings, Inc. following its business integration with Aioi Insurance Co., Ltd. and Mitsui Sumitomo Insurance Group Holdings, Inc. on April 1, This stock swap resulted in the recording of a 12,898 million gain on sales of securities for the fiscal year ended March 31, Loans (1) The total amount of loans to bankrupt borrowers, delinquent loans, loans that are delinquent for over three months and restructured loans, which were included in loans, was 42,589 million (U.S.$518 million), 42,669 million and 42,056 million as of March 31, 2012, 2011 and 2010, respectively. i) The balances of loans to bankrupt borrowers and delinquent loans were 3,018 million (U.S.$37 million) and 33,532 million (U.S.$408 million) as of March 31, 2012, 3,127 million and 35,301 million as of March 31, 2011 and 3,222 million and 36,524 million as of March 31, Loans to bankrupt borrowers are loans for which interest is not accrued as income, except for a portion of loans written off, and to which any event specified in Article 96, Paragraph 1, Item 3 (a) to (e) or Item 4 of the Order for Enforcement of the Corporation Tax Act has occurred. Interest is not accrued as income for the loans since the recovery of principal or interest on the loans is unlikely due to the fact that principal repayments and interest payments are overdue for a significant period of time or for other reasons. Delinquent loans are loans with interest not accrued and exclude loans to bankrupt borrowers and loans with interest payments extended with the objective of restructuring or supporting the borrowers. ii) There were no loans delinquent for over three months as of March 31, 2012, 2011 and Loans that are delinquent for over three months are loans with principal or interest unpaid for over three months beginning one day after the due date based on the loan agreement. These loans exclude loans classified as loans to bankrupt borrowers and delinquent loans. 145 Financial Data

148 iii) The balances of restructured loans were 6,038 million (U.S.$73 million), 4,240 million and 2,309 million as of March 31, 2012, 2011 and 2010, respectively. Restructured loans are loans that provide certain concessions favorable to borrowers with the intent of supporting the borrowers restructuring, such as by reducing or exempting interest, postponing principal or interest payments, releasing credits, or providing other benefits to the borrowers. These loans exclude loans classified as loans to bankrupt borrowers, delinquent loans, and loans delinquent for over three months. (2) Direct write-offs of loans decreased the balances of loans to bankrupt borrowers and delinquent loans by 752 million (U.S.$9 million) and 1,001 million (U.S.$12 million) as of March 31, 2012, 1,035 million and 1,961 million as of March 31, 2011 and 10,849 million and 2,810 million as of March 31, Loan Commitments The amounts of commitments related to loans and loans outstanding were 137,032 million (U.S.$1,667 million), 122,666 million and 108,580 million as of March 31, 2012, 2011 and 2010, respectively. 18. Policy Reserves for Reinsurance Contracts Provided in Accordance with Article 71, Paragraph 1 of the Ordinance for Enforcement of the Insurance Business Act The amounts of policy reserves provided for the portion of reinsurance (hereafter referred to as policy reserves for ceded reinsurance ) as defined in Article 71, Paragraph 1 of the Ordinance for Enforcement of the Insurance Business Act were 164 million (U.S.$2 million), 163 million and 198 million as of March 31, 2012, 2011 and 2010, respectively. 20. Investment Income and Expenses The major components of gain on sales of securities were as follows: Millions of U.S. Dollars Domestic bonds including national government bonds 43,709 35,190 17,010 $ 532 Domestic stocks 68, , , Foreign securities 121, ,839 66,277 1,482 The major components of loss on sales of securities were as follows: Millions of U.S. Dollars Domestic bonds including national government bonds 138 7,148 1,306 $ 2 Domestic stocks 34,992 18,628 19, Foreign securities 118, , ,093 1,447 The major components of loss on valuation of securities were as follows: Millions of U.S. Dollars Domestic stocks 26, ,372 4,809 $319 Foreign securities 2,702 20,335 75, Gain or loss on derivative financial instruments, net, included net valuation losses of 84,089 million (U.S.$1,023 million) and gains of 6,503 million and 77,626 million for the fiscal years ended March 31, 2012, 2011 and 2010, respectively. Gain or loss from assets held in trust, net, included net valuation gains of 2,479 million and 79,793 million for the fiscal years ended March 31, 2011 and 2010, respectively. Financial Data 19. Contributions to the Life Insurance Policyholder Protection Fund and Organization Of the maximum borrowing amount from the Life Insurance Policyholders Protection Corporation of Japan, which is provided for in Article 37-4 of the Order for Enforcement of the Insurance Business Act, the amounts applied to the Company were estimated to be 84,947 million (U.S.$1,034 million), 85,971 million and 86,842 million as of March 31, 2012, 2011 and 2010, respectively. The amounts contributed to said corporation were recorded within operating expenses for the fiscal year. 21. Policy Reserves for Ceded Reinsurance Provision for/reversal of policy reserves for ceded reinsurance that was deducted from/added to the calculation of provision for policy reserves was a provision of 1 million (U.S.$0 million), a reversal of 34 million and a provision of 7 million for the fiscal years ended March 31, 2012, 2011 and 2010, respectively. 22. Impairment Losses i) Method for grouping the assets Leased property and idle property are classified as one asset group per structure. Assets utilized for insurance business operations are classified into one asset group. 146

149 ii) Circumstances causing impairment losses The Company observed a marked decrease in profitability or market value in some of the fixed asset groups. The book value of fixed assets was reduced to the recoverable amount and impairment losses were recognized as extraordinary losses. iii) Breakdown of asset groups that recognized impairment losses: For the year ended March 31, 2012 Land lease Purpose of use Land rights Buildings Total Leased property 6, ,472 11,119 Idle property 2, ,781 Total 9, ,789 13,900 For the year ended March 31, 2011 Land lease Purpose of use Land rights Buildings Total Leased property ,571 2,722 Idle property 3,507 5,526 9,033 Total 4, ,097 11,756 For the year ended March 31, 2010 Land lease Purpose of use Land rights Buildings Total Leased property 1, ,539 Idle property 3, ,111 Total 5,128 1,522 6,650 For the year ended March 31, 2012 Millions of U.S. Dollars Land lease Purpose of use Land rights Buildings Total Leased property $ 81 $ 0 $54 $135 Idle property Total $111 $ 0 $58 $ Deferred Tax Assets and Liabilities (1) Deferred tax assets/liabilities consisted of the following: Millions of U.S. Dollars Deferred tax assets 1,082,260 1,306,890 1,203,884 $13,168 Valuation allowance for deferred tax assets (81,422) (77,081) (65,749) (991) Subtotal 1,000,838 1,229,809 1,138,135 12,177 Deferred tax liabilities (533,903) (487,768) (703,107) (6,496) Net deferred tax assets/ (liabilities) 466, , ,027 $ 5,681 The major components causing deferred tax assets/liabilities were as follows: Millions of U.S. Dollars Deferred tax assets: Policy reserves and other reserves 712, , ,701 $8,667 Reserve for price fluctuations in investments in securities 106, , ,737 1,292 Accrued retirement benefits 136, , ,907 1,659 Allowance for doubtful accounts 5,386 9,908 12, Deferred tax liabilities: Net unrealized gains on available-for-sale securities 494, , ,894 $6,015 (2) The statutory tax rate was 36.1% for the fiscal years ended March 31, 2012, 2011 and The main factors in the difference between the statutory tax rate and the effective income tax rate were as follows: iv) Calculation method of recoverable amount The recoverable amount used for the measurement of impairment losses is based on the net realizable value upon sales of the assets or the discounted future cash flows. The discount rate used in the calculation of future cash flows is in principle 4.0%. Net realizable values are determined based on appraisals performed in accordance with the Real Estate Appraisal Standards or posted land prices Reserve for dividends to policyholders (12.8)% (24.4)% (28.3)% Loss on valuation of securities (4.6) Impact from a change in the tax rate 31.3 % Financial Data 147

150 Financial Data (3) In line with the promulgation of the Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating Taxation System Responding to Changes in Economic and Social Structures (Act No. 114 of 2011) and the Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake (Act No. 117 of 2011), the statutory tax rate applied to measure deferred tax assets and liabilities was changed from 36.1%. For items that are expected to be collected or paid during the period from April 1, 2012 to March 31, 2015, the rate was changed to 33.2%, and for items that are expected to be collected or paid on or after April 1, 2015, the rate was changed to 30.7%. As a result of this change, as of March 31, 2012, deferred tax assets and deferred tax liabilities for land revaluation decreased by 61,157 million (U.S.$744 million) and 25,001 million (U.S.$304 million), respectively, net unrealized gains on available-for-sale securities and land revaluation differences increased by 87,305 million (U.S.$1,062 million) and 25,001 million (U.S.$304 million), respectively, and income taxes deferred increased by 147,915 million (U.S.$1,800 million). 24. Transactions with Subsidiaries The total income and expenses from transactions with subsidiaries for the fiscal years ended March 31, 2012, 2011 and 2010 were as follows: Millions of U.S. Dollars Total income 8,309 5,667 26,024 $101 Total expenses 32,275 32,344 38, Transactions with Related Parties For the fiscal years ended March 31, 2012, 2011 and 2010 Subsidiaries Type: Company Name: Location: Capital as of March 31, 2012: March 31, 2011: March 31, 2010: Main Business: Percentage of Shareholder Voting Rights as of March 31, 2012: March 31, 2011: March 31, 2010: Subsidiaries Nissay Credit Guarantee Co., Ltd. Osaka 950 million (U.S.$12 million) 950 million 950 million Debt guarantee services Direct 87.3% Indirect 6.3% Direct 87.3% Indirect 6.3% Direct 78.7% Indirect 6.3% Nature of Relationship between Parties: Debt guarantee, etc. Interlocking directors, etc. Details of Transaction: Debt guarantees of Nippon Life s loans* Balance as of March 31, 2012: March 31, 2011: March 31, 2010: 513,616 million (U.S.$6,249 million) 536,027 million 549,269 million * Debt guarantees of the loans held by Nippon Life are made in accordance with the guarantee service agreement bound between Nissay Credit Guarantee Co., Ltd. and the debtor. 26. Other Extraordinary Losses In the fiscal year ended March 31, 2011, other extraordinary losses are losses from the abolishment of part of the retirement benefit system associated with revisions in the retirement benefit system for in-house employees, etc. 27. Subsequent Events 1) Approval of proposed appropriation of surplus by the annual meeting of the representatives of policyholders The non-consolidated proposed appropriations of surplus for the fiscal year ended March 31, 2012 were approved as planned at the annual meeting of the representatives of policyholders held on July 3, ) Foundation funds offering of 50,000 million Following the approval of changes to the Articles of Incorporation at the annual meeting of the representatives of policyholders held on July 3, 2012, in accordance with Article 60 of the Insurance Business Act, foundation funds were offered and payments were made on August 3, 2012, as described below: a. Total amount of offering 50,000 million (U.S.$608 million) b. Interest rate From August 4, 2012 to August 3, 2018: 0.87% annually c. Redemption date 50,000 million (U.S.$608 million) to be redeemed on the two business days prior to August 3, 2018 d. Use of funds Foundation funds for mutual company 3) Completed investment in Reliance Capital Asset Management Limited The Company made an investment in Reliance Capital Asset Management Limited of 20,679 million (U.S.$252 million)) on August 17, 2012 after completing all relevant procedures, including obtaining approval by the Securities and Exchange Board of India. 148

151 INDEPENDENT AUDITOR S REPORT (Consolidated Financial Review) INDEPENDENT AUDITOR S REPORT To the Board of Directors of Nippon Life Insurance Company: We have audited the accompanying consolidated balance sheets of Nippon Life Insurance Company and consolidated subsidiaries as of March 31, 2012, 2011 and 2010, and the related consolidated statements of income for each of the three years in the period ended March 31, 2012, the consolidated statements of comprehensive income (loss) for each of the two years in the period ended March 31, 2012, and the consolidated statements of changes in net assets, and cash flows for each of the three years in the period ended March 31, 2012, and a summary of significant accounting policies and other explanatory information, all expressed in Japanese yen. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in confor mity with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in conformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the con solidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluat ing the appropriateness of accounting policies used and the reasonableness of accounting estimates made by manage ment, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consoli dated financial position of Nippon Life Insurance Company and consolidated subsidiaries as of March 31, 2012, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the three years in the period ended March 31, 2012, in conformity with the applicable Japanese laws and regulations and accounting principles gener ally accepted in Japan. As explained in Note 1 (1), the information provided in the consolidated financial statements including notes to the consolidated financial statements is limited to that required by Japanese laws and regulations. Financial Data Convenience Translation Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan. May 23, 2012 (August 17, 2012 as to Note 23) 149

152 INDEPENDENT AUDITOR S REPORT (Non-Consolidated Financial Review) INDEPENDENT AUDITOR S REPORT To the Board of Directors of Nippon Life Insurance Company: We have audited the accompanying non consolidated balance sheets of Nippon Life Insurance Company as of March 31, 2012, 2011 and 2010, and the related non consolidated statements of income, and changes in net assets, and the non consolidated proposed appropriations of surplus for the years then ended, and a summary of significant accounting policies and other explanatory information, all expressed in Japanese yen. Management s Responsibility for the Non consolidated Financial Statements Management is responsible for the preparation and fair presentation of these non consolidated financial statements in conformity with accounting principles generally accepted in Japan, and for such internal control as management deter mines is necessary to enable the preparation of non consolidated financial statements that are free from material mis statement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these non consolidated financial statements based on our audits. We con ducted our audits in conformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the non consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the non consoli dated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the non consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the non consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the non consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the non consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nippon Life Insurance Company as of March 31, 2012, 2011 and 2010, and the results of its opera tions for the years then ended in conformity with the applicable Japanese laws and regulations and accounting principles generally accepted in Japan. Financial Data As explained in Note 1 (1), the information provided in the non consolidated financial statements including notes to the non consolidated financial statements is limited to that required by Japanese laws and regulations. Convenience Translation Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan. May 21, 2012 (August 17, 2012 as to Note 27) 150

153 Chapter 6 Operational Data Status of Financial Assets (Non-Consolidated) 1. Status of Non-Performing Assets According to Borrower s Classification Status of Risk-Monitored Loans Status of Loans in Trust from Contract for Replacement of Loss Ability to Pay Benefits (Solvency Margin Ratio) Unrealized Gains/Losses from Assets (Company Total) Data on Market Value of Securities (Company Total) Data on Market Value of Assets Held in Trust (Company Total) Ordinary Profit (Core operating profit) 160 Main Business Indicators 9. Policies in Force and New Policies Annualized Premiums New Policies by Product Policies in Force by Product Amount of Policies in Force by Coverage Type Individual Insurance and Annuity Policy Amounts in Force by Product Trends and Transitions of Policies 168 Insurance Policy Indicators 16. Increase in Policy Amounts in Force Increase in New Policies Average Policy Coverage (Individual Insurance) Percentage of New Policies (Compared with Beginning of the Same Fiscal Year) Rate of Cancellation and Expiration (Compared with Beginning of the Same Fiscal Year) Average New Policy Premium (Individual Insurance Policies with Monthly Payments) Mortality Rate (Primary Individual Insurance Policies) Incidence of Events Covered by Riders (Individual Insurance) Percentage of Premium Earned of Insured Amount Classified by Grounds for Third-Sector Insurance Benefits or Type of Insurance Percentage of Operating Expense (Operating Expenses as a Percentage of Premium Revenues) The Number of Major Insurance Companies That Accepted Reinsurance Agreements The Ratio of Reinsurance Premiums to Total Premiums Written by the Top Five Insurance Companies Using Reinsurance The Ratio of Insurance Companies Which Accepted Reinsurance Agreements by Ratings Assessed Unreceived Reinsurance Premiums 173 Accounting Indicators 30. Reserve for Outstanding Claims Policy Reserves Policy Reserve Balance Policy Reserves for Individual Insurance and Annuities (by Policy Year) Policy Reserve Balance of the General Account Calculation Method and Integers Used as the Basis for Calculations Related to Insurance Policies with Separate Accounts that Guarantee a Minimum Amount of Insurance Benefits Confirmation of Reasonableness and Validity of Article 121, Paragraph 1, Item 1 of the Insurance Business Act (Limited to That Relating to Third-Sector Insurance) Reserve for Dividends to Policyholders Allowance for Doubtful Accounts and Other Reserves Status of Allowance for Specific Overseas Debt Insurance Premiums Death and Other Claims Annuity Payments Health and Other Benefits Surrender Benefits Depreciation Operating Expenses Loans by Due Date Tax Expenses Lease Transactions 183 Indicators Related to investment (General Account) 49. Overview of the Fiscal Year Ended March 31, 2012 Investment (General Account) Portfolio Trends (General Account) Average Balance and Yield on Primary Assets (General Account) Investment Income (General Account) Investment Expenses (General Account) Interest, Dividends and Other Income (General Account) Analysis of Interest, Dividends and Other Income (General Account) Gain on Sales of Securities (General Account) Loss on Sales of Securities (General Account) Loss on Valuation of Securities (General Account) Securities Composition (General Account) Securities by Maturity Date (General Account) Bond Yields (General Account) Stocks Held Breakdown by Industry (General Account) Loans (General Account) Industrial and Consumer Loans by Maturity Dates (General Account) Loans to Domestic Companies by Company Size (General Account) Breakdown of Industrial and Consumer Loans by Industry (General Account) Breakdown of Industrial and Consumer Loans by Use (General Account) Breakdown of Loans by Region (General Account) Breakdown of Loans by Collateral (General Account) Appraisal Value of Real Estate (General Account) Amount of Real Estate and Numbers Held (General Account) Tangible Fixed Assets (General Account) Gain and Loss on Disposals of Fixed Assets (General Account) Depreciation on Tangible Fixed Assets, Intangible Fixed Assets and Other Assets Held for Leasing (General Account) Status of Overseas Loans and Investments (General Account) Yield on Overseas Loans and Investments (General Account) Summary of New Public-Sector Investment Underwriting and Loans (General Account) Breakdown of Other Assets (General Account) Loan Interest Rates 198 Securities Indicators (General Account) 80. Market Value of Securities (General Account) Market Value of Assets Held in Trust (General Account) Qualitative Information on Derivative Transactions (General Account: Excludes Proprietary Trading Securities) Credit Risk Amounts (General Account) Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (General Account) 202 Separate Account Indicators 85. Balance of Separate Account Assets Asset Management Overview for the Fiscal Year Ended March 31, 2012 (Separate Account Assets for Individual Variable Insurance and Individual Variable Annuities) 205 Status of Separate Account for Individual Variable Insurance 87. Policies in Force (Separate Account for Individual Variable Insurance) Breakdown of Assets Year-End Balance (Separate Account for Individual Variable Insurance) Investment Income and Expenses (Separate Account for Individual Variable Insurance) Market Value of Securities (Separate Account for Individual Variable Insurance) Market Value of Assets Held in Trust (Separate Account for Individual Variable Insurance) Qualitative Information on Derivative Transactions (Separate Account for Individual Variable Insurance) Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (Separate Account for Individual Variable Insurance) 207 Status of Separate Account for Individual Variable Annuities 94. Policies in Force (Separate Account for Individual Variable Annuities) Breakdown of Assets Year-End Balance (Separate Account for Individual Variable Annuities) Investment Income and Expenses (Separate Account for Individual Variable Annuities) Market Value of Securities (Separate Account for Individual Variable Annuities) Market Value of Assets Held in Trust (Separate Account for Individual Variable Annuities) Qualitative Information on Derivative Transactions (Separate Account for Individual Variable Annuities) Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (Separate Account for Individual Variable Annuities) 210 Status of Separate Account for Group Annuities 101. Separate Account Assets by Product (Separate Account for Group Annuities) Status of First Treaty Comprehensive Account (Separate Account for Group Annuities) Status of First Treaty Accounts by Investment Category (Separate Account for Group Annuities) 212 Status of Financial Assets (Consolidated) 104. Nippon Life Group Performance Principal Indicators of Operating Performance (Consolidated) Status of Non-Performing Assets According to Borrower s Classification (Consolidated) Status of Risk-Monitored Loans (Consolidated) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries (Consolidated Solvency Margin Ratio) Status of Insurance Claims Paying Ability of Insurance Subsidiaries (Solvency Margin Ratio) Segment Information 216 All figures are rounded down to the nearest unit. % and 00/0 are rounded to the nearest figure. 151 Operational Data

154 STATUS OF FINANCIAL ASSETS (NON-CONSOLIDateD) 1. Status of Non-Performing Assets According to Borrower s Classification, % As of March Bankrupt and quasi-bankrupt loans 1 11,825 12,048 12,505 Doubtful loans 2 24,729 26,383 27,253 Substandard loans 3 6,038 4,240 2,309 Subtotal 42,594 42,671 42,067 [Ratio to total] [0.37%] [0.38%] [0.39%] Normal loans 4 11,563,104 11,303,865 10,650,996 Total ,605,698 11,346,537 10,693,063 Notes: 1. 1) Bankrupt and quasi-bankrupt loans are non-performing assets and similar loans that have fallen into bankruptcy due to reasons including initiation of bankruptcy proceedings, start of reorganization proceedings, or submission of an application to start rehabilitation proceedings. 2) Doubtful loans are non-performing assets with a strong likelihood that loan principal cannot be recovered or interest cannot be received according to the contract, because of difficulties in financial condition and business performance of the debtor who has not yet entered into bankruptcy. 3) Substandard loans include loans that are delinquent for over three months and restructured loans. Loans that are delinquent for over three months are loans with principal or interest being unpaid for over three months counting from the day after the due date based on the loan agreement (excluding 1) and 2) in the above notes). Restructured loans are loans that provide certain concessions favorable to the borrower with the intent of supporting the borrower s restructuring. Examples of such concessions include reducing or exempting interest, postponing principal or interest payments, releasing credits, or providing other benefits to the borrowers (excluding 1) and 2) in the above notes and loans that are delinquent for over three months). 4) Normal loans are loans that do not fall under the classifications for 1) to 3) in the above notes, and where the debtor has no financial or business performance problems. 2. Classifications and calculation methods used in this table are based on the Ordinance for Enforcement of the Insurance Business Act. The table includes guaranteed private offering loans of financial institutions, loans, securities lending, accrued interest, suspense payments, and customer s liabilities for acceptances and guarantees. 3. Bankrupt and quasi-bankrupt loans are directly deducted from total loans as estimated uncollectible amounts calculated by subtracting estimated collectable amounts based on the collateral and guarantees from total loans. These amounts for bankrupt and quasi-bankrupt were 1,754 million, 2,996 million and 13,660 million as of March 31, 2012, 2011 and 2010, respectively. 2. Status of Risk-Monitored Loans, % As of March Loans to bankrupt borrowers 1 3,018 3,127 3,222 Delinquent loans 2 33,532 35,301 36,524 Loans that are delinquent for over three months 3 Restructured loans 4 6,038 4,240 2,309 Total ,589 42,669 42,056 [Ratio to total loans] [0.49%] [0.49%] [0.48%] Notes: 1. For loans to bankrupt borrowers and quasi-bankrupt borrowers (including collateralized and guaranteed loans), an estimated uncollectible amount (calculated by subtracting estimated collectable amounts based on collateral and guarantees from total loans) is directly deducted from the total loan amount. The amounts of loans to bankrupt borrowers were 752 million, 1,035 million and 10,849 million as of March 31, 2012, 2011 and 2010, respectively. The amounts of delinquent loans were 1,001 million, 1,961 million and 2,810 million as of March 31, 2012, 2011 and 2010, respectively. 2. 1) Loans to bankrupt borrowers are loans with principal or interest payments being overdue for a significant period of time and interest not being accrued including the following: (a) loans to borrowers that are legally bankrupt through filings for proceedings under the Corporate Reorganization Act, Civil Rehabilitation Act, Bankruptcy Act, or Company Act, (b) loans to borrowers that have notes suspended from being traded, or (c) loans to borrowers that have filed for legal proceedings similar to the aforementioned proceedings based on overseas laws. 2) Delinquent loans are loans with interest not accrued and exclude loans to bankrupt borrowers and loans with interest payments extended with the objective of restructuring or supporting the borrowers. 3) Loans that are delinquent for over three months are loans with principal or interest unpaid for over three months counting from the day after the due date based on the loan agreement. Note that the account does not include loans to bankrupt borrowers and delinquent loans. 4) Restructured loans are loans that provide certain concessions favorable to the borrower with the intent of supporting the borrower s restructuring, such as by reducing or exempting interest, postponing principal or interest payments, releasing credits, or providing other benefits to the borrowers (excluding loans to bankrupt borrowers and delinquent loans from above, and loans that are delinquent for over three months). 3. Based on the results of asset self-assessment, accrued interest on loans is not recorded as revenues for obligors that are bankrupt, essentially bankrupt or nearing bankruptcy. Operational Data 152

155 Asset Self-Assessment Asset self-assessment refers to evaluating individual assets based on the financial condition of each borrower and its collateral, and is classified into categories. The Company has defined strict assessment standards based on the Inspection Manual for Insurance Companies of the Financial Services Agency and conducted internal audit by the Auditing Department independent from the groups handling the actual assessment. In addition, it undergoes external audit by external auditors (certified public accountants). Self-assessment categories Recoverability through collateral and guarantees (see Notes) Debtor category a) b) c) d) Normal Non-categorized 1 On caution Non-categorized 2 Category II 2 Substandard Category II 3 Doubtful Non-categorized Category II Category III 4 Quasi-bankrupt Non-categorized Category II Category III 4 Category IV 5 Bankrupt Non-categorized Category II Category III 4 Category IV 5 Status of debtors Debtors whose performance is sound and for whom there are no specific concerns regarding their financial situation. Debtors on caution, such as debtors whose loan terms and conditions have been eased or whose loan repayment performance is poor, and debtors posting a loss, or whose performance is sluggish or unstable. Of above, debtors whose loan terms and conditions have been eased or who are delinquent for the past three months or more from the due date. Debtors who are not bankrupt at present, but for whom the possibility of bankruptcy in the near future is high owing to their financial difficulties. Debtors who are essentially bankrupt. Although there is no legal or formal evidence of the bankruptcy, the debtor is in serious financial difficulty and there is no prospect of revitalization. Debtors that are legally or formally bankrupt as a result of having entered into bankruptcy, liquidation, corporate reorganization, corporate rehabilitation or civil rehabilitation procedures. Notes: Categories for collateral/guarantee-based recoverability a) Estimation of disposal of solid collateral and solid guarantee b) Estimation of disposal of general collateral and general guarantee c) Portion for which recovery through guarantees is uncertain, calculated as the difference between estimates of the collateral amount and disposal amount d) Portions other than a) c) that are deemed irrecoverable Self-assessment debtor classifications and relationship of disclosed non-performing debt (as of March 31, 2012) Self-assessment debtor classification Claims based on Financial Reconstruction Law Applicable categories related to loans: Loans, securities loaned, accrued interest, suspense pay ments, customers liability for acceptances and guarantees, private placements guaranteed by financial institutions) ( Risk-monitored loans (Applicable: Only to loans) Normal Normal On caution Substandard Restructuring Delinquent for over three months Doubtful Doubtful Delinquent Quasi-bankrupt Bankrupt and quasi-bankrupt Bankrupt Bankrupt 42.5 billion Percentage of total claims 0.37% 42.5 billion Percentage of total loans 0.49% Status of Borrower Classification Billions of Yen, % As of March 31, 2012 Amount Percentage Loan balances 8, % (After direct write-off of category IV) Non-categorized 8, Category II Category III Category IV Note: The amount of IV categorized which was directly written off from loans was 1.7 billion. Standards for allowance for doubtful accounts In order to take appropriate measures against bad debt, the Company has created the following types of reserve principles for self-assessment categories 1 5, as noted in the table of self-assessment categories, and builds reserves (bad-debt accounting) in accordance with these principles. Reserve principles: l Normal: General allowance for doubtful accounts based on actual loan losses in the previous fiscal year. [1] l On caution: General allowance for doubtful accounts based on the accumulated actual loan loss ratio (ratio of losses incurred from loans within three years from a certain date) for the previous three fiscal years. [2] Substandard: Corporate loans are divided into two categories: those that are not secured by collateral, guarantees, or others, and calculate the actual loan loss ratio. [3] l For doubtful, quasi-bankrupt and bankrupt, the necessary amount, concerning the balance calculated by subtracting the estimated collectable amount based on collateral and guarantees from total loans, is provided as specific allowance for doubtful accounts. [4] The portion for the amount in Category IV is directly deducted from total loans amount. [5] Operational Data 153

156 3. Status of Loans in Trust from Contract for Replacement of Loss No ending balance as of March 31, 2012, 2011 or Ability to Pay Benefits (Solvency Margin Ratio) Solvency Margin Ratio According to New Standard As of March Solvency margin gross amount (A) 5,892,084 5,634,273 Foundation funds (kikin) and other reserve funds: 2,824,109 2,767,335 Foundation funds and others 1 1,371,689 1,268,064 Reserve for price fluctuations in investments in securities 2 333, ,003 Contingency reserve 3 775, ,755 General allowance for doubtful accounts 4 9,454 10,504 Others 9 333, ,007 Net unrealized gains/losses on available-for-sale securities 90% 5 1,365,853 1,066,495 Net unrealized gains/losses on real estate 85% 6 9,974 37,905 Excess of continued Zillmerized reserve 7 1,659,986 1,721,278 Qualifying subordinated debt Excess of continued Zillmerized reserve and qualifying subordinated debt not included in margin calculations Deduction clause 8 (532) (430) Others 9 32,693 41,689 Total amount of risk (R1+R8) 2 +(R2+R3+R7) 2 + R4 (B) 2,078,230 2,129,384 Underwriting risk R , ,389 Underwriting risk of third-sector insurance R ,383 74,042 Anticipated yield risk R , ,800 Minimum guarantee risk R ,285 10,824 Investment risk R3 14 1,610,090 1,649,467 Business management risk R ,709 45,810 Solvency margin ratio (A) x 100 (1/2) x (B) 567.0% 529.1% Notes: 1. The amounts and figures in the table above are calculated based on the provisions of Article 86 and Article 87 of the Ordinance for Enforcement of the Insurance Business Act and the Ministry of Finance Public Notice No. 50 of In accordance with Cabinet Office Ordinance No. 23 of 2010 and Financial Services Agency Public Notice No. 48 of 2010, part of the calculation standard for the solvency margin gross amount and the total amount of risk has been changed (tightening of margin calculations, tightening and refining of risk measurements, etc.). The amounts and figures as of March 31, 2011 are shown above assuming that the standard for the fiscal year ended March 31, 2012 was applied to the amounts and figures as of March 31, The amount of foundation funds and others represents the amount after the appropriation of surplus. 3. The standard method is used for the calculation of the amount equivalent to minimum guarantee risk R7. Operational Data 154

157 Solvency Margin Ratio According to Previous Standard As of March Solvency margin gross amount (A) 5,722,029 6,232,562 Foundation funds (kikin) and other reserve funds: 2,767,335 2,805,804 Foundation funds and others 1,268,064 1,217,299 Reserve for price fluctuations in investments in securities 347, ,011 Contingency reserve 821, ,445 General allowance for doubtful accounts 10,504 11,481 Others 320, ,567 Net unrealized gains on available-for-sale securities 90% 1,066,495 1,654,828 Net unrealized gains on real estate 85% 37,905 77,950 Excess of continued Zillmerized reserve 1,721,278 1,555,073 Qualifying subordinated debt Deduction clause (430) (360) Others 129, ,265 Total amount of risk (R1+R8) 2 +(R2+R3+R7) 2 + R4 (B) 1,184,387 1,238,967 Underwriting risk R1 144, ,961 Underwriting risk of third-sector insurance R8 74,042 74,937 Anticipated yield risk R2 169, ,138 Minimum guarantee risk R7 10,401 10,677 Investment risk R3 956, ,788 Business management risk R4 27,098 28,290 Solvency margin ratio (A) x 100 (1/2) x (B) 966.2% 1,006.0% Notes: 1. The amounts and figures in the table above are calculated based on the provisions of Article 86 and Article 87 of the Ordinance for Enforcement of the Insurance Business Act and the Ministry of Finance Public Notice No. 50 of The amount of foundation funds and others represents the amount after the appropriation of surplus. 3. The standard method is used for the calculation of the amount equivalent to minimum guarantee risk R7. 1. Foundation Funds and Others The amount after excluding estimated distributed income (interest on foundation funds and provision for reserve for dividends to policyholders) from the appropriation of surplus plus total valuations, conversions and others included under total net assets on the balance sheets. 2. Reserve for Price Fluctuations in Investments in Securities The amount of the reserve for price fluctuations in investments in securities on the balance sheets. 3. Contingency Reserve The amount of the contingency reserve, which is a part of policy reserves on the balance sheets. 4. General Allowance for Doubtful Accounts The amount of the general allowance for doubtful accounts, listed as allowance for doubtful accounts on the balance sheets. 5. Net Unrealized Gains on Available-for-Sale Securities If the difference between the total amount of securities on the balance sheet and the total book value is positive, multiply by 90%, if negative, multiply by 100% and record the resulting amount. 6. Net Unrealized Gains on Real Estate If the difference between the total market value of real estate and the total book value is positive, multiply by 85%, if negative, multiply by 100% and record the resulting amount. The difference between the market value and book value of real estate includes land revaluation differences on the balance sheet and the total deferred tax liabilities for land revaluation on the balance sheets. 7. Excess of Continued Zillmerized Reserve An amount that exceeds either the continued Zillmerized reserve or the amount of surrender benefits out of policy reserves (excluding the contingency reserve) on the balance sheet, whichever is greater. 8. Deduction Clause The deduction clause improves the ability to pay, for example, the insurance claims of other insurance companies and to raise the capital adequacy ratio of subsidiaries (when banks, etc. are made into subsidiaries, etc.), in cases where the shares and other means of capital procurement of the aforementioned other insurance companies or subsidiaries are held intentionally, by enabling the deduction of the amount of those means of capital procurement from the solvency margin ratio. 9. Others The total amount of a part of dividend reserves on the balance sheets and tax amounts corresponding to contingency funds under net assets. 10. Underwriting Risk Shows the amount for dealing with underwriting risk (out of risk of actual insurable incidents occurring at a higher frequency than generally expected; risk that applies to third-sector insurance). 11. Underwriting Risk of Third-Sector Insurance Shows the amount for dealing with underwriting risk of third-sector insurance (out of risk of actual insurable incidents occurring at a higher frequency than generally expected, risk that applies to third-sector insurance). 12. Anticipated Yield Risk Shows the amount for dealing with anticipated yield risk (risk of not being able to secure an anticipated yield that serves as the basis for calculating policy reserves). 13. Minimum Guarantee Risk Shows the amount for dealing with minimum guarantee risk (in insurance policies in the separate accounts, those policies that guarantee a minimum amount of insurance benefits, the risk that said insurance policies and the value of assets belonging to the separate accounts when paying said insurance benefits, will fall below the amount of minimum guaranteed insurance benefits, and the risk arising from greater than expected price fluctuations for assets belonging to said special accounts). 14. Investment Risk Shows the amount for dealing with investment risk (in risks related to investment, those risks arising from reasons other than more than generally expected price fluctuations of held securities and other assets). 15. Business Management Risk Shows the amount for dealing with business management risk (with regard to risks arising at a greater than expected frequency, those risks that do not fall under the category of underwriting risk, underwriting risk of third-sector insurance, anticipated yield risk, investment risk and minimum guarantee risk are included in this category). Operational Data 155

158 5. Unrealized Gains/Losses from Assets (Company Total) Billions of Yen As of March Book value Market value (appraisal value) Cash, deposits and call loans Net gains/losses (0.0) (0.0) (0.0) Gains Losses (0.0) (0.0) (0.0) Book value Market value (appraisal value) Proprietary trading securities* 1 Net gains/losses Gains Losses Book value 10.6 Market value (appraisal value) 10.6 Assets held in trust* 2 Net gains/losses Gains Losses Book value 36, , ,110.4 Market value (appraisal value) 38, , ,470.6 Investments in securities* 3 Net gains/losses 2, , ,360.1 Gains 3, , ,784.1 Losses (614.4) (709.2) (423.9) Book value 8, , ,770.8 Market value (appraisal value) 8, , ,947.5 Loans Net gains/losses Gains Losses (9.7) (13.2) (9.5) Book value 1, , ,292.2 Market value (appraisal value) 1, , ,301.0 Real estate* 4 Net gains/losses (63.2) (37.3) 8.8 Gains Losses (223.2) (203.3) (190.7) Book value 2, , ,935.9 Market value (appraisal value) 2, , ,950.6 Other assets Net gains/losses Gains Losses (0.5) (1.2) (4.8) Book value 49, , ,846.1 Market value (appraisal value) 52, , ,406.4 Total assets Net gains/losses 2, , ,560.3 Gains 3, , ,189.5 Losses (847.9) (927.1) (629.1) *1 Proprietary trading securities include securities with market values calculated using theoretical prices. *2 Market value calculations are based on prices rationally calculated by the trustee of assets held in trust. Book value includes net gains/losses related to derivative transactions within assets held in trust. *3 Investments in securities include securities with market values calculated using theoretical prices. Securities also include securities loaned. *4 Real estate is the total of the land account and leasehold account. The market value of real estate (land + land lease rights) is calculated with reference to publicly disclosed appraisal values. The Company reappraised land for business use based on the Law for the Revaluation of Land. Book value includes revaluation differences of 74.9 billion, 81.9 billion and 82.9 billion as of March 31, 2012, 2011 and 2010, respectively. Operational Data 156

159 6. Data on Market Value of Securities (Company Total) Please refer to the following pages: Market Value of Securities (General Account) p. 199, Market Value of Securities (Separate Account for Individual Variable Insurance) p. 206, Market Value of Securities (Separate Account for Individual Variable Annuities) p Net valuation gains/losses from trading securities As of March Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Trading securities 1,041,876 20,342 1,182,649 (19,844) 1,330, ,974 Notes: 1. Balance sheet amount of assets held in trust included in trading securities and the net valuation gains/losses included in profits/losses for current period include net gains/losses on derivative transactions. 2. The carrying value above excludes cash equivalents and call loans within assets held in trust included in trading securities. 2. Data on market value of securities (Securities with market value other than trading securities) As of March Book value Market value Net gains/losses Gains Losses Book value Market value Net gains/losses Gains Losses Policy-reserve-matching bonds 18,228,648 19,392,601 1,163,953 1,189,139 (25,185) 17,415,476 18,106, , ,757 (28,794) Held-to-maturity debt securities 14,500 14,479 (21) 61 (82) 16,511 16, (39) Investments in subsidiaries and affiliates 7,711 21,406 13,695 13,695 7,711 34,062 26,351 26,351 Available-for-sale securities 16,558,688 18,085,285 1,526,597 2,067,918 (541,320) 15,947,266 17,144,379 1,197,112 1,827,671 (630,559) Domestic bonds 1,724,475 1,772,691 48,216 55,928 (7,711) 1,447,102 1,481,593 34,490 38,044 (3,553) Domestic stocks 4,652,436 5,596, ,490 1,389,380 (444,889) 4,718,455 5,905,992 1,187,537 1,539,836 (352,299) Foreign securities 9,624,725 10,166, , ,182 (73,314) 8,999,879 8,991,350 (8,529) 242,325 (250,854) Foreign bonds 8,095,784 8,508, , ,129 (47,833) 7,689,976 7,599,864 (90,111) 138,886 (228,997) Foreign stocks and other securities 1,528,940 1,658, , ,052 (25,480) 1,309,902 1,391,485 81, ,439 (21,856) Other securities 229, ,694 (7,960) 7,423 (15,383) 324, ,857 (16,844) 6,973 (23,817) Monetary receivables purchased 76,396 76,381 (15) 4 (19) 34,127 34, (30) Negotiable certificates of deposit 251, ,997 (2) (2) 423, ,995 (4) 0 (4) Total 34,809,548 37,513,773 2,704,225 3,270,814 (566,589) 33,386,965 35,301,529 1,914,563 2,573,956 (659,393) Domestic bonds 19,078,734 20,244,760 1,166,026 1,198,181 (32,154) 17,804,828 18,493, , ,448 (31,117) Domestic stocks 4,652,436 5,596, ,490 1,389,380 (444,889) 4,718,455 5,905,992 1,187,537 1,539,836 (352,299) Foreign securities 9,714,636 10,272, , ,684 (73,650) 9,095,298 9,115,769 20, ,362 (250,891) Foreign bonds 8,177,984 8,592, , ,936 (48,169) 7,777,684 7,690,221 (87,462) 141,572 (229,034) Foreign stocks and other securities 1,536,652 1,679, , ,748 (25,480) 1,317,613 1,425, , ,790 (21,856) Other securities 229, ,694 (7,960) 7,423 (15,383) 324, ,857 (16,844) 6,973 (23,817) Monetary receivables purchased 883, ,722 43,637 44,145 (508) 1,020,683 1,055,755 35,072 36,335 (1,262) Negotiable certificates of deposit 251, ,997 (2) (2) 423, ,995 (4) 0 (4) As of March Book value Market value Net gains/losses Gains Losses Policy-reserve-matching bonds 16,835,535 17,370, , ,694 (30,653) Held-to-maturity debt securities 19,522 19, Investments in subsidiaries and affiliates 62,165 86,172 24,006 24,006 Available-for-sale securities 14,969,667 16,811,804 1,842,136 2,207,938 (365,801) Domestic bonds 1,662,706 1,697,638 34,932 35,508 (575) Domestic stocks 4,767,514 6,439,520 1,672,005 1,903,019 (231,013) Foreign securities 7,757,947 7,909, , ,665 (109,399) Foreign bonds 6,482,201 6,579,520 97, ,817 (60,498) Foreign stocks and other securities 1,275,745 1,329,692 53, ,847 (48,900) Other securities 314, ,340 (15,830) 8,415 (24,246) Monetary receivables purchased 97,328 97,097 (230) 330 (561) Negotiable certificates of deposit 370, ,994 (5) 0 (5) Total 31,886,890 34,288,417 2,401,526 2,797,981 (396,454) Domestic bonds 17,370,556 17,931, , ,604 (24,436) Domestic stocks 4,821,968 6,507,838 1,685,869 1,916,883 (231,013) Foreign securities 7,857,734 8,017, , ,914 (111,904) Foreign bonds 6,574,277 6,670,197 95, ,923 (63,003) Foreign stocks and other securities 1,283,456 1,347,546 64, ,990 (48,900) Other securities 314, ,340 (15,830) 8,415 (24,246) Monetary receivables purchased 1,152,460 1,162,774 10,314 15,163 (4,849) Negotiable certificates of deposit 370, ,994 (5) 0 (5) Note: This table includes negotiable certificates of deposit and other items deemed appropriate to be handled as securities under the Financial Instruments and Exchange Act. 157 Operational Data

160 6. Data on Market Value of Securities (Company Total), continued (1) Policy-reserve-matching bonds As of March Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Bonds whose market value exceeds balance sheet amount 17,926,383 19,115,522 1,189,139 15,669,707 16,389, ,757 14,925,486 15,491, ,694 Domestic bonds 17,108,566 18,250,757 1,142,191 14,690,166 15,371, ,228 14,092,476 14,642, ,755 Foreign securities 68,973 71,780 2,806 80,912 83,598 2,685 37,850 38,957 1,106 Monetary receivables purchased 748, ,984 44, , ,471 35, , ,991 14,833 Bonds whose market value does not exceed balance sheet amount 302, ,079 (25,185) 1,745,768 1,716,974 (28,794) 1,910,049 1,879,396 (30,653) Domestic bonds 231, ,831 (24,360) 1,651,047 1,623,521 (27,525) 1,595,851 1,571,991 (23,860) Foreign securities 13,226 12,890 (336) 6,795 6,758 (36) 54,224 51,719 (2,504) Monetary receivables purchased 57,846 57,357 (488) 87,926 86,693 (1,232) 259, ,685 (4,287) (2) Held-to-maturity debt securities As of March Balance sheet amount Market value Difference Balance sheet amount Market value Difference Balance sheet amount Market value Difference Bonds whose market value exceeds balance sheet amount 12,000 12, ,012 14, ,522 19, Domestic bonds 12,000 12, ,012 14, ,522 19, Bonds whose market value does not exceed balance sheet amount 2,499 2,417 (82) 2,499 2,460 (39) Domestic bonds 2,499 2,417 (82) 2,499 2,460 (39) (3) Available-for-sale securities As of March Book value Balance sheet amount Difference Book value Balance sheet amount Difference Book value Balance sheet amount Difference Bonds whose balance sheet amount exceeds book value 12,435,950 14,503,868 2,067,918 8,544,381 10,372,053 1,827,671 9,921,362 12,129,301 2,207,938 Domestic bonds 1,669,385 1,725,313 55,928 1,158,509 1,196,553 38,044 1,143,171 1,178,679 35,508 Domestic stocks 2,656,297 4,045,678 1,389,380 3,147,836 4,687,672 1,539,836 3,678,010 5,581,030 1,903,019 Foreign securities 7,936,643 8,551, ,182 4,011,331 4,253, ,325 4,903,840 5,164, ,665 Other securities 170, ,190 7, , ,393 6, , ,786 8,415 Monetary receivables purchased 2,855 2, ,283 4, ,968 5, Negotiable certificates of deposit 10,000 10, ,000 15,000 0 Bonds whose balance sheet amount does not exceed book value 4,122,738 3,581,417 (541,320) 7,402,885 6,772,326 (630,559) 5,048,304 4,682,502 (365,801) Domestic bonds 55,089 47,378 (7,711) 288, ,039 (3,553) 519, ,958 (575) Domestic stocks 1,996,138 1,551,249 (444,889) 1,570,618 1,218,319 (352,299) 1,089, ,490 (231,013) Foreign securities 1,688,081 1,614,767 (73,314) 4,988,547 4,737,693 (250,854) 2,854,106 2,744,707 (109,399) Other securities 58,887 43,503 (15,383) 112,281 88,463 (23,817) 137, ,554 (24,246) Monetary receivables purchased 73,540 73,521 (19) 29,843 29,813 (30) 92,359 91,798 (561) Negotiable certificates of deposit 251, ,997 (2) 413, ,995 (4) 355, ,994 (5) Operational Data (4) Book value of securities without market value As of March Policy-reserve-matching bonds Held-to-maturity debt securities Unlisted foreign bonds Others Investments in subsidiaries and affiliates 247, , ,835 Available-for-sale securities 1,039,878 1,180,194 1,244,653 Unlisted domestic stocks (excluding stocks sold over-the-counter) 202, , ,507 Unlisted foreign stocks (excluding stocks sold over-the-counter) 692, , ,363 Unlisted foreign bonds 53,912 53,912 Others 144, , ,870 Total 1,287,790 1,364,275 1,425,489 Note: Of securities without market value, the net loss on currency exchange valuation of assets denominated in foreign currencies was 47,025 million, 50,943 million and 31,061 million as of March 31, 2012, 2011 and 2010, respectively. 158

161 6. Data on Market Value of Securities (Company Total), continued Policy-reserve-matching bonds The Company has established the following target portfolios that correspond to specific types of insurance products: Regarding lump-sum payment products (lump-sum payment endowment, lump-sum payment annuities, lump-sum payment whole life insurance) and guaranteed fixed-term rate group annuities, the Company has established an Asset/Liability Management (ALM) portfolio that aims to avoid interest fluctuation risks by predicting future cash flows from debt. In terms of other types of insurance, the Company has established an ALM portfolio that has a goal of expanding long-term future revenue by evaluating debt characteristics and by operating within a specific range of risk allowance. Given the characteristics of these insurance products, and this type of investment, the Company has specified and sub-categorized the following insurance policies based on Temporary Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds in the Insurance Industry (Japan Institute of Certified Public Accountants Industry Audit Committee Release No. 21). All insurance policies for other than lump-sum payment products and group annuities All insurance policies for lump-sum payment products other than variable assumed rate-type insurance All insurance policies for group annuities other than guaranteed fixed-term rate products Concerning bonds held for the purpose of controlling the respective duration (level of market price fluctuations against fluctuations in interest rates) of bonds that fit into these sub-categories, the Risk Management Committee regularly confirms that the policy reserves and the duration are in a state of general consistency. Based on such confirmation, the Company classifies most Japanese yen-based debt securities into policy-reserve-matching bonds. 7. Data on Market Value of Assets Held in Trust (Company Total) As of March Assets held in trust Balance sheet amount 10,670 Market value 10,670 Net unrealized gains/losses Gains Losses Notes: 1. Market value calculations are based on prices rationally calculated by the trustee of assets held in trust. 2. Balance sheet amount includes net gains/losses related to derivative transactions within assets held in trust. Assets held in trust for trading purposes As of March Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Assets held in trust for trading purposes 2,479 10,670 79,793 Note: The carrying value of assets held in trust on the balance sheets and the net valuation gains/losses included in profits/losses for the current period include net gains/losses related to derivative transactions. Assets held in trust classified as held to maturity, held for reserves and other No ending balance as of March 31, 2012, 2011 or Operational Data 159

162 8. Ordinary Profit (Core operating profit) Fiscal years ended March Core operating income 6,836,132 6,316,006 6,361,557 Revenues from insurance and reinsurance 5,368,272 4,896,413 4,817,479 Insurance premiums 5,367,387 4,895,562 4,816,612 Reinsurance revenue Investment income 1,221,074 1,207,553 1,322,092 Interest, dividends, and other income 1,198,148 1,204,606 1,119,518 Gain on redemptions of securities 239 2,120 1,226 Reversal of general allowance for doubtful accounts 1,049 Other investment income 2, ,189 Gain on separate accounts, net 18, ,158 Other ordinary income 246, , ,985 Income from annuity riders 10,328 12,842 8,308 Income from deferred benefits 171, , ,839 Reversal of policy reserves for outstanding claims 41,933 Reversal of policy reserves Reversal of accrued retirement benefits 3,081 Other income 20,106 20,903 19,837 Other core operating income Core operating expenses 6,291,826 5,799,679 5,856,496 Benefits and other payments 3,886,720 3,813,023 3,882,981 Death and other claims 1,167,385 1,135,052 1,173,840 Annuity payments 649, , ,285 Health and other benefits 804, , ,421 Surrender benefits 1,011,204 1,014,833 1,059,647 Other refunds 252, , ,455 Reinsurance premiums 1,337 1,296 1,330 Provision for policy reserves* 1,414, , ,073 Investment expenses 66, ,191 59,433 Interest expenses 2,658 2,839 2,137 Loss on redemptions of securities 16,265 16,191 12,580 Transfer to general allowance for doubtful accounts (4,769) Depreciation of rental real estate and other assets 25,848 26,045 26,405 Other investment expenses 21,993 27,296 23,079 Loss on separate accounts, net 34,818 Operating expenses 572, , ,633 Other ordinary expenses 351, , ,374 Deferred benefit payments 248, , ,138 Taxes 37,392 34,972 35,562 Depreciation 50,511 48,035 44,094 Provision for accrued retirement benefits 9,469 12,142 Deferred asset amortization (Insurance Business Act, Article 113) Other expenses 15,573 15,687 14,436 Other core operating expenses Core operating profit A 544, , ,061 Fiscal years ended March Capital gains 233, , ,068 Gain on proprietary trading securities Gain on assets held in trust, net 16 27,911 Gain on trading securities Gain on sales of securities 233, , ,497 Gain on derivative financial instruments, net 19,659 Foreign exchange gains, net Other capital gains Capital losses 347, , ,344 Loss on proprietary trading securities Loss on assets held in trust, net 605 Loss on trading securities Loss on sales of securities 154, , ,658 Loss on valuation of securities 29, ,243 81,808 Loss on derivative financial instruments, net 157,980 27,178 Foreign exchange losses, net 6,282 7,619 12,876 Other capital losses Net capital gains/losses B (113,750) (97,883) 14,724 Core operating profit including net capital gains/losses A+B 430, , ,785 Non-recurring gains 51,016 42,690 Reinsurance revenue Reversal of contingency reserve 46,101 42,690 Reversal of specific allowance for doubtful accounts 4,915 Other non-recurring gains Non-recurring losses 3 230, ,271 Reinsurance premiums Provision for contingency reserve Provision for specific allowance for doubtful accounts 18,147 Provision of allowance for specific overseas debts Write-off of loans Other non-recurring losses 230, ,970 Non-recurring gains/losses C 51,012 (187,347) (226,271) Ordinary profit A + B + C 481, , ,513 * Provision for policy reserves excludes provision for (reversal of) contingency reserve and provision for policy reserves based on Article 69, Paragraph 5 of the Ordinance for Enforcement of the Insurance Business Act. (Reference) Breakdown of other core operating income and others Fiscal years ended March Other core operating income Other core operating expenses Other capital gains Other capital losses Other non-recurring gains Other non-recurring losses 230, ,970 Provision for policy reserves based on Article 69, Paragraph 5 of the Ordinance for Enforcement of the Insurance Business Act 230, ,970 Operational Data 160

163 MAIN BUSINESS INDICATORS 9. Policies in Force and New Policies 1. Policies in force (1) Number of policies Number of Policies, % As of March Number of policies Rate of increase (decrease) Number of policies Rate of increase (decrease) Number of policies Individual insurance 11,339,098 (1.5)% 11,510,549 (2.2)% 11,775,230 Individual annuities 3,149, ,024, ,939,764 (2) Policy amount, % As of March Amount Rate of increase (decrease) Amount Rate of increase (decrease) Individual insurance 162,385,451 (4.9)% 170,791,778 (5.4)% 180,524,286 Individual annuities 19,047, ,314, ,935,253 Group insurance 91,234, ,990, ,619,874 Group annuities 10,476, ,952, ,621,896 Notes: 1. The amount of individual annuities is the total of (a) annuity resources at the start of the annuities for policies bound prior to the start of annuity payments, and (b) policy reserves for policies bound after the start of annuity payments. 2. The amount of group annuities is the amount of the policy reserves. Amount 2. New policies in force (1) Number of policies Number of Policies, % Fiscal years ended March Number of policies Rate of increase (decrease) Number of policies Rate of increase (decrease) Number of policies Individual insurance 1,037, % 970,757 (13.2)% 1,118,537 Individual annuities 259, ,971 (10.3) 233,999 Note: The number of policies includes policies that were converted into new policies. (2) Policy amount, % Fiscal years ended March Amount Rate of increase (decrease) Amount Rate of increase (decrease) Individual insurance New policies, including conversions 6,758, % 6,577, % 6,279,281 New policies, excluding conversions 7,513, ,168,882 (4.2) 7,486,182 By conversion (754,766) (591,204) (1,206,900) Individual annuities New policies, including conversions 1,640, ,251,849 (5.4) 1,323,523 New policies, excluding conversions 1,672, ,282,464 (5.3) 1,354,329 By conversion (32,022) (30,614) (30,805) Group insurance New policies, including conversions 1,072, , ,440 New policies, excluding conversions 1,072, , ,440 [5,540,481] 19.6 [4,631,958] 1.7 [4,553,446] By conversion Group annuities New policies, including conversions 1, ,457 (50.5) 2,944 New policies, excluding conversions 1, ,457 (50.5) 2,944 By conversion Notes: 1. The amount for new policies for individual annuities represents annuity resources at the start of annuity payments. 2. Figures in brackets in group insurance are amounts that include the increase in premiums and the net increase in premiums from midterm enrollments and withdrawals. 3. Figures for group annuities for new policies represent the first premium revenues. Amount 10. Annualized Premiums 1. Policies in force, % As of March Amount Rate of increase (decrease) Amount Rate of increase (decrease) Individual insurance 2,345,320 (0.2)% 2,350,756 (1.6)% 2,389,759 Individual annuities 820, , ,202 Total 3,165, % 3,140,800 (0.4)% 3,153,962 Medical coverage, living benefits, and others 590, , ,449 Amount Operational Data Notes: 1. The amount of annualized net premium is the annual premium amount calculated by multiplying factors according to the premium payment method to a single premium payment amount (for lump-sum payment, the amount is the total premium divided by the insured period). 2. The amount of medical coverages, living benefits, and others represents annualized premium related to medical benefits (hospitalization benefits and surgical benefits), living benefits (specified illness benefits and nursing care benefits) and waiver of premium benefits (excluding disability benefits but including specified illness and nursing care benefits). 161

164 10. Annualized Premiums, continued 2. New policies, % Fiscal years ended March Amount Rate of increase (decrease) Amount Rate of increase (decrease) Individual insurance 203, , % 166,603 Individual annuities 67, ,187 (32.2) 81,386 Total 270, ,018 (6.4)% 247,989 Amount Medical coverage, living benefits, and others 36,455 (0.1)% 36,501 (21.0)% 46,185 Notes: 1. The amount of annualized net premium is the annual premium amount calculated by multiplying factors according to the premium payment method to a single premium payment amount (for lump-sum payment, the amount is the total premium divided by the insured period). 2. The amount of medical coverages, living benefits, and others represents annualized premium related to medical benefits (hospitalization benefits and surgical benefits), living benefits (specified illness benefits and nursing care benefits) and waiver of premium benefits (excluding disability benefits but including specified illness and nursing care benefits). 3. New policies includes the net increases due to conversions. 11. New Policies by Product Operational Data 162 Number of Policies, Fiscal years ended March Policies Amount Policies Amount Policies Amount Individual Mortality insurance [918,017] [15,256,819] [830,242] [15,211,310] [955,565] [18,303,774] insurance 535,116 6,759, ,364 6,267, ,521 6,491,299 Term life insurance [19,984] [1,407,228] [21,320] [1,454,166] [25,090] [1,536,588] 16,834 1,143,054 16,593 1,066,114 21,434 1,227,850 Whole life insurance [195,138] [1,217,483] [138,575] [879,111] [115,197] [701,565] 151, ,665 96, ,602 70, ,812 Lump-sum payment whole life insurance with variable accumulation rate 6,163 36,121 27, ,073 22, ,255 Lump-sum payment increasing whole life insurance with variable assumed rate 61, ,764 21, ,357 Whole life insurance with term rider [554,956] [11,955,145] [546,545] [12,371,885] [693,513] [15,787,205] 218,851 3,976, ,816 4,067, ,863 4,530,454 Term life insurance with dread disease term rider Whole life insurance with dread disease term rider Cancer insurance 15,253 2,420 15,793 2,493 19,790 3,175 Hospitalization medical insurance 47 General medical insurance 59,241 54,629 74,456 Increasing term life insurance 3, ,390 2, ,401 2,753 94,727 Medical Iife insurance Lump-sum payment whole life insurance for retirement 849 4, , ,061 Medical life insurance for retirement 1, , Term rider [2,579] [11,161] [2,812] [11,412] [2,171] [8,691] 1,760 7,040 2,034 7,689 1,421 5,457 Life and mortality insurance [119,593] [848,100] [140,515] [1,011,891] [162,972] [1,132,303] 115, , , , , ,883 Endowment insurance [60,804] [263,709] [67,710] [283,169] [82,692] [332,757] 59, ,939 66, ,075 80, ,407 Endowment insurance with term rider Kurashi no Hoken [8,868] [81,045] [12,230] [108,841] [11,770] [105,871] 5,828 55,756 8,330 77,543 7,970 74,768 Term life with survival benefit insurance Melody 9,126 9,604 11,309 11,894 14,319 15,653 Term life with survival benefit insurance Big You 8, ,400 12, ,114 13, ,068 Juvenile insurance 32, ,166 36, ,679 40, ,118 Multi-increase endowment rider Term rider with survival benefit [68,464] [126,156] [81,234] [149,150] [116,281] [205,779] 33,223 60,122 41,216 73,823 63, ,812 Pure endowment Family pure endowment [1,037,610] [16,104,920] [970,757] [16,223,202] [1,118,537] [19,436,078] Subtotal 650,620 7,513, ,619 7,168, ,636 7,486,182 <6,758,549> <6,577,677> <6,279,281>

165 11. New Policies by Product, continued Number of Policies, Fiscal years ended March Individual annuities Group insurance Group annuities Workers assetformation insurance Workers assetformation annuities Medical life insurance Disability income insurance Policies Amount Policies Amount Policies Amount Nissay annuities [243,139] [1,615,510] [193,209] [1,220,080] [187,461] [1,152,799] 241,190 1,593, ,311 1,198, ,230 1,128,497 Annuities focused on survival coverage [ ] [ ] [ ] [ ] [ ] [ ] Annuities with variable accumulation rate 16,523 79,345 16,716 83,692 46, ,714 Guaranteed minimum maturity benefit equity-indexed annuities ,117 Nissay investment-type annuities [259,662] [1,694,856] [209,971] [1,304,458] [233,999] [1,378,631] Subtotal 257,713 1,672, ,073 1,282, ,768 1,354,329 <1,640,762> <1,251,849> <1,323,523> Group term life insurance 170,921 1,072, , , , ,397 Group credit life insurance 346 3, ,042 Consumer credit group insurance Group endowment insurance Group whole life insurance Life insurance for dependents of disabled Annuities rider (group term life insurance) Subtotal 170,921 1,072, , , , ,440 Corporate pension plans New corporate pension plans 91, , , Insured contributory pension plans 24, , , Defined benefit corporate pension plans National pension fund insurance Employees pension fund insurance 4, ,773 2,000 Employees pension association insurance Group pure endowment insurance 1,226 Defined contribution pension plans Subtotal 116,505 1,946 55,692 1,457 40,943 2,944 Workers asset-formation savings insurance 4, , , Workers asset-formation housing funding insurance Workers asset-formation benefits savings insurance Workers asset-formation fund savings insurance Subtotal 5, , , Workers asset-formation annuities Workers asset-formation funding annuities 1, , , Subtotal 1, , , Individual type Group type 34, , Subtotal 34, , Group disability income insurance 6, ,876 4,607 41,326 5,238 Subtotal 6, ,876 4,607 41,326 5,238 Reinsurance assumed Notes: 1. Figures in brackets include policies that were converted into new policies, except for subtotal figures in angle brackets, which exclude policies prior to conversion. 2. Term life insurance includes term life insurance (group type). 3. Whole life insurance includes comprehensive whole life insurance. 4. Term rider includes juvenile term life insurance riders and spouse term life insurance riders. 5. Term rider, multi increase endowment rider, term rider with survival benefit, life insurance for dependents of disabled and employees pension association insurance are not included in the subtotals. 6. The number of policies for group insurance, group annuities, workers asset-formation insurance, workers asset-formation annuities, medical life insurance, disability income insurance and reinsurance assumed is the number of insured persons. 7. Figures for individual annuities, group insurance (annuities rider) and workers asset-formation annuities (excluding workers asset-formation funding annuities) represent annuity resources at the start of annuity payments. 8. New policy amounts for group annuities, workers asset-formation insurance and workers asset-formation funding annuities are the first time premium revenues. 9. Amounts for medical life insurance show daily amounts of hospitalization benefit. 10. Amounts for disability income insurance show monthly amounts of disability income insurance benefit. Operational Data 163

166 12. Policies in Force by Product Number of Policies, As of March Policies Amount Policies Amount Policies Amount Individual Mortality insurance 9,076, ,242,306 8,951, ,935,170 8,911, ,823,740 insurance Term life insurance 170,534 9,887, ,921 9,732, ,602 9,681,848 Whole life insurance 3,269,489 24,818,592 3,081,871 24,024,815 2,938,786 23,501,199 Lump-sum payment whole life insurance with variable accumulation rate 75, ,282 74, ,018 51, ,203 Lump-sum payment increasing whole life insurance with variable accumulation rate 80, ,923 21, ,238 Whole life insurance with term rider 4,663, ,383,610 4,795, ,098,235 4,944, ,347,173 Variable life insurance (whole life type) 35, ,534 36, ,967 36, ,803 Variable life insurance with term rider (whole life type) 1,224 36,223 1,412 42,368 1,582 48,141 Term life insurance with dread disease term rider 179, , , , ,659 1,080,044 Whole life insurance with dread disease term rider 32, ,563 33, ,121 34, ,351 Cancer insurance 250,901 34, ,930 35, ,595 36,858 Hospitalization medical insurance 88, , ,207 General medical insurance 166, ,163 72,823 Increasing term life insurance 19, ,368 21, ,694 26,027 1,122,918 Medical life insurance 5, , , Lump-sum payment whole life insurance for retirement 7,557 32,029 6,842 27,943 6,274 24,416 Medical life insurance for retirement 10,203 4,485 9,370 4,118 8,668 3,802 Former Dowa Life Insurance 19, ,610 20, ,744 21, ,654 Term rider 243,200 1,151, ,691 1,348, ,566 1,557,990 Life and mortality insurance 2,262,364 13,140,507 2,558,955 14,853,589 2,860,175 16,696,123 Endowment insurance 1,150,528 4,773,725 1,298,625 5,298,631 1,446,302 5,830,054 Endowment insurance with term rider Kurashi no Hoken 121,883 1,593, ,752 1,940, ,091 2,285,223 Variable life insurance (defined term type) 2,222 11,319 2,439 12,755 2,599 13,618 Term life with survival benefit insurance Melody 50,770 60,879 46,302 57,602 38,895 52,046 Term life with survival benefit insurance BIG YOU 194,203 2,387, ,930 2,835, ,294 3,399,991 Juvenile insurance 739,806 3,322, ,684 3,651, ,505 4,011,311 Former Dowa Life Insurance 2,952 6,263 3,223 7,374 3,489 8,209 Multi-increase endowment rider 16,636 4,840 17,289 5,245 18,465 5,772 Term rider with survival benefit 530, , ,710 1,043, ,369 1,089,895 Pure endowment 171 2, ,017 3,181 4,422 Family pure endowment ,997 1,431 Pure endowment with nursing care benefit 171 2, , ,990 Subtotal 11,339, ,385,451 11,510, ,791,778 11,775, ,524,286 Operational Data 164

167 12. Policies in Force by Product, continued Number of Policies, As of March Individual annuities Group insurance Group annuities Workers assetformation insurance Workers assetformation annuities Medical life insurance Disability income insurance Policies Amount Policies Amount Policies Amount Nissay annuities 2,505,585 15,345,858 2,370,561 14,526,016 2,282,340 14,089,878 Individual fixed annuities Sounen no Sekkei 520 1, ,478 1,449 2,224 Annuities focused on survival coverage 409,693 2,558, ,157 2,625, ,359 2,704,569 Variable assumed rate-type annuities 12,774 41,190 13,520 48,526 15,456 55,768 Annuities with variable accumulation rate 162, , , , , ,850 Guaranteed minimum maturity benefit equity-indexed annuities 619 3, , ,528 Nissay investment-type annuities 24, ,185 26, ,289 28, ,837 Former Dowa Life Insurance 4,108 18,127 4,239 18,859 4,368 19,642 Annuity rider 26,284 97,075 25,665 94,529 24,573 87,943 Term rider annualized payment 2,725 28,092 3,046 30,595 3,428 35,005 Annuity for spouse term rider Subtotal 3,149,513 19,047,063 3,024,773 18,314,507 2,939,764 17,935,253 Group term life insurance 14,203,069 56,336,373 14,282,060 55,046,421 14,473,972 53,691,946 Group credit life insurance 12,521,825 34,847,268 12,698,575 34,892,658 12,936,919 34,875,481 Consumer credit group insurance 50,895 2,322 52,183 1,964 53,649 2,154 Group endowment insurance Group whole life insurance Life insurance for dependents of disabled 54,807 32,132 57,005 33,289 59,306 34,541 Annuities rider (group term life insurance) 11,096 15,662 11,348 15,519 11,438 15,083 Subtotal 26,787,009 91,234,040 27,044,336 89,990,366 27,476,203 88,619,874 Corporate pension plans 1,218 5,033 2,995 6,632 51,095 35,921 New insured pension plans 6,811, ,452 8,429,965 1,172,806 8,752,619 1,513,083 Insured contributory pension plans 3,521,709 3,675,616 3,620,061 3,589,259 3,674,131 3,380,337 Defined benefit corporate pension plans 4,684,681 3,955,604 3,464,450 National pension fund insurance 1,653 2,185 7,457 Employees pension fund insurance 3,233, ,626 3,411, ,564 3,462, ,914 Employees pension association insurance Group pure endowment insurance 212, , ,086 Defined contribution pension plans 507, , ,644 Subtotal 13,568,172 10,476,956 15,464,750 9,952,833 15,940,492 9,621,896 Workers asset-formation savings insurance 112, , , , , ,696 Workers asset-formation housing funding insurance 18,800 53,867 20,106 56,616 21,525 59,836 Workers asset-formation benefits savings insurance 20,535 1,638 20,487 1,453 20,640 1,348 Workers asset-formation fund savings insurance Subtotal 152, , , , , ,897 Workers asset-formation annuities 345 1, , ,349 Workers asset-formation funding annuities 61, ,047 62, ,158 64, ,105 Subtotal 62, ,181 63, ,389 64, ,455 Individual type 1, , ,526 7 Group type 903,546 3, ,278 3, ,044 2,861 Subtotal 904,815 3, ,677 3, ,570 2,868 Group disability income insurance 94,556 13,178 96,523 12,617 78,402 7,621 Subtotal 94,556 13,178 96,523 12,617 78,402 7,621 Reinsurance assumed 16,093 18,814 13,724 16,576 16,767 15,777 Notes: 1. Term life insurance includes term life insurance (group type). 2. Whole life insurance includes comprehensive whole life insurance. 3. Term rider includes juvenile term life insurance riders and spouse term life insurance riders. 4. Term rider, multi increase endowment rider, term rider with survival benefit, life insurance for dependents of disabled and employees pension association insurance are not included in the subtotals. 5. The number of policies for group insurance, group annuities, workers asset-formation insurance, workers asset-formation annuities, medical life insurance, disability income insurance and reinsurance assumed is the number of insured persons. 6. Figures for individual annuities, group insurance (annuities rider) and workers asset-formation annuities (excluding workers asset-formation funding annuities) represent the total of annuity resources at the start of annuities for policies prior to the start of annuity payments and policy reserves for policies after the start of annuity payments. 7. New policy amounts for group annuities, workers asset-formation insurance and workers asset-formation funding annuities are amounts for policy reserves. 8. Amounts for medical life insurance show daily amounts of hospitalization benefits. 9. Amounts for disability income insurance show monthly amounts of disability income insurance benefits. 165 Operational Data

168 13. Amount of Policies in Force by Coverage Type Operational Data As of March Individual insurance 162,381, ,786, ,517,589 Individual annuities Death protection due to Group insurance 91,218,378 89,974,847 88,604,790 illness/accident Group annuities Total including other types 253,618, ,778, ,138,158 Individual insurance [30,185,419] [32,267,227] [34,542,457] Individual annuities [310,147] [326,010] [343,448] Death Death protection due to Group insurance [3,617,358] [3,787,888] [3,900,626] protection accident Group annuities [ ] [ ] [ ] Total including other types [34,144,021] [36,398,427] [38,805,163] Individual insurance [308,172] [319,257] [331,870] Individual annuities [ ] [ ] [ ] Death protection due to Group insurance [120,696] [120,835] [139,516] specific causes Group annuities [ ] [ ] [ ] Total including other types [428,869] [440,092] [471,387] Individual insurance 4,352 5,046 6,696 Individual annuities 17,587,998 16,963,360 16,654,081 Maturity and survival Group insurance benefits Group annuities Total including other types 17,679,787 17,060,025 16,757,361 Individual insurance [256,037] [315,242] [382,021] Individual annuities [2,182,980] [2,098,856] [2,053,088] Pure Annuity Group insurance [2,070] [2,026] [1,939] endowment Group annuities [ ] [ ] [ ] Total including other types [2,449,827] [2,424,792] [2,445,532] Individual insurance Individual annuities 1,459,064 1,351,147 1,281,171 Other Group insurance 14,758 14,633 14,400 Group annuities 10,476,956 9,952,833 9,621,896 Total including other types 12,326,468 11,691,835 11,287,920 Individual insurance [47,816] [49,309] [50,642] Coverage for Individual annuities [1,545] [1,573] [1,594] hospitalization Group insurance [1,718] [1,809] [1,920] due to accident Group annuities [ ] [ ] [ ] Total including other types [54,277] [55,733] [57,026] Individual insurance [47,543] [48,948] [50,157] Coverage for Individual annuities [1,531] [1,558] [1,578] Hospitalization hospitalization Group insurance [ ] [ ] [ ] coverage due to illness Group annuities [ ] [ ] [ ] Total including other types [52,271] [53,547] [54,604] Individual insurance [57,192] [61,227] [66,218] Coverage for Individual annuities [329] [344] [374] hospitalization Group insurance [49] [48] [48] due to other causes Group annuities [ ] [ ] [ ] Total including other types [57,572] [61,620] [66,642] Individual insurance Individual annuities Disability coverage Group insurance Group annuities Total including other types 13,178 12,617 7,621 Notes: 1. Figures in brackets show additional coverage and rider coverage attached to primary policies. However, death protection due to illness/accident of term riders is recorded under primary coverage. 2. Figures for maturity and survival benefits of pure endowment show annuity resources at the start of annuity payments for policies prior to the start of annuity payments for individual annuities and group insurance [annuities rider]. 3. Figures for annuity of pure endowment show annual annuity amounts. 4. Figures for other of pure endowment show policy reserves for individual annuities (after start of annuity payments), group insurance (after start of annuities rider annuities payments) and group annuities. 5. Figures for hospitalization coverage show daily hospitalization benefits. 6. Figures for total including other types included in coverage for hospitalization due to illness of hospitalization coverage show the total of primary coverage portions and rider coverage. 166

169 13. Amount of Policies in Force by Coverage Type, continued Number of Policies As of March Individual insurance [7,012,202] [7,342,436] [7,684,405] Individual annuities [83,825] [84,383] [84,715] Disability coverage Group insurance [2,877,511] [2,931,634] [3,038,028] Group annuities [ ] [ ] [ ] Total including other types [9,973,538] [10,358,453] [10,807,148] Individual insurance [11,572,001] [12,079,351] [12,651,964] Individual annuities [338,900] [346,034] [351,997] Surgical coverage Group insurance [ ] [ ] [ ] Group annuities [ ] [ ] [ ] Total including other types [11,910,901] [12,425,385] [13,003,961] Note: Figures in brackets show attached coverage portions of primary policies and rider coverage. 14. Individual Insurance and Annuity Policy Amounts in Force by Product As of March Mortality insurance Life and mortality insurance Pure endowment Whole life insurance 26,314,047 25,066,869 24,211,142 Whole life insurance with term rider 109,383, ,098, ,347,173 Term life insurance 11,638,908 11,635,371 11,886,834 Total including other types 149,242, ,935, ,823,740 Endowment insurance 4,773,725 5,298,631 5,830,054 Endowment insurance with term rider 1,593,887 1,940,862 2,285,223 Term life insurance with survival benefits 2,448,239 2,893,163 3,452,037 Total including other types 13,140,507 14,853,589 16,696,123 Family pure endowment 183 1,431 Total including other types 2,637 3,017 4,422 Annuities Individual annuities 19,047,063 18,314,507 17,935,253 Accident rider with extra premium 9,558,861 10,323,563 11,213,637 Injury rider 20,715,292 22,034,377 23,458,340 Accident coverage rider 1,554 2,614 4,118 General medical rider 26,778 22,736 16,063 Hospitalization due to accident rider 20,915 26,698 34,961 Hospitalization due to illness rider 20,619 26,311 34,437 Hospitalization/accident Hospitalization due to adult disease rider 2,952 3,974 5,395 riders Hospital visit rider 3,363 4,493 6,205 Long-term hospitalization rider Hospitalization rider for women 1,374 1,969 2,990 Limited injury rider 150, , ,109 Hospitalization due to cancer rider 23,183 23,640 23,812 Short-term hospitalization rider 8,449 11,319 15,368 Notes: 1. Whole life insurance includes whole life insurance with dread disease term rider, comprehensive whole life insurance, cancer insurance, medical life insurance for retirement (whole life), single premium whole life insurance for retirement, lump-sum payment whole life insurance with variable accumulation rate and lump-sum payment increasing whole life insurance with variable assumed rate. 2. Term life insurance includes term life insurance with dread disease term rider, group term life insurance, increasing term life insurance, medical life insurance and medical life insurance for retirement (defined term). 3. Term life insurance with survival benefits is the total of term life with survival benefit insurance BIG YOU and term life with survival benefit insurance Melody. 4. Figures for individual annuities are the total of annuity resources at the start of annuity payments for policies prior to the start of annuity payments and policy reserves for policies after the start of annuity payments. 5. Figures for hospitalization and hospital visit riders show the daily hospitalization and hospital visit benefits. Operational Data 167

170 15. Trends and Transitions of Policies 1. Individual insurance Number of Policies,, % Fiscal years ended March Policies Amount Policies Amount Policies Amount At the beginning of the fiscal year 11,510, ,791,778 11,775, ,524,286 12,047, ,373,811 New policies 650,620 7,513, ,619 7,168, ,636 7,486,182 Renewals 6,572 1,405,438 9,664 1,396,465 9,904 1,202,516 Reinstatements 9, ,767 11, ,737 12, ,060 Increase from conversion 386,990 8,591, ,138 9,054, ,901 11,949,895 Increase from variable amount Death 51, ,661 47, ,218 45, ,773 Maturity 259,856 1,006, ,425 1,075, ,914 1,115,752 Decrease of benefits 2,109,531 2,341,173 2,817,983 Decrease from conversion 370,709 9,346, ,374 9,645, ,773 13,156,796 Cancellation 471,499 8,015, ,494 8,612, ,503 9,827,839 Expiration 68,491 1,028,506 75,976 1,165,673 85,276 1,355,177 Decrease from variable amount Decrease due to other changes 3,888 3,965,793 4,010 4,126,501 4,701 3,850,958 At the end of the fiscal year 11,339, ,385,451 11,510, ,791,778 11,775, ,524,286 [Rate of decrease] [(1.5)%] [(4.9)%] [(2.2)%] [(5.4)%] [(2.3)%] [(6.2)%] Net decrease (171,451) (8,406,327) (264,681) (9,732,508) (272,211) (11,849,525) [Rate of net increase] [ %] [ %] [ %] [ %] [ %] [ %] Note: Figures show the total of primary coverage portions for mortality insurance, life and mortality insurance, and pure endowment. 2. Individual annuities Number of Policies,, % Fiscal years ended March Policies Amount Policies Amount Policies Amount At the beginning of the fiscal year <2,096,803> <2,050,925> <1,999,212> 3,024,773 18,314,507 2,939,764 17,935,253 2,827,125 17,470,385 New policies <180,404> <139,171> <147,507> 257,713 1,672, ,073 1,282, ,768 1,354,329 Reinstatements 960 5,742 1,007 5, ,253 Increase from conversion 1,949 22,070 1,898 21,994 2,231 24,302 Death 9,920 51,491 9,181 47,875 8,163 44,524 Completion of payments 14,371 11,207 13,844 10,811 12,106 10,014 Decrease of insurance amount 43,937 42,441 44,020 Decrease from conversion 9,045 54,093 8,872 52,609 8,842 55,108 Cancellation 86, ,678 87, ,457 86, ,708 Expiration 7,125 41,907 7,162 41,444 7,186 41,517 Decrease due to other changes 8,829 83,754 (842) 55,058 (808) 58,408 At the end of the fiscal year <2,181,026> <2,096,803> <2,050,925> 3,149,513 19,047,063 3,024,773 18,314,507 2,939,764 17,935,253 [Rate of increase] [4.1%] [4.0%] [2.9%] [2.1%] [4.0%] [2.7%] Net increase 124, ,555 85, , , ,867 [Rate of net increase (decrease)] [46.7%] [93.2%] [(24.5)%] [(18.4)%] [4.2%] [34.6%] Notes: 1. Figures are the total of annuity resources at the start of annuity payments for policies prior to annuity payments and policy reserves for policies after the start of annuity payments. 2. Figures in angle brackets show annual amounts of annuities. Operational Data 168

171 15. Trends and Transitions of Policies, continued 3. Group insurance Number of Policies,, % Fiscal years ended March Policies Amount Policies Amount Policies Amount At the beginning of the fiscal year 27,044,336 89,990,366 27,476,203 88,619,874 27,824,152 87,430,483 New policies 170,921 1,072, , , , ,440 Renewals 13,934,215 54,625,354 14,039,831 53,903,781 14,287,350 52,675,386 Midterm enrollment 2,202,255 8,407,147 2,108,805 7,598,757 2,166,776 7,148,375 Increase of insurance amount 2,764,122 2,020,194 2,605,997 Death 56, ,648 55, ,351 57, ,004 Maturity 14,077,177 55,022,190 14,257,837 54,186,295 14,401,686 52,934,281 Withdrawal 2,358,881 6,702,948 2,396,040 5,674,981 2,470,838 5,767,365 Decrease of insurance amount 3,548,842 2,616,391 2,814,125 Cancellation 70, ,595 82, ,942 71, ,843 Expiration 2,832 4, ,186 1,128 3,958 Decrease due to other changes (872) (1,035) (324) (1,415) (821) (5,189) At the end of the fiscal year 26,787,009 91,234,040 27,044,336 89,990,366 27,476,203 88,619,874 [Rate of increase (decrease)] [(1.0)%] [1.4%] [(1.6)%] [1.5%] [(1.3)%] [1.4%] Net increase (decrease) (257,327) 1,243,673 (431,867) 1,370,491 (347,949) 1,189,391 [Rate of increase (decrease)] [ %] [(9.3)%] [ %] [15.2%] [ %] [(40.8)%] Notes: 1. Figures show the total of primary coverage portions of mortality insurance, life and mortality insurance, and annuity riders. 2. Number of policies shows the number of insured persons. 4. Group annuities Number of Policies,, % Fiscal years ended March Policies Amount Policies Amount Policies Amount At the beginning of the fiscal year 15,464,750 9,952,833 15,940,492 9,621,896 16,789,685 9,151,763 New policies 116,505 1,946 55,692 1,457 40,943 2,944 Annuity payments 3,822, ,446 3,998, ,102 4,101, ,371 Single payments 742, , , , , ,087 Cancellation 119, ,180 77, , , ,755 At the end of the fiscal year 13,568,172 10,476,956 15,464,750 9,952,833 15,940,492 9,621,896 [Rate of increase (decrease)] [(12.3)%] [5.3%] [(3.0)%] [3.4%] [(5.1)%] [5.1%] Net increase (decrease) (1,896,578) 524,123 (475,742) 330,936 (849,193) 470,133 [Rate of increase (decrease)] [ %] [58.4%] [ %] [(29.6)%] [ %] [332.3%] Notes: 1. Figures for the beginning of the fiscal year and the end of the fiscal year represent policy reserve amounts at that time. 2. Amount of new policies represents the first time premium revenues. 3. Number of policies shows the number of insured persons. Operational Data 169

172 INSURANCE POLICY INDICATORS 16. Increase in Policy Amounts in Force 1. Number of policies in force and rate of increase Fiscal years ended March Policies Rate of increase (decrease) Policies Rate of increase (decrease) Policies Number of Policies, % Rate of increase (decrease) Individual insurance 11,339,098 (1.5)% 11,510,549 (2.2)% 11,775,230 (2.3)% Mortality insurance 9,076, ,951, ,911, Life and mortality insurance 2,262,364 (11.6) 2,558,955 (10.5) 2,860,175 (10.1) Pure endowment 171 (68.5) 542 (83.0) 3,181 (47.7) Individual annuities 3,149, ,024, ,939, Group insurance 26,787,009 (1.0) 27,044,336 (1.6) 27,476,203 (1.3) Group annuities 13,568,172 (12.3) 15,464,750 (3.0) 15,940,492 (5.1) Workers asset-formation insurance 152,468 (3.5) 158,068 (3.5) 163,844 (4.4) Workers asset-formation annuities 62,007 (2.0) 63,302 (2.2) 64,730 (2.5) Medical life insurance 904, , ,570 (3.5) Disability income insurance 94,556 (2.0) 96, , Note: Number of policies for group insurance, group annuities, workers asset-formation insurance, workers asset-formation annuities, medical life insurance and disability income insurance is the number of insured persons. 2. Amount of insurance policies in force and rate of increase Billions of Yen, % Fiscal years ended March Rate of increase Rate of increase Rate of increase Amount (decrease) Amount (decrease) Amount (decrease) Individual insurance 162,385.4 (4.9)% 170,791.7 (5.4)% 180,524.2 (6.2)% Mortality insurance 149,242.3 (4.3) 155,935.1 (4.8) 163,823.7 (5.6) Life and mortality insurance 13,140.5 (11.5) 14,853.5 (11.0) 16,696.1 (11.5) Pure endowment 2.6 (12.6) 3.0 (31.8) 4.4 (26.2) Individual annuities 19, , , Group insurance 91, , , Group annuities 10, , , Workers asset-formation insurance (0.7) Workers asset-formation annuities (2.9) (2.8) (2.7) Medical life insurance Disability income insurance Notes: 1. Figures for individual annuities, group insurance (annuities rider), and workers asset-formation annuities (excluding workers asset-formation funding annuities) are the total of annuity resources at the start of annuity payments for policies prior to the start of annuity payments and policy reserves for policies after the start of annuity payments. 2. Figures for group annuities, workers asset-formation insurance and workers asset-formation annuities (workers asset-formation funding annuities) are amounts for policy reserves. 3. Amounts for medical life insurance are daily amounts of hospitalization benefits. 4. Amounts for disability income insurance are monthly amounts of disability income insurance benefits. 17. Increase in New Policies Operational Data 1. Number of new policies and rate of increase Number of Policies, % Fiscal years ended March Rate of increase Rate of increase Rate of increase Policies (decrease) Policies (decrease) Policies (decrease) Individual insurance 650, % 581,619 (8.1)% 632, % Mortality insurance 535, ,364 (6.1) 475, Life and mortality insurance 115,504 (14.6) 135,255 (13.9) 157,115 (15.6) Pure endowment Individual annuities 257, ,073 (10.2) 231, Group insurance 170,921 (19.6) 212, , Group annuities 116, , , Workers asset-formation insurance 5,710 (10.4) 6,370 (4.7) 6,686 (14.6) Workers asset-formation annuities 1,839 (1.0) 1, ,753 (5.3) Medical life insurance 34,260 (34.7) 52,459 5, (62.7) Disability income insurance 6,042 (78.3) 27,876 (32.5) 41, Notes: 1. Number of policies is the number of insured persons for group insurance, group annuities, workers asset-formation insurance, workers asset-formation annuities, medical life insurance, and disability income insurance. 2. Excludes converted policies.

173 17. Increase in New Policies, continued 2. Amount of new policies and rate of increase Fiscal years ended March Amount Rate of increase (decrease) Amount Rate of increase (decrease) Amount Billions of Yen, % Rate of increase (decrease) Individual insurance 7, % 7,168.8 (4.2)% 7, % Mortality insurance 6, ,267.7 (3.4) 6, Life and mortality insurance (16.3) (9.4) (23.0) Pure endowment Individual annuities 1, ,282.4 (5.3) 1, Group insurance 1, (45.8) Group annuities (50.5) Workers asset-formation insurance Workers asset-formation annuities 0.0 (8.0) (23.4) Medical life insurance , (56.2) Disability income insurance 0.9 (79.7) 4.6 (12.0) 5.2 Notes: 1. Figures for individual annuities and workers asset-formation annuities (excluding workers asset-formation funding annuities) are annuity resources at the start of annuity payments. 2. Figures for group annuities, workers asset-formation insurance, and workers asset-formation annuities (workers asset-formation funding annuities) represent the first premium revenues. 3. Amounts for medical life insurance are daily amounts of hospitalization benefits. 4. Amounts for disability income insurance are monthly amounts of disability income insurance benefits. 5. Excludes converted policies. 18. Average Policy Coverage (Individual Insurance) Thousands of Yen Average policy coverage of new policies Average policy coverage of policies in force Fiscal years ended March Mortality insurance 12,631 14,041 13,650 16,442 17,420 18,382 Life and mortality insurance 6,527 6,662 6,332 5,808 5,804 5,837 Pure endowment 15,423 5,568 1,390 Average 11,547 12,325 11,833 14,320 14,837 15,330 Note: Average policy coverage for new policies excludes converted policies. 19. Percentage of New Policies (Compared with Beginning of the Same Fiscal Year) Fiscal years ended March Individual insurance 4.4% 4.0% 3.9% Individual annuities Group insurance Notes: 1. Excludes converted policies. 2. For individual annuities, the ratio of policies prior to start of annuity payments is provided. % 20. Rate of Cancellation and Expiration (Compared with Beginning of the Same Fiscal Year) % Fiscal years ended March Individual insurance 6.4% 6.6% 7.2% Individual annuities Group insurance Notes: 1. The rate of cancellation and expiration is adjusted for net cancellations and expirations with consideration for net increases or decreases in policies and policy reinstatements. 2. For individual annuities, the percentage of policies prior to the start of annuity payments is provided. Operational Data 171

174 21. Average New Policy Premium (Individual Insurance Policies with Monthly Payments) Fiscal years ended March Average premium of new individual policies (monthly payment policies) 186, , ,385 Notes: 1. Excludes converted policies. 2. Policies with annualized monthly payments. Yen 22. Mortality Rate (Primary Individual Insurance Policies) Fiscal years ended March Number of policies Insurance amount Notes: 1. Mortality rate is a rate that is calculated by having mortality incidence policies as the numerator and outstanding policies as the denominator. 2. Outstanding policies are calculated by adding the policies at the start of the fiscal year, policies at the end of the fiscal year and mortality incidence policies, and then dividing the total by two. 3. Mortality includes serious disability. 23. Incidence of Events Covered by Riders (Individual Insurance) Fiscal years ended March Ratio of the number of policies Ratio of the amount of claims on policies Ratio of the number of policies Ratio of the amount of claims on policies Ratio of the number of policies Ratio of the amount of claims on policies Accidental death Disability Hospitalization due to accident Hospitalization due to illness , , ,029.6 Hospitalization due to adult disease Surgery due to illness or injury Surgery due to adult disease Notes: 1. Incidence of the events covered by riders is a rate that is calculated by having incidence of events covered by riders as the numerator and outstanding policies as the denominator. 2. Outstanding policies for accidental death insurance are calculated by adding the policies at the start of the fiscal year, policies at the end of the fiscal year and incidence of accidental death, and then dividing the total by two, and for policies other than accidental death insurance, by adding the policies at the start of the fiscal year and policies at the end of the fiscal year, and then dividing the total by two. 3. Accidental death includes serious disability due to accident. 24. Percentage of Premium Earned of Insured Amount Classified by Grounds for Third-Sector Insurance Benefits or Type of Insurance Fiscal years ended March Third-sector incidence rate 35.8% 34.3% 33.9% Medical care Cancer Nursing care Others Note: The third-sector incidence rate is calculated by dividing the sum of payments for insured incidents (payments such as claims and benefits, matching provision for reserve for outstanding claims [excluding past unreported incidents as defined in Article 72 of the Ordinance for Enforcement of Insurance Business Act] and total business expenses related to such payments as claims and benefits) by earned premiums. % 25. Percentage of Operating Expense (Operating Expenses as a Percentage of Premium Revenues) Operational Data % Fiscal years ended March Operating efficiency (Operating expenses as a percentage of premium revenues) 10.7% 11.7% 11.9% 172

175 26. The Number of Major Insurance Companies That Accepted Reinsurance Agreements Number of insurance companies Fiscal years ended March The number of major insurance companies using reinsurance 11 [ ] 12 [1] 14 [2] Notes: 1. Covers insurance companies and others that have paid reinsurance. 2. Figures in parentheses indicate third-sector insurances paid (including only policies that stipulate no coverage by reserves in accordance with Article 71 of the Ordinance for Enforcement of the Insurance Business Act). 27. Tthe Ratio of Reinsurance Premiums to Total Premiums Written by the Top Five Insurance Companies Using Reinsurance Fiscal years ended March The ratio of reinsurance expenses paid to the top five insurance companies 87.3% [ ] 89.3% [100.0] 88.4% [100.0] Notes: 1. Covers insurance companies and others that have paid reinsurance. 2. Figures in parentheses indicate third-sector insurances paid (including only policies that stipulate no coverage by reserves in accordance with Article 71 of the Ordinance for Enforcement of the Insurance Business Act). % 28. Tthe Ratio of Insurance Companies Which Accepted Reinsurance Agreements by Ratings Assessed Fiscal years ended March Over A 98.2% [ ] 98.8% [100.0] 73.3% [100.0] Over BBB and below A 1.6 [ ] 1.1 [ ] 26.5 [ ] Others (Below BBB or no rating) 0.2 [ ] 0.2 [ ] 0.2 [ ] Notes: 1. Data compiled by S&P was used to create the above table. In cases where no rating was available from S&P, such insurance companies are classified as Others. 2. Figures in parentheses indicate third-sector insurers (including only those whose policies stipulate no coverage by reserves in accordance with Article 71 of the Ordinance for Enforcement of the Insurance Business Act). % 29. Unreceived Reinsurance Premiums Fiscal years ended March Unreceived reinsurance premiums 75 [ ] 123 [ ] 97 [ ] Note: Figures in parentheses indicate amounts with regard to third-sector insurances (which includes only policies that stipulate no coverage by reserves in accordance with Article 71 of the Ordinance for Enforcement of the Insurance Business Act). Operational Data 173

176 ACCOUNTING INDICATORS 30. Reserve for Outstanding Claims As of March Insurance claims Mortality insurance claims 79, ,298 87,246 Accident insurance claims 2,799 10,835 2,666 Serious disability insurance claims 16,561 18,719 24,705 Maturity insurance amount 11,787 10,278 10,173 Others Subtotal 110, , ,792 Annuities 4,018 2,940 3,048 Benefits 38,048 39,628 41,258 Surrender benefits 47,114 46,845 46,557 Deferred insurance amount 6,195 6,507 6,579 Total including other reserves 206, , , Policy Reserves As of March Policy reserves Individual Insurance 23,136,221 22,545,882 22,281,303 (Excluding contingency reserve) [General Account] [23,036,417] [22,439,414] [22,164,170] [Separate Account] [99,803] [106,467] [117,132] Individual Annuities 9,547,779 9,274,676 8,734,187 [General Account] [9,403,832] [9,118,442] [8,559,397] [Separate Account] [143,946] [156,233] [174,790] Group Insurance 47,683 46,246 44,892 [General Account] [47,683] [46,246] [44,892] [Separate Account] [ ] [ ] [ ] Group Annuities 10,476,956 9,952,833 9,621,896 [General Account] [9,606,363] [8,965,446] [8,523,773] [Separate Account] [870,592] [987,386] [1,098,122] Other 463, , ,650 [General Account] [463,785] [465,503] [467,650] [Separate Account] [ ] [ ] [ ] Subtotal 43,672,424 42,285,140 41,149,929 [General Account] [42,558,081] [41,035,053] [39,759,884] [Separate Account] [1,114,342] [1,250,087] [1,390,045] Contingency reserve 775, , ,445 Total 44,448,079 43,106,896 42,014,375 [General Account] [43,333,736] [41,856,809] [40,624,329] [Separate Account] [1,114,342] [1,250,087] [1,390,045] 32. Policy Reserve Balance As of March Insurance reserve funds 42,945,906 41,548,301 40,388,673 Unearned premiums 726, , ,256 Refund reserve Contingency reserve 775, , ,445 Total 44,448,079 43,106,896 42,014,375 Operational Data 33. Policy Reserves for Individual Insurance and Annuities (by Policy Year) 1. Policy reserve valuation method and valuation ratio % As of March Valuation method Policies subject to the standard policy reserve Net level premium method Net level premium method Net level premium method Policies not subject to the standard policy reserve Net level premium method Net level premium method Net level premium method Valuation ratio (excluding contingency reserve) 100.0% 100.0% 100.0% Notes: 1. Individual insurance and annuities are subject to valuation method and ratio. Policy reserves for group insurance and annuities are not included in the above figures due to the absence of an accumulation method. 2. For valuation ratio, policies subject to the standard policy reserve represent the ratio in accordance with the method, which is prescribed by the Ordinance No. 48 issued by the Ministry of Finance in Policies which are not subject to the standard policy reserve represent the ratio for the reserve calculated by the net level premium method and unearned premium. 174

177 33. Policy Reserves for Individual Insurance and Annuities (by Policy Year), continued 2. Policy reserves (breakdown by policy year), % Policy year Balance of policy reserves Assumed interest rate As of March , , , % ,363,213 2,605,968 2,668, ,282,872 6,326,507 6,376, ,658,404 7,674,623 7,505, ,643,182 3,737,029 3,933, ,792,531 4,185,912 4,454, ,819,497 6,887,807 5,417, ,755, Total 32,440,249 31,557,857 30,723,568 Notes: 1. Balance of policy reserves shows policy reserves for individual insurance and individual annuities, excluding policy reserves for the separate account and contingency reserve. 2. Assumed interest rate shows the main assumed interest rate on policy reserves for each policy year. 34. Policy Reserve Balance of the General Account Calculation Method and Integers Used as the Basis for Calculations Related to Insurance Policies with Separate Accounts that Guarantee a Minimum Amount of Insurance Benefits 1. Policy reserve balance (general account) As of March Policy reserve balance (general account) 2,031 2,886 2,121 Notes: 1. Applicable to insurance policies (policies applicable to standard policy reserves) as defined in Article 68 of the Ordinance for Enforcement of the Insurance Business Act. 2. Policy reserve balance (general account) includes the premium reserve fund related to minimum guarantees. 3. Applied to insurance policies executed following April 1, Calculation method and integers used as the basis for calculations In terms of the calculation method, we use the standard method defined in Section 5, No. 1 of Ordinance No. 48 issued by the Ministry of Finance in Regarding the integers used as the basis for calculations (volatility), the Company uses 0.3% for short-term loans that have not been defined and the amount defined in Section 5, No. 1 (d) of the aforementioned bulletin in all other cases. 35. confirmation of Reasonableness and Validity of Article 121, Paragraph 1, Item 1 of the Insurance Business Act (Limited to That Relating to Third-Sector Insurance) 1. Method for assuring the appropriateness of the accumulation of policy reserves in the third sector The stress test and liability adequacy test are conducted based on clear management regulations following risk management policies provided for by the Act, or by the Board of Directors. Necessary accumulated policy reserves are calculated appropriately. In addition, a test conducted by the Auditing Department, which is independent of the Accounting Department ensures the appropriateness of the accumulation. 2. Reasonableness and validity of established standards for risk frequency, etc., in the liability adequacy test and stress test To provide for uncertainty regarding the worsening of the rate of incidence of insured events, the Company establishes a risk frequency that covers a range beyond what is normally forecasted or a normally forecasted range. Specifically, this assumes that the future incidence of insured events follows a regular distribution based on the record of past insured events and the historical change of those past events, and that a level covering increased insurance premiums has been set at a uniform probability (99.0% and 97.7%). 3. Results of the liability adequacy test and stress test (insurance reserve fund and contingency reserve) As of March Insurance reserve fund Contingency reserve 3,784 3,918 3,700 Operational Data 175

178 36. Reserve for Dividends to Policyholders Individual insurance Individual annuities Group insurance Group annuities Fiscal year ended March Workers asset-formation insurance and annuities Other insurance Balance at the end of the previous fiscal year 1,097,015 22,251 2,728 7,969 6,731 7,632 1,144,330 Transfer to reserve from surplus in the previous fiscal year 46,927 3, ,413 19,743 1, ,513 Increase in interest 26, ,087 Other increases Policyholder dividends paid out during the fiscal year 102,313 2,055 98,493 20, , ,595 Other decreases Balance at the end of the current fiscal year 1,068,259 23,914 8,655 7,103 6,965 5,438 1,120,336 [772,009] [13,163] [2,341] [17] [6,352] [48] [793,932] Fiscal year ended March Balance at the end of the previous fiscal year 1,100,385 21,415 1,878 9,277 7,633 9,550 1,150,140 Transfer to reserve from surplus in the previous fiscal year 79,465 2,307 97,672 19, ,189 Increase in interest 28, ,228 Other increases Policyholder dividends paid out during the fiscal year 111,547 1,944 96,834 21, , ,228 Other decreases Balance at the end of the current fiscal year 1,097,015 22,251 2,728 7,969 6,731 7,632 1,144,330 [804,313] [13,357] [2,467] [38] [6,161] [51] [826,390] Fiscal year ended March Balance at the end of the previous fiscal year 1,162,207 20,721 4,135 9,407 7,418 11,500 1,215,391 Transfer to reserve from surplus in the previous fiscal year 33,232 2,334 89,793 4,111 1, ,634 Increase in interest 30, ,160 Other increases Policyholder dividends paid out during the fiscal year 125,663 2,149 92,061 4, , ,044 Other decreases Balance at the end of the current fiscal year 1,100,385 21,415 1,878 9,277 7,633 9,550 1,150,140 Note: The numbers in brackets indicate accumulated dividends reserved. [842,518] [13,455] [2,163] [89] [5,956] [53] [864,238] Total 37. Allowance for Doubtful Accounts and Other Reserves As of March Amount Increase/ decrease Amount Increase/ decrease Amount Increase/ decrease Allowance for doubtful accounts 1 General allowance for doubtful accounts 9,454 (1,049) 10,504 (976) 11,481 (4,769) Specific allowance for doubtful accounts 4,431 (8,549) 12,980 (144) 13,124 8,197 Allowance for specific overseas debt Accrued bonuses for directors and corporate auditors 2 53 (4) (14) Accrued retirement benefits 3 437,421 (3,081) 440,503 (10,588) 451,091 12,142 Accrued retirement benefits for directors and corporate auditors 4 4,564 (553) 5,118 (811) 5,929 (38) Reserve for program points 5 7,238 2,585 4,652 4,652 Accrued losses from supporting closely related companies (26) 424 (29) 453 (31) Reserve for loss on disaster (1,086) 1,826 1,826 Reserve for price fluctuations in investments in securities 8 333,710 (13,293) 347,003 (51,008) 398,011 25,998 Operational Data Reasons for recording: 1. Allowance for doubtful accounts is recorded to cover bad-debt loss. 2. Allotted for executive bonus payments, and recorded accordingly. 3. Accrued retirement benefits are recorded to prepare for employee retirement benefit and pension payments. 4. Allotted for executive retirement bonus payments. 5. Reserve for program points is recorded to prepare for expenses from the use of points granted to policyholders. 6. Accrued losses from supporting closely related companies are recorded to cover losses related to reconstruction aid. 7. Reserve for loss on disaster is recorded to prepare for expenditures associated with disasters, such as expenditures for the repair of tangible fixed assets. 8. Reserve for price fluctuations in investments in securities is recorded based on the provisions of Article 115 of the Insurance Business Act. 176

179 38. Status of Allowance for Specific Overseas Debt 1. Allowance for specific overseas debt No ending balance as of March 31, 2012, 2011 or Balance of debt by creditor countries No ending balance as of March 31, 2012, 2011 or Insurance Premiums 1. Premiums by payment methods Fiscal years ended March Individual insurance 2,967,949 2,680,504 2,483,950 Lump-sum payment 1,060, , ,696 Annual payment 335, , ,045 Semiannual payment 11,801 12,903 14,451 Monthly payment 1,560,294 1,619,646 1,684,757 Individual annuities 545, , ,954 Lump-sum payment 150, , ,466 Annual payment 88,822 82,061 78,895 Semiannual payment 4,715 4,341 4,284 Monthly payment 301, , ,308 Group insurance 256, , ,896 Group annuities 1,540,043 1,372,042 1,324,865 Total including other premiums 5,367,387 4,895,562 4,816,612 Note: Total including other premiums includes premium revenues from workers asset-formation insurance, workers asset-formation annuities, medical life insurance, disability income insurance and reinsurance assumed. 2. Premium revenues by fiscal year, % Fiscal years ended March Individual insurance Initial year premium 1,445,409 1,103,210 1,001,892 Individual annuities Subsequent year premiums 2,067,861 2,109,912 2,178,012 Subtotal 3,513,271 3,213,122 3,179,905 Group insurance Initial year premium 2,649 1,824 2,467 Subsequent year premiums 253, , ,428 Subtotal 256, , ,896 Group annuities Initial year premium 16,645 10,473 11,992 Subsequent year premiums 1,523,398 1,361,568 1,312,872 Subtotal 1,540,043 1,372,042 1,324,865 Total including other premiums Initial year premium 1,468,216 1,118,995 1,019,507 Subsequent year premiums 3,899,170 3,776,567 3,797,104 Total 5,367,387 4,895,562 4,816,612 [Percent increase (decrease)] [9.6%] [1.6%] [(4.3)%] Note: Total including other premiums includes premium revenues from workers asset-formation insurance, workers asset-formation annuities, medical life insurance, disability income insurance and reinsurance assumed. Operational Data 177

180 40. Death and Other Claims 1. Amount Individual insurance Individual annuities Group insurance Group annuities Workers asset-formation insurance and annuities Fiscal year ended March Medical life insurance Disability income insurance Reinsurance assumed Mortality 472, , ,007 Accident 15, ,761 Serious disability 67, , ,517 Maturity 460, ,444 3, ,083 Others Total 1,016, ,469 23,444 3, ,167,385 Fiscal year ended March Mortality 442, , ,689 Accident 8, ,645 Serious disability 67, , ,178 Maturity 465, ,947 3, ,537 Others 2 2 Total 984, ,956 22,947 3, ,135,052 Fiscal year ended March Mortality 433, , ,681 Accident 8, ,639 Serious disability 68, , ,128 Maturity 501, ,703 3, ,382 Others 9 9 Total 1,012, ,193 32,703 3, ,173,840 Total Operational Data 2. Number of claims paid Individual insurance Individual annuities Group insurance Group annuities Workers asset-formation insurance and annuities Fiscal year ended March Medical life insurance Disability income insurance Reinsurance assumed Number of Claims Mortality 44, , ,083 Accident 2, ,659 Serious disability 16, , ,582 Maturity 144, , ,746 Others Total 207,561 1,150 58, , ,124 Fiscal year ended March Mortality 40, , ,810 Accident 1, ,331 Serious disability 15, , ,071 Maturity 150,003 1, , ,977 Others Total 207,272 1,312 58, , ,212 Fiscal year ended March Mortality 39, , ,576 Accident 1, ,337 Serious disability 14, , ,588 Maturity 167,401 1, , ,154 Others Total 222,876 1,662 59, , ,670 Total 178

181 40. Death and Other Claims, continued 3. Mortality insurance claims paid by age and cause of death Less than 20 years old years old years old years old Fiscal year ended March years old Over 60 years old Number of Claims Paid, % Tuberculosis % % % 2 0.1% 1 0.0% % % Legally-designated contagious disease Malignant neoplasm , , , Cerebrovascular disease , , Heart disease , , Pneumonia and bronchitis , , Gastric and duodenal ulcers Liver cirrhosis Kidney inflammation and nephrosis Accident , , Suicide and self-inflicted injuries , Others , , Total , , , , Note: Applies to endowment insurance, endowment insurance with term rider Kurashi no Hoken, term life insurance, whole life insurance and whole life insurance with term rider. Total 41. Annuity Payments Individual insurance Individual annuities Group insurance Group annuities Workers asset-formation insurance and annuities Fiscal year ended March Medical life insurance Disability income insurance, Number of Policies Reinsurance assumed Annuities paid 67, ,937 2, ,414 9, ,373 Number of policies 38, ,623 39,817 7,705,506 29, ,151,937 Fiscal year ended March Annuities paid 72, ,623 2, ,065 9, ,489 Number of policies 39, ,395 40,693 7,360,343 29, ,769,967 Fiscal year ended March Annuities paid 80, ,775 2, ,339 9, ,285 Number of policies 40, ,438 41,290 7,154,917 28, ,541,945 Total Operational Data 179

182 42. Health and Other Benefits 1. Amount Individual insurance Individual annuities Group insurance Group annuities Workers asset-formation insurance and annuities Fiscal year ended March Medical life insurance Disability income insurance Reinsurance assumed Hospitalization due to accident benefits 7, ,099 Hospitalization due to illness benefits 68,282 1,590 1, ,127 Disability benefits 3, ,538 Surgical benefits 49,285 1,362 1, ,952 Survival benefits 181, , ,049 Death benefits 5,522 34, ,275 Group annuity single benefits 430, ,662 Other benefits , ,779 Total 315,771 37, ,515 3,876 2, ,484 Fiscal year ended March Hospitalization due to accident benefits 7, ,125 Hospitalization due to illness benefits 66,559 1,577 1, ,322 Disability benefits 3, ,418 Surgical benefits 47,709 1,340 1, ,285 Survival benefits 190, , ,415 Death benefits 5,137 32, ,895 Group annuity single benefits 454, ,404 Other benefits , ,629 Total 320,559 35, ,126 4,644 2, ,497 Fiscal year ended March Hospitalization due to accident benefits 7, ,354 Hospitalization due to illness benefits 65,040 1,487 1,211 67,739 Disability benefits 3, ,618 Surgical benefits 46,795 1,314 1,159 49,268 Survival benefits 197, , ,926 Death benefits 5,325 27, ,323 Group annuity single benefits 487, ,294 Other benefits ,885 11,895 Total 326,340 30, ,276 4,670 2, ,421 Total Operational Data 180

183 42. Health and Other Benefits, continued 2. Number of policies Individual insurance Individual annuities Group insurance Group annuities Workers asset-formation insurance and annuities Fiscal year ended March Medical life insurance Disability income insurance Reinsurance assumed Number of Policies Hospitalization due to accident benefits 67,199 2,061 3,645 12, ,207 Hospitalization due to illness benefits 732,489 24,233 17,976 1, ,921 Disability benefits 32, ,719 Surgical benefits 402,731 15,566 9, ,785 Survival benefits 556, , ,244 Death benefits 5,048 6, ,607 Group annuity single benefits 894, ,322 Other benefits Total 1,795,984 49,401 4, ,332 1,847 40,109 2,437 2,788,709 Fiscal year ended March Hospitalization due to accident benefits 67,039 1,878 3,815 12, ,353 Hospitalization due to illness benefits 713,979 23,060 17, ,172 Disability benefits 31, ,237 Surgical benefits 391,832 15,256 9, ,770 Survival benefits 564,482 1,793 1, ,085 Death benefits 4,602 6, ,675 Group annuity single benefits 962, ,446 Other benefits Total 1,773,898 48,409 4, ,456 2,081 39, ,832,372 Fiscal year ended March Hospitalization due to accident benefits 69,492 1,815 3,979 13,381 88,667 Hospitalization due to illness benefits 703,407 21,032 18, ,489 Disability benefits 33, ,002 Surgical benefits 388,436 14,851 9, ,392 Survival benefits 588, , ,924 Death benefits 4,627 5, ,990 Group annuity single benefits 975, ,627 Other benefits Total 1,788,432 43,621 5, ,638 2,255 40,536 2,855,958 Total 43. Surrender Benefits Fiscal years ended March 31 Individual insurance Individual annuities Group insurance Group annuities Workers asset-formation insurance and annuities Medical life insurance Disability income insurance Reinsurance assumed , , ,759 38,247 1,011, , , ,529 39,229 1,014, , , ,336 44,759 1,059,647 Total Operational Data 181

184 44. Depreciation Acquisition cost Current year depreciation Accumulated depreciation Fiscal year ended March Balance as of March 31, % Accumulated depreciation percentage Tangible fixed assets 606,258 21, , , % Buildings 525,138 14, , , Lease assets 8,075 2,417 4,878 3, Other tangible fixed assets 73,044 4,831 53,634 19, Intangible fixed assets 200,966 28,042 90, , Others 9, ,163 3, Total 816,522 50, , , % Fiscal year ended March Tangible fixed assets 618,128 20, , , % Buildings 542,898 13, , , Lease assets 7,118 2,145 2,474 4, Other tangible fixed assets 68,111 4,611 55,144 12, Intangible fixed assets 149,381 27,122 76,651 72, Others 8, ,542 3, Total 776,149 48, , , % Fiscal year ended March Tangible fixed assets 597,042 19, , , % Buildings 521,293 12, , , Lease assets 3, , Other tangible fixed assets 72,506 6,348 56,842 15, Intangible fixed assets 147,079 23,868 72,697 74, Others 12, ,644 5, Total 756,956 44, , , % 45. Operating Expenses Fiscal years ended March Marketing operations 230, , ,385 Marketing administration 82,843 81,142 84,846 General and administrative expenses 259, , ,401 Total 572, , ,633 Notes: 1. Marketing operations and marketing administration include expenditures for underwriting new policies. Marketing operations primarily include expenses related to new policy solicitation and assessment. Marketing administration primarily includes expenses related to advertising and the sales force. 2. General and administrative expenses include expenditures for managing policies with insurance handling systems and for investment. 3. Nippon Life s contributions to the Life Insurance Policyholders Protection Corporation of Japan, as is stipulated in Article , Paragraph 1 of the Insurance Business Act, were 7,379 million in the fiscal year ended March 31, 2012, 8,591 million in the fiscal year ended March 31, 2011 and 8,675 million in the fiscal year ended March 31, Loans by Due Date Operational Data year or under Over 1 year under 3 years Over 3 years under 5 years Over 5 years under 7 years Over 7 years under 10 years Over 10 years No fixed maturity Total As of March Loans payable Cash received as collateral under securities lending transactions 935, ,584 As of March Loans payable Cash received as collateral under securities lending transactions 1,297,252 1,297,252 As of March Loans payable Cash received as collateral under securities lending transactions 1,025,057 1,025,057

185 47. Tax Expenses Fiscal years ended March National tax 20,221 18,882 19,578 Consumption tax 14,313 13,525 14,228 Special local corporate tax 5,435 4,962 4,897 Documentary stamp tax Registration and license tax Other national tax Local tax 17,170 16,090 15,984 Local consumption tax 3,578 3,380 3,557 Corporate enterprise tax 7,012 6,277 6,214 Fixed asset tax 5,573 5,494 5,158 Real-estate acquisition tax Corporate income tax Automobile tax Other local tax Total 37,392 34,972 35, Lease Transactions Lease Transactions (lessee side) (1) Non-ownership transfer lease transactions that have been recorded based on normal lease transaction methods 1 Pro forma information relating to acquisition cost, accumulated depreciation, and book value of leased assets as of fiscal year-end As of March Acquisition cost Tangible fixed assets 1,536 1,485 1,497 Total 1,536 1,485 1,497 Accumulated depreciation Tangible fixed assets 1,372 1, Total 1,372 1, Year-end balance Tangible fixed assets of leased properties Total Future minimum lease payments year-end balance Fiscal years ended March Future minimum lease payments year-end balance One year and under Over one year Total Note: The fiscal year-end balance of future minimum lease payments is calculated using methods that do not deduct interest amounts. 3 Lease fees paid and depreciation Fiscal years ended March Lease fees paid Depreciation Calculation method for depreciation The straight-line method is applied. until the fiscal year ended March 31, 2008, non-ownership transfer lease transactions were recorded in accordance with normal lease transaction methods; however, from the fiscal year ended March 31, 2009, lease assets beginning on or after April 1, 2008 are recorded in accordance with sales transaction methods. Operational Data 183

186 48. Lease Transactions, continued Lease Transactions (lessee side), continued (2) Operating lease contracts Fiscal year ended March Future minimum lease payments year-end balance One year and under Over one year Total Lease transactions (lessor side) (1) Operating lease contracts Fiscal year ended March Future minimum lease payments year-end balance One year and under 7,000 7,593 7,803 Over one year 15,266 18,592 16,632 Total 22,267 26,186 24,435 INDICATORS RELATED TO Investment (GENERAL ACCOUNT) 49. Overview of the Fiscal Year Ended March 31, 2012 Investment (General Account) Operational Data 1 Investment environment In the fiscal year ended March 31, 2012, although some aspects of the Japanese economy experienced a slowdown in the first half due to the impact of the Great East Japan Earthquake, the economy recovered rapidly after this due to progress in rebuilding supply chains. Towards the end of the year, a decline in exports and other factors caused the economy to decelerate. Towards the end of the fiscal year, however, there was an upturn thanks to the effects of government policies such as subsidies on environmentally friendly vehicles and demand driven by reconstruction. Although there were positive aspects for the Nikkei Stock Average including a recovery to the 10,000 level on the back of heightened expectations of a quick recovery from the earthquake, from the summer onwards, such factors as a recurrence of the sovereign debt problem in the eurozone and the ongoing appreciation of the yen caused the market to continue to slump, with the Nikkei Stock Average falling temporarily below the 8,500 level. After the turn of the year, the effects of monetary easing in the eurozone and other areas and expectations of a recovery in the US economy caused the Nikkei Stock Average to rebound substantially, bringing it to the 10,083 at the end of March. Having started at 1.25%, the yield rate on 10-year government bonds declined to 1.03% at the end of the first half of the fiscal year, primarily because of the worsening of the sovereign debt problem in the eurozone. Following that, a more hawkish attitude to monetary easing among the Central Banks of Japan, the US and the eurozone helped cause long-term interest rates to trend flatly, and the yield rate was 0.99% at the end of March. Regarding the foreign exchange rate of the yen against the US dollar, the yen appreciated to a record high of 75 per the US dollar in October against the background of a decline in expectations of recovery in the US economy and the debt problem in the eurozone. Despite this, intervention by the government and the Bank of Japan, in which they bought the US dollars and sold yen, caused a lull in the yen s appreciation. In March, the yen depreciated rapidly against the dollar due to such factors as speculation that Japan s trade deficit would expand and take root and additional monetary easing by the Bank of Japan, reaching per the US dollar at the end of March. Regarding the foreign exchange rate of the yen against the euro, the yen appreciated from the start of the fiscal year to the second half of the fiscal year because of concerns that the deepening of the eurozone debt problem would develop into a financial crisis. Following that, liquidity supply by the ECB and agreement regarding additional assistance for Greece helped the yen to depreciate against the euro, with the exchange rate reaching per euro at the end of March. 2 Investment policy Nippon Life creates portfolios that serve as core medium- to long-term investments, based on its Asset/Liability Management (ALM) approach of appropriately controlling assets and liabilities. Specifically, to supply the stable long-term yields promised to policyholders, the Company has positioned public and corporate bonds and loans that the Company expects to provide stable Japanese yen-denominated revenue as its primary assets. Furthermore, the Company is working to improve medium- to long-term revenues and is investing in domestic and foreign securities through a process of controlling risk while taking into account management stability with a view to returning profits to policy holders through dividend payouts. 3 Overview of investment results In the fiscal year ended March 31, 2012, the Company has positioned yen-denominated assets that can be expected to provide stable income, such as bonds and loans, as its core asset. From the perspective of improving profits in the mid-to-long term, the Company invested in assets such as stocks and foreign securities within the scope of acceptable risk while taking into account business stability. 184

187 49. overview of the Fiscal Year Ended March 31, 2012 Investment (General Account), continued 3 Overview of investment results, continued Domestic bonds The Company invested in bonds as sound assets that provide stable interest revenue. Selecting the timing of relatively high interest rates through the fiscal year, the Company replaced low-yield bonds with high-yield long-term bonds, etc., and added such long-term bonds to the portfolio. Domestic stocks The Company implemented replacements of issues while focusing its attention on the overall state of returns to investors including corporate profitability and dividends from the point of view of investing for the medium- to long-term, with the goal of increasing portfolio profitability. Foreign securities Regarding foreign securities, the Company invested in foreign currencydenominated bonds based on currency movements. Also, the Company increased the balance of foreign bonds that hedge risk of exchange rate fluctuation because the difference in domestic and overseas interest rates remained small with a low level of exchange rate hedge cost. Loans The Company focused on safe and stable prime lendings by appropriately assessing credit risks. Real estate The Company worked to secure profitability through strengthening the competitive edge of its buildings by decreasing vacancy rates and renovating pre-existing properties, among others. Billions of Yen, % As of March Increase (decrease)* Breakdown General Account 49, , % Domestic bonds 19, , Domestic stocks 5,836.9 (130.8) 11.7 Foreign securities 11, Loans 8,721.6 (21.7) 17.5 Real estate 1,727.0 (21.8) 3.5 * Indicates asset increase/decrease when the market price valuation of available-for-sale securities is not conducted. 50. Portfolio Trends (General Account) 1. Asset structure, % As of March Cash, deposits and call loans 591, % 705, % 681,899 Receivables under resale agreements Receivables under securities borrowing transactions 211, , ,689 Monetary receivables purchased 883, ,021, ,152,229 Proprietary trading securities Assets held in trust 10,670 Investments in securities 36,480, ,492, ,628,853 Domestic bonds 19,126, ,839, ,405,488 Domestic stocks 5,836, ,210, ,850,014 Foreign securities 11,268, ,109, ,050,439 Foreign bonds 8,590, ,737, ,726,605 Foreign stocks and other securities 2,678, ,371, ,323,833 Other securities 248, , ,911 Loans 8,721, ,743, ,770,808 Policy loans 896, , ,025,658 Industrial and consumer loans 7,825, ,777, ,745,149 Real estate 1,727, ,748, ,769,593 Investment property 1,083, ,105, ,123,204 Deferred tax assets 466, , ,027 Other assets 793, , ,926 Allowance for doubtful accounts (13,885) (0.0) (23,484) (0.0) (24,606) Total 49,862, % 48,514, % 47,235,092 Foreign currency-denominated assets 9,362, % 8,454, % 7,542,832 Operational Data Notes: 1. The above assets include cash received as collateral under securities lending transactions. Cash collateral received through these transactions is recorded in liabilities. (As of March 31, 2012: 935,584 million; March 31, 2011: 1,297,252 million; and March 31, 2010: 1,025,057 million) 2. Real estate is the sum of land, buildings, and construction in progress. 185

188 50. Portfolio Trends (General Account), continued 2. Increases/decreases in assets Fiscal years ended March Cash, deposits and call loans (113,921) 23,470 (25,175) Receivables under resale agreements Receivables under securities borrowing transactions (180,597) 240, ,689 Monetary receivables purchased (138,074) (131,084) (8,158) Proprietary trading securities Assets held in trust (10,670) (103,967) Investments in securities 1,988, ,241 3,529,224 Domestic bonds 1,287, , ,903 Domestic stocks (373,910) (639,147) 1,319,279 Foreign securities 1,159,454 1,058,977 1,702,117 Foreign bonds 852,695 1,010,979 1,053,858 Foreign stocks and other securities 306,758 47, ,258 Other securities (84,386) 9,581 20,924 Loans (21,780) (27,418) (362,623) Policy loans (69,447) (59,864) (61,830) Industrial and consumer loans 47,667 32,445 (300,793) Real estate (21,896) (20,662) 118,312 Investment property (22,431) (17,465) 103,687 Deferred tax assets (275,105) 307,013 (491,862) Other assets 100,919 33,856 (23,244) Allowance for doubtful accounts 9,598 1,121 (3,427) Total 1,347,932 1,279,703 2,780,767 Foreign currency-denominated assets 907, ,086 1,374,410 Notes: 1. Increases/decreases in cash received as collateral under securities lending transactions are as follows: Fiscal year ended March 31, 2012: 361,667 million decrease Fiscal year ended March 31, 2011: 272,194 million increase Fiscal year ended March 31, 2010: 574,562 million increase 2. Real estate is the sum of land, buildings, and construction in progress. 51. Average Balance and Yield on Primary Assets (General Account) Operational Data, % Fiscal years ended March Average balance Yield Average balance Yield Average balance Yield Cash, deposits and call loans 389, % 399, % 473, % Receivables under resale agreements Receivables under securities borrowing transactions 234, , , Monetary receivables purchased 948, ,112, ,165, Proprietary trading securities Assets held in trust 8,214 (7.37) 112, Investments in securities 34,064, ,604, ,770, Domestic bonds 18,582, ,384, ,084, Domestic stocks 4,969, ,125, ,050, Foreign securities 10,209, ,743, ,300, Foreign bonds 7,833, ,523, ,284, Foreign stocks and other securities 2,376, ,220, ,016, Loans 8,791, ,692, ,948, Industrial and consumer loans 7,862, ,700, ,896, Real estate 1,743, ,768, ,757, Investment property 1,102, ,117, ,118, General account total 47,844, % 46,477, % 44,946, % Overseas investments 10,604, % 10,205, % 8,797, % Notes: 1. Yields are calculated by dividing investment income less investment expenses by the daily average book value balance. 2. The amount of overseas investment is the sum of assets denominated in foreign currencies and Japanese yen. 3. Real estate is the sum of land, buildings, and construction in progress. 186

189 52. Investment Income (General Account) Fiscal years ended March Interest, dividends, and other income 1,198,148 1,204,606 1,119,518 Gain on proprietary trading securities Gain on assets held in trust, net 16 27,911 Gain on sales of securities 233, , ,497 Gain on redemptions of securities 239 2,120 1,226 Gain on derivative financial instruments, net 19,659 Foreign exchange gains, net Reversal of allowance for doubtful accounts 5,964 Other investment income 2, ,189 Total 1,441,288 1,538,398 1,355, Investment Expenses (General Account) Fiscal years ended March Interest expenses 2,658 2,839 2,137 Loss on proprietary trading securities Loss on assets held in trust, net 605 Loss on sales of securities 154, , ,658 Loss on valuation of securities 29, ,243 81,808 Loss on redemptions of securities 16,265 16,191 12,580 Loss on derivative financial instruments, net 157,980 27,178 Foreign exchange losses, net 6,282 7,619 12,876 Provision for allowance for doubtful accounts 13,377 Write-off of loans Depreciation of rental real estate and other assets 25,848 26,045 26,405 Other investment expenses 21,993 27,296 23,079 Total 414, , ,078 Note: From the fiscal year ended March 31, 2012, reversal of allowance for doubtful accounts is included in investment income. For the fiscal year ended March 31, 2011, reversal of allowance for doubtful accounts was presented under extraordinary gains and not shown above. 54. Interest, Dividends, and Other Income (General Account) Fiscal years ended March Interest on deposits and savings Interest/dividends on securities 904, , ,883 Interest on bonds 367, , ,694 Domestic stock dividends 137, , ,941 Interest/dividends on foreign securities 395, , ,674 Interest on loans 185, , ,283 Real estate rental income 85,868 92, ,067 Total including other income 1,198,148 1,204,606 1,119,518 Operational Data 187

190 55. Analysis of Interest, Dividends, and Other Income (General Account) Fiscal years ended March Change in asset allocation balance Increase (decrease) from interest variance Total increase (decrease) Change in asset allocation balance Increase (decrease) from interest variance Total increase (decrease) Change in asset allocation balance Increase (decrease) from interest variance Total increase (decrease) Interest, dividends, and other income 35,423 (41,880) (6,457) 38,137 46,950 85,088 21,745 (50,720) (28,975) Cash equivalents and call loans (10) (21) (31) (96) (124) (220) (399) (1,479) (1,878) Securities 40,258 (35,185) 5,072 47,566 53, ,310 36,946 (52,474) (15,528) Loans 2,138 (4,260) (2,121) (5,550) (1,317) (6,868) (8,540) 3,957 (4,582) Real estate (1,274) (5,013) (6,287) 627 (8,539) (7,912) 6,297 (9,684) (3,387) 56. Gain on Sales of Securities (General Account) Fiscal years ended March Domestic bonds 43,709 35,190 17,010 Domestic stocks and other securities 68, , ,209 Foreign securities 121, ,839 66,277 Total including other gains on sales of securities 233, , , Loss on Sales of Securities (General Account) Fiscal years ended March Domestic bonds 138 7,148 1,306 Domestic stocks and other securities 34,992 18,628 19,258 Foreign securities 118, , ,093 Total including other losses on sales of securities 154, , , Loss on Valuation of Securities (General Account) Fiscal years ended March Domestic bonds Domestic stocks and other securities 26, ,372 4,809 Foreign securities 2,702 20,335 75,857 Total including other losses on valuation of securities 29, ,243 81, Securities Composition (General Account) Operational Data, % As of March Domestic bonds 19,126, % 17,839, % 17,405,488 National government bonds 14,403, ,041, ,176,511 Local government bonds 1,579, ,641, ,746,085 Corporate bonds 3,144, ,156, ,482,891 Public entity bonds 1,605, ,566, ,790,648 Domestic stocks 5,836, ,210, ,850,014 Foreign securities 11,268, ,109, ,050,439 Foreign bonds 8,590, ,737, ,726,605 Foreign stocks and other securities 2,678, ,371, ,323,833 Other securities 248, , ,911 Total 36,480, % 34,492, % 33,628,853 Subordinated bonds 15, % 15, % 15,

191 60. Securities by Maturity Date (General Account) 1 year or under Over 1 year through 3 years Over 3 years through 5 years Over 5 years through 7 years As of March Over 7 years through 10 years Over 10 years No fixed maturity Investments in securities 467,489 1,550,918 2,887,049 1,996,163 3,084,785 19,290,491 7,203,986 36,480,884 Domestic bonds National government bonds 184, ,443 1,165, ,361 1,045,050 11,044,155 14,403,602 Local government bonds 86, , , , , ,197 1,579,157 Corporate bonds 101, , , , ,673 1,337,338 3,144,190 Domestic stocks 5,836,957 5,836,957 Foreign securities 85, , , ,127 1,654,312 6,566,800 1,245,160 11,268,871 Foreign bonds 77, , , ,659 1,590,918 5,227,577 8,590,281 Foreign stocks and other securities 8,251 4, ,468 63,394 1,339,222 1,245,160 2,678,590 Other securities 9,312 6,484 8,978 34,065 67, , ,105 Monetary receivable purchased 80,688 1,011 10,456 14,508 44, , ,070 Negotiable certificates of deposit 250, ,997 Total 799,175 1,551,930 2,897,506 2,010,672 3,128,877 20,022,805 7,203,986 37,614,953 As of March Investments in securities 849,917 1,223,191 1,932,631 3,081,321 3,013,631 16,810,952 7,580,448 34,492,095 Domestic bonds National government bonds 588, , ,788 1,466, ,519 8,976,071 13,041,407 Local government bonds 134, , , , , ,524 1,641,609 Corporate bonds 103, , , , ,705 1,254,390 3,156,301 Domestic stocks 6,210,867 6,210,867 Foreign securities 13, , , ,060 1,270,964 6,333,966 1,133,534 10,109,417 Foreign bonds 5, , , ,060 1,214,231 5,168,802 7,737,585 Foreign stocks and other securities 7,836 7,139 1,423 56,733 1,165,164 1,133,534 2,371,831 Other securities 9, ,382 28,825 45, , ,492 Monetary receivable purchased 46,123 12,578 11,539 40, ,171 1,021,145 Negotiable certificates of deposit 422, ,995 Total 1,319,037 1,235,769 1,944,171 3,081,321 3,054,363 17,721,123 7,580,448 35,936,236 As of March Investments in securities 1,311,680 1,533,516 1,701,342 3,645,683 3,819,133 13,416,136 8,201,361 33,628,853 Domestic bonds National government bonds 884, , ,882 1,823,328 1,278,274 6,886,471 12,176,511 Local government bonds 63, , , , , ,076 1,746,085 Corporate bonds 332, , , , ,338 1,195,202 3,482,891 Domestic stocks 6,850,014 6,850,014 Foreign securities 24, , , ,359 1,518,784 5,131,385 1,123,419 9,050,439 Foreign bonds 11, , , ,359 1,481,891 3,993,219 6,726,605 Foreign stocks and other securities 12,990 8,450 3,914 36,893 1,138,165 1,123,419 2,323,833 Other securities 7, ,016 8,025 65, , ,911 Monetary receivable purchased 119,285 40,543 6,334 11,443 32, ,510 1,152,229 Negotiable certificates of deposit 369, ,994 Total 1,800,960 1,574,059 1,707,677 3,657,126 3,851,245 14,358,647 8,201,361 35,151,077 Total 61. Bond Yields (General Account) % As of March Domestic bonds 2.05% 2.04% 1.98% Foreign bonds Japanese yen-denominated Foreign currency-denominated Operational Data 189

192 62. Stocks Held Breakdown by Industry (General Account), % As of March Fishery, agriculture and forestry 2, % 2, % 3,259 Mining 2, , ,021 Construction 76, , ,682 Manufacturing Food 171, , ,644 Textiles and apparel 83, , ,230 Pulp and paper 22, , ,133 Chemicals 485, , ,034 Pharmaceuticals 490, , ,246 Oil and coal products 23, , ,513 Rubber products 54, , ,836 Glass and ceramic products 74, , ,734 Iron and steel 151, , ,397 Nonferrous metals 68, , ,927 Metal products 29, , ,827 Machinery 343, , ,127 Electric appliances 650, , ,486 Transportation equipment 860, , ,354 Precision instruments 83, , ,582 Other products 66, , ,787 Electric power and gas 398, , ,759 Transportation, information and communication Land transportation 327, , ,829 Marine transportation 12, , ,601 Air transportation 10, , ,094 Warehousing and harbor transportation services 8, , ,475 Information and communication 87, , ,485 Trade and services Wholesale trade 227, , ,865 Retail trade 154, , ,596 Finance and insurance Banking 599, , ,304 Securities and trading 43, , ,491 Insurance 84, , ,767 Other financial services 26, , ,214 Real estate 34, , ,962 Services 79, , ,736 Total 5,836, % 6,210, % 6,850, Loans (General Account) Operational Data 190 As of March Policy loans 896, ,794 1,025,658 Premium loans 71,583 78,262 86,433 Policyholder loans 824, , ,225 Industrial and consumer loans 7,825,262 7,777,595 7,745,149 [Loans to non-residents] [274,425] [312,290] [355,446] Corporate loans international and domestic 5,913,610 5,904,401 5,988,768 [Corporate loans domestic] [5,733,491] [5,704,646] [5,771,177] Loans to national, international and government-affiliated organizations 82, , ,766 Loans to public entities 397, , ,311 Housing loans 952, , ,275 Consumer loans 458, , ,677 Other loans 21,584 23,114 25,351 Total 8,721,609 8,743,389 8,770,808

193 64. Industrial and Consumer Loans by Maturity Dates (General Account) 1 year or under Over 1 year through 3 years Over 3 years through 5 years Over 5 years through 7 years As of March Over 7 years through 10 years Over 10 years Maturity not fixed Fixed rate loans 990,889 1,653,576 1,244,438 1,086,380 1,079,841 1,321,257 7,376,384 Variable rate loans 51,625 81,509 58,875 51,935 58, , ,877 Total loans 1,042,515 1,735,085 1,303,314 1,138,316 1,138,193 1,467,836 7,825,262 As of March Fixed rate loans 1,026,971 1,729,053 1,300,392 1,095,238 1,052,934 1,068,186 7,272,776 Variable rate loans 79,998 93,153 66,435 50,525 64, , ,818 Total loans 1,106,970 1,822,206 1,366,828 1,145,764 1,117,249 1,218,576 7,777,595 As of March Fixed rate loans 1,008,335 1,685,058 1,307, ,409 1,272, ,240 7,210,706 Variable rate loans 64, ,431 70,878 65,431 80, , ,443 Total loans 1,072,781 1,796,489 1,378,037 1,034,841 1,352,733 1,110,266 7,745,149 Total 65. Loans to Domestic Companies by Company Size (General Account) Number of Borrowers,, % As of March Large companies Number of borrowers % % 968 Amount of loans 5,187, ,084, ,036,137 Medium-sized companies Number of borrowers Amount of loans 73, , ,804 Small companies Number of borrowers Amount of loans 472, , ,235 Total loans to domestic companies Number of borrowers 2, , ,276 Total amount of loans 5,733, % 5,704, % 5,771,177 Notes: 1. Classifications are defined as follows. 2. Number of borrowers is the number of borrowers identified by name and is not the number of loans. Industry Type Company size 1. All industries (excluding 2 4) 2. Retail and restaurants Large companies More than 300 employees and Paid-in capital 1 billion or more More than 50 employees and Paid-in capital 1 billion or more Medium-sized companies More than 300 employees and Paid-in capital between 0.3 billion and 1 billion More than 50 employees and Paid-in capital between 0.05 billion and 1 billion Small companies Paid-in capital under 0.3 billion or 300 employees or less Paid-in capital under 0.05 billion or 50 employees or less 3. Services 4. Wholesale Large companies More than 100 employees and Paid-in capital 1 billion or more More than 100 employees and Paid-in capital 1 billion or more Medium-sized companies More than 100 employees and Paid-in capital between 0.05 billion and 1 billion More than 100 employees and Small companies Paid-in capital under 0.05 billion or 100 employees or less Paid-in capital under 0.1 billion or 100 employees or less Paid-in capital between 0.1 billion and 1 billion Operational Data 191

194 66. Breakdown of Industrial and Consumer Loans by Industry (General Account), % As of March Domestic Manufacturing 1,572, % 1,604, % 1,604,043 Food 106, , ,912 Textiles and apparel 49, , ,425 Wood, wood products 2, , ,082 Pulp and paper 83, , ,342 Printing 23, , ,472 Chemicals 280, , ,511 Oil and coal products 85, , ,139 Ceramics, soil and stone 41, , ,714 Iron and steel 242, , ,419 Nonferrous metals 34, , ,732 Metal products 13, , ,472 General purpose, production, and industrial machinery 123, , ,003 Electric appliances 173, , ,041 Transportation equipment 264, , ,848 Other manufacturing products 50, , ,924 Agriculture and forestry Fishery 1, , ,000 Mining, quarrying and gravel mining 8, , ,888 Construction 42, , ,140 Electric power, gas, heat supply and waterworks 1,031, , ,949 Information and communication 197, , ,469 Logistics and postal services 719, , ,673 Wholesale trade 884, , ,581 Retail trade 56, , ,054 Financing and insurance 745, , ,050 Real estate 340, , ,731 Rental and leasing services 292, , ,912 Professional, scientific, and technical services 1, , ,632 Lodging 5, , ,091 Restaurants 6, , ,113 Lifestyle and leisure 15, , ,177 Education and training 2, , ,020 Medical and welfare 2, , ,882 Other services 3, , ,078 Local organizations and public entities 208, , ,614 Individuals (residential/consumption/local taxes/other) 1,411, ,406, ,376,590 Subtotal 7,550, ,465, ,389,703 Overseas Governments and public entities 94, , ,855 Financial institutions 33, , ,000 Commerce and industry 147, , ,590 Subtotal 274, , ,446 Total loans 7,825, % 7,777, % 7,745,149 Operational Data 192

195 67. Breakdown of Industrial and Consumer Loans by Use (General Account), % As of March Capital investments 2,715, % 2,615, % 2,586,186 Operations 5,109, ,162, ,158,963 Total loans 7,825, % 7,777, % 7,745, Breakdown of Loans by Region (General Account), % As of March Hokkaido 52, % 33, % 38,962 Tohoku 135, , ,863 Kanto 3,774, ,875, ,938,282 Chubu 475, , ,331 Kinki 870, , ,342 Chugoku 135, , ,492 Shikoku 112, , ,323 Kyushu 177, , ,580 Total 5,733, % 5,704, % 5,771,177 Notes: 1. Excludes personal loans, loans to non-residents and policy loans. 2. Regional classifications are based on the location of the headquarters of borrowers. 69. Breakdown of Loans by Collateral (General Account), % As of March Secured loans 54, % 64, % 73,711 Loans secured by securities 11, , ,337 Loans secured by real estate, movables and foundations 37, , ,612 Loans secured by personal guarantees 5, , ,762 Guarantee loans 259, , ,373 Fiduciary loans 6,101, ,033, ,997,111 Other loans 1,410, ,405, ,374,952 Ordinary loans 7,825, % 7,777, % 7,745,149 Subordinated loans 374, % 385, % 355, Appraisal Value of Real Estate (General Account) Billions of Yen As of March Land and land lease rights Balance sheet amount 1, , ,292.2 Market value (appraisal value) 1, , ,301.0 Net unrealized gains/losses 1 (63.2) (37.3) 8.8 Gain Loss (223.2) (203.3) (190.7) Revaluation differences Notes: 1. Appraisal value is based on the value of land disclosed to the public. 2. In accordance with the Act on Revaluation of Land, business-use land was revalued and net valuation gains/losses were recorded on the balance sheets. 3. For revaluation differences 2, the difference between the amount revalued and the historical cost, net of tax has been credited to revaluation reserve for land in net assets, resulting in deferred tax liabilities for land revaluation being included in liabilities. Operational Data 193

196 71. Amount of Real Estate and Numbers Held (General Account), Number of Buildings As of March Amount of real estate 1,727,034 1,748,930 1,769,593 For business operations 643, , ,389 For lease 1,083,307 1,105,738 1,123,204 Number of buildings held for leasing Note: Amount of real estate is recorded as the total of land, buildings and construction in progress. 72. Tangible Fixed Assets (General Account) Ending balance of prior period Increase in current period Decrease in current period Depreciation in current period Ending balance of current period Accumulated depreciation, % Accumulated depreciation percentage Fiscal year ended March Land 1,202,499 11,308 15,387 1,198,419 % [9,084] Buildings 523,417 37,179 5,818 39, ,114 1,073, [4,789] Lease assets 4, ,419 3,205 4, Construction in progress 23,014 35,214 44,728 13,500 Other tangible fixed assets 13,659 11, ,092 20,163 62, Total 1,767,242 96,500 66,164 47,175 1,750,402 1,141,335 % [13,874] Of which assets are being leased 1,114,812 36,280 37,279 25,351 1,088, ,942 % [13,508] Fiscal year ended March Land 1,208,797 1,468 7,766 1,202,499 % [4,443] Buildings 534,557 35,971 8,232 38, ,417 1,059, [7,097] Lease assets 2,917 3, ,146 4,652 2, Construction in progress 26,238 40,038 43,262 23,014 Other tangible fixed assets 16,404 2, ,853 13,659 63, Total 1,788,915 83,844 59,638 45,879 1,767,242 1,125,580 % [11,541] Of which assets are being leased 1,132,973 24,860 17,428 25,593 1,114, ,863 % [6,669] Fiscal year ended March Land 1,083, ,570 8,766 1,208,797 % [5,128] Buildings 545,803 30,345 2,770 38, ,557 1,020, [1,522] Lease assets 160 3, , Construction in progress 21,484 33,016 28,262 26,238 Other tangible fixed assets 20,656 3, ,569 16,404 65, Total 1,672, ,183 40,723 45,641 1,788,915 1,086,502 % [6,650] Of which assets are being leased 1,027, ,563 30,268 26,186 1,132, ,200 % [6,602] Notes: 1. Figures in brackets under the decrease in current period column indicate the amount of decrease due to impairment loss. 2. The accumulated depreciation percentage shows the accumulated depreciation versus acquisition cost. 3. Investment and rental properties shown in Increase in current period and Decrease in current period include those occurring due to changes in application. Operational Data 194

197 73. Gain and Loss on Disposals of Fixed Assets (General Account) Fiscal years ended March Gain Loss Gain Loss Gain Loss Tangible fixed assets 72 6,474 1,572 5,863 1,324 3,159 Land 69 2, Buildings 0 3,911 1,025 4, ,301 Lease assets 16 Other assets Intangible fixed assets ,400 Others Total 72 7,013 1,588 6,476 1,324 5,057 Of which assets are being leased 70 4,211 1,530 4,296 1,317 2, depreciation on Tangible Fixed Assets, Intangible Fixed Assets and Other Assets Held for Leasing (General Account) Acquisition cost Depreciation in current period Accumulated depreciation Fiscal year ended March Balance at end of current period, % Accumulated depreciation percentage Tangible fixed assets 1,073,558 25, , , % Buildings 1,063,622 25, , , Lease assets Others 9, , Intangible fixed assets Other assets 4, ,155 1, Total 1,078,506 25, , , % Fiscal year ended March Tangible fixed assets 1,049,163 25, , , % Buildings 1,039,740 25, , , Lease assets Others 9, , Intangible fixed assets Other assets 4, ,897 1, Total 1,053,999 26, , , % Fiscal year ended March Tangible fixed assets 1,043,339 26, , , % Buildings 1,034,059 26, , , Lease assets Others 9, , Intangible fixed assets Other assets Total 1,043,339 26, , , % Operational Data 195

198 75. Status of Overseas Loans and Investments (General Account) 1. Breakdown by asset composition, % As of March Foreign currency-denominated assets Foreign bonds 7,460, % 6,710, % 5,876,257 Foreign stocks 341, , ,295 Cash and cash equivalents 1,560, ,504, ,341,279 Subtotal 9,362, ,454, ,542,832 Foreign currency-denominated assets with fixed yen value Foreign bonds Cash and cash equivalents 153, , ,112 Subtotal 153, , ,112 Japanese yen-denominated assets Loans to non-residents 161, , ,524 Foreign bonds and other assets 2,190, ,843, ,679,067 Subtotal 2,352, ,038, ,897,592 Net overseas loans and investment 11,867, % 10,650, % 9,633,537 Overseas real estate 233, % 222, % 242,110 Note: Foreign currency-denominated assets with fixed yen value are recorded under assets on the balance sheets at the fixed yen value that was determined at settlement with foreign exchange forward contracts. Operational Data 2. Overseas loans and investments by geographic area, % Foreign securities Bonds Stocks and other securities Loans to non-residents Value Percent Value Percent Value Percent Value Percent As of March North America 4,935, % 4,709, % 226, % 123, % Europe 3,424, ,095, , , Oceania 379, , , , Asia 240, , , Central and South America 2,208, , ,004, , Middle East Africa 6, International organizations 79, , , Total 11,268, % 8,590, % 2,678, % 274, % As of March North America 4,263, % 4,036, % 226, % 127, % Europe 3,124, ,845, , , Oceania 533, , Asia 94, , , Central and South America 2,042, , ,843, , Middle East Africa 7, International organizations 50, , , Total 10,109, % 7,737, % 2,371, % 312, % As of March North America 3,500, % 3,263, % 237, % 146, % Europe 2,928, ,649, , , Oceania 499, , Asia 67, , , , Central and South America 1,976, , ,786, , Middle East Africa 1, International organizations 78, , , Total 9,050, % 6,726, % 2,323, % 355, % Note: Applies only to foreign securities and loans to non-residents among overseas investments. 196

199 75. Status of Overseas Loans and Investments (General Account), continued 3. Composition of foreign currency-denominated assets by currency, % As of March U.S. Dollar 5,661, % 4,979, % 4,168,109 Euro 1,402, ,419, ,940,742 British pound 1,269, ,106, ,059 Australian dollar 698, , ,517 Poland Zloty 196, , ,024 India Rupee 48, Others 84, , ,378 Net foreign currency-denominated assets 9,362, % 8,454, % 7,542,832 Note: The six currencies are broken down and shown by rank in terms of their outstanding balance as of March 31, Yields on Overseas Loans and Investments (General Account) Fiscal years ended March Yields on overseas loans and investments 3.19% 2.43% 2.14% Notes: 1. Yields are calculated by dividing investment income less investment expenses by the daily average balance based on book value. 2. Overseas loans and investments are the total of assets denominated in foreign currencies and Japanese yen. % 77. Summary of New Public-Sector Investment Underwriting and Loans (General Account), % Fiscal years ended March Public bonds National government bonds 18, % 70, % 7,223 Local government bonds Subtotal 18, , ,223 Loans Public corporations and agencies 59, , ,455 Other public entities 42, , ,700 Subtotal 101, , ,155 Total 119, % 227, % 39, Breakdown of Other Assets (General Account) Acquisition cost Increase in current period Decrease in current period Fiscal year ended March Accumulated depreciation Balance at end of current period Deferred assets 9,519 1, ,112 3,867 Others 20,307 2,187 4,103 3,210 15,181 Total 29,827 3,340 4,796 9,323 19,049 Fiscal year ended March Deferred assets 8,311 1, ,370 4,294 Others 20,193 1,928 1,813 3,070 17,237 Total 28,504 3,740 2,273 8,440 21,531 Fiscal year ended March Deferred assets 8, ,699 3,781 Others 20,735 1,077 1,619 2,945 17,248 Total 28,776 1,579 1,680 7,644 21,030 Operational Data 197

200 79. Loan Interest Rates Prime rate (extra long-term 10-year prime rate loans) Prime rate (long-term prime rate loans) Fixed interest rate Housing loans Variable interest rate optional with fixed interest rate Type of loan Variable interest rate (long-term loans) Variable interest rate (short-term loans) Fixed interest rate Fiscal year ending March / / / Consumer loans Dates, % Variable interest Variable interest rate rate (long-term loans) (short-term loans) Operational Data Fiscal year ended March / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / Fiscal year ended March / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / Fiscal year ended March / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / Notes: 1. The prime rate (extra long-term 10-year prime rate loans) is shown as a standard rate for fixed interest rate loans with loan periods in excess of five years. 2. Fixed interest rates for housing loans and consumer loans are set at interest rates according to the lending period. 3. For housing loans, variable interest rates optional with fixed interest rates are set according to the fixed interest rate period of 2, 3, 5, 10 or 15 years. 4. Housing loan interest rates show interest rates at the time of initial lending. 5. Housing loan interest rates include group credit life insurance warranty fees. 6. Consumer loans show traditional mortgage-backed loans. 198

201 SECURITIES INDICATORS (GENERAL ACCOUNT) 80. Market Value of Securities (General Account) 1. Net valuation gains/losses of trading securities As of March Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Trading securities 2,479 10,266 79,793 Notes: 1. Assets held in trust included in trading securities recorded on the balance sheets and net valuation gains/losses included in profit/loss of current period both include net gains/losses related to derivative transactions. 2. Assets held in trust included in trading securities do not include cash, deposits and call loans. 2. Market value information of securities (with market value, other than trading securities) As of March Types of securities Book value Market value Net gains/ losses Gains Losses Book value Market value Net gains/ losses Gains Losses Policy-reserve-matching bonds 18,228,648 19,392,601 1,163,953 1,189,139 (25,185) 17,415,476 18,106, , ,757 (28,794) Held-to-maturity debt securities 14,500 14,479 (21) 61 (82) 16,511 16, (39) Investments in subsidiaries and affiliates 7,711 21,406 13,695 13,695 7,711 34,062 26,351 26,351 Available-for-sale securities 16,558,688 18,085,285 1,526,597 2,067,918 (541,320) 15,947,266 17,144,379 1,197,112 1,827,671 (630,559) Domestic bonds 1,724,475 1,772,691 48,216 55,928 (7,711) 1,447,102 1,481,593 34,490 38,044 (3,553) Domestic stocks 4,652,436 5,596, ,490 1,389,380 (444,889) 4,718,455 5,905,992 1,187,537 1,539,836 (352,299) Foreign securities 9,624,725 10,166, , ,182 (73,314) 8,999,879 8,991,350 (8,529) 242,325 (250,854) Foreign bonds 8,095,784 8,508, , ,129 (47,833) 7,689,976 7,599,864 (90,111) 138,886 (228,997) Foreign stocks and other securities 1,528,940 1,658, , ,052 (25,480) 1,309,902 1,391,485 81, ,439 (21,856) Other securities 229, ,694 (7,960) 7,423 (15,383) 324, ,857 (16,844) 6,973 (23,817) Monetary receivables purchased 76,396 76,381 (15) 4 (19) 34,127 34, (30) Negotiable certificates of deposit 251, ,997 (2) (2) 423, ,995 (4) 0 (4) Total 34,809,548 37,513,773 2,704,225 3,270,814 (566,589) 33,386,965 35,301,529 1,914,563 2,573,956 (659,393) Domestic bonds 19,078,734 20,244,760 1,166,026 1,198,181 (32,154) 17,804,828 18,493, , ,448 (31,117) Domestic stocks 4,652,436 5,596, ,490 1,389,380 (444,889) 4,718,455 5,905,992 1,187,537 1,539,836 (352,299) Foreign securities 9,714,636 10,272, , ,684 (73,650) 9,095,298 9,115,769 20, ,362 (250,891) Foreign bonds 8,177,984 8,592, , ,936 (48,169) 7,777,684 7,690,221 (87,462) 141,572 (229,034) Foreign stocks and other securities 1,536,652 1,679, , ,748 (25,480) 1,317,613 1,425, , ,790 (21,856) Other securities 229, ,694 (7,960) 7,423 (15,383) 324, ,857 (16,844) 6,973 (23,817) Monetary receivables purchased 883, ,722 43,637 44,145 (508) 1,020,683 1,055,755 35,072 36,335 (1,262) Negotiable certificates of deposit 251, ,997 (2) (2) 423, ,995 (4) 0 (4) As of March Types of securities Book value Market value Net gains/ losses Gains Losses Policy-reserve-matching bonds 16,835,535 17,370, , ,694 (30,653) Held-to-maturity debt securities 19,522 19, Investments in subsidiaries and affiliates 62,165 86,172 24,006 24,006 Available-for-sale securities 14,969,667 16,811,804 1,842,136 2,207,938 (365,801) Domestic bonds 1,662,706 1,697,638 34,932 35,508 (575) Domestic stocks 4,767,514 6,439,520 1,672,005 1,903,019 (231,013) Foreign securities 7,757,947 7,909, , ,665 (109,399) Foreign bonds 6,482,201 6,579,520 97, ,817 (60,498) Foreign stocks and other securities 1,275,745 1,329,692 53, ,847 (48,900) Other securities 314, ,340 (15,830) 8,415 (24,246) Monetary receivables purchased 97,328 97,097 (230) 330 (561) Negotiable certificates of deposit 370, ,994 (5) 0 (5) Total 31,886,890 34,288,417 2,401,526 2,797,981 (396,454) Domestic bonds 17,370,556 17,931, , ,604 (24,436) Domestic stocks 4,821,968 6,507,838 1,685,869 1,916,883 (231,013) Foreign securities 7,857,734 8,017, , ,914 (111,904) Foreign bonds 6,574,277 6,670,197 95, ,923 (63,003) Foreign stocks and other securities 1,283,456 1,347,546 64, ,990 (48,900) Other securities 314, ,340 (15,830) 8,415 (24,246) Monetary receivables purchased 1,152,460 1,162,774 10,314 15,163 (4,849) Negotiable certificates of deposit 370, ,994 (5) 0 (5) Operational Data Note: The above table includes securities that are deemed appropriate as securities under the Financial Instruments and Exchange Act in Japan. 199

202 80. Market Value of Securities (General Account), continued 2. Market value information of securities (with market value, other than trading securities), continued Book value of securities without market value As of March Policy-reserve-matching bonds Held-to-maturity debt securities Unlisted foreign bonds Others Investments in subsidiaries and affiliates 247, , ,835 Available-for-sale securities 1,039,878 1,180,194 1,244,653 Unlisted domestic stocks (excluding over-the-counter stocks) 202, , ,507 Unlisted foreign stocks (excluding over-the-counter stocks) 692, , ,363 Unlisted foreign bonds 53,912 53,912 Others 144, , ,870 Total 1,287,790 1,364,275 1,425,489 Note: Of securities without market value, net losses on foreign exchange valuation of assets denominated in foreign currencies were as follows: (As of March 31, 2012: 47,025 million; March 31, 2011: 50,943 million; and March 31, 2010: 31,061 million.) 81. Market Value of Assets Held in Trust (General Account) As of March Assets held in trust Balance sheet amount 10,670 Market value 10,670 Net unrealized gains/losses Notes: 1. Market value calculations are based on prices rationally calculated by the trustees of assets held in trust. 2. Balance sheet amount includes net gains/losses on derivative transactions. Gains Losses Assets held in trust for investment As of March Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Assets held in trust for investment 2,479 10,670 79,793 Note: Balance sheet amount and net valuation gains/losses include net gains/losses on derivative transactions. Assets held in trust classified as policy-reserve-matching, held-to-maturity, and others No ending balance as of March 31, 2012, 2011 or Operational Data 200

203 82. Qualitative Information on Derivative Transactions (General Account: Excludes Proprietary Trading Securities) 1. Transaction details The following are derivative transactions that the Company uses: Interest-related: Interest futures, interest swaps, swaptions Currency-related: Exchange contracts, currency options, currency swaps Stock-related: Stock price index futures, stock price index options, stock options Bond-related: Bond futures, bond futures options, bond sales with attached options 2. Policy Given its goal of achieving efficient asset investment, the Company mainly uses derivatives for the purpose of controlling investment risks. 3. Purpose The Company mainly uses derivatives to hedge market risk exposures related to investment assets in order to ensure stable profit from assets entrusted to the Company by its policyholders. 4. Risk details The derivative transactions the Company conducts involve market risks (fluctuations in interest rates, stock prices, currency exchange rates, etc.) and credit risks (transaction partner s inability to fulfill obligations due to bankruptcy, etc.). The Company recognizes market risks as limited given that derivative transactions are mainly for the purpose of controlling investment risks. In terms of credit risks, the Company s transactions are through domestic and foreign financial instrument exchanges or with transaction counterparties with a high credit rating; thus, the risk of unfulfilled obligations remains low. 5. Risk management system The Company established a system that maintains the necessary transaction limits for derivative transactions based on the purpose and type of transaction. In addition, this system incorporates front office controls, whereby the back office confirms transaction details through reconciliation with external vouchers. Furthermore, the system is designed such that the state of market risks is monitored and analyzed quantitatively; information on the amount of risk, as well as on position and the status of profits and loss, is reported periodically to the Investment Risk Management Committee. 6. Supplementary explanation regarding quantitative information (1) Supplementary explanation regarding notional amount (amount of contract) The notional amounts for swap transactions and contract amounts of options transactions are nominal values related to interest conversions, etc., and are not meant to indicate a level of risk amount. The credit risk of derivative transactions refers to latent costs required to restore market position in the event a transaction partner defaults. The Company calculates this risk using the current exposure method. (2) Supplementary explanation regarding market price calculations Futures and other market transactions: Liquidation value or closing market price at year-end Exchange contract and currency options: Theoretical values based on Telegraphic Transfer Middle rate (TTM) and discount rates obtained from brokers Interest swap transactions, currency swaps: Theoretical present value calculated by discounting future cash flows based on published market interest rates (3) Supplementary explanation regarding transaction gain and loss The Company mainly utilizes derivative transactions as a complementary measure in controlling market risks inherent in spot investments. For example, foreign exchange forward contract and currency option transactions are used mainly to hedge fluctuations in foreign currency exchange rates; it is thus necessary to measure profits combined with foreign bonds, stocks and other foreign currency spot assets. 7. Hedge accounting methods Hedge accounting methodologies include fair value hedge accounting, deferred hedge accounting, exceptional accounting treatment ( Tokureishori ) for interest rate swaps, and designated hedge accounting ( Furiateshori ) for foreign exchange contracts and currency swaps. Effectiveness of hedging activities is mainly evaluated by ratio analysis to compare market value movements on the hedging instruments and the hedged items in accordance with the Company s internal risk management policies. 83. Credit Risk Amounts (General Account) As of March Notional principal (contract amount) Credit risk estimate Notional principal (contract amount) Credit risk estimate Notional principal (contract amount) Credit risk estimate Interest-rate swaps Currency swaps 377,367 33, ,987 22,537 14,694 1,184 Foreign exchange forward contracts 8,636, ,015 6,609,500 84,401 6,337,679 94,140 Interest options (purchase) Currency options (purchase) 124,725 1, ,000 3,110 Other derivative financial instruments Total 9,013, ,813 6,890, ,203 6,663,466 98,445 Operational Data Note: Excludes currency-related derivatives corresponding to debts and credits denominated in foreign currencies. 201

204 84. Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (General Account) 1. Proprietary trading securities account Bonds related No ending balance as of March 31, 2012, 2011 or General account (excluding proprietary trading securities) (1) Breakdown of gains/losses (with and without hedge accounting applied) Interest Currencies Stocks Bonds Others Total As of March Hedge accounting applied (109,143) (109,143) Hedge accounting not applied (80,516) (18) (80,534) Total (189,659) (18) (189,677) As of March Hedge accounting applied (81,201) (81,201) Hedge accounting not applied 932 (18) 914 Total (80,269) (18) (80,287) As of March Hedge accounting applied (101,313) (101,313) Hedge accounting not applied (10,188) 1 (10,186) Total (111,501) 1 (111,500) Note: Net gains/losses from applying the fair value hedge included in gain and loss on hedge accounting applied, and net gains/losses included in hedge accounting applied other than deferred gain to be amortized from the discontinuation of hedge accounting are recorded on the statements of income. (2) Breakdown of interest-rate-related derivative transactions No ending balance as of March 31, 2012, 2011 or (3) Currency-related As of March Over-the- Foreign Sold U.S. Dollar Contract amount 4,278,866 3,471,228 3,063,129 counter exchange Over 1 year forward Market value 4,335,084 3,501,219 3,149,249 contracts Net gains/losses (56,217) (29,990) ( 86,119) Euro Contract amount 1,157, , ,950 Over 1 year Market value 1,199, , ,033 Net gains/losses (41,965) (35,153) ( 1,083) Total including Contract amount 7,033,543 5,636,361 5,195,080 others Over 1 year Market value 7,202,841 5,745,491 5,314,358 Net gains/losses (169,297) (109,130) ( 119,278) Purchased U.S. Dollar Contract amount 615, , ,128 Over 1 year Market value 609, , ,699 Net gains/losses (6,359) 8,600 6,570 Euro Contract amount 545, , ,311 Over 1 year Market value 543, , ,529 Net gains/losses (1,439) 5,668 3,217 Total including Contract amount 1,443, ,761 1,012,893 others Over 1 year Market value 1,433, ,008 1,023,321 Net gains/losses (10,311) 18,247 10,427 Operational Data 202

205 84. Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (General Account), continued 2. General account (excluding proprietary trading securities), continued (3) Currency-related, continued As of March Over-the- Currency Sold Call U.S. Dollar Contract amount 124,725 counter options [ ] [149] [ ] Over 1 year [ ] [ ] [ ] Market value 126 Net gains/losses 23 Euro Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Total including Contract amount 124,725 others [ ] [149] [ ] Over 1 year [ ] [ ] [ ] Market value 126 Net gains/losses 23 Put U.S. Dollar Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Euro Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses [ ] [ ] [ ] Total including Contract amount others [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Purchased Call U.S. Dollar Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Euro Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Total including Contract amount others [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Put U.S. Dollar Contract amount 124, ,080 [ ] [149] [4,497] Over 1 year [ ] [ ] [ ] Market value 46 3,623 Net gains/losses (103) (873) Euro Contract amount 124,920 [ ] [ ] [4,109] Over 1 year [ ] [ ] [ ] Market value 3,275 Net gains/losses (834) Total including Contract amount 124, ,000 others [ ] [149] [8,607] Over 1 year [ ] [ ] [ ] Market value 46 6,899 Net gains/losses (103) (1,708) Currency swaps U.S. Dollar Contract amount 200,645 64,469 14,694 Over 1 year 199,602 64,469 14,694 Market value (6,257) 3,446 (943) Net gains/losses (6,257) 3,446 (943) Euro Contract amount 174,072 88,869 Over 1 year 174,072 88,869 Market value (3,607) 7,277 Net gains/losses (3,607) 7,277 Total including Contract amount 377, ,987 14,694 others Over 1 year 376, ,987 14,694 Market value (10,049) 10,694 (943) Net gains/losses (10,049) 10,694 (943) Total Net gains/losses (189,659) (80,269) (111,501) Operational Data Notes: 1. Brackets show option premiums recorded on the balance sheets. However, these option premiums include commitments made as of the balance sheet date. 2. Net gains/losses shows the difference between the contract amount and market value for forward agreements, the difference between option premiums and market value for options transactions, and the current market value or present value for swap transactions. 203

206 84. Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (General Account), continued 2. General account (excluding proprietary trading securities), continued (4) Stock-related As of March Over-the- Stock options Sold Call Contract amount counter [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Put Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Purchased Call Contract amount [65] [65] [28] Over 1 year [65] [65] [28] Market value Net gains/losses (18) (18) 1 Put Contract amount [ ] [ ] [ ] Over 1 year [ ] [ ] [ ] Market value Net gains/losses Total Net gains/losses (18) (18) 1 Notes: 1. Brackets show option premiums recorded on the balance sheets. However, these option premiums include commitments made as of the balance sheet date. 2. The net gains/losses shows the difference between option premiums and market value for options transactions. (5) Bond-related No ending balance as of March 31, 2012, 2011 or (6) Others No ending balance as of March 31, 2012, 2011 or Securitized Product Investments and Subprime-Related Investments Investments in securitized products and U.S. subprime-related investments during the fiscal year ended March 31, 2012 were as follows: The majority of securitized products were domestic residential mortgage-backed securities (RMBS), primarily Housing Finance Agency Bonds, and U.S. agency mortgage-backed securities (MBS). There were no direct investments in subprime-related products and there were no realized gains or losses related to such products during or at the end of the fiscal period. Operational Data [Investments in Securitized Products] Billions of Yen Market value Unrealized gain (loss) Gain (loss) on sales Domestic commercial mortgage-backed securities (CMBS) 14.1 (0.0) Other securitized products, etc. 4, (0.3) Asset-backed securities (ABS) 4, (0.3) Domestic RMBS 1, U.S. RMBS 2, (0.3) Credit-linked notes Total 4, (0.3) Notes: 1. Backed assets and the rankings of each investment product are disclosed on the Company s website. 2. Aside from the above, investments were made in subprime securitized products, within investment trusts and hedge funds. The exposure, which was calculated from the allocation ratio to the fund, was approximately 0.4 billion, and total indirect investment, including subsidiaries amounted to approximately 0.6 billion. There were no realized gains related to these. For further details, please see the Company s website at: (Japanese only) 204

207 SEPARATE ACCOUNT INDICATORS About the General Account and Separate Account A life insurance company classifies and manages its assets in two accounts, the separate account and the general account. Individual variable insurance, individual variable annuities and certain group annuities, which change in terms of insurance amount and accumulated value based on investment performance in assets, are managed as a separate account with a clear division from the general account. 85. Balance of Separate Account Assets, % As of March Individual variable insurance 101, % 109, % 120,824 Individual variable annuities 143, , ,792 Group annuities 900, ,045, ,154,136 Separate account total 1,146, % 1,311, % 1,449, Aasset Management Overview for the Fiscal Year Ended March 31, 2012 (Separate Account Assets for Individual Variable Insurance and Individual Variable Annuities) In the fiscal year ended March 31, 2012, domestic stock prices were weak because of the effects of the March 11, 2011 earthquake disaster and concerns that the problems over nuclear power plants would be prolonged. The Nikkei Stock Average recovered to the 10,000 yen level in July 2011, but the index fell significantly from August 2011 towards the end of the year mainly due to the debt problem in the eurozone. As the market well received the substantial progress in the depreciation of the yen and the monetary easing measures of Japan, the US and Europe, the domestic stock prices picked up after the new year. Consequently, the domestic stock prices rose through the year. (The Nikkei Stock Average increased approximately 3%.) In such operating environment, the investment return on individual variable insurance for the fiscal year ended March 31, 2012 was positive 1.07%. This also represented investment return of 34.94% (1.19% on an annualized bases) since November 1, 1986, when investment was first undertaken. In individual variable annuities, the Company continued its investment policy of holding a certain amount of cash and deposits to prepare for changes in insurance policies while maintaining, in principle, a high allocation ratio in investment trusts, the main investment vehicle for the separate account. Regarding Investment Return on the Separate Account for Individual Variable Insurance The investment return on the separate account for individual variable insurance reflects growth rates on premiums received from policyholders, less portions allocated for death protection, and is not total insurance premiums. Operational Data 205

208 STATUS OF SEPARATE ACCOUNT FOR INDIVIDUAL variable INSURANCE 87. Policies in Force (Separate Account for Individual Variable Insurance) Number of Policies, As of March Policies Amount Policies Amount Policies Amount Variable insurance (defined term type) 2,222 11,319 2,439 12,755 2,599 13,618 Variable insurance (whole life type) 36, ,758 37, ,336 38, ,945 Total 39, ,077 39, ,092 40, ,564 Note: Amounts include term life insurance riders. 88. Breakdown of Assets Year-End Balance (Separate Account for Individual Variable Insurance), % As of March Cash, deposits and call loans 6, % 4, % 5,006 Investment in securities 88, , ,879 Domestic bonds 22, , ,001 Domestic stocks 34, , ,801 Foreign securities 31, , ,077 Foreign bonds 10, , ,313 Foreign stocks and other securities 20, , ,763 Other securities Loans Others 7, , ,938 Allowance for doubtful accounts Total 101, % 109, % 120, Investment Income and Expenses (Separate Account for Individual Variable Insurance) Fiscal years ended March Interest, dividends, and other income 2,046 2,022 2,076 Gain on sales of securities 2,626 3,327 3,256 Gain on redemptions of securities 5 1 Gain on valuation of securities ,607 Foreign exchange gains, net 3 25 Gain on derivative financial instruments, net 394 Other investment income Loss on sales of securities 4,680 6,613 11,105 Loss on redemptions of securities Loss on valuation of securities (873) 1,617 (20,888) Foreign exchange losses, net 37 Loss on derivative financial instruments, net Other investment expenses Net investment income 888 (2,971) 19,143 Notes: 1. Investment income and investment expenses related to the separate account are recorded on the statements of income as gains/losses from separate account, net. 2. The net gains/losses on valuation of securities contains reversal for net gains/losses on valuation of securities from the previous fiscal year. 90. Market Value of Securities (Separate Account for Individual Variable Insurance) Operational Data Net valuation gains/losses on trading securities As of March Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Trading securities 88, ,467 (1,580) 105,879 24,

209 91. Market Value of Assets Held in Trust (Separate Account for Individual Variable Insurance) No ending balance as of March 31, 2012, 2011 or Qualitative Information on Derivative Transactions (Separate Account for Individual Variable Insurance) 1. Transaction details The following derivative transactions are currently used in the separate account. Currency related: Foreign exchange contract transactions Stock related: Stock index futures transactions 2. Policy Derivative transactions are used as complementary instruments with the aim of efficient asset investment, and are not used for speculative purposes to gain profit. 3. Purpose Derivative transactions are used to hedge against market risks that relate to assets held. 4. Risk details Derivative transactions conducted in the separate account are exposed to market risk (price fluctuation and foreign exchange risks). With respect to credit risk, the Company s transactions are implemented through domestic exchange markets or counterparties with high credit ratings, so that the credit risk is extremely low. 5. Risk management system Transaction execution is governed by internal rules such as limitations on transaction amounts. Transactions are executed under a framework including front office and back office functions, where the back office is completely separated from the front office and confirms transactions by verifying external vouchers. 6. Supplementary explanation of quantitative information Market transactions such as futures transactions use liquidation value or settlement prices to determine market value. Foreign exchange contracts use theoretical prices calculated by Nippon Life as based on reference prices, such as TTM rate and discount rates, matched to certain credits and debits denominated in foreign currencies. As for derivative transactions for the separate account for individual variable insurance, the Company does not apply hedge accounting. 93. Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (Separate Account for Individual Variable Insurance) 1. Breakdown of gains/losses (with and without hedge accounting applied) Interest Currencies Stocks Bonds Others Total As of March Hedge accounting applied Hedge accounting not applied (14) Total (14) As of March Hedge accounting applied Hedge accounting not applied (0) (157) (158) Total (0) (157) (158) As of March Hedge accounting applied Hedge accounting not applied (2) Total (2) Note: The net gains/losses without hedge accounting applied is recorded in the statements of income. 2. Interest rate-related No ending balance as of March 31, 2012, 2011 or Operational Data 207

210 93. Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (Separate Account for Individual Variable Insurance), continued 3. Currency-related As of March Over-the- Foreign Sold U.S. Dollar Contract amount ,038 counter exchange Over 1 year forward Market value ,048 contracts Net gains/losses 11 (1) (9) Euro Contract amount 1, Over 1 year Market value 1, Net gains/losses (6) (2) (3) Total Contract amount 2, ,221 including Over 1 year others Market value 2, ,246 Net gains/losses 6 (3) (24) Purchased U.S. Dollar Contract amount 1, ,042 Over 1 year Market value ,052 Net gains/losses (18) 0 9 Euro Contract amount Over 1 year Market value Net gains/losses (1) 1 4 Total Contract amount 2, ,201 including Over 1 year others Market value 2, ,223 Net gains/losses (21) 3 22 Total Net gains/losses (14) (0) (2) Note: The net gains/losses shows the difference between contract amount and market value for forward transactions. 4. Stock-related As of March Stock exchange Stock index futures Sold Contract amount Over 1 year Market value Net gains/losses Purchased Contract amount 1,395 1,967 2,268 Over 1 year Market value 1,422 1,809 2,424 Net gains/losses 27 (157) 155 Total Net gains/losses 27 (157) 155 Note: The net gains/losses shows the difference between contract amount and market value for forward transactions. 5. Bond-related No ending balance as of March 31, 2012, 2011 or Operational Data 6. Others No ending balance as of March 31, 2012, 2011 or

211 STATUS OF SEPARATE ACCOUNT FOR INDIVIDUAL Variable ANNUITIES 94. Policies in Force (Separate Account for Individual Variable Annuities) Number of Policies, As of March Policies Value Policies Value Policies Value Individual variable annuities 24, ,946 26, ,233 28, ,790 Note: Amounts represent policy reserves. 95. Breakdown of Assets Year-End Balance (Separate Account for Individual Variable Annuities), % As of March Cash, deposits and call loans % % Investment in securities 139, , ,692 Domestic bonds 25, , ,602 Domestic stocks Foreign securities Foreign bonds Foreign stocks and other securities Other securities 113, , ,090 Loans Others 4, , ,099 Allowance for doubtful accounts Total 143, % 156, % 174, Investment Income and Expenses (Separate Account for Individual Variable Annuities) Fiscal years ended March Interest, dividends, and other income Gain on sales of securities Gain on redemptions of securities Gain on valuation of securities 1,535 (940) 1,738 Foreign exchange gains, net Gain on derivative financial instruments, net Other investment income Loss on sales of securities 1,917 1,439 1,445 Loss on redemptions of securities Loss on valuation of securities (2,335) 2,552 (22,182) Foreign exchange losses, net Loss on derivative financial instruments, net Other investment expenses Net investment income 2,933 (4,073) 23,282 Notes: 1. Investment income and investment expenses related to the separate account are recorded in income as gains/losses from separate account, net. 2. Net gains/losses on valuation of securities contains reversal for net gains/losses on valuation of securities from the previous year. Operational Data 209

212 97. Market Value of Securities (Separate Account for Individual Variable Annuities) Net valuation gains/losses on trading securities As of March Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Balance sheet amount Net valuation gains/losses included in profits/losses Trading securities 139,237 3, ,920 (3,493) 168,692 23, Market Value of Assets Held in Trust (Separate Account for Individual Variable Annuities) No ending balance as of March 31, 2012, 2011 or Qualitative Information on Derivative Transactions (Separate Account for Individual Variable Annuities) No ending balance as of March 31, 2012, 2011 or Market Value of Derivative Transactions, Combined Total with and without Hedge Accounting Applied (Separate Account for Individual Variable Annuities) No ending balance as of March 31, 2012, 2011 or Operational Data 210

213 STATUS OF SEPARATE ACCOUNT FOR GROUP ANNUITIES 101. Separate Account Assets by Product (Separate Account for Group Annuities) As of March Separate account 1st treaty 763, ,311 1,062,622 Comprehensive account 517, , ,945 Account by investment categories 246, , ,676 Separate account 2nd treaty 126, ,058 81,988 Defined contribution pension plans 10,823 10,128 9,525 Total 900,761 1,045,498 1,154,136 Notes: 1. Separate account 1st treaty: Joint management of defined benefit corporate pension funds and employees pension funds Comprehensive account: Balanced portfolio management Account by investment categories: Investments made in specific assets for closer matching with customer needs 2. Separate account 2nd treaty: Independent management of annuity assets for each customer 3. Defined contribution pension plans: Jointly managed funds for defined contribution pensions 102. Status of First Treaty Comprehensive Account (Separate Account for Group Annuities) Figures in 103 are stated at fair market value, and rounded to the nearest whole unit. 1. Asset management principles and performance in the fiscal year ended March 31, 2012 Asset management principles The comprehensive account aims to achieve a balanced portfolio, with goals of moderate-risk, moderate-return. Based on the asset allocation for the fiscal year which is set within the allowable range of the standard asset allocation,* the Company makes adjustments to asset allocation in response to changes in domestic and foreign financial and economic developments. At the same time, the Company aims to improve total profitability through appropriate risk management for each asset. *Standard asset allocation refers to that asset allocation considered best based on a medium- to long-term investment period under a certain degree of risk tolerance. Performance in the fiscal year ended March 31, 2012 Since interest rates declined in Japan and abroad largely due to the debt problem in the eurozone and the proactive monetary easing measures of major countries, yields on both domestic and foreign bonds picked up (domestic bonds: 3.13%, foreign bonds: 5.05%). Consequently, investment returns for the current fiscal year (rate of change in unit prices) stood at 1.68%. 2. Asset allocation in the fiscal year ended March 31, 2012 (Comprehensive Account) Japanese yendenominated bonds Japanese yendenominated stocks Foreign currencydenominated bonds Foreign currencydenominated stocks* Asset allocation Asset allocation results (Fiscal years ended March 31) End of Mar. End of Dec. End of Sept. End of June End of Mar. 30.0% 28.0% 32.3% 31.2% 29.6% 32.6% Asset management results compared with standard asset allocation for 2012 The percentage of asset allocation to yen-denominated bonds on a yearly basis was high early in the fiscal year, declined in the first quarter, rose in the second quarter, and fell again in the fourth quarter. The percentage of asset allocation to yen-denominated stocks on a yearly basis was low early in the fiscal year, rose in the first quarter, declined in the third quarter, and increased again in the fourth quarter. The percentage of asset allocation to bonds denominated in foreign currencies on a yearly basis was low early in the fiscal year, rose in the second quarter, fell in the third quarter, and increased again in the fourth quarter. The percentage of asset allocation to stocks denominated in foreign currencies on a yearly basis was at the same level as last year, declined in the second quarter, and rose in the fourth quarter. Call loans and other short-term assets Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% * Of asset allocation to stocks denominated in foreign currencies of 21.0%, 2.0% was allocated to stocks in emerging countries (Asia). % Operational Data 211

214 102. Status of First Treaty Comprehensive Account (Separate Account for Group Annuities), continued 3. Movement of market value balance by asset type (Comprehensive Account) As of March Market value Market value Market value Japanese yen-denominated bonds 134, , ,334 Japanese yen-denominated stocks 170, , ,076 Foreign currency-denominated bonds 55,381 59,101 86,220 Foreign currency-denominated stocks 101, , ,245 Call loans and other short term assets 45,014 29,568 22,030 Total 505, , , Investment return ratio (Comprehensive Account) Fiscal years ended March Unit price fluctuation 1.68% (2.65)% 18.68% % 103. Status of First Treaty Accounts by Investment Category (Separate Account for Group Annuities) Figures in 104 are stated at fair market value, and rounded to the nearest whole unit. Operational Data 1. Asset management principles and performance in the fiscal year ended March 31, 2012 (accounts by investment categories) (1) Domestic bond accounts Asset management principles Nippon Life makes necessary adjustments to bring its portfolio mix in line with benchmarks for duration, maturity structure and portfolio diversification. The Company minimizes credit and liquidity risks by investing primarily in investment-graded securities. Benchmark: Nomura Bond Performance Index (overall) Performance in the fiscal year ended March 31, 2012 The duration was flexibly adjusted throughout the fiscal year as the Company carefully watched interest rates, domestic and overseas economic trends and financial regulatory authorities in various countries. Regarding the composition by type of bond, the weight of domestic bonds, industrial bonds, etc., was adjusted flexibly for the market trend. (2) Domestic equity accounts Asset management principles The Company s stock selection process emphasizes the analysis of fundamentals, and the Company makes adjustments as necessary to bring its portfolio mix in line with market benchmark. Benchmark: TOPIX (dividends included) Performance in the fiscal year ended March 31, 2012 Based on corporate research and analysis by analysts and analysis utilizing the Company s Stock Valuation System (SVS) to evaluate medium to long-term performance, the Company shifted to stocks with high expected returns. (3) Quantitative Investment Management Domestic Stock Account Asset management principles Utilizing a quantitative model, the Company selects stocks with a focus on those that are undervalued and have growth potential. Benchmark: TOPIX (dividends included) Performance in the fiscal year ended March 31, 2012 In order to maintain a low-priced, high-growth potential portfolio (with other risk characteristics in line with the benchmark) the Company rebalances (reshuffle) stocks on a regular basis. (4) OTC/small-cap equity accounts Asset management principles The Company s stock selection process emphasizes the analysis of fundamentals, and the Company makes necessary adjustments to keep its portfolio in line with benchmarks for portfolio mix and market diversification. The Company s primary investment targets are Japanese yen-denominated small-cap equities listed on the First Section of the Tokyo Stock Exchange (TSE) and Japanese yen- denominated equities not listed on the First Section of the TSE. Benchmark: Russell/Nomura Japan stock index (small-cap index) Performance in the fiscal year ended March 31, 2012 The Company shifted its stock selection process to a focus on earnings outlook and undervalued stocks with anticipated high returns. (5) Foreign bond accounts Asset management principles The Company makes adjustments as necessary to keep its portfolio in line with benchmarks for duration, country mix and currency mix. As a means of minimizing credit risk, country risk and liquidity risk, the Company invests mainly in government bonds of leading industrialized nations. Benchmark: Citigroup World Government Bond Index (excluding Japan, Japanese yen-based) Performance in the fiscal year ended March 31, 2012 Throughout the fiscal year, the Company made flexible adjustments to the duration. Regarding the composition by country, adjustments such as a continued underweighting of Portugal and Ireland in the eurozone were made for the market trend and other factors. The composition by currency was adjusted flexibly, such as the underweighting of euros. 212

215 103. Status of First Treaty Accounts by Investment Category (Separate Account for Group Annuities), continued (6) Foreign bond accounts with currency hedging Asset management principles The Company makes any necessary adjustments to keep its portfolio in line with benchmarks for duration and country mix. As a means of minimizing credit risk, country risk and liquidity risk, the Company invests mainly in government bonds of leading industrialized nations. In principle, the Company uses currency hedges as a means of avoiding currency risk. Benchmark: Citigroup World Government Bond Index (excluding Japan, yen-hedge basis) Performance in the fiscal year ended March 31, 2012 Throughout the fiscal year the Company made flexible adjustments to the duration. Regarding the composition by country, adjustments such as a continued underweighting of Portugal and Ireland in the eurozone, etc., were made for the market trend and other factors. (7) Foreign stock accounts Asset management principles The Company s stock selection process emphasizes analysis of fundamentals, and the Company makes adjustments, as necessary, to bring its portfolio mix in line with market benchmarks for country mix, currency mix and industry sector mix. Benchmark: Morgan Stanley Capital International Kokusai Index (dividend reinvestment, yen-basis, excluding withholding tax) Performance in the fiscal year ended March 31, 2012 The composition by region started with an underweighting of North America and underweighting of Asia and Oceania, and basically remained neutral in and after the second quarter. A breakdown by industry sector shows flexible distribution with an eye on business conditions and interest rate trends. the Company shifted to stocks with high expected returns based on SVS analysis of medium- to long-term performance. (8) Money market accounts Asset management principles These accounts are invested in call loans, deposits and other short-term financial instruments, with the aim of achieving stable income gain. Benchmark: Weighted average of unsecured call loan (overnight) rates Performance in the fiscal year ended March 31, 2012 In the interest of maintaining liquidity and in pursuit of stable earnings, the Company invested mainly in overnight unsecured call loans and threemonth short-term government securities. 2. Market value (accounts by investment category) As of March Market value Market value Market value Domestic bond accounts 89, , ,429 Domestic stock accounts 30,538 43,480 46,561 Quantitative investment management domestic stock account 6,362 19,128 24,371 OTC/small-cap equity accounts Foreign bond accounts 24,804 40,156 44,438 Foreign bond accounts with currency hedging 35, Foreign stock accounts 33,255 39,058 40,500 Money market accounts 11,180 9,964 17,559 Total 232, , , Investment return ratio (accounts by investment category) Fiscal years ended March Unit price fluctuation Unit price fluctuation Unit price fluctuation Domestic bond accounts 3.02% 2.21% 2.11% Domestic stock accounts 2.13 (8.15) Quantitative investment management domestic stock account 1.89 (8.79) OTC/small-cap equity accounts 8.29 (2.05) Foreign bond accounts 5.07 (8.14) (0.17) Foreign bond accounts with currency hedging 7.26 (0.02) 1.69 Foreign stock accounts Money market accounts % Operational Data 213

216 Status of Financial Assets (Consolidated) 104. Nippon Life Group Performance Summary of Operations for the Most Recent Fiscal Year The Nippon Life Group unified its efforts and concentrated on improving services and developing products to provide customers with the finest and the most advanced services and took the following measures in the fields of asset management and information technology. The Nippon Life Group has 10 consolidated subsidiaries and 4 equity method affiliates. (See p. 94) Asset Management Field To meet the diversified asset building needs of its individual customers, the Company worked to offer a wide range of products such as those that provide stable income or those that are managed globally through the discretionary investment and investment advisory businesses, as well as investment trusts of Nissay Asset Management Corporation, among others. In the fiscal year ended March 31, 2012, Nissay Asset Management recorded an 6.4% year-on-year decrease in assets under management to 5,104.6 billion, including a 3.5% decrease in the investment advisory business to 3,322.3 billion and a 11.2% decrease in the investment trusts business to 1,782.3 billion. Ordinary profit at Nissay Asset Management stood at 0.7 billion with net income of 0.3 billion. Information Technology Field Centered on Nissay Information Technology Co. Ltd., continued efforts to develop and strengthen a business processing system were made in order to enhance services for customers. Large system development projects were advanced including development for the launch of the New Integrated System for which the main system was fundamentally rebuilt in all areas and the whole process of customer services. In the fiscal year ended March 31, 2012, Nissay Information Technology had sales of 58.5 billion, down 6.9% year on year, ordinary profit of 1.4 billion, up 31.5% year on year, and net income of 0.6 billion, up 18.8% year on year. As a result of these overall activities, consolidated total ordinary income amounted to 7,167.9 billion, up 6.5% year on year. Total ordinary expenses amounted to 6,680 billion, up 2.7% year on year, while ordinary profit was billion, up 117.8%. After income taxes, tax adjustments, minority interests, extraordinary gains of 13.7 billion and extraordinary losses of 22.4 billion, net surplus in the current year decreased by 0.2% to billion. On the consolidated balance sheet, surplus at the end of the fiscal year amounted to billion and total assets rose 2.4% to 51,166.9 billion Principal Indicators of Operating Performance (Consolidated) Billions of Yen Fiscal years ended March Total ordinary income 7, , ,689.8 Ordinary profit Net surplus Comprehensive income (217.0) Net cash provided by operating activities 1, , ,428.3 Net cash used in investing activities (1,914.3) (2,113.3) (1,164.6) Net cash provided by (used in) financing activities 73.4 (11.2) 43.2 Billions of Yen, Number, % As of March Total assets 51, , ,850.3 Solvency Margin Ratio 583.1% % % Cash and cash equivalents at the end of the year ,250.3 Number of consolidated subsidiaries and affiliates Number of affiliates accounted for under the equity method Number of employees 72,522 72,914 70,085 Note: Number of employees shows the total number of employees at Nippon Life and its consolidated subsidiaries, excluding employees on loan to other companies, at the fiscal year-end. Operational Data 214

217 106. Status of Non-Performing Assets According to Borrower s Classification (Consolidated), % As of March Bankrupt and quasi-bankrupt 1 12,751 12,897 13,513 Doubtful 2 24,858 26,884 28,664 Substandard 3 12,278 11,298 10,534 Subtotal 49,888 51,080 52,711 [Ratio to Total] [0.43%] [0.45%] [0.50%] Normal 4 11,473,673 11,210,870 10,563,650 Total ,523,561 11,261,951 10,616,362 Notes: 1. 1) Bankrupt and quasi-bankrupt loans are non-performing assets and similar loans that have fallen into bankruptcy due to reasons including initiation of bankruptcy proceedings, start of reorganization proceedings, or submission of an application to start rehabilitation proceedings. 2) Doubtful loans are non-performing assets with a strong likelihood that loan principal cannot be recovered or interest cannot be received according to the contract, because of difficulties in financial condition and business performance of the debtor, who has not yet entered into bankruptcy. 3) Substandard loans include loans that are delinquent for over three months and restructured loans. Loans that are delinquent for over three months are loans with principal or interest being unpaid for over three months counting from the day after the due date based on the loan agreement (excluding 1) and 2) in the above notes). Restructured loans are loans that provide certain concessions favorable to the borrower with the intent of supporting the borrower s restructuring. Examples of such concessions include reducing or exempting interest, postponing principal or interest payments, releasing credits, or providing other benefits to the borrowers (excluding 1) and 2) in the above notes and loans that are delinquent for over three months). 4) Normal loans are loans that do not fall under the classifications for 1) to 3) in the above notes, and where the debtor has no financial or business performance problems. 2. The table includes loans, securities loaned, accrued interest, suspense payments and customers liability for acceptances and guarantees and private placement guarantee by financial institutions. 3. Bankrupt and quasi-bankrupt loans, reorganization and other proceedings are directly deducted from total loans as estimated uncollectible amounts calculated by subtracting estimated collectable amounts based on collateral and guarantees from total loans. These amounts for bankrupt and quasi-bankrupt were 2,668 million, 3,953 million and 14,732 million as of March 31, 2012, 2011 and 2010, respectively Status of Risk-Monitored Loans (Consolidated), % As of March Loans to bankrupt borrowers 1 3,042 3,138 3,250 Delinquent loans 2 34,561 36,640 38,915 Loans that are delinquent for over three months 3 Restructured loans 4 12,278 11,298 10,534 Total ,883 51,078 52,700 [Ratio to total loans] [0.58%] [0.59%] [0.61%] Notes: 1. For loans to bankrupt borrowers and quasi-bankrupt borrowers (including collateralized and guaranteed loans), an estimated uncollectible amount (calculated by subtracting estimated collectable amounts based on collateral and guarantees from total loans) is directly deducted from the total loan amount. The amounts of loans to bankrupt borrowers were 808 million, 1,180 million and 11,008 million as of March 31, 2012, 2011 and 2010, respectively. The amounts of delinquent loans were 1,860 million, 2,772 million and 3,723 million as of March 31, 2012, 2011 and 2010, respectively. 2. 1) Loans to bankrupt borrowers are loans with principal or interest payments being overdue for a significant period of time and interest not being accrued including the following: (a) loans to borrowers that are legally bankrupt through filings for proceedings under the Corporate Reorganization Act, Civil Rehabilitation Act, Bankruptcy Act, or Company Act, (b) loans to borrowers that have notes suspended from being traded, or (c) loans to borrowers that have filed for legal proceedings similar to the aforementioned proceedings based on overseas laws. 2) Delinquent loans are loans with interest not accrued and exclude loans to bankrupt borrowers and loans with interest payments extended with the objective of restructuring or supporting the borrowers. 3) Loans that are delinquent for over three months are loans with principal or interest unpaid for over three months counting from the day after the due date based on the loan agreement. Note that the account does not include loans to bankrupt borrowers and delinquent loans. 4) Restructured loans are loans that provide certain concessions favorable to the borrower with the intent of supporting the borrower s restructuring, such as by reducing or exempting interest, postponing principal or interest payments, releasing credits, or providing other benefits to the borrowers (excluding loans to bankrupt borrowers and delinquent loans from above, and loans that are delinquent for over three months). 3. Based on the results of assets self-assessment, accrued interest on loans is not recorded as revenues for obligors that are bankrupt, essentially bankrupt or nearing bankruptcy. Operational Data 215

218 108. Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries (Consolidated Solvency Margin Ratio) As of March Solvency margin gross amount (A) 5,883,034 Foundation funds (kikin) and other reserve funds: 2,882,927 Foundation funds and others 1,427,666 Reserve for price fluctuations in investments in securities 333,710 Contingency reserve 775,654 Extraordinary contingency reserve General allowance for doubtful accounts 12,295 Others 333,600 Net unrealized gains/losses on available-for-sale securities 90% 1,364,200 Net unrealized gains/losses on real estate 85% 16,958 Excess of continued Zillmerized reserve 1,659,986 Qualifying subordinated debt Excess of continued Zillmerized reserve and qualifying subordinated debt not included in margin calculations Deduction clause (73,732) Others 32,693 Total amount of risk [{(R1 2 + R5 2 ) 1/2 + R8 + R9} 2 + (R2 + R3 + R7) 2 ] 1/2 + R4 + R6 (B) 2,017,780 Underwriting risk R1 139,799 General underwriting risk R5 Huge disaster risk R6 Underwriting risk of third-sector insurance R8 74,872 Underwriting risk related to small amount and short-term insurance providers R9 Anticipated yield risk R2 401,939 Minimum guarantee risk R7 10,285 Investment risk R3 1,550,305 Business management risk R4 43,544 Solvency margin ratio (A) x 100 (1/2) x (B) 583.1% Notes: 1. The amounts and figures in the table above are calculated based on Article 86-2 and Article 88 of the Ordinance for Enforcement of the Insurance Business Act and the Financial Services Agency Public Notice No. 23 of The amount of foundation funds and others represents the amount after the appropriation of surplus. 3. The standard method is used for the calculation of the amount equivalent to minimum guarantee risk R Status of Insurance Claims Paying Ability of Insurance Subsidiaries (Solvency Margin Ratio) Not applicable Segment Information For the fiscal year ended March 31, 2010 to the fiscal year ended March 31, 2012, the Company and its consolidated subsidiaries engaged in insurance and insurance-related businesses (including asset management-related business and general administration-related business) in Japan and overseas. Segment information and its related information are omitted because there are no other significant segments to report. * Subsidiary is defined in Article 2(12) of the Insurance Business Act and in Article (3) of the Order for Enforcement of the Insurance Business Act. Operational Data 216

219 Policyholder Protection Systems Early Correction Safeguard System Early correction safeguarding is a system designed to protect policyholders and ensure sound and appropriate operations at insurance companies. When an insurance company s solvency margin ratio falls below a certain level, depending on the circumstances, the regulatory agency may issue a directive to the insurance company to improve its operations. An insurance company is subject to such a directive when its solvency margin ratio falls below 200%. The action standards and directives are categorized in the table on the right. Depending on the assets and liabilities of the insurance company, as well as the management improvement plans submitted to the regulatory agency, additional directives may be issued for classifications other than the solvency margin ratio in the table on the right. Action Standards and Directives Classification according to solvency margin First classification Under 200% Over 100% Second classification Under 100% Over 0% Third classification Under 0% Directive Directive to propose and implement the management improvement plan Directive to discontinue or limit policyholder dividends, directive to change calculation methods for new policies (anticipated rate of return, etc.) Directive to halt all or a portion of operations Bankruptcy Proceedings for Life Insurance Companies When a life insurance company enters bankruptcy, the following two proceedings are taken to dispose of assets: 1. Corporate rehabilitation proceedings based on the court-guided rehabilitation law This proceeding is taken under the supervision of a court of law. First, the bankrupt insurance company petitions the court to start rehabilitation procedures (the commissioner of the Financial Services Agency in Japan can also be petitioned). The court of law that receives this petition decides to start the procedures and appoints an administrator. The court-appointed administrator formulates a rehabilitation plan for transferring policyholders while managing and examining the operations and financial assets of the bankrupt insurance company. Through the decisions of related parties, the court-appointed administrator requests authorization from the court of law. After authorization is granted, the administrator executes the disposal of assets based on the rehabilitation plan. 2. Government proceedings based on the Insurance Business Act These proceedings are based on directives issued by the commissioner of the Financial Services Agency. The commissioner of the Financial Services Agency orders the cessation of all or a portion of operations at the bankrupt insurance company, and appoints an insurance administrator to dispose of financial assets under management and operations. The insurance administrator manages and supervises the operations and financial assets of the bankrupt insurance company, creates plans for the management of operations and financial assets; including the transfer of insurance policies; and seeks approval from the commissioner of the Financial Services Agency. After approval is granted, the insurance administrator disposes of the assets according to the plan. There are no clear standards as to which of the aforementioned procedures will be taken, and there are no differences in the indemnification through protective measures (see next page) between the two procedures. Life Insurance Policyholders Protection Corporation of Japan The Life Insurance Policyholders Protection Corporation of Japan ( hereinafter Policyholders Protection Cor pora tion ) is a corporate entity that was established in December 1998 through the Insurance Business Act. In the event that a life insurance company goes bankrupt, this entity will protect policyholders through a mutual support system. Members and Financial Resources Nippon Life and other life insurance companies that operate in Japan are members of the Policyholders Protection Corporation, and financial resources are, in principle, contributions paid by these members. However, until the end of March 2017, in the event that membership contributions from life insurance companies are insufficient as financial support to a life insurance company that goes bankrupt, the Japanese government may provide financial assistance to the Policyholders Protection Corporation through Diet deliberations. Main Operations In the event of a bankruptcy of a life insurance company, the Policyholders Protection Corporation performs the following operations through a mutual support system for the purpose of protecting policyholders. (Primary Operations of the Policyholders Protection Corporation) 1. Provides financial assistance to savior companies that take over in surance policies 2. Takes over insurance policies in the event that no savior company steps forward 3. Acts as a procedural representative for insurance policyholders in the event that the bankruptcy undergoes rehabilitation proceedings 217

220 Main Content of Indemnification In the event of a bankruptcy of a life insurance company, policy indemnification is as follows: Type of insurance Individual insurance Group insurance Types of coverage (Note 1) General policies Policy reserves 90% High assumed interest rate Policy (Notes 2, 4) policies reserves (Notes 1, 3) (90% Set rate) (Note 1) General policies Policy reserves 90% High assumed interest rate Policy (Notes 2, 4) policies Portion related to separate accounts of group annuity policies reserves (Notes 1, 3) (90% Set rate) Not eligible for (Note 5) indemnification Notes: 1. Policy reserves are reserves for future insurance claims, annuity and benefit payments, accumulated through insurance premiums and investment returns. This system is not the indemnification for insurance claims, annuities and other benefits, but the indemnification for policy reserves. Accordingly, 90% of pension resource coverage attached to individual variable annuity insurance is not eligible for indemnification. 2. High assumed interest rate policies* 1 are policies for which assumed interest rates regularly exceeded reserve interest rates* 2 during the five years preceding bankruptcy. *1: Reserve interest rates are determined by the Commissioner of the Financial Services Agency and the Finance Minister. The current reserve interest rate is 3%, which may be confirmed on the website of Nippon Life or the Policyholders Protection Corporation. *2: When assumed interest rates are different for primary policies and for riders within one insurance policy, decisions of whether or not such policies fall under the category of a high assumed interest rate policy are made for both the primary policy and the rider. 3. Set rate = (sum of assumed interest rates for the previous five years less reserve interest rates) / 2 4. In the event that assumed interest rates are different for each insured when the insured are contributing insurance premiums, each insured shall be deemed to have concluded their own insurance policy, and it shall be determined whether or not such a policy falls into the category of a high assumed interest rate policy. However, regarding defined contribution annuity insurance policies, regardless of whether or not the insured is contributing premium, it shall be determined whether or not each insured s policy falls into the category of a high assumed interest rate policy. 5. In rehabilitation procedures, it has become possible to create a rehabilitation plan in which policy reserves that fall into this category are not reduced (whether or not the reserves are actually reduced shall be determined in each individual rehabilitation procedure). Framework of Life Insurance Policyholders Protection Mechanisms When a savior insurance company steps forward Bankrupt life insurance company Payment of covered insurance benefits Life insurance policyholders Financial assistance for payment of covered insurance benefits Transfer of all or a portion of insurance policies Merger and stock acquisition Purchase of insurance benefits requisition Payment of insurance benefits Life Insurance Policyholders Protection Corporation of Japan Savior insurance company Financial assistance When a savior insurance company does not step forward Bankrupt life insurance company Payment of covered insurance benefits Life insurance policyholders Financial assistance for payment of covered insurance benefits Underwriting of insurance policies Transfer of insurance policies Purchase of insurance benefits requisition Payment of insurance benefits Life Insurance Policyholders Protection Corporation of Japan Insurance company receiving transfer of insurance policies Payment of contributions Lending Fiscal measures Payment of contributions Lending Fiscal measures Life insurance company and member of protection organization Private-sector financial institution National government Life insurance company and member of protection organization Private-sector financial institution National government Information on the previous page and this page, including that regarding the scope of policies eligible for indemnity and the limit of indemnity for eligible policies, is based upon current legal statutes, and is subject to change in the future in accordance with revisions to those legal statutes. (July 2012) 218

221 WORLDWIDE NETWORK Headquarters Name Address/Department Tel/Fax Osaka Head Office , Imabashi, Chuo-ku, Osaka , Japan Tel: Tokyo Headquarters 1-6-6, Marunouchi, Chiyoda-ku, Tokyo , Japan Tel: Overseas Representative Offices Business Name Address Tel/Fax Overseas Representative Office New York Representative Office 277 Park Avenue, 34th Floor, New York, NY 10172, U.S.A. Tel: Fax: London Representative Office 1-5 Queen Street, London EC4N 1SW, U.K. Tel: Fax: Frankfurt Representative Office An der Hauptwache 5, 60313, Frankfurt am Main, Germany Beijing Representative Office Chang Fu Gong Office Building, Room 4007 Jia 26, Jian Guo Men Wai Dajie Beijing, , China Tel: Fax: Tel: Fax:

222 Subsidiaries Business Name Address Tel/Fax Insurance and Insurance Related Nippon Life Insurance Company of America NLI Insurance Agency, Inc. Eastern Region Office Atlantic Region Office 655 Third Avenue, 16th Floor, New York NY 10017, U.S.A. 655 Third Avenue, 18th Floor, New York NY 10017, U.S.A Atlantic Avenue, Suite 189, Manasquan NJ 08736, U.S.A. Central Region Office 20 North Martingale Road, Suite 150, Schaumburg IL 60173, U.S.A. South Eastern Region Office 7000 Central Parkway, Suite 1670, Atlanta, GA 30328, U.S.A. South Western Region Office One Riverway, Suite 1700, Houston TX 77056, U.S.A. Western Region Office 445 South Figueroa Street Suite 2305, Los Angeles CA 90071, U.S.A. Research NLI International Asia Pte. Ltd. 80 Raffles Place, #24-22 UOB Plaza 2 Singapore Asset Management Real Estate Investment NLI International Inc. NLI International PLC Nissay Schroders Asset Management Europe Limited Nissay Schroders Asset Management Asia Limited NLI Properties West, Inc. 277 Park Avenue, 34th Floor, New York, NY 10172, U.S.A. 1-5 Queen Street, London EC4N 1SW, U.K. 31 Gresham Street, London EC2V 7QA, U.K. 65 Chulia Street #46-00, OCBC Centre, Singapore Park Avenue, 34th Floor, New York, NY 10172, U.S.A. Tel: Fax: Tel: Fax: Tel: Tel: Fax: Tel: Fax: Tel: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax:

223 AFFILIATES Business Name Address Tel/Fax Insurance and Insurance Related Asset Management Reliance Life Insurance Company Limited Nissay-Greatwall Life Insurance Co., Ltd. Bangkok Life Assurance Public Company Limited PanAgora Asset Management, Inc. 9th Floor/10th Floor, Building No. 2, R-Tech Park, Nirlon Compound, Next to Hub Mall Behind I-Flex Building, Goregaon, (East), Mumbai , India Room 08T70, 8th Floor, Shanghai World Financial Center, No.100 Century Avenue, Pudong New Area, Shanghai, China 23/ Royal City Avenue, Rama 9 Road Huaykwang, Bangkok 10310, Thailand 470 Atlantic Avenue, 8th Floor, Boston MA 02110, U.S.A. Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax:

224 Nippon Life Insurance Company Osaka Head Office: , Imabashi, Chuo-ku, Osaka , Japan Tel: Tokyo Headquarters: 1-6-6, Marunouchi, Chiyoda-ku, Tokyo , Japan Tel: Printed in Japan