Message from the President

Let me express my deepest appreciation to all stakeholders for the continued support and interest you have extended to the Sony Financial Group (SFG). Now that we have entered the second year of our medium-term business plan, I would like to convey again our thoughts on the medium-term plan, the new corporate philosophy SFG formulated in April of this year “Mission, Vision & Values”, and the purpose of renewing our management structure in June.

Environmental changes that reshape the world

At present, environmental change is accelerating and advancing dramatically in qualitative aspects, so we expect in another 10 years the world will be an entirely different place. Looking back at the past decade, many environmental changes have occurred, for example, various technological advances have affected our lives, and demographic changes such as family composition have changed. SFG has provided new services that take into consideration the diversifying needs of customers even with the stagnant market. As a result, Sony Life has steadily increased its policies in force and increased its share of the life insurance market. Sony Assurance has also continued to grow as a leader in direct automobile insurance. In addition, Sony Bank now trails closely behind the megabanks in Japan in the market for individual foreign currency deposits, and has steadily increased its number of mortgage loans. Indeed, SFG companies have achieved an adequately strong presence among existing players in these markets.

However, it would be overly optimistic for us to forecast that our future will remain on the same trajectory of business development as in the past. Companies will be affected by not only technological advances and changes in population trends, but also changes in the economic environment such as continued long-term slow growth. Changes in expectations for financial services represented by “customer-first business operations” will also challenge the conventional ways that financial services and companies are managed.

Financial services are no longer provided only by traditional financial institutions, with players other than banks appearing in the field of settlements, for example. Providing new value is essential in order to survive in the harsh new world where any industry can be disrupted. Providing added value based on technology is the way for us to achieve further growth. In the past, we found a way to provide existing financial services in a more streamlined manner and entered in the markets for respective businesses. Once more, by providing new value that customers can really feel, we hope to achieve our next great success and achieve sustainable growth.

Two challenges

Based on this idea, our medium-term business plan foresees changes in the next 10 years, uses the first three years to prepare, and considers which challenges to take on and how to implement this. We believe that the hurdles SFG must clear in order to achieve sustainable growth are that we must undertake two challenges of differing natures. For existing businesses, we must improve our current operations and further refine them so that they are more in line with customers’ needs. Simultaneously, we will use the assets of our existing businesses to adapt to environmental changes and provide new value that does not lie on an extension of our present trajectory. In essence, this means accepting and expanding upon divergent ideas.

In order for our existing businesses to continue growth according to their potential, we must achieve steady growth by increasing the degree of freedom with which each company may act, and also aim for growth beyond the scope of our existing businesses in response to environmental changes. It is our intent to provide services that exceed customers’ expectations by making full use of the Sony Group’s technology, without confining ourselves to our past achievements.

As a specific move in our medium-term business plan, we have established Sony Financial Ventures in 2018, which will be responsible for our venture capital business. We will strengthen our existing businesses in SFG companies and create new high value-added financial services by investing in, and promoting partnership and collaboration with, venture companies that have unique strengths in new movements in the financial field such as Fintech. By developing our venture capital business, we will be able to access the frontlines of Fintech, which is a footing we must absolutely hold now as a financial institution. I consider it essential for us to not only have a deep knowledge of the field on the frontlines, but also be able to act taking into consideration the possibility of collaboration from an early stage.

Building a stronger foundation for management

It is also necessary for us to have a solid promotion and management system in order to carry out the reforms I have described above. To do so, it is crucial that we strengthen our governance. Our stakeholders are also strongly requesting that we make this change. Therefore, SFG has strengthened its governance system in order to build a better foundation for taking on the two challenges of “growing our existing businesses” and “growing beyond the scope of our existing businesses” by executing reforms. Specifically, we reviewed structure of SFH’s Board of Directors with the purpose of separating “supervision and execution.” We received an approval at our most recent General Meeting of Shareholders to restructure the Board of Directors so that it consists of 10 members, four of whom are outside directors, three of whom are from Sony Corporation which holds approximately 65% of shares in SFH, and three of whom are executive directors of SFH.

Until June, the presidents of our major subsidiaries have concurrently served as Directors of SFH to ensure efficiency. However, in order to adapt to the harsh environment we are in, we decided that it would be better for them to concentrate more on the execution of their respective businesses.

Sustainability and the pursuit of the original will of SFG

The theme of our current medium-term business plan is to take on the challenge of new growth. As we aim for the next opportunity for growth, SFH must create sustainable value in the long term. As part of that, we returned to the original will and reviewed the positioning of SFG, which now operates a wide range of businesses including life insurance, non-life insurance, banking, and nursing care. Based on the desire for our stakeholders to feel a sense of enrichment and contribute to the creation of a sustainable society, we have identified the Group’s “Mission” and “Vision,” so that all of the Group employees who are involved in our various businesses can move forward together in a common direction, and have also formulated the Group’s “Values,” which are treasured by each employee.

We recognize that SFG is expected to provide high-value-added products and services, as stated in our Vision. While the urgency of applying reforms to our business style is growing, the services we have provided from our origin, to work “for the customer,” will continue to be in demand as long as people go about their daily lives. We will contribute to society by providing the best possible services to customers, fulfilling the essential needs of people and society, and meeting their expectations for services that would be nice to have. In doing so, I believe that we can realize sustainable growth, make our stakeholders feel a sense of enrichment, and build fruitful win-win relationships with each of our stakeholders. We will do our best to make this happen.

We look forward to your continued support and interest in our efforts.