Investment EnvironmentAt the beginning of fiscal 2014, the yield on 10-year Japanese Government Bonds (JGBs)—the prime indicator of domestic long-term interest rates—stood at 0.64%. The yield temporarily fell to under 0.20% due partly to the impact of lower Eurozone interest rates following additional monetary easing by the European Central Bank (ECB). Other factors included the Bank of Japan (BOJ)’s expansion of the quantitative and qualitative monetary easing (QQE), along with a drop in crude oil prices. After that, the bond yield rallied to 0.40% at the close of fiscal 2014, supported mainly by a rise in the U.S. interest rates.In the domestic stock market, the Nikkei 225 Average started fiscal 2014 at ¥14,870. It temporarily lost some ground based on concerns about a downturn in the Japanese economy, mainly in response to the consumption tax hike in April 2014. However, the yen started to weaken further as the BOJ expanded its QQE, which gave rise to expectations of higher corporate earnings leading to an upturn in the Nikkei index. Thereafter, the index traded in a narrow range before tracking upwards around the fiscal year-end. This rebound was mainly based on expectations of capital inflows stemming from additional monetary easing by the ECB. Consequently, the Nikkei 225 Average ended fiscal 2014 at ¥19,206.On the foreign exchange markets, the yen stood at ¥103.23/$1 at the start of fiscal 2014. The yen remained mostly range-bound against the U.S. dollar until mid-August. Thereafter, the dollar appreciated sharply against the yen due to rising expectations for a U.S. economic recovery, the end of a monetary policy of quantitative easing by the Federal Reserve, and the BOJ expanded its QQE. From the end of December 2014, the yen remained mostly flat in a high range against the dollar, ending the fiscal year at ¥120.17 against the dollar.March 31, 2014March 31, 2015Long-term interest rates (10-year JGB yield)0.64%0.40%Stock market (Nikkei 225 Average)¥14,827.83¥19,206.99Foreign exchange market (¥/$ rate)¥102.92¥120.17JGB: Japanese Government BondInvestment PolicyZenkyoren is engaged in both the life and non-life insurance business. Moreover, most of our liabilities are liability reserves at fixed long-term interest rates because the main products we market are long-term insurance policies with predetermined fixed rates of return.To secure funds for paying claims and other insurance refunds in the future, Zenkyoren invests mainly in fixed-income assets (public and corporate bonds, and loans) denominated in yen. In order to enhance profitability, it also invests in some equities and foreign bonds.Working Assets (¥ Billion)Breakdown of Working AssetsASSET MANAGEMENT Highlights of Investment in Fiscal 201460,00045,00015,00030,0000Fiscal Year201020112012201352,3492014■ Securities95.3% ■ Public and corporate bonds85.8% ■ Foreign securities5.3% ■ Equities2.5% ■ Other securities1.8%■ Loans receivable2.5%■ Real estate investments0.6%■ Cash, bank deposits, and call loans1.0%■ Miscellaneous items0.6%ANNUAL REPORT 201510