Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Investor Presentation (July 2023)
52 slides from Lifenet Insurance's investor presentation, July 2023
Slide 1: Presentation Material for Business Plan and Growth Potential
Presentation Material for Business Plan and Growth Potential July 2023 LIFENET INSURANCE COMPANY Copyright© LIFENET INSURANCE COMPANY All rights reserved. 0
Slide 2: Table of Contents
Table of Contents I. Company Overview and Business Model II. Japanese Life Insurance Industry Trends Ⅲ. FY2022 Results Ⅳ. Growth Strategy Ⅴ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 1
Slide 3: Lifenet is…
Lifenet is… ◼ Lifenet’s management philosophy is helping our customers embrace life more fully by offering comprehensible, cost- competitive and convenient products and services based on the highest levels of business integrity. ◼ With the internet as our main sales channel, we utilize technology an
Slide 4: Lifenet's Mission
Lifenet’s Mission ◼ Customer’s pain points related to life insurance are lying all stage from when they search insurance to claim benefits. ◼ Based on LIFENET Manifesto “Comprehensible, Cost-Competitive, Convenient”, we aim to cope with these pain points by providing better products and services, wh
Slide 5: LIFENET Manifesto
LIFENET Manifesto ◼ The Lifenet Manifesto is our guiding principles for our company since business commencement. Comprehensible, Cost-Competitive, Convenient I. Our Guiding Principles II. Making Life Insurance Accessible Again - Headache-free (1) Creating the future of the life insurance without los
Slide 6: Lifenet at a Glance
Lifenet at a Glance History Stock Information • Oct. 2006 Established • Tokyo Stock Exchange, Growth – Market of the high growth and emerging stocks • May 2008 Commenced operation • Ticker: 7157 • Mar. 2012 Listed on Tokyo Stock Exchange, Mothers • Total number of authorized shares: 200,000,000 • Ma
Slide 7: Management Team (as of June 25, 2023)
Management Team (as of June 25, 2023) ◼ Management team is comprised of individuals of various backgrounds across a wide age range from 30s and 60s. Directors Yasuhiro Koba Ryosuke Mori Director, Executive Vice President Representative Director and President Executive Officer of Business Development
Slide 8: Business Model with Manifesto
Business Model with Manifesto High integrity ◼ Actively disclose relevant information ◼ Communicate with customers proactively Comprehensiveness ◼ Provide very simple and pure protection products ◼ Develop easy-to-understand and customer friendly website Cost-Competitiveness ◼ Offer competitively pr
Slide 9: Management with High Level of Business Integrity
Management with High Level of Business Integrity ◼ We provide life insurance online and at the same time, we put emphasis on transparency and disclose our management, products, employees, and workplace through our website. Transparent disclosure Transparent Company • Disclosure of insurance premiums
Slide 10: Simple Products
Simple Products ◼ We offer simple and competitively priced pure protection products. Internet-based low cost operations enable us to be extremely price competitive. ◼ We have provided competitively priced term life, which is our main product. We offer industry-first coverage3 for long-term disabilit
Slide 11: Develop Easy-to-understand and Customer Friendly Website (e.g. Quotes)
Develop Easy-to-understand and Customer Friendly Website (e.g. Quotes) ◼ We are striving to provide a stress-free customer experience through a series of improvement activities to enhance the UI/UX from the customer's perspective. Select Select products birthday Select sex Total monthly premium All
Slide 12: Competitively Priced Products
Competitively Priced Products ◼ We do not have sales representatives or branches for selling insurance. We use the Internet to sell our products. This enables us to provide products with inexpensive insurance premiums. Structure of premium Savings of insurance premium1 (Life insurance) after switchi
Slide 13: Pursuing Convenience
Pursuing Convenience ◼ We are striving to provide the convenience that only an online insurance company can provide. We use technology to establish an environment that enables customers to request insurance consultation, apply for insurance, and claim benefits 24 hours a day, 365 days a year, as it
Slide 14: External Evaluations
External Evaluations ◼ Our products and services are well supported by customers and receive high evaluations. Awarded in FY2022 J.D. Power 2023 Japan Life Insurance Contract Customer Satisfaction Study ＜Direct Segment＞1 1st for 3rd consecutive year Lifenet’s Insurance Products Lifenet's Contact Cen
Slide 15: Unique Customer Base
Unique Customer Base ◼ New customers in their 20s to 40s consist of 74% of our policyholder base, with more than 50% of new policyholders taking out life insurance for the first time. Number of new policies by age group Customer Situation3 We are attracting younger customers and building a good The
Slide 16: Table of Contents
Table of Contents I. Company Overview and Business Model II. Japanese Life Insurance Industry Trends Ⅲ. FY2022 Results Ⅳ. Growth Strategy Ⅴ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 15
Slide 17: Life Insurance Market in Japan
Life Insurance Market in Japan ◼ Japan's life insurance market is huge and it worth approximately JPY 38 trillion. ◼ We believe there is a high need for life insurance. There were around 12.9 million new enrollments in fiscal 2022 despite approximately 90% of Japanese households have already taken o
Slide 18: Individual Insurance Market
Individual Insurance Market ◼ Japan’s life insurance industry has 194 million policies-in-force in the individual insurance. ◼ Term-Life, Whole-Life, Medical and Cancer Insurance account for a large part of the life insurance market. The Industry and Lifenet’s Number of Number of Policies-in-force b
Slide 19: Trend of Customer's Purchasing Channel and Intention
Trend of Customer’s Purchasing Channel and Intention ◼ Sales representative accounts for a large proportion of life insurance’s purchasing channel. ◼ On the other hand, the figure shows that preferred purchasing channels are diversifying while online channel and insurance agent channel are increasin
Slide 20: Group Credit Life Insurance Market
Group Credit Life Insurance Market ◼ The outstanding balance of mortgage loans in Japan has been increasing and amounted to JPY 210 trillion at the end of FY2021. ◼ In the market for group credit life insurance（GCL)1 which Lifenet will newly enter from FY2023, the four major life insurers have a 60%
Slide 21: Table of Contents
Table of Contents I. Company Overview and Business Model II. Japanese Life Insurance Industry Trends Ⅲ. FY2022 Results Ⅳ. Growth Strategy Ⅴ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 20
Slide 22: In-Force Business Growth
In-Force Business Growth ◼ Annualized premiums and number of policies-in-force corresponding to the annual recurring revenue amounted to JPY 24 billion and 568,674 respectively at the end of March 2023. ◼ Both annualized premium and the number of policies-in-force are record highs, representing over
Slide 23: Strong EEV Growth
Strong EEV1 Growth ◼ EEV and value of in-force business have been growing at a CAGR of 19%2 and 32%, respectively since IPO. ◼ EEV per share has also steadily increased. ¥1,788 ¥1,673 124,666 : Value of in-force business (JPY millions) ¥1,570 : Adjusted net worth (JPY millions) 116,604 ¥1,430 : EEV/
Slide 24: COVID-19 Claims Condition
COVID-19 Claims Condition ◼ Due to the spread of COVID-19 infections, payment of insurance claims and benefits related to COVID-19 increased and it was JPY 1.37 billion for FY2022. The amount of COVID-19 claims Total actual results from April 2022 to March 2023 approx. JPY 1.37 billion September 26
Slide 25: FY2022 Business Forecasts and Results
FY2022 Business Forecasts and Results ◼ Annualized premium1 of policies-in-force increased by 11.7% from the end of FY2021 to JPY 24.0 billion, continuing double-digit growth. ◼ Ordinary income and net income were lower than the business forecasts given at the beginning of FY2022, mainly due to COVI
Slide 26: Summary of FY2022
Summary of FY2022 ◼ The main initiatives and summary of performance for FY2022 are as follows. Business Growth • Achieved continuous double-digit growth of in-force business while affected by COVID-19 situation • Increased EEV steadily despite of the negative impacts by deterioration in efficiency,
Slide 27: Table of Contents
Table of Contents I. Company Overview and Business Model II. Japanese Life Insurance Industry Trends Ⅲ. FY2022 Results Ⅳ. Growth Strategy Ⅴ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 26
Slide 28: Management Policy
Management Policy Help our customers embrace life more fully Mission by offering comprehensible, cost-competitive and convenient products and services Vision Be the leading company driving the growth of the online life insurance market • Innovation of customer experience Priority Enhancing and evolv
Slide 29: Growth Potential of Online Life Insurance Market
Growth Potential of Online Life Insurance Market ◼ The growth potential of the online life insurance business is steadily expanding with the structural megatrend of digitization of financial services, and the percentage of those intend to purchase online has accelerated over the last 3 years. ◼ We a
Slide 30: Competitive Landscape
Competitive Landscape ◼ There are three major stages in the process of the birth and expansion of a new market: (1) a period when a small number of players develop the market, (2) a period when the market expands as more players compete with each other, and (3) a period when a small number of winnin
Slide 31: Growth Loop Leveraging No.1 Position
Growth Loop Leveraging No.1 Position ◼ Lifenet’s brand, superior UI/UX, and unique position as a leading online life insurance company have led to attractions from powerful partners and others seeking to build a financial economic zone with embedded insurance business. ◼ We believe that our uniquene
Slide 32: Individual Insurance
Individual Insurance ◼ We aim to re-accelerate the growth of the Internet direct channel in the mid-term and adapt to the changing behavior of customers over time, including the younger generation. ◼ In the partner business channel, we will actively work with partners to leverage our strength as a l
Slide 33: Group Credit Life Insurance
Group Credit Life Insurance ◼ Lifenet began offering group credit life insurance to mortgage loan customers of au Jibun Bank from July 1, 2023, as the first group credit life insurance business since our business commencement. ◼ This initiative in the group credit life insurance business is a new ch
Slide 34: Platform Business
Platform Business ◼ With the aim of becoming an online life insurance platform, Lifenet established a subsidiary, LIFENET MIRAI Inc., in FY2021. ◼ LIFENET MIRAI aims to expand the scale of its business as an online insurance agency by working to improve the UI/UX of the online insurance comparison w
Slide 35: Mid-term Growth Path
Mid-term Growth Path ◼ In the individual insurance business, we intend to take our Internet direct channel to another level to reaccelerate growth in the medium term. We also intend to further improve the contribution to our business performance by expanding our partner business channels. ◼ In addit
Slide 36: Purpose of IFRS Adoption
Purpose of IFRS Adoption1 ◼ We adopt IFRS 17 in our financial reporting from FY2023. ◼ The voluntary adoption of IFRS can better reflect our actual periodic profit/loss and profitability, for example, by allowing a part of cost acquired new business to be deferred over the period of the contract. We
Slide 37: Key Indicators
Key Indicators ◼ With the change in financial reporting to IFRS, we will use “European Embedded Value””Annualized premium of policies-in-force””Insurance service results” as key indicators in our discussions with shareholders and investors. Corporate Value European Embedded Value （EEV） Growth Annual
Slide 38: FY2023 Consolidated Business Forecasts
FY2023 Consolidated Business Forecasts ◼ We forecast annualized premium of policies-in-force for individual insurance and group credit life insurance combined of 28,500 million yen, insurance service results of 8,200 million yen, and net income attributable to owners of parent of 5,300 million yen.
Slide 39: IFRS Major Accounts in Past Years
IFRS Major Accounts in Past Years1 ◼ As a reference, we have disclosed data for the past five fiscal years for major IFRS items. We believe that this will provide shareholders and investors with a certain level of understanding of the changes over time. (JPY millions) FY2018 FY2019 FY2020 FY2021 FY2
Slide 40: Future Direction
Future Direction ◼ In FY2023 and beyond, in addition to re-accelerating the growth of the Internet direct channel over the mid-term, we aim to expand business areas such as the group credit life insurance business. ◼ Through these efforts, in addition to aiming to achieve high profit growth of conti
Slide 41: Table of Contents
Table of Contents I. Company Overview and Business Model II. Japanese Life Insurance Industry Trends Ⅲ. FY2022 Results Ⅳ. Growth Strategy Ⅴ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 40
Slide 42: Risk Classification
Risk Classification ◼ We categorize 27 risks into "business strategy risks," "insurance underwriting risks," "market risks, credit risks and liquidity risks," and "operational risks”. Of these, the risks that are of particular significance in terms of their impact if they occur and possibility of oc
Slide 43: Major Risks (1/3)
Major Risks（1/3） ◼ Our inherent risks in the operation of life insurance business and our measures to the risks are as follows. Priority High Major risk Measures (Occurrence and severity) ■Competition in the life insurance industry With the digitization of financial We design and develop our product
Slide 44: Major Risks (2/3)
Major Risks（2/3） Priority High Major risk Measures (Occurrence and severity) ■Change in Mortality and morbidity In the event of mass casualties due to a We design appropriate coverage massive outbreak of an infectious and underwriting methods at the Life insurance premiums are calculated based on di
Slide 45: Major Risks (3/3)
Major Risks（3/3） Priority High Major risk Measures (Occurrence and severity) ■System failures We have not experienced any The Company has established basic large-scale system troubles since policy and measures for the stable The Company relies on the stable operation of its our business commencement
Slide 46: Appendix
Appendix ) LiFENE] LIFENET INSURANCE COMPANY
Slide 47: Initiative for Sustainability
Initiative for Sustainability ◼ We place importance on the concept of mutual support in terms of sustainability. ◼ We have identified Materiality (key sustainability issues) based on the concept of mutual support, the original purpose of life insurance. https://ir.lifenet-seimei.co.jp/en/sustainabil
Slide 48: Annualized premium growth & Initiatives
Annualized premium growth & Initiatives ◼ Due to various initiatives, in-force business has increased steadily since we first commenced business. Launched au Life Insurance with Ponta Point Business Alliance with Sumitomo Mitsui Card 24,033 Capital & Business Alliance with Eisai Launched New Long-te
Slide 49: Appropriation of Funds Raised through Overseas Public Offering
Appropriation of Funds Raised through Overseas Public Offering Summary of Overseas Public Offering in September 2021 Number of 9,000,000 shares Shares Offered Amount JPY 9.7 billion Raised Amount Amount Amount Raised Allocated Allocated Contents （JPY millions） （JPY millions） （JPY millions） As of Mar
Slide 50: Profit Structure under Current Statutory Accounting
Profit Structure under Current Statutory Accounting ◼ Typically, large expenses are incurred when life insurance policies are acquired (1). However, because the profit is earned over a long period of time, there is a time lag between the recognition of costs and revenue. (2) ◼ In other words, the gr
Slide 51: Structure of Embedded Value
Structure of Embedded Value ◼ Embedded value is the indicator of long-term profitability, and is the sum of adjusted net worth and value of in- force business. ◼ The value of in-force business is the future profit stream that will likely be derived from current policies, discounted to present value.
Slide 52: Contact and IR information
This material is based on information as of June 2023. All information on this document that is not historical fact constitutes forward-looking information and is based on assumptions and forecasts available to the company at the time of preparation. The company cannot guarantee the accuracy of thes
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