Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q2 2012 Earnings Presentation
53 slides from Lifenet Insurance's earnings presentation, Nov 16, 2012
Slide 1: Investor Meeting Presentation for Second Quarter Fiscal 2012
Securities Code:7157 TSE Mothers Investor Meeting Presentation for Second Quarter Fiscal 2012 November 16, 2012
Slide 2: LIFENET is… Comprehensible, Cost-Competitive, Convenient
LIFENET is… Comprehensible Cost-Competitive Convenient Returning to the original purpose of life insurance – mutual support – Lifenet was founded with the goal of offering simple, convenient and competitively priced products and services based on the highest levels of business integrity. We offer th
Slide 3: Reach 150,000 Policies-In-Force
Reach 150,000 Policies-In-Force Achieved management target to 150,000 reach 150,000 policies-in-force 150,175 144,575 Policies-in-force 19,065 "Hataraku-hito" (Long-term disability) 132,55118,333 702 "Jibun-Plus"(Term medical care) 118,040 "Jibun" (Whole-life medical coverage) "Kazoku" (Term-life
Slide 4: The Road to 150,000
The Road to 150,000 May 18, 2008 Commenced Business Operations Nov 2008 Disclosure of Net Premiums (Product Cost Structure) Aug 2009 Policies-in-Force exceeds 10,000 Feb 2010 Launch of Long Term Disability Dec 2010 Policies-in-Force exceeds 50,000 Jul 2011 Broadcasting of the TV program “Cambrian Pa
Slide 5: Mid-term Business Plan
Mid-term Business Plan Considering mid-term business plan with new management target Three key strategies (announced June 22, 2011) 1. Develop a popular Lifenet brand that resonates with customers 2. Offer high-quality life insurance services (comprehensible, cost-competitive, and convenient) 3. B
Slide 6: Next Phase
Next Phase Moving ahead based on our Manifesto Photo: Shareholders’ meeting held on Jun. 24, 2012 5
Slide 7: Contents
Contents 1. Outline of Business Results for 2Q of fiscal 2012 2. Challenges to Be Addressed 6
Slide 8: Growth Track Record
Growth Track Record Maintain an overall increase 14,000 despite some fluctuation 2961 300 12,000 250 10,000 # of Applications 9,1711 # of New Business 200 8,000 Average # of applications per day 6,2421 150 6,000 100 4,000 2,000 50 0 0 09/05 10/04 11/04 12/04 12/10 1. Record high 7
Slide 9: Key Figures (first-half year ended Sep. 30)
Key Figures (first-half year ended Sep. 30) 1. Operating Income JPY 2,821mn 1 (175% of corresponding period of fiscal 2011 ) 2. Number of Policies-in-Force 144,575 2 (122% of end of fiscal 2011 ) Number of New Business 30,709 2 (same level as corresponding period of fiscal 2011 ) 3. Value of New (ul
Slide 10: Topics (first-half year ended Sep. 30)
Topics (first-half year ended Sep. 30) Recognition from Stakeholders Awards for Website & Contact Center “Easy-To-Understand” Award Bronze Stevie® Award Best Contact Center of the Year in the Life Insurance Website Category - Company of the Year 2012 Recognition Prize Special sites that received g
Slide 11: Policies-in-Force
Policies-in-Force (# in thousand) 144 118 Number of Policies-in-Force 144,575 63 Annualized Premium1 23 JPY 59mn 10/03 11/03 12/03 12/09 (YY/MM) 10.4 26.5 48.7 59.5 Annualized Premium (JPY in mn) 1. The amount of money equivalent to what is to be paid to have the insurance coverage for one year.
Slide 12: New Business (first-half year ended Sep. 30)
New Business (first-half year ended Sep. 30) (# in thousand) 30.4 30.2 30.7 Number of new business up 0.9% from 1H/FY2011 25.0 Number of policies per customer1 up to 170% 10/1H 11/2H 11/1H 12/2H (Semi-annual) 158% 167% 168% 170% number of policies per customer 1. The ratio of new business / new
Slide 13: New Business (Quarterly)
New Business (Quarterly) (# in thousand) 16.1 16.5 Number of 15.9 Policies-in-Force down 12.6% 14.2 14.2 14.1 from 2011 2Q Temporary high number in 2011 2Q due to TV program1 11/1Q 11/2Q 11/3Q 11/4Q 12/1Q 12/2Q (Quarterly) 1. Jul. 14, 2011 Broadcasting of the TV program “Cambrian Palace” (TV Tok
Slide 14: Applications (Quarterly)
Applications (Quarterly) (# in thousand) 25 25 24 19 20 20 20 Increasing 17 overall with 14 slight 12 Temporary increased deceleration 9 as a result of TV in this 6 7 program. quarter 4 09/2Q 10/2Q 11/2Q 12/2Q (Quarterly) 13
Slide 15: Name Recognition and Application
Name Recognition and Application Correlation between name recognition1 and application Application is proportional to recognition Unusual Tendency ：application per quarter1 ：name recognition level 09/2Q 10/2Q 11/2Q 12/2Q (Quarterly) 1. Source: A life insurance company perception survey by MyVoice
Slide 16: Reasons of Deceleration in 2Q
Reasons of Deceleration in 2Q Changes in trend of tech devices More use of smart phones and tablets Changes in customer segments From early adopter to semi-mass Changes in specification of search site Decrease visitor to our website by other companies’ paid listing 15
Slide 17: Changes in Trend of Tech Devices
Changes in Trend of Tech Devices More use of smart phones and tablets Increase document request More use of smart phones1 by smart phones2 Use only smart phone Total smart Use both smart phone and feature phone : feature phone Phone user : smart phone Use only feature phone 2011/01 (n=3,096) 2011/
Slide 18: Changes in Trend of Tech Devices
Changes in Trend of Tech Devices ■ Smart phones and tablets use increase http://matome.naver.jp/odai/2135208226487940101 17
Slide 19: Changes in Customer Segments
Changes in Customer Segments Gradual shift from early adopters to semi-mass market Responses from those who were aware of Lifenet but did not consider buying its product among people in their 30’s who purchased death insurance in the past year1(%) Main reason (single response) Reasons for not cons
Slide 20: Changes in Customer Segments
Changes in Customer Segments Understand needs of new customer and resolve needless anxiety by providing reassurance Responses from those who considered buying Lifenet’s product but did not actually do so among people in their 30’s who purchased death insurance in the past year1(%) Main reason (sin
Slide 21: Name Recognition and Applications
Name Recognition and Applications Correlation between name recognition2 and application Aiming to return to growth by responding to changes and implementing new measures 09/2Q 10/2Q 11/2Q 12/2Q : Number of applications during quarter ： ： : Name recognition of Lifenet 1. Dotted lines in the chart a
Slide 22: Embedded Value and Value of New Business
Embedded Value and Value of New Business (Illustrative purpose only: Based on present value) Appraisal Value (AV) Insurance payments Premium for Value of in-force business is the present value future growth at the valuation date of future after-tax profits distributable to shareholders from in-force
Slide 23: European Embedded Value
European Embedded Value1 18,547 18,210 (JPY mn) Value of In-Force 5,826 Business Value of in- force business 9,551 114%2 of Adjusted March 31, 2012 12,384 Net Asset 11/03 12/03 12/09 (YY/MM) 1. Lifenet has fully adopted the EEV Principles, while also taking into account a market-consistent approac
Slide 24: Value of New Business (VoNB)
Value of New Business (VoNB) : Fiscal year Left : value of new business : First-half Right : value of new business(ultimate unit cost base) of fiscal year 1,692 (JPY mn) Value of new business 1,010 (ultimate unit 788840 cost base) 40% of 1H/FY2011 467 338 31 (65) 2010 11 12/1H (Fiscal year) 1. The
Slide 25: Structure Breakdown of VoNB per Policy
Structure Breakdown of VoNB per Policy Decrease due to active advertising expenses with IPO 27 VoNB per policy (ultimate unit cost base) (JPY thousand) Initial expenses increased (23) Insurance premiums per policy Other variables (decline of 11 increased Assumption corporate changes tax rate, etc.
Slide 26: VoNB (Ultimate Unit Cost Base)
VoNB (Ultimate Unit Cost Base) Fiscal 2011 1st half 1st half Per new business for 1st half/2012 (JPY mn) fiscal 2011 fiscal 2012 (JPY thousand) Certainty equivalent present value of future profit 6,270 3,070 3,417 111 -) Time value of financial options and guarantees - - - - -) Frictional cost of ca
Slide 27: Historical Financials
Historical Financials Fiscal 2010 Fiscal 2011 Fiscal 2011 Fiscal 2012 (JPY mn) 1st half 1st half Operating income 1,827 3,773 1,611 2,821 Insurance premiums and other 1,765 3,720 1,584 2,719 Investment income 60 47 25 24 Other operating income 1 5 1 77 Operating expenses 2,648 4,461 1,849 2,890 Insu
Slide 28: Operating Income/Operating Expenses
Operating Income/Operating Expenses Operating income 175% of 1H/FY2011 Operating income 3,773 Operating expenses (Fiscal year) (JPY mn) (JPY mn) : Fiscal year 2010 11 12/1H : First-half of fiscal year 2,821 1,827 (68) (238) 1,611 (363) 706 (687) 2010 11 12/1H (Fiscal year) (820) 27
Slide 29: Project Expenses
Project Expenses (JPY mn) 2,621 Active advertising 1,710 1,567 Marketing expenses continued with 1,217 901 IPO Customer 622 206 258 service Project expenses 130 602 794 System and other ratio 97%1 464 2010/1H 11/1H 12/1H (Semiannual) 181% 109% 97% Project expenses ratio 1. The ratio of project e
Slide 30: Fundamental Profit
Fundamental Profit (JPY mn) Fiscal year 2010 2011 2012/1H Mortality margin 279 490 471 Fundamental Expense margin (loss) (911) (919) (414) profit went Interest margin 58 37 14 black for the (ref.) Insurance 1,765 3,720 2,719 first time in 1H premiums Fundamental profit 71 Mortality (JPY mn) (87)
Slide 31: Marketing Expenses / Value of New Business per Policy
Marketing Expenses / Value of New Business per Policy (JPY thousand) Marketing expenses per policy 51 Fluctuations due 35 to active 34 advertising and deceleration of 27 new business 23 Increased 11 confidence from Value of new business per policy (ultimate unit cost base) improved name recognit
Slide 32: Financial Condition
Financial Condition (JPY mn) Total assets 11/3 10,523 18,861 19,548 Invested 12/3 12/9 Cash and deposits 380 428 395 conservatively Securities 7,200 13,800 13,182 Short-term Government 3,556 9,939 6,453 government bonds local government bonds switched bonds - - - to corporate Corporate bonds Sto
Slide 33: Solvency Margin Ratio
Solvency Margin Ratio1 3,499% 3,283% Maintained at a healthy level, 2,643% decrease due to the increase Average of 4 major insurance company 650% in policies-in- as of March 31, 20123 force 11/032 12/03 12/09 (YY/MM) 1. The solvency margin ratio is an important financial indicator and a key benchm
Slide 34: Contents
Contents 1. Outline of Business Results for 2Q of fiscal 2012 2. Challenges to Be Addressed 33
Slide 35: Fiscal 2012 Priorities
Fiscal 2012 Priorities 1. Maintaining high growth in the number of policies-in-force and value of new business 2. Reviewing and improving the overall efficiency of its operations and processes 3. Establishing an organization appropriate for a public company 34
Slide 36: Lifenet Changes the Common Sense of Life Insurance
Improving Name Recognition and Increasing Number of Applications Our new challenge Lifenet Changes the “Common Sense” of Life Insurance http://www.lifenet-seimei.co.jp/change/ 35
Slide 37: Increasing Number of Applications: 5 challenges and 5 reassurances
Improving Name Recognition and Increasing Number of Applications Our 5 challenges and 5 reassurances to customers Our major achievements in the past May 2008 May 2008 Nov 2008 Jun 2009 Expense Loading Expense Loading Life insurance industry’s Support for families First in life insurance Adapting t
Slide 38: Our 5 New Challenges
Our 5 New Challenges Launch Medical Care Insurance “Jibun Plus” Introduce Exclusion of Specific Organs Remove Medical Certificate Submission for Policy Claim General Recruitment of Affiliated Insurance Planners Long-term Disability Insurance Policies Exceeded 20,000 37
Slide 39: New Product Jibun Plus
New Product “Jibun Plus” In total 4 products NEW 38
Slide 40: Overview of Jibun Plus
New Product “Jibun Plus” Overview of “Jibun Plus” ・ Coverage of individual copayment regardless of the number of days of hospitalization ・ Coverage for “cancer” and “advanced medical care” ・ 10-year “term” product ・ Monthly insurance premium – only 1,499 yen for 30- year-old males; 2,207 yen for 3
Slide 41: Copayment-linked medical insurance
New Product “Jibun Plus” Copayment-linked medical insurance Outside the scope of the Scope of public health care insurance public health care insurance Expenses out of the scope of 70% 30% public insurance (=all paid by patients) 70% of medical expenses High cost Copay- are covered by public healt
Slide 42: 1,163 applications for October
New Product “Jibun Plus” 1,163 applications for October • 36% of all new business applied for “Jibun Plus” • Applicant breakdown: 22% in their 20s, 48% in their 30s – approx 70% in total • 71% male applicants, 29% female applicants • Average monthly premium at 2,458 yen • 84% of “Jibun Plus” appli
Slide 43: Exclusion of Specific Organs
Exclusion of Specific Organs Makes underwriting possible <Example> for those previously rejected Previously Customer LIFENET Application thru Assessment Underwriting Website (e.g. notification of based on not possible due to past injury or disease past Caesarian notification (Caesarian section) se
Slide 44: Exclusion of Specific Organs results
Exclusion of Specific Organs Indication of special conditions for 3.7% of medical insurance applicants, 85% of them accepted Underwriting Results under Excursion of Specific Organs (Oct 2012) New Process Customer LIFENET LIFENET Customer Indication of Confirmation of Underwriting Assessment possib
Slide 45: Remove Medical Certificate Submission for Policy Claims
Remove Medical Certificate Submission for Policy Claims For more prompt payment Previously (LN) (Customer and medical institution) (Customer) Preparation Preparation Request for and acquisition of medical certificate (LN) (Customer) and and dispatching Assessment Notification dispatching and to LI
Slide 46: General Recruitment of Affiliated Insurance Planners
General Recruitment of Affiliated Insurance Planners Submissions received in excess of capacity (30 people), followed by selection and training, scheduled to start activities in 2013 Does this plan meet my needs? Affiliated Customer Advice Insurance Planner Apply (1) Supports Lifenet’s principles
Slide 47: Disclosure of Agent Commission
Disclosure of Agent Commission Disclose the commission our agents receive for insurance selling in order to ensure the best advice from independent agents Agent Commission Rate: 1 7.5% of monthly premium Period of Commission Payment: Up to 5 years (60 months) 1. These are the same as the terms for
Slide 48: LTD Insurance Policies Exceeded 20,000
LTD Insurance Policies Exceeded 20,000 Accumulated number of new business 20,000 in the 2.5 years after the launch LTD insurance “Hataraku-Hito” accumulated number of new business 20,050 17,916 15,181 12,596 10,337 7,779 5,645 3,837 2,220 1,074 144 10/03 11/03 12/03 12/09 47
Slide 49: LTD Policyholders from Medical Industry
LTD Insurance Policies Exceeded 20,000 Many Policyholders from Medical Industry Distribution of business sectors to which policyholders of long-term disability insurance belong Top 10 (as of September 30, 2012) Business sector to which policyholders belong Composition 1 Medical services business 8
Slide 50: 5 Reassurances from Lifenet to Customers
5 Reassurances from Lifenet to Customers 1 - Payments of approx. 800 million yen for 2,968 “Will Lifenet really pay my claims as of September 30, 2012 claims?” - Payment scheme backed with the “triple check system” 2 “Can I rely on an online - Contact Center with the industry’s longest level operati
Slide 51: Contact Center and Website Awarded
Contact Center and Website Awarded Contact Center and Website Awarded Three Stars in the 2012 HDI Contact Center Rankings Contact Center Support Portal (Website) 50
Slide 52: LIFENET Manifesto
LIFENET Manifesto I. Our Guiding Principles II. Life Insurance will be Comprehensive (1) We believe that our responsibility to society is to return life insurance to its (1) Our products will be simple and comprehensible. There will not be complex original state. Life insurance is for the customers,
Slide 53: http://ir.lifenet-seimei.co.jp/en/
http://ir.lifenet-seimei.co.jp/en/ 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 these assumptions and fo
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