Lifenet Insurance Company · TSE:7157

Lifenet Insurance — Q1 FY2017 Earnings Presentation

37 slides from Lifenet Insurance's earnings presentation, Aug 9, 2017

1. Slide 1: Reference Data for First Quarter Fiscal 2017

   Securities Code:7157 ４ TSE Mothers Reference Data for First Quarter Fiscal 2017 August 9, 2017

2. Slide 2: Contents

   Contents 1. Progress of Mid-term Business Plan 2. Results for 1Q of Fiscal 2017 1

3. Slide 3: Mid-term Business Plan

   Mid-term Business Plan  Summary of mid-term business plan FY2018 13.5 billion yen in ordinary income Management Positive profitability of ordinary profit (loss) Goal 1. The pillars of business : Online direct sales, KDDI (exclusive alliance agent) and Over- the-counter agent Business 2. Continuous

4. Slide 4: To Achieve Mid-term Business Plan

   To Achieve Mid-term Business Plan  Aiming for establishing system realizing sustainable profitability in fiscal 2017  Achieve Management Goal  Establish a system realizing sustainable  Return to profitability growth in new 2018 business performance 2017 2016 3

5. Slide 5: Progress of Mid-term Business Plan (Ordinary Income)

   Progress of Mid-term Business Plan (Ordinary Income)  102% year on year (JPY mn) : Fiscal year 13,500 : First 3 months Business forecasts of fiscal year 11,000 10,096 9,387 Up 2% Y-on-Y 2,284 2,594 2,651 FY2015 16 17 18 4

6. Slide 6: Progress of Mid-term Business Plan (Ordinary Profit/Loss)

   Progress of Mid-term Business Plan (Ordinary Profit/Loss)  Aiming for positive profitability1 of ordinary profit (loss) in fiscal 2018 (JPY mn) Results Business forecasts Management for FY2016 FY2017 Goal FY2018 Ordinary profit (loss) before amortization of deferred assets 88 - - under Article 113

7. Slide 7: Contents

   Contents 1. Progress of Mid-term Business Plan 2. Results for 1Q of Fiscal 2017 6

8. Slide 8: Summary of 1Q for FY2017 Results

   Summary of 1Q for FY2017 Results (JPY mn) 2016/1Q 2017/1Q Year on year Ordinary income 2,594 2,651 102.2% Operating expenses 861 1,005 116.8% Ordinary profit (loss)1 139 136 98.0% Net income (loss) (124) 109 - Mortality margin 549 616 112.3% Annualized premium2 of policies-in-force 9,551 10,263 107.

9. Slide 9: Key Accomplishment in 1Q for FY2017

   Key Accomplishment in 1Q for FY2017 Ordinary income increased steadily Y-o-Y New business performance grew Y-o-Y Ordinary profit was recorded Mortality margin was steadily recorded 8

10. Slide 10: Ordinary Income (Quarterly)

    Ordinary Income (Quarterly)  Steadily increased as insurance premiums and other increased (JPY mn) 2,594 2,651 2,551 2,528 2,421 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 9

11. Slide 11: Ordinary Income (Quarterly) breakdown

    Ordinary Income (Quarterly)  Steadily increased as insurance premiums and other increased (JPY mn) 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q Insurance premiums and other 2,444 2,413 2,463 2,494 2,588 Investment income 51 56 52 56 54 Reversal of reserves for outstanding claims 96 (53) 30 (27) - Other (excl. Rev

12. Slide 12: Number of Policies-in-force / Annualized Premium (Quarterly)

    Number of Policies-in-force/ Annualized Premium (Quarterly)  In-force business and premium steadily increased :Number of policies-in-force :Annualized premium of policies-in-force (JPY bn) 243,610 239,800 234,828 228,846 231,538 9.8 10.0 10.2 9.5 9.6 16/06 16/09 16/12 17/03 17/06 (YY/MM) 11

13. Slide 13: Breakdown of Policies-in-force

    Breakdown of Policies-in-force  155,817 in-force policyholders (as of June 30) (YY/MM) 16/06 17/06 Ratio Number of policies-in-force 228,846 243,610 100.0％ - Term Life1 119,081 124,325 51.0％ - Whole-life Medical1 68,961 72,092 29.6％ - Term Medical Care1 10,955 10,299 4.2％ - Long-term Disability1 29

14. Slide 14: Number of New Business / Annualized Premium (Quarterly)

    Number of New Business/ Annualized Premium (Quarterly)  Number of new business exceeded 1Q for FY2016 :Number of new business :Annualized premium of new business (JPY mn) 9,142 7,307 6,980 406 7,793 6,312 341 343 320 293 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 13

15. Slide 15: Amount of Insurance Claims and Benefits (Quarterly)

    Amount of Insurance Claims and Benefits (Quarterly)  Insurance claims totaled 18 payments, down 5 payments year on year (JPY mn) 505 424 394 343 375 267 290 260 Insurance claims 207 133 Benefit 130 134 134 136 134 claims 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 14

16. Slide 16: Provision for Policy Reserves (Quarterly)

    Provision for Policy Reserves (Quarterly)  Decreased slightly due to performance of new business :Provision for policy reserves (JPY mn) :Provision for policy reserves/Premiums income (%) 911 925 917 883 879 38.8% 38.8% 37.8% 35.8% 34.9% 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 15

17. Slide 17: Operating Expenses (Quarterly)

    Operating Expenses (Quarterly)  Plan to invest in new product promotion from August 1,332 (JPY mn) 997 1,005 861 855 731 428 425 Marketing 339 323 153 142 166 Customer 134 138 service 387 393 414 459 413 System and other 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 16

18. Slide 18: Marketing Expenses per New Business (Quarterly)

    Marketing Expenses per New Business (Quarterly)  Declined year on year due to marketing expenses increase :Marketing expenses per new business (JPY thousand) :Marketing expenses/Annualized premium of new business 79 61 51 54 46 1.8 1.3 0.9 1.1 1.2 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q 17

19. Slide 19: Ordinary Profit/Loss (Quarterly)

    Ordinary Profit/Loss (Quarterly)  Ordinary profit (loss) and net income (loss) recorded profitability (JPY mn) , 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q Ordinary profit (loss)1 before amortization of deferred assets under Article 113 of IBA 139 187 19 (258) 136 Amortization cost (265) (265) (265) (1,325)2 -

20. Slide 20: Structure Breakdown of Ordinary Profit/Loss

    Structure Breakdown of Ordinary Profit/Loss1  Slightly declined due to increase of operating expenses (JPY mn) Transition of ordinary profit (loss)1 Income Expense Increase Decrease of insurance of insurance premiums claims and other and other 143 96 Other 139 (86) 136 Increase of operating Other e

21. Slide 21: Condensed Statements of Operation (Quarterly)

    Condensed Statements of Operation (Quarterly) (JPY mn) 16/1Q 17/1Q Change Insurance premiums and other 2,444 2,588 143 Other 150 63 (86) Ordinary income 2,594 2,651 56 Insurance claims and other 564 467 (96) Provision for policy reserves and other 911 912 0 Operating expenses 861 1,005 144 Other 117

22. Slide 22: Fundamental Profit

    Fundamental Profit  Continuously recorded mortality margin (JPY mn) 16/1Q 16/2Q 16/3Q 16/4Q 17/1Q Mortality margin 549 589 552 601 616 Expense margin (loss) (655) (655) (777) (2,158) (454) Interest margin (loss) 5 8 1 2 (2) Fundamental profit (loss) (100) (57) (224) (1,554) 159 (ref.) Insurance pre

23. Slide 23: Financial Condition

    Financial Condition (JPY mn) (YY/MM) 16/03 17/03 17/06 Total assets 30,317 31,934 32,826 Cash and deposits 734 1,004 974  Promote Monetary claims bought 1,999 1,999 1,999 diversification Money held in trust 1,035 995 1,501 Securities 23,067 26,372 26,691 in investment Government bonds Municipal bon

24. Slide 24: Utilization of au Shop Channel

    Utilization of au Shop Channel  Started trial sales through some au shops among Japan 3 sales channels au SAPPORO Website au OSAKA au SENDAI New! au SHINJUKU Follow-up call by au Financial Support Center au FUKUOKA au MINATOMIRAI New! au NAGOYA au HAKATA Sales at some au shops 23

25. Slide 25: Customer-Oriented Business Conduct

    Customer-Oriented Business Conduct  Disclosed our policy based on Manifesto http://www.lifenet-seimei.co.jp/profile/cs_policy/ 24

26. Slide 26: High Evaluation by Outsider

    High Evaluation by Outsider  Term Life and Long-term Disability highly evaluated1 Term Life Kazoku and Long-term Disability Hataraku-Hito 2 ranked 1st in Kakaku.com Insurance Award 2017 1. The most popular insurance products in each category from January through December 2016, receiving the highest

27. Slide 27: Insurance for Workers

    Insurance for Workers  Cancer Insurance as new product followed Long-term Disability Approx. 60％ of payment for cancer (actual) Launched in Feb. 2010 Long-term Cancer Launched Disability Insurance in Aug. 2017 Renewed in June 2016 Support working patients receiving treatment for cancer (75％1 of can

28. Slide 28: Launched Cancer Insurance in August

    Launched Cancer Insurance in August  Provides double support for treatment while working Treatment Income expenses decrease Treatment Income support support benefit benefit Lifenet Cancer Insurance Double Yell ＋ Survivorship Support Services 27

29. Slide 29: Survivorship Support Services

    Survivorship Support Services  Introduce necessary services by partnering companies based on cancer survivors’ voice Housekeeping services Appearance care Support taxi http://www.lifenet-seimei.co.jp/survivorship/ 28

30. Slide 30: Future Direction

    Future Direction  Support life of workers × child-rearing generation utilizing technology Workers × Child-rearing generation Money Raising Digital Technology Work children Insurance FinTech InsurTech HealthTech Medical Health care Life support by insurance and related information/services 29

31. Slide 31: Utilization of Three Core Channels

    Utilization of Three Core Channels  Aim for steady growth of new business performance Online direct sales Online → Improve services via direct smartphone and promote sales Cancer Insurance KDDI (exclusive alliance agent) → Utilize au Financial Support Center and au shops KDDI Agent (exclusive allia

32. Slide 32: Business Forecasts FY2017

    Business Forecasts FY2017  Business forecasts disclosed in May 2017 remains unchanged (JPY mn) Business forecasts (Reference) for FY2017 Results for FY2016 Ordinary income 11,000 10,096 Ordinary profit (loss) (300) (2,031)1 Net income (loss) (300) (1,889)1 1. Amortization of the deferred assets und

33. Slide 33: 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,

34. Slide 34: 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 forecasts. Earnings projections and o

35. Slide 35: Appendix

    Appendix oD) LiFENE] LIFENET INSURANCE COMPANY

36. Slide 36: Three Surplus Factors of Fundamental Profit

    Three Surplus Factors of Fundamental Profit 1Q of FY2017 Statements of operations Profit analysis Insurance premiums and other 2,588 Ordinary income Net premiums Expense loading Premiums income 2,521 Reinsurance income 66 Reinsurance income Interest and Gains on sales Investment income 54 dividends

37. Slide 37: Solvency Margin Ratio Calculation

    Solvency Margin Ratio Calculation As of June 30, 2017 (R 1  R 8 )2  (R 2  R 3  R 7 )2  R 4 / 2 Solvency margin ratio Total amount of solvency margin Total amount of risk/2 2,689.5% = <numerator> 20,610 ÷ < the denominator> 1,532/2 Cash and deposits Other liabilities 974 442 Insurance risk R1 1,

Lifenet Insurance Company — Q1 FY2017 Earnings Presentation on 6ix