Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q1 FY2022 Earnings Presentation
23 slides from Lifenet Insurance's earnings presentation, Aug 10, 2022
Slide 1: Q1 Financial Results Briefing for the Fiscal Year Ending March 2023
LIFENET INSURANCE COMPANY Q1 Financial Results Briefing for the Fiscal Year Ending March 2023 August 10, 2022 [Speakers] Ryosuke Mori President and Representative Director
Slide 2: Presentation
Presentation Mori: Thank you very much for attending today's financial results briefing. The Company announced its financial results for Q1 of FY2022 today at 3:30 PM. The presentation materials are available on the Company's IR website. Today I would like to provide an overview of the financial res
Slide 3: Today's main points
Please refer to page two. Today's main points. First, annualized premiums of policies-in-force at the end of June 2022 increased 14% YoY to JPY22.1 billion. Next, with the increase in the number of COVID-19 cases, benefit claims have been increasing in our company as well, with insurance and benefit
Slide 4: Performance of in-force business
Please refer to page three. This is the performance of in-force business. Annualized premiums of policies-in-force, which correspond to annual recurring revenue, amounted to JPY22.1 billion at the end of June 2022, with 522,604 policies-in-force. Both have achieved strong growth of more than 10% YoY
Slide 5: Movement in number of policies-in-force
Page four shows the movement in the number of policies-in-force. The green bar graph on the far right stands for Q1 of FY2022. The number of new business for Q1 totaled 23,928. The surrender and lapse ratio was 6.4%. As you can see, we are maintaining our medium-term trend of double-digit growth in
Slide 6: Marketing efficiency
Page five is the marketing efficiency. The table below left shows the marketing expenses invested. Figures from FY2018 to FY2021 are for the full fiscal year, and that for FY2022 is for the first three months of the fiscal year. The Marketing expenses for Q1 of FY2022 totaled JPY2,079 million. As sh
Slide 7: Marketing expenses and efficiency over five quarters
Page six shows changes in marketing expenses and marketing efficiency for the last five quarters. As you can see, marketing efficiency has been on a downward trend since Q3 of FY2021, especially in Q4 when marketing expenses was significantly increased. Therefore, in Q1 of FY2022, we have reduced ma
Slide 8: Operating expenses excluding marketing expenses
Next, I will explain the efficiency of operating expenses excluding marketing expenses. Operating expenses excluding marketing expenses totaled JPY1,141 million and operating expense ratio was 21.3%. Although insurance premium is steadily increasing, the operating expenses ratio is higher than that
Slide 9: Accounting structure of life insurance companies
Page eight shows the accounting structure of life insurance companies. This is important to properly understand our profitability. Under the current statutory accounting on the profit and loss statement, the entire cost associated with the acquisition of new business is recognized as a current perio
Slide 10: Adjusted profit
Page nine shows the adjusted profit. Under current statutory accounting, there is a time lag between the recognition timing of revenues and cost, and we believe that marketing expenses, which are the cost of acquiring new business, make it difficult to understand the actual state of our profitabilit
Slide 11: Embedded Value structure
Page 10 is the Embedded Value structure. The European Embedded Value is the net assets reflecting the present value of future profit, or net assets, which is the after-tax value of unrealized future profits that will generate from existing policies-in-force on statutory accounting. We focus on the g
Slide 12: European Embedded Value as of June 30, 2022
Please refer to page 11. European Embedded Value as of June 30, 2022 was JPY118.1 billion. The compound average growth rate (CAGR) of EEV since listing in March 2012 has been 20%. Especially, the value of in-force business, which is the unrealized future profits arising from in-force business has be
Slide 13: Changing factors of EEV
Page 12 is changing factors of EEV for the three-month period from the end of March 2022 to the end of June 2022. We define adjusted incremental EV as the sum of the three components, value of new business, expected existing business contribution, and the operating experience variance, which are sho
Slide 14: EV sensitivity compared with listed life insurers
Please refer to page 13. The following table shows the sensitivity of EV to changes in interest rates, stock prices, and other factors for the Company and listed life insurance companies in Japan. As you can see, the sensitivity of our EV to changes in interest rates and other factors has been limit
Slide 15: Summary of the balance sheet
Page 14 is a summary of the balance sheet. As of June 30, 2022, total assets amounted to JPY67.935 billion, liabilities to JPY47.386 billion, and net assets to JPY20.549 billion. The solvency margin ratio was 3,297% which indicated that an adequate level of payment capacity was maintained. We will a
Slide 16: Growth of the value of in-force business
On page 15, I would like to explain the growth of the value of in-force business. The number of policies-in-force on the left side steadily has been increasing, indicating that the scale of our business is expanding. In addition, the value of in-force business per policy shown in the center has not
Slide 17: Main initiatives and other activities
On page 16, we explain our main initiatives and other activities. On the price comparison website for insurance operated by Kakaku.com Insurance, Inc., we have started offering limited plans for whole-life medical insurance Jibun 3. This will allow us to offer our product to more customers with cove
Slide 18: Business alliance with au Jibun Bank
Please refer to page 17. This will be the first of today's major announcements. In order to expand our business area to group credit life insurance, we have entered into a business alliance agreement with au Jibun Bank today. The figure on the left is quoted from the presentation material of the New
Slide 19: Capital and business alliance with Eisai
Please refer to page 18. This is the second of today's major announcements. Yesterday, we announced a capital and business alliance agreement with Eisai Co., Ltd. As the people’s intention to purchase life insurance online is increasing among a wide range of generations, not just the young, we belie
Slide 20: Voluntary adoption of IFRS
Please refer to page 19. In the announcement of our FY2021 financial results in May 2022, we reported that we aim to adopt IFRS (International Financial Reporting Standards) on a voluntary basis from FY2023. Since the main points are the same as those explained in May 2022, the explanation stated in
Slide 21: Schedule for voluntary adoption of IFRS
Page 20 is the future schedule for the voluntary adoption of IFRS. We hope to disclose our business forecast for FY2023 under IFRS in May 2023, after making an institutional decision by the second half of FY2022. At that time, we would like to make an effort to disclose the business results for FY20
Slide 22: Business forecasts for FY2022
Page 21 is the business forecasts for FY2022. This is unchanged from what we announced in May 2022. We continue to aim for double- digit growth in in-force business. As explained, the benefit claims related to COVID-19 has currently increased. In Q1 of FY2022, we makes benefit payments mainly due to
Slide 23: Management policy
Finally, here is the management policy. There is no change in our major policy of pursuing growth in the online life insurance market with the aim of expanding the scale of our business. We will continue to firmly expand and drive the online life insurance market by our own efforts and remain a lead
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