Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q3 2023 Earnings Presentation
37 slides from Lifenet Insurance's earnings presentation, Feb 13, 2024
Slide 1: Presentation Material for Investors Third Quarter for Fiscal 2023
Securities Code: 7157 TSE Growth Presentation Material for Investors Third Quarter for Fiscal 2023 February 13, 2024
Slide 2: Cumulative 3Q for Fiscal 2023 Key Highlights
Cumulative 3Q for Fiscal 2023 Key Highlights Key Indicators Corporate Value Growth Profitability EEV Annualized premium1 Insurance service (European Embedded Value) of policies-in-force results ¥ 144,294mn ¥ 27,872mn ¥ 6,275mn (YoY 117.3%) (YoY 118.5%) (YoY 128.9%) Notable Achievements ◼ Individual
Slide 3: Annualized Premium of Policies-in-Force
Annualized Premium of Policies-in-Force ◼ Strongly grew 18.5% YoY, with large contribution of ¥2.8bn from newly started GCL YoY +18.5％ :AP1 of policies-in-force for GCL (JPY millions) ¥ 27,872mn :AP1 of policies-in-force for individual life (JPY millions) Group credit 2,877 life insurance Individual
Slide 4: Policies-in-Force Movement
Policies-in-Force Movement ◼ GCL strongly grew and reached ¥306mn ◼ Individual life performance has bottomed out Net increase of Net increase of GCL :Net increase of AP of policies-in-force for GCL (JPY millions) individual life 306 :Net increase of AP of policies-in-force for individual life (JPY m
Slide 5: Summary IFRS P/L
Summary IFRS P/L ◼ Insurance service results and net income resulted in ¥6,275mn and ¥4,365mn, respectively (JPY millions) FY2022/3Q FY2023/3Q （Ref.） Items (YTD)2 (YTD)2 Change FY20222 Insurance service results 4,867 6,275 1,407 6,618 Financial results1 (636) 276 912 (452) Other results (552) (335)
Slide 6: Insurance Service Results
Insurance Service Results1 ◼ Significantly increased 28.9% YoY and reached ¥6,275mn ◼ 73.0% progress rate over revised business forecasts in August :Insurance service results (fiscal year, JPY millions) Business forecasts :Insurance service results (3QYTD, JPY millions) 8,600 7,216 Progress rate 6,2
Slide 7: Insurance Service Results Analysis
Insurance Service Results Analysis ◼ Growth driven by settling down of COVID-19 claims and increasing of CSM release, while GCL claims deteriorated in 3Q CSM release (JPY millions) Risk 462 Expected adjustment Insurance Items FY2022/3Q FY2023/3Q Change minus incurred release service results (YTD) (Y
Slide 8: European Embedded Value
European Embedded Value1 ◼ EEV and value of in-force business have been strongly growing at a CAGR of 19%2 and 31%, respectively since IPO ◼ EEV per share continued its growth trend, offset dilution by capital raising in Sep. ¥1,788 ¥1,797 ¥1,673 144,294 ¥1,570 ¥1,430 : Value of in-force business (J
Slide 9: Changing Factors of EEV
Changing Factors of EEV1 ◼ Increased due to the growth of VoNB including GCL and the improvement of opex ratio, and capital raising (JPY millions) 144,294 Adjustments Adjusted incremental EV2 Economic to the values3 variances as of Dec. 31, 2023 Expected Operating Assumption and assumption 9,881 exi
Slide 10: Strong Business Performance of GCL
Strong Business Performance of GCL ◼ Backed by the growth of Jibun Bank’s mortgage loan, GCL business has been progressing steadily au Jibun Bank’s rapid growth of mortgage loan Contribution to key indicators1 Nov. 2023 ¥3.5tn + ¥2,877mn Jun. 2023 ¥3.0tn AP of Nov. 2022 policies-in-force ¥2.5tn In a
Slide 11: Embed into Point Ecosystem
Embed into Point Ecosystem ◼ Boosting sales efforts aimed at Ponta Point users, utilizing “au Life Insurance” with Ponta Points as the anchor au Ecosystem Ponta Point’s Customer Base July 2023 Started GCL Targeting sales for point collectors February 2023 “au Life Insurance” with Ponta Points 10
Slide 12: Alliance with SMBC Group
Alliance with SMBC Group ◼ Launched exclusive products for SMBC Group from December to be embedded into V-point ecosystem Initial performance of “Insurance with V-points” AP of policies-in-force Launched V-Points equivalent to Previous products (without V-points) 1% of monthly premiums is awarded Ma
Slide 13: Initiatives to Diversifying Customer Needs
Initiatives to Diversifying Customer Needs ◼ Updated customer experience with same-sex partners in de facto marriages Feb. 2024 Nov. 2023 Customers can designate same-sex partners as Received Gold Rating for LGBTQ initiatives beneficiary for our term-life insurance by for 8th consecutive year, indus
Slide 14: Consolidated Business Forecasts for FY2023
Consolidated Business Forecasts for FY2023 ◼ Remains unchanged from August 2023 Growth Profitability (JPY millions) (JPY millions) AP of policies-in-force Business forecasts Insurance service results Business forecasts GCL approx. 2,700 28,200 8,600 Individual approx. 1,500 6,618 24,033 2023/03 2024
Slide 15: Future Direction
Future Direction ◼ Aim for growth in in-force business for both individual life and GCL ◼ Continue 10% profit growth and aim for TSE Prime Market in around FY2025 Mid-term growth path of in-force business Insurance service results Group credit life insurance Continue 10% profit Steadily grow as new
Slide 16: Management Policy
Management Policy Help our customers embrace life more fully by Mission 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 17: LIFENET Manifesto
LIFENET Manifesto 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 losing sight of its original (1) Helping the customers help themselves. By making our materials ea
Slide 18: https://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
Slide 19: Appendix
Appendix
Slide 20: Glossary
Glossary Glossary Explanation Revenue accrued for fulfillment of insurance services. Mainly, expected claims, expected maintenance expenses, risk Insurance revenue adjustment release, CSM release and recovery of insurance acquisition cash flows. Investment components which will be paid regardless of
Slide 21: Breakdown of Policies-in-Force
Individual life Breakdown of Policies-in-Force Component 2022/12 2023/12 ratio Number of policies-in-force 556,942 590,097 100% - Term Life 270,451 288,013 49% - Whole-life Medical 153,628 161,384 27% - Term Medical Care 8,130 7,248 1% - Long-term Disability 67,549 69,074 12% - Cancer 57,184 64,378
Slide 22: Annualized Premium / Number of New Business
Individual life Annualized Premium / Number of New Business :AP1 of new business (JPY millions) 1,166 :Number of new business 1,123 1,137 1,104 1,051 990 991 981 969 934 933 923 889 822 818 794 747 639 675 16,993 29,864 28,136 27,553 26,918 26,167 24,410 23,928 23,314 23,369 22,506 22,612 22,164 22,
Slide 23: Surrender and Lapse Ratio
Individual life Surrender and Lapse Ratio :Surrender and lapse ratio1（%） 7.6% 7.6% 7.1% 7.0% 7.1% 6.9% 6.8% 6.6% 6.6% 6.4% 5.9% 6.3% 6.0% 6.4% 6.3% 6.4% 6.3% 5.5% 5.5% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2019年度 FY2019 2020年度 FY2020 2021年度 FY2021 2022年度 FY2022 2023年度 FY2023 1. Th
Slide 24: Insurance Acquisition Cash Flows (IACF) Efficiency
Individual life Insurance Acquisition Cash Flows (IACF) Efficiency1 :Insurance acquisition cash flows / AP of new business :Insurance acquisition cash flows per new business (JPY thousands) Fiscal year Quarter 125 138 114 123 117 121 105 97 3.5 92 82 3.1 3.1 2.9 3.1 2.7 2.8 2.4 2.2 2.0 (fiscal year)
Slide 25: Operating Expenses Ratio
Operating Expenses Ratio1 :Operating Expenses Ratio（％） :Operating expenses excl. insurance acquisition cash flows (JPY millions) Fiscal year Quarter 20.7% 20.7% 20.0% 19.3% 17.8% 19.4% 18.9% 17.4% 18.6% 4,715 3,896 18.3% 3,598 Recording of 3,047 system charges, etc 2,757 1,162 1,232 1,146 1,171 1,28
Slide 26: Summary IFRS P/L (Quarter)
Summary IFRS P/L (Quarter) (JPY millions) Items FY2023/1Q FY2023/2Q FY2023/3Q Note Insurance service results 2,274 1,813 2,186 Expected claims minus incurred Due to individual life’s lower incurred claims1 368 (104) 331 claims than expected Risk adjustment release 433 438 397 CSM release 1,677 1,758
Slide 27: Breakdown of Insurance Service Results
Breakdown of Insurance Service Results (JPY millions) FY2022 FY2023 Items （Ref.）Fiscal Year 3Q(YTD) 3Q(YTD) Insurance revenue 20,732 15,277 18,087 Expected claims 9,569 7,042 7,788 Risk adjustment release 1,698 1,250 1,270 CSM release 6,401 4,728 5,191 Recovery of IACF 3,184 2,340 2,687 Others (121)
Slide 28: Breakdown of Financial Results
Breakdown of Financial Results ◼ Increase in foreign interest rates has been mitigated, resulting in a recovery in the valuation of investment trusts and other assets (JPY millions) Items FY2022/3Q(YTD) FY2023/3Q(YTD) Change Investment results (604) 371 976 Interest income 224 272 47 Impairment loss
Slide 29: Detail of Bond Portfolio
Detail of Bond Portfolio1 As of December 31, 2023 (JPY millions) Available-for-Sale Held-to-Maturity Total JPY Bonds 17,931 20,484 38,415 Duration2 4 years 10 years 7 years Foreign Currency Bonds 9,095 — 9,095 Duration2 5 years Non-Currency Hedged 1,214 — 1,214 Currency Hedged 7,881 — 7,881 1. Based
Slide 30: CSM Movement
CSM Movement ◼ Large contribution from improvement of opex ratio with the launch of GCL in assumption changes in addition to the new business CSM of individual life Impact of (JPY millions) assumption changes, etc. 5,520 Items FY2022 FY2023/3Q(YTD) CSM, beginning of the period 74,907 83,604 CSM, Int
Slide 31: CSM Future Allocation
CSM Future Allocation ◼ Stable profits will be realized over long period from in-force CSM ◼ Aim for CSM release growth by adding CSM generated from future acquired new business Future allocation of CSM (JPY billions) Expected timing when CSM is recognized in PL Amount A+year 6 A+year 1 A＋year 2 A＋y
Slide 32: Structure of Embedded Value
Structure of Embedded Value Adjusted net worth Value of in-force EV (Net assets at end of period business + adjustments) Profit/loss for the current fiscal year is reflected in end-of- period net assets Revenue Revenue Expense Expense Unrealized future profits/losses on policies-in-force at the end
Slide 33: EV Resilience to Financial Changes
EV Resilience to Financial Changes ◼ Limited sensitivity to interest rates and stock prices Dec. 2023 End Reference: March 2023 End1 Lifenet Lifenet Company A Company B Company C 4% 4% 2.1% 1.9% 1% -0.4% -0.8% -1% -2.2% -2.0% -4% 0.5% interest rate increase -5% -5% -5% 0.5% interest rate decrease -7
Slide 34: EV Sensitivity Analysis
EV Sensitivity Analysis1 ◼ Impacts of changes in assumptions (sensitivities) Change in EEV as of Change in (JPY millions) Dec. 31, 2023 VoNB EEV and new business value as of December 31, 2023 144,294 6,350 Sensitivity 1a: 1.0% increase in risk-free rate (6,319) (1,097) Sensitivity 1b: 1.0% decrease
Slide 35: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of Dec. 31, 2023 ( (𝑅 1 + 𝑅 8 )2 + (𝑅 2 + 𝑅 3 + 𝑅 7 )2 + 𝑅 4 )/2 (JPY millions) = Solvency margin ratio Total amount of solvency margin Total amount of risk/2 2,333.8% <numerator> ÷ < the denominator> 【Ref.】 43,910 Consolidated 3,762/2 Solvency margin…
Slide 36: IFRS Reporting
IFRS Reporting ◼ IFRS adoption better presents periodic performance and profitability from policies-in-force ◼ Capital adequacy and dividends are regulated by statutory accounting standards (J-GAAP) Statutory Accounting Embedded Value IFRS 17 （J-GAAP） Economic value of Recognition of revenue Financi
Slide 37: Dividend Policy
Dividend Policy ◼ Aim for the increase in total shareholder return by capital gain1 Profit Policies-in-force & profit and loss（illustrative image） : Policies-in-force : New business : J-GAAP profit and loss Retained earnings are realized after generating profit Marketing expenses are recorded in lum
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