Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Investor Presentation (June 2024)
57 slides from Lifenet Insurance's investor presentation, June 2024
Slide 1: Presentation Material for Business Plan and Growth Potential
Securities Code: 7157 TSE Growth Presentation Material for Business Plan and Growth Potential June 2024
Slide 2: Table of Contents
Table of Contents １. Business Model ２. Japanese Life Insurance Industry Trends ３. FY2023 Results ４. New Management Policy and Mid-term Plan ５. Future Initiatives to Improve Market Evaluation ６. Risk Information 1
Slide 3: Lifenet is…
Lifenet is… ◼ Based on our mission of “Help our customers embrace life more fully by offering comprehensible, cost-competitive and convenient products and services,” we have consistently provided life insurance from the customer’s perspectives since starting our business Comprehensible Cost-Competit
Slide 4: 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 5: Lifenet at a Glance
Lifenet at a Glance History Stock Information • Oct. 2006 Establishment • Tokyo Stock Exchange, Growth Commencement of business – Market of the high growth and emerging stocks • May 2008 Listing on the Mothers market of Tokyo Stock Exchange • Ticker: 7157 • Mar. 2012 Capital and business alliance wi
Slide 6: Core Strength
Core Strength ◼ Five unique characteristics make us the leading online life insurer Dedicated to Online, J.D. Power 2024 Japan Life Insurance 1 Contract Customer Satisfaction Study Simple Products ＜Direct Segment＞1 2 Sophisticated UI/UX 1st Diverse Human for 4th consecutive year 3 Resources Drawn to
Slide 7: Dedicated to Online, Simple Products
Dedicated to Online, Simple Products ◼ Easy to understand and pure protection-type products1 ◼ Utilization of online allows us to reduce sales costs and offer affordable premiums to customers Simple Products Affordable Pricing Savings of insurance premium2 after switching to Lifenet Long-term Term L
Slide 8: Sophisticated UI/UX
Sophisticated UI/UX ◼ Offer convenient services unique to online life insurance by adapting to the changing customers’ needs over time Insurance Procedures while Application Claim payments Consultation enrolled in a policy • Using LINE enables • A paperless application process • Enable to log-in to
Slide 9: Diverse Human Resources under the Customer-oriented Philosophy
Diverse Human Resources under the Customer-oriented Philosophy ◼ Create the future of life insurance by gathering members with diverse backgrounds Inside Directors Employees Ryosuke Mori Yasuhiro Koba Representative Director, Executive Employees with Experience Director and Vice President President
Slide 10: Unique Customer Base
Unique Customer Base ◼ 74% of new policyholders are in their 20’s to 40’s ◼ Under 90% life insurance penetration, over half of new policyholders are “first insurance purchase” Number of new policies by age group Customer Situation3 Reference: Industry average１ Lifenet2 Ratio of 20’s to 40’s First ti
Slide 11: Cross-Industry Partnerships
Cross-Industry Partnerships ◼ Embed our insurance business in the partners’ ecosystem ◼ Launched GCL1 business as expansion of business domain Individual Life Insurance Group Credit Life Insurance Leverage broad customer base and strong brand Start offering group credit life insurance to of partners
Slide 12: Growth Loop
Growth Loop ◼ Unique position as No.1 online life insurer contributes to expansion of partner business Increasing Embedded insurance Unique positioning opportunities of business with partners as No.1 online insurer embedded insurance creating ecosystem Online life Insurance Self- reinforcing Expandi
Slide 13: Table of Contents
Table of Contents １. Business Model ２. Japanese Life Insurance Industry Trends ３. FY2023 Results ４. New Management Policy and Mid-term Plan ５. Future Initiatives to Improve Market Evaluation ６. Risk Information 12
Slide 14: Life Insurance Market in Japan
Life Insurance Market in Japan ◼ Demand for life insurance is high in huge market, with approx. 90% of penetration Market size by industry in Japan1 Ratio of households with policies2 Life insurance ¥ 38.0tn 89.8% Bank ¥23.3tn Average annual premiums per household2 Telecommunications business ¥15.2t
Slide 15: Individual Life Insurance Market
Individual Life Insurance Market ◼ The number of policies-in-force is approx. 190mn ◼ Medical insurance, term-life insurance and whole-life insurance for death coverage occupy high share of the market The Industry and Lifenet’s Number of Number of Policies-in-force by Coverage Policies-in-force Type
Slide 16: Trend of Customer's Purchasing Channel and Intention
Trend of Customer’s Purchasing Channel and Intention ◼ Purchasing channels remains high via in-house sales representatives ◼ Preferred purchasing channels shows high intention for online channel, recognizing high growth potential of online life insurance Preferred Purchasing Channels Trends of Purch
Slide 17: Group Credit Life Insurance Market
Group Credit Life Insurance Market ◼ Mortgage loan outstanding increases year by year ◼ Four major life insurers account for 60% of market share, while foreign life insurers account for 20% Trends of Mortgage Loan Outstanding1 Share of Group Credit Life Insurance2 215 trillion yen 178 Other 18% Life
Slide 18: Table of Contents
Table of Contents １. Business Model ２. Japanese Life Insurance Industry Trends ３. FY2023 Results ４. New Management Policy and Mid-term Plan ５. Future Initiatives to Improve Market Evaluation ６. Risk Information 17
Slide 19: Annualized Premium of Policies-in-Force
Annualized Premium of Policies-in-Force1 ◼ Achieved significant growth of 19.6% YoY with the addition of GCL YoY +19.6％ :AP2 of policies-in-force for GCL (JPY millions) ¥ 28,750mn :AP2 of policies-in-force for individual life (JPY millions) Group credit 3,326 life insurance Individual 24,033 25,424
Slide 20: Insurance Service Results
Insurance Service Results1 ◼ Significantly increased 24.2% YoY to ¥8,222mn Business forecasts 8,600 :Insurance service results (fiscal year, JPY millions) ￥ 8,222ｍn 2 7,216 vs. forecast 6,606 6,618 2 95.6％ 5,419 YoY ＋24.2％ 2019 2020 2021 2022 2023 (fiscal year) 1. Figures for FY2021 and earlier are
Slide 21: European Embedded Value
European Embedded Value1 ◼ EEV and value of in-force business have been strongly growing at a CAGR of 19%2 and 30%, respectively since IPO ◼ EEV per share continued its growth trend, offset dilution by capital raising in Sep. ¥1,788 ¥1,831 ¥1,673 ¥1,570 146,991 : Value of in-force business (JPY mill
Slide 22: FY2023 Business Forecasts and Results
FY2023 Business Forecasts and Results FY2023 Forecasts FY2023 Forecasts FY2023 Results （Ref.） （As of May 2023） （As of Aug. 2023） FY2022 Results (JPY millions) Annualized premium of policies-in-force 28,500 28,200 28,750 24,033 Insurance revenue 24,900 24,900 24,698 20,732 Insurance service results 8
Slide 23: Key Efforts in Individual Life
Key Efforts in Individual Life ◼ Carried out initiatives to accelerate growth of in-force business even in environment of declining demand Direct Business Partner Business Implemented new various measures for younger generation Launched new products embedded into point ecosystem J.D. Power Japan Lif
Slide 24: Key Efforts in GCL
Key Efforts in GCL ◼ Achieved strong growth in in-force business although higher than expected payments ◼ Forecast to record profit from FY2024 due to planned premium rate revisions au Jibun Bank’s rapid growth of mortgage loan Contribution to key indicators1 Nov. 2023 Mar. 2024 ¥3.5tn ¥4.0tn + ¥3,3
Slide 25: Table of Contents
Table of Contents １. Business Model ２. Japanese Life Insurance Industry Trends ３. FY2023 Results ４. New Management Policy and Mid-term Plan ５. Future Initiatives to Improve Market Evaluation ６. Risk Information 24
Slide 26: Committed to Outcome Goal
Committed to Outcome Goal Outcome goal A Society where next generations can be nurtured with confidence in the future we contribute to creating a future where next generations can be nurtured by society as a whole through delivering the value of insurance based on the LIFENET Manifesto. Outcome Refe
Slide 27: Outcome Reference Indicators
Outcome Reference Indicators Reference Indicators1 Market penetration rate 01 of online life insurance 02 Prospect for the future life 03 Ease of raising children We want customers to leave their worries We offer simple coverages, affordable about the future to convenient and useful In particular, w
Slide 28: New Management Policy: Mission, Vision, Value
New Management Policy Help our customers embrace life more fully by offering comprehensible, Mission cost-competitive and convenient products and services Be the leading online life insurer Vision creating the future of life insurance Lifenetter Values -Manifesto driven Value -Ownership -Teamwork -G
Slide 29: FY2024-2028 Mid-term Business Plan
FY2024-2028 Mid-term Business Plan Growth Strategy Goals in Fiscal 2028 Priority Areas Management Goal Comprehensive Equity (CE) : ¥200-240bn Rebranding Embedded Financial Targets 中期計画 Stock price：¥3,000+ Annual growth rate of CE per share： Tech & Services approx. 10% Non-financial Targets (Human ca
Slide 30: Our Business Environment
Our Business Environment ◼ External environment changes will be a major tailwind for business growth Expansion of online life Younger generation × Trend of financial １ insurance market 2 technologies 3 ecosystem • COVID-19 accelerated online • Emerging new technologies • High interest in online insu
Slide 31: Priority Areas for Further Growth
Priority Areas for Further Growth ◼ Three priority areas to move toward the next stage of growth Rebranding Embedded Qualitative changes in Business enhancement Internet direct business with partners Direct Tech & Services Partner GCL Refinement of value provided Partner GCL Direct 30
Slide 32: Individual: Direct Business
Individual：Direct Business Rebranding Tech & Services Embedded ◼ Aim for further growth by updating the Lifenet brand and being unique for younger generation Focus areas of marketing centered on younger generation Rebranding Number of new policies by age group Nurture Marketing Increase preference E
Slide 33: Individual: Partner Business
Individual：Partner Business Rebranding Tech & Services Embedded ◼ Accelerate growth by embedding our business into partners’ ecosystem Deepening ties with existing partners Telecom- munications Development of • Initiatives to enhance business synergy in new partners partners’ ecosystem Retail Paymen
Slide 34: Group Credit Life Insurance
Group Credit Life Insurance Rebranding Tech & Services Embedded ◼ Aim for business expansion by alliance with au Jibun Bank and development of new partner banks Deepening of alliance with au Jibun Bank Expansion of partner banks • Contribute to enhancing competitiveness of mortgage • Aim to develop
Slide 35: HR Strategy for Business Growth
HR Strategy for Business Growth ◼ Further strengthen initiatives for human capital based on diversity and growth opportunities Human Resources Strategy Policies regarding HR focus on Diversity & Growth Opportunities FY2028 Mid-term business plan Management Policy Cross-organizational Development thr
Slide 36: New Management Indicator “Comprehensive Equity”
New Management Indicator “Comprehensive Equity” ◼ Adopt “Comprehensive Equity” as new management indicator representing corporate value to replace EEV ◼ Increase the credibility of corporate value indicators by changing from "EV" to “Comprehensive Equity” European Embedded Value（EEV） Comprehensive E
Slide 37: Table of Contents
Table of Contents １. Business Model ２. Japanese Life Insurance Industry Trends ３. FY2023 Results ４. New Management Policy and Mid-term Plan ５. Future Initiatives to Improve Market Evaluation ６. Risk Information 36
Slide 38: Current Market Evaluation
Current Market Evaluation ◼ Market evaluation has room for improvement while our corporate value has been growing strongly EEV per Share Stock Price Price/EEV per Share (PEV) ¥1,831 2.00 EEV/share (JPY) ¥1,788 EEV (JPY millions) ¥1,673 146,991 ¥1,570 ¥1,430 124,666 ¥1,239 116,604 95,140 ¥1,512 PEV r
Slide 39: Major Initiatives to Improve Market Evaluation
Major Initiatives to Improve Market Evaluation Major initiatives Key points • Increase the credibility of corporate value indicators by changing Adopt corporate value indicators from "EV" to "Comprehensive Equity" 1 linked to IFRS • Enable investors to compare with global peers applying IFRS17 Commi
Slide 40: Further Strengthening of Corporate Governance
Further Strengthening of Corporate Governance ◼ Shift to structure with a majority of Independent Outside Directors with aim of strengthening the supervisory function of the Board of Directors and further enhancement of the separation of supervisory and executive functions Ratio of Independent Outsi
Slide 41: Increase in Shareholder Value over Mid-to-long Term
Increase in Shareholder Value over Mid-to-long Term ◼ Aiming to both increase corporate value by expanding business scale and improve market evaluation Increase in corporate value（CE） Improvement market evaluation • Re-growth in individual life + expansion of GCL Scaling up • Pursuit of upside Adopt
Slide 42: Fiscal 2028 goals image
Fiscal 2028 goals image ◼ Aim to achieve Comprehensive Equity of ¥200-240bn in FY2028 by realizing sustainable growth through investment in new priority areas Fiscal 2025 ¥200-240bn CE growth image Aim for TSE Goals in Fiscal 2028 Prime Market Stock price 159 124 133 ¥3,000+ Annual growth rate of CE
Slide 43: For Achieving Mid-term Business Plan
For Achieving Mid-term Business Plan Management goal • We expect to achieve over ¥200 billion in Comprehensive equity(“CE”) through current efforts in the individual insurance business and efforts with one partner bank (au Jibun Bank Corporation) in the group credit life insurance business. In addit
Slide 44: Consolidated Business Forecasts for FY2024
Consolidated Business Forecasts for FY2024 ◼ Expect ¥8.9bn in insurance service results and ¥6.2bn in net income (JPY millions) (JPY millions) Growth Profitability Business forecasts Business forecasts AP of policies-in-force GCL Insurance service results approx. 3,500 34,000 8,900 Individual 8,222
Slide 45: Table of Contents
Table of Contents １. Business Model ２. Japanese Life Insurance Industry Trends ３. FY2023 Results ４. New Management Policy and Mid-term Plan ５. Future Initiatives to Improve Market Evaluation ６. Risk Information 44
Slide 46: Risk Classification
Risk Classification Category Major Risks Severity A-1 Competition in the life insurance industry A-2 Investment in insurance acquisition cash flows 〇 A-3 Change in relationship with, or performance of business partners A-4 Demographic movements in Japan A-5 Climate change A-6 General sustainability
Slide 47: Major Risks (1/3)
Major Risks（1/3） Priority High Major risk Measures (Occurrence and severity) ■Competition in the life insurance industry With the accelerated digitization of financial We design and develop our products and In the Japanese life insurance market, Lifenet faces services backed by the spread of the COV
Slide 48: 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 and Life insurance premiums are calculated based on massive outbreak of an infectious disease underwriting methods a
Slide 49: Major Risks (3/3)
Major Risks（3/3） Priority High Major risk Measures (Occurrence and severity) ■System failures We have not experienced any large-scale The Group has established basic policy and The Group relies on the stable operation of its system troubles since our business measures for the stable operation of inf
Slide 50: Appendix
Appendix
Slide 51: 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 52: Glossary 1
Glossary 1 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
Slide 53: Glossary 2
Glossary 2 Glossary Explanation An indicator defined by the Group. It is the sum of “Equity (attributable to owners of the Company)” on the IFRS balance sheets, “CSM”, a liability representing unearned profit that the Group expects to earn as it provides insurance services Comprehensive Equity (insu
Slide 54: 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 55: Appropriation of Funds for Capital Raising
Appropriation of Funds for Capital Raising Overseas public offering in Sep. 2021 (JPY millions) Amount Allocated Amount Allocated Amount Allocated Contents Amount Raised (FY2021) (FY2022) (FY2023) Operating expenses, primarily comprising 6,800 680 1,500 1,520 market expenses for acquiring new busine
Slide 56: 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
Slide 57: https://ir.lifenet-seimei.co.jp/en/
This material is based on information as of June 2024. 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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