Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q1 2024 Earnings Presentation
41 slides from Lifenet Insurance's earnings presentation, Aug 14, 2024
Slide 1: Presentation Material for Investors First Quarter Fiscal 2024
Securities Code: 7157 TSE Growth Presentation Material for Investors First Quarter for Fiscal 2024 August 14, 2024
Slide 2: 1Q for Fiscal 2024 Key Highlights
1Q for Fiscal 2024 Key Highlights Key Indicators Corporate Value Growth Profitability Comprehensive Equity1 Annualized premium2 Insurance service of policies-in-force results ¥ 161,022mn ¥ 29,507mn ¥ 2,340mn (YoY 118.3%) (YoY 120.9%) (YoY 102.9%) Notable Achievements ◼ "Comprehensive Equity (CE)" ha
Slide 3: Annualized Premium of Policies-in-Force
Annualized Premium of Policies-in-Force ◼ Resulted in ¥29,507mn and achieved significant growth of 20.9% YoY YoY +20.9％ :AP1 of policies-in-force for GCL (JPY millions) :AP1 of policies-in-force for individual life (JPY millions) ¥ 29,507mn Group credit 3,735 life insurance Individual 24,408 25,772
Slide 4: Policies-in-Force Movement
Policies-in-Force Movement ◼ GCL remained strong with net increase of ¥408mn in the quarter ◼ Individual life bottomed out while recovery momentum is slow Net increase of :Net increase of AP of policies-in-force for GCL (JPY millions) Net increase of GCL :Net increase of AP of policies-in-force for
Slide 5: Summary IFRS P/L
Summary IFRS P/L ◼ Insurance service results and net income resulted in ¥2,340mn and ¥1,887mn, respectively (JPY millions) Items FY2023/1Q FY2024/1Q Change Insurance service results 2,274 2,340 66 Financial results1 367 338 (29) Other results (120) (57) 62 Profit before tax 2,521 2,621 99 Net income
Slide 6: Insurance Service Results
Insurance Service Results1 ◼ 26.3% progress rate for business forecasts and steadily growing :Insurance service results (fiscal year, JPY millions) :Insurance service results (1Q, JPY millions) Business forecasts 2 8,900 8,222 Progress rate for the business 7,216 forecasts 26.3％ 2 6,606 6,618 ￥2,340
Slide 7: Insurance Service Results Analysis
Insurance Service Results Analysis ◼ While YoY growth is limited, GCL business recorded profit for the first time ◼ Aim for full-year profit growth by increasing CSM release and GCL results Insurance (JPY millions) Insurance service results service results 2,340 Items FY2023/1Q FY2024/1Q Change 2,27
Slide 8: New Management Indicator “Comprehensive Equity”
New Management Indicator “Comprehensive Equity” ◼ Having changed our management indicator from EEV to “Comprehensive Equity” based on IFRS, aim to achieve ¥200-240bn in fiscal 2028 European Embedded Value（EEV） Comprehensive Equity (CE) Conceptually similar GCL contracts value1 CSM2 （after-tax） Value
Slide 9: Movement of Management Indicators
Movement of Management Indicators ◼ Management indicators have been strongly growing at a CAGR of 19% Comprehensive European Embedded Value（EEV）1 Equity ¥1,991 ¥2,006 : EEV (JPY millions) ¥1,788 : GCL contracts value (JPY millions) 159,802 161,022 : CSM after tax (JPY millions) 6,709 7,894 : IFRS Eq
Slide 10: Changing Factors of Comprehensive Equity
Changing Factors of Comprehensive Equity ◼ Increased due to GCL contracts value and net income, though affected by rising interest rates Equity movement Net income (JPY millions) attributable to owners GCL of the Company CSM (after tax) movement movement 1,887 Impact of assumption GCL contracts valu
Slide 11: Achievements in GCL business
Achievements in GCL business Rebranding Tech & Services Embedded ◼ With the revision of premium rate in July and further growth in mortgage loans, expecting to grow profits in fiscal 2024 au Jibun Bank’s rapid growth of mortgage loan Contribution to key indicators (FY2024/1Q) Mar. 2024 Jun. 2024 ¥4.
Slide 12: Progress in GCL business
Progress in GCL business Rebranding Tech & Services Embedded ◼ The revision of premium rate resulted in increase of AP of policies-in-force ◼ Aim for expanding partner banks for further growth Effect on premium rate revision July 2024 Future initiatives Revision of :AP of policies-in-force for GCL (
Slide 13: Launch of New Product, Dementia
Launch of New Product, Dementia Rebranding Tech & Services Embedded ◼ Launched dementia insurance in April 2024 and actively conducted publicity campaigns in collaboration with Eisai Insurance with the age of dementia Initiatives • Started “Brenavi” on LINE Dementia for dementia information • Conduc
Slide 14: Enhancement of Promotion Message
Enhancement of Promotion Message Rebranding Tech & Services Embedded ◼ Renewed marketing message in ads for being more chosen by the younger generation “Your insurance, your choice“ “YOU change the value of life insurance” 13
Slide 15: Impact from Rising Interest Rates
Impact from Rising Interest Rates ◼ Impact on Comprehensive Equity and net income is limited ◼ Stable interest income is expected from high turnover asset management of short duration bonds Impact on corporate value & net income Opportunity for interest income Expected stable growth of interest inco
Slide 16: Consolidated Business Forecasts for FY2024
Consolidated Business Forecasts for FY2024 ◼ Remains unchanged since May 2024 Growth Profitability (JPY millions) (JPY millions) Business forecasts Business forecasts AP of policies-in-force GCL Insurance service results approx. 3,500 34,000 8,900 Individual 8,222 approx. 1,700 28,750 2024/03 2025/0
Slide 17: 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 18: Initiatives to Improve Market Evaluation
Initiatives to Improve Market Evaluation ◼ P/CE ratio remains below 1x and market evaluation needs improvement ◼ Aim to increase corporate value and improve market evaluation Stock price / CE per share (P/CE) Improvement market evaluation 2.00 2,000 1,800 1 ¥1,512 ¥1,539 1,600 Adopt corporate value
Slide 19: For Achieving Mid-term Business Plan
For Achieving Mid-term Business Plan ◼ Aim to achieve Comprehensive Equity of ¥200-240bn in FY2028 by realizing sustainable growth through investment in priority areas Fiscal 2025 ¥200-240bn CE growth image Aim for TSE Goals in Fiscal 2028 Prime Market Stock price 159 1241 133 ¥3,000+ Annual growth
Slide 20: 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 21: 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 22: Appendix
Appendix
Slide 23: 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 24: 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 25: Breakdown of Policies-in-Force
Individual life Breakdown of Policies-in-Force Component 2023/06 2024/06 ratio Number of policies-in-force 576,852 609,888 100% - Term Life 280,789 297,565 49% - Whole-life Medical 158,403 166,558 27% - Long-term Disability 68,507 70,242 12% - Cancer 61,509 68,455 11% - Other1 7,644 7,068 1% Sum ins
Slide 26: Annualized Premium / Number of New Business
Individual life Annualized Premium / Number of New Business :AP1 of new business (JPY millions) :Number of new business 1,166 1,123 1,137 1,104 1,051 991 981 969 934 933 923 889 820 747 734 675 639 29,864 28,136 27,553 26,918 23,369 22,164 26,167 22,506 24,410 23,928 22,612 22,128 18,634 20,934 18,4
Slide 27: Surrender and Lapse Ratio
Individual life Surrender and Lapse Ratio :Surrender and lapse ratio1（%） 7.6% 7.1% 6.9% 6.8% 6.6% 6.6% 6.3% 6.4% 6.4% 6.3% 6.4% 6.3% 5.9% 6.0% 6.1% 5.5% 5.5% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY2020 2020年度 FY2021 2021年度 FY2022 2022年度 FY2023 2023年度 FY2024 2024年度 1. The surrender and
Slide 28: Insurance Acquisition Cash Flows (IACF) Efficiency
Individual life Insurance Acquisition Cash Flows (IACF) Efficiency :Insurance acquisition cash flows / AP of new business :Insurance acquisition cash flows per new business (JPY thousands) Fiscal year1 Quarter 138 138 118 129 121 118 117 3.5 3.5 105 82 97 3.3 3.0 2.9 3.1 3.0 2.7 2.4 2.0 (fiscal year
Slide 29: Operating Expenses Ratio
Operating Expenses Ratio1 :Operating Expenses Ratio（％） :Operating expenses excl. insurance acquisition cash flows (JPY millions) Fiscal year2 Quarter 20.7% 19.4% 16.7% 18.9% 18.9% 16.7% 18.4% 18.6% 17.8% 17.4% 4,935 4,715 3,896 3,047 1,215 1,146 1,171 1,280 1,337 1,215 (fiscal year) 2020 ’21 ’22 ’23
Slide 30: Summary IFRS P/L (Quarter)
Summary IFRS P/L (Quarter) (JPY millions) Items FY2023/1Q FY2023/2Q FY2023/3Q FY2023/4Q FY2024/1Q Note Due to improvement in GCL Insurance service results 2,274 1,813 2,186 1,947 2,340 results Expected claims minus incurred Incurred claim payments for claims1 368 (104) 331 189 46 individual life inc
Slide 31: Breakdown of Insurance Service Results
Breakdown of Insurance Service Results (JPY millions) FY2023 FY2024 Items （Ref.）Fiscal Year １Q 1Q Insurance revenue 24,698 5,500 6,776 Expected claims 10,464 2,561 2,694 Risk adjustment release 1,678 433 391 CSM release 7,056 1,677 1,864 Recovery of IACF 3,647 869 990 Others (150) (41) (34) Premium
Slide 32: Breakdown of Financial Results
Breakdown of Financial Results ◼ Interest income rose due to increased foreign securities holdings, while valuation gains decreased as a result of stock sales (JPY millions) Items FY2023/1Q FY2024/1Q Change Investment results 392 360 (32) Interest income 72 237 164 Impairment losses on financial ass
Slide 33: Detail of Bond Portfolio
Detail of Bond Portfolio1 As of June 30, 2024 (JPY millions) Available-for-Sale Held-to-Maturity Total JPY Bonds 16,926 28,445 45,372 Duration2 4 years 8 years 6 years Foreign Currency Bonds 12,089 — 12,089 Duration2 4 years Non-Currency Hedged 3,570 — 3,570 Currency Hedged 8,518 — 8,518 1. Based on
Slide 34: CSM Movement
CSM Movement ◼ Decreased due to slower growth in new business CSM for individual life Impact of (JPY millions) assumption Interest changes, etc. Items FY2023 FY2024/1Q New business accretion 221 CSM 240 1,124 CSM, beginning of the period 83,604 92,173 Amortization CSM, in current beginning period Ne
Slide 35: 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 36: Comprehensive Equity Sensitivity Analysis
Comprehensive Equity Sensitivity Analysis1 ◼ Impacts of changes in assumptions (sensitivities) Changes in Comprehensive Equity (CE) as of June 30, 2024 Of which Changes in CE % changes changes in CSM2 (JPY millions) Comprehensive Equity as of June 30, 2024 161,022 ー 62,077 0.5% increase in risk-free
Slide 37: Changing Factors of EEV
Changing Factors of EEV1 ◼ Though affected by rising interest rate, increased due to adjusted incremental EV Assumption changes (JPY millions) Expected 147 existing Operating experience business contribution variances 148,897 441 845 Economic variances and assumption changes Value of (758) new busin
Slide 38: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of June 30, 2024 ( (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 1,892.9％ <numerator> ÷ < the denominator> 【Ref.】 43,667 Consolidated 4,613/2 Solvency margin…
Slide 39: 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 40: Summary J-GAAP P/L & B/S
Summary J-GAAP P/L & B/S (JPY millions) (JPY millions) Items FY2023 FY2023/1Q FY2024/1Q Items FY2023 FY2024/1Q Ordinary income 35,964 7,929 10,437 Total assets 84,194 84,814 Insurance premiums 34,264 7,693 9,580 Cash and deposits 20,009 16,485 and other Ordinary expenses 40,634 8,348 10,984 Money he
Slide 41: 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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