Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q1 2016 Earnings Presentation
41 slides from Lifenet Insurance's earnings presentation, Aug 10, 2016
Slide 1: Reference Data for First Quarter Fiscal 2016
Securities Code:7157 TSE Mothers Reference Data for First Quarter Fiscal 2016 August 10, 2016
Slide 2: Contents
Contents 1. Progress of Mid-term Business Plan 2. Results for 1Q of Fiscal 2016 1
Slide 3: LIFENET is…
LIFENET is… Comprehensible Cost-Competitive Convenient Returning to the original purpose of life insurance – mutual support – Plugged-in way to reach customers who need insurance products with necessary coverage 2
Slide 4: New Mid-term Business Plan
New Mid-term Business Plan Summary of new 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
Slide 5: To Achieve New Mid-term Business Plan
To Achieve New Mid-term Business Plan Aiming for returning to growth in new business performance in fiscal 2016 Achieve Establish a system Management Goal realizing sustainable Return to profitability growth in new business 2018 performance 2017 2016 4
Slide 6: Business Strategy
Business Strategy For reaching more customers using channels Online direct sales Online →Realize Manifesto direct sales KDDI (exclusive alliance agent) →Extend customer base KDDI Over-the-counter agent Over-the- (exclusive counter →Develop the market for alliance agent long-term disability agent)
Slide 7: Progress of Mid-term Business Plan: Ordinary Income
Progress of Mid-term Business Plan (Ordinary Income) 14% increase year on year (JPY mn) : Fiscal year 13,500 : 1Q of fiscal year 10,000 9,387 Up 14% Y-on-Y Progress ratio to target For 1Q 26% 2,284 2,594 FY2015 16 18 6
Slide 8: 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) Business forecast Management Goal Results for FY2016 FY2018 16/1Q Ordinary profit (loss) before amortization of deferred assets under Article 113 of Prof
Slide 9: Contents
Contents 1. Progress of Mid-term Business Plan 2. Results for 1Q of Fiscal 2016 8
Slide 10: Summary of 1Q for FY2016 Results
Summary of 1Q for FY2016 Results (JPY mn) 2015/1Q 2016/1Q Year on year Ordinary income 2,284 2,594 113.6% Operating expenses 751 861 114.7% Ordinary profit (loss)1 161 139 86.4% Cash flows from operating activities 1,057 758 71.8% Mortality margin 513 549 107.1% Annualized premium2 of policies-in-fo
Slide 11: Key Accomplishment in 1Q for FY2016
Key Accomplishment in 1Q for FY2016 Ordinary income 114% Y-o-Y New business performance grew Y-o-Y Continuously recorded ordinary profit1 Steadily recorded mortality margin Commenced sales of “au Life Insurance” 1. Ordinary profit before amortization of deferred assets under Article 113 of the Insur
Slide 12: Promote Utilization of Smartphone
Promote Utilization of Smartphone Realize consideration process suited to the times (April 2016) Renewed Smartphone website For customers convenience and satisfaction (July 2016) Started consultation service via LINE Making process convenient and accessible 11
Slide 13: Enhance Online Advertising
Enhance Online Advertising Emphasize our strengths and features through video advertising https://www.youtube.com/watch?v=7UWWpu37LE8 12
Slide 14: Business Alliance with KDDI
Business Alliance with KDDI Commenced sales of “au Life Insurance” in April au Medical Insurance au Term Insurance au Medical Insurance for Women 13
Slide 15: au Life Insurance
au Life Insurance Approaching customers different from existing customers Gender1 Applying device1 40% Female 40% Via SPH 50% 80% 60% Male 60% Via PC 50% 20% au Life Insurance Our other au Life Insurance Our other products2 products2 1. Based on number of applications in June 2016 2. Our all produ
Slide 16: Dedicated Product for KDDI
Dedicated Product for KDDI “au Life Insurance” with refunds1 will be launched in December From April to November 2016 Discount on Set au Life Insurance ＋ Discount telecommunication charge 200 yen× 60 months (max) From December 2016 Refund from au Life Insurance insurance premium with refunds1 200
Slide 17: Promotion of Long-term Disability
Promotion of Long-term Disability Highly evaluated as pioneer in Japan market Long-term Disability “Hataraku-Hito” Ranking of insurance recommended by experts Ranked number 1 in “Long-term Disability Product Category” Weekly Diamond magazine (Diamond Inc., April 23, 2016) 1. Sales of Long-term Dis
Slide 18: New Long-term Disability Product
New Long-term Disability Product Launched in June based on customers requirements Long-term Disability Long-term Disability “Hataraku-Hito” “Hataraku-Hito 2” New Elimination period: Choose from 60 days only “180 days” and 180 days New Insurance term: Choose from 55, 60, only “65 years old” 65 and
Slide 19: Ordinary Income (Quarterly)
Ordinary Income (Quarterly) 114% year on year by increase of insurance premiums and other (JPY mn) 2,594 2,345 2,365 2,392 2,284 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 18
Slide 20: Ordinary Income (Quarterly) Breakdown
Ordinary Income (Quarterly) In addition to increase of insurance premiums and other, recorded reversal of reserves for outstanding claims (JPY mn) 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q Insurance premiums and other 2,241 2,261 2,280 2,335 2,444 Investment income 41 50 113 54 51 Reversal of reserves for out
Slide 21: 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) 228,846 225,534 222,598 217,335 219,471 9.3 9.5 9.2 8.9 9.0 15/06 15/09 15/12 16/03 16/06 (YY/MM) 20
Slide 22: Breakdown of Policies-in-force
Breakdown of Policies-in-force 143,123 in-force policyholders (as of June 30) (YY/MM) 15/06 16/06 Number of policies-in-force 217,335 228,846 - Term Life1 113,690 119,081 - Whole-Life Medical1 66,185 68,961 - Term Medical Care1 11,660 10,955 - Long-term Disability1 25,800 29,849 Sum insured of pol
Slide 23: Number of New Business / Annualized Premium (Quarterly)
Number of New Business / Annualized Premium (Quarterly) New business performance is bottoming out :Number of new business :Annualized premium of new business (JPY mn) 6,864 6,883 7,307 5,756 5,647 323 316 341 279 268 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 22
Slide 24: Amount of Insurance Claims and Benefits (Quarterly)
Amount of Insurance Claims and Benefits (Quarterly) 23 benefit claims, 10 claims increased year on year 505 (JPY mn) Benefit 130 claims 306 293 253 109 225 114 Insurance 99 375 claims 120 154 197 179 105 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 23
Slide 25: Provision for Policy Reserves (Quarterly)
Provision for Policy Reserves (Quarterly) Remaining at same level :Provision for policy reserves (JPY mn) :Provision for policy reserves / Premiums income 931 945 950 917 911 42.4% 42.4% 41.9% 39.7% 38.8% 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 24
Slide 26: Operating Expenses (Quarterly)
Operating Expenses (Quarterly) Increased in order to achieve Management Goal (JPY mn) 992 787 861 751 709 441 339 Marketing 279 312 269 135 134 Customer 128 124 138 service System 343 315 336 415 387 and other 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 25
Slide 27: Marketing Expenses per New Business (Quarterly)
Marketing Expenses per New Business (Quarterly) Improved year on year despite increase in marketing expenses :Marketing expenses per new business (JPY thousand) :Marketing expenses/Annualized premium of new business 64 48 47 46 45 1.3 0.9 1.0 0.9 0.9 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 26
Slide 28: Ordinary Profit / Loss (Quarterly)
Ordinary Profit / Loss (Quarterly) Recorded profitability1 despite increase in expenses (JPY mn) 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q Ordinary profit (loss) before amortization 161 257 220 (54) 139 of deferred assets Amortization cost (265) (265) (265) (265) (265) Ordinary profit (loss) (103) (7) (44) (3
Slide 29: Structure Breakdown of Ordinary Profit / Loss
Structure Breakdown of Ordinary Profit / Loss Decreased due to increase in insurance payment year on year Transition of ordinary profit (loss)1 (JPY mn) Income Expense Other Increase of insurance 107 premiums Decrease and other of provision 203 Increase of insurance for policy reserves claims and
Slide 30: Condensed Statements of Operation (Quarterly)
Condensed Statements of Operation (Quarterly) (JPY mn) 15/1Q 16/1Q Change Insurance premiums and other 2,241 2,444 203 Other 42 150 107 Ordinary income (A) 2,284 2,594 310 Insurance claims and other 301 564 263 Provision for policy reserves and other 954 911 (43) Operating expenses 751 861 110 Other
Slide 31: Fundamental Profit
Fundamental Profit Continuously recorded mortality margin (JPY mn) 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q Mortality margin 513 545 532 509 549 Expense margin (loss) (602) (547) (625) (819) (655) Interest margin 8 14 9 11 5 Fundamental profit (81) 12 (83) (298) (100) (ref.) Insurance premiums and other 2,24
Slide 32: Operating Cash Flows (Quarterly)
Operating Cash Flows (Quarterly) Maintain positive despite increase in insurance payment (JPY mn) 1,195 1,235 1,123 1,057 758 15/1Q 15/2Q 15/3Q 15/4Q 16/1Q 31
Slide 33: Financial Condition
Financial Condition (JPY mn) (YY/MM) 15/03 16/03 16/06 Total assets Cash and deposits 23,387 731 30,317 734 31,179 1,101 Promote Monetary claims bought - 1,999 1,499 diversification Money held in trust 1,033 1,035 999 in investment Securities Government bonds 17,082 8,227 23,067 10,102 24,252 10,2
Slide 34: Solvency Margin Ratio
Solvency Margin Ratio1 Maintain high level despite investment risk increase 2,723% 2,747% 2,782% 2,805% 2,778% Average2 of 4 major Average2 of 4 major insurance companies as insurance companies as of September 30, 2015 of March 31, 2016 909％ 894％ 15/06 15/09 15/12 16/03 16/06 (YY/MM) 1. The solven
Slide 35: Impact of Decline of Interest Rate
Impact of Decline of Interest Rate Limited impact in 1Q of fiscal 2016 Impact on interest margin →Limited because our products are all protection type Impact on balance sheet →Increase in unrealized gains of government bonds and corporate bonds Investment policy →Promote diversification in i
Slide 36: Business Forecast
Business Forecast Business forecast for fiscal 2016 remains unchanged (JPY mn) Ordinary income Ordinary profit1 Business forecast FY2016 10,000 Profitability (ref.) Results for 1Q of FY2016 2,594 139 1. Ordinary profit before amortization of deferred assets under Article 113 of the Insurance Busin
Slide 37: 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,
Slide 38: 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
Slide 39: Appendix
Appendix oD) LiFENE] LIFENET INSURANCE COMPANY
Slide 40: Three Surplus Factors of Fundamental Profit
Three Surplus Factors of Fundamental Profit 1Q of FY2016 Statements of Operations Profit analysis Insurance premiums and other 2,444 Ordinary income Net premiums Expense loading Premiums income 2,347 Reinsurance income 97 Reinsurance income Interest and Gains on sales Investment income 51 dividends
Slide 41: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of Jun 30, 2016 (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 2,778.7% = <numerator> 19,917 ÷ < the denominator> 1,433/2 Cash and deposits Other liabilities 449 Insurance risk R1 1,024 1
Lifenet Insurance Company — Q1 2016 Earnings Presentation on 6ix