Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q3 FY2021 Earnings Presentation
27 slides from Lifenet Insurance's earnings presentation, Feb 10, 2022
Slide 1: Q3 Financial Results Briefing for the Fiscal Year Ending March 2022
LIFENET INSURANCE COMPANY Q3 Financial Results Briefing for the Fiscal Year Ending March 2022 February 10, 2022 [Speaker] Ryosuke Mori Representative Director and President
Slide 2: Presentation
Presentation Mori: Thank you very much for taking time out of your busy schedule to participate in today's financial results briefing. Our company announced its financial results for the 3Q of FY2021 at 3:30 PM today. The presentation materials are available on our IR website. Today, I would like to
Slide 3: Overview of cumulative 3Q for FY2021
First, please see page 2. This is the overview of cumulative 3Q for FY2021. The in-force business grew steadily, and the annualized premium of policies-in-force, which is equivalent to annual recurring revenue, increased 11.5% from the end of the FY2020 to JPY20,862 million. Annualized premium of ne
Slide 4: Trend of policies-in-force performance
Please see page 3. This is the trend of our policies-in-force performance. Annualized premium of policies-in-force, which is equivalent to annual recurring revenue, totaled JPY20.8 billion, and the number of policies-in-force was 491,611, both of which continued to grow strongly by more than 16% ove
Slide 5: Factors changing number of policies-in-force
Page 4 shows the factors that caused the change in the number of policies-in-force. The growth of policies-in-force depends on not only the growth of new business, but also how to improve the surrender and lapse ratio. I would like to explain each in turn. Copyright© LIFENET INSURANCE COMPANY All ri
Slide 6: Trend of new business performance
Please see page 5 shows the trend of our new business performance. Annualized premium of new business totaled JPY3,107 million, and the number of policies was 76,226. While this is a record high for the first nine months of a fiscal year, the new business performance for the 3Q of FY2021 was lower t
Slide 7: Surrender and lapse ratio on a quarterly basis
On the other hand, there is a good change. Please see page 6. This chart shows the surrender and lapse ratio on a quarterly basis. The annualized surrender and lapse ratio for the 3Q of FY2021 was 6.0%, which corresponds to a monthly surrender and lapse ratio (churn rate) of 0.5%, has recovered to t
Slide 8: Marketing efficiency
Page 7 shows marketing efficiency. First, the table on the lower left shows the actual amount of the marketing expenses. Marketing expenses for the first nine months ended December 31, 2021 totaled JPY5,862 million. As I mentioned earlier, the business environment was not necessarily favorable from
Slide 9: Efficiency of operating expenses excluding marketing expenses
Next, we will explain the efficiency of operating expenses excluding marketing expenses. Operating expenses excluding marketing expenses were JPY2,861 million, and operating expenses ratio was 19.6%. In line with the current growth in-force business, the operating ratio has been steadily improving a
Slide 10: Accounting structure of life insurance companies
Page 9 shows the accounting structure of life insurance companies. This is important for you 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 p
Slide 11: Adjusted profit from policies-in-force
Please see page 10. Therefore, the Company discloses periodic earnings from policies-in-force as adjusted profit which excludes marketing expenses from ordinary profit (loss) and adjusts the effects of other technical profit and loss factors such as modified co-insurance and policy reserves. Adjuste
Slide 12: Structure of European Embedded Value
Page 11 shows the structure of European Embedded Value. European Embedded Value is a net asset that considers the after-tax value of unrealized future profits under the statutory accounting that the in-force business will generate in the future, so it is regarded as the present value of our net asse
Slide 13: European Embedded Value as of end of December 2021
Please see page 12. European Embedded Value as of the end of December 2021 was JPY144 billion. The present value of in-force business, which is the unrealized future profits shown as the dark green bar in the graph, has been growing at a CAGR of 34%, contributing significantly to the overall CAGR of
Slide 14: Changing factors of EEV
Page 13 shows changing factors of EEV from the end of March 2021 to the end of December 2021. Among the changes in EEV, the Company defines the sum of the three items, the value of new business, the expected existing business contribution, and the operating experience variance, all of which are circ
Slide 15: Sensitivity of EV to interest rates and stock prices
Page 14 shows the sensitivity of EV to interest rates, stock prices and others for our Company and other domestic listed life insurance companies. The nature of our EV's sensitivity to interest rates, stock prices, etc., is very limited and remains unchanged. This is especially important in the curr
Slide 16: Financial performance with SaaS-style key metrics
Page see page 15. For your reference, we have showed our financial performance with key metrics for a SaaS company, using lifetime value (LTV) and customer acquisition cost (CAC) from the perspective of unit economics . I will not explain it specifically today, but I hope you will refer to it as it
Slide 17: Summary of the balance sheet
Page 16 is a summary of the balance sheet. As of December 31, 2021, total assets were JPY67.7 billion, liabilities were JPY43.7 billion, and net assets were JPY24 billion. The solvency margin ratio, an indicator of solvency, stood at 3,258%, which maintains a sufficient level of financial stability.
Slide 18: Main initiatives: Innovation of Customer Experience
Please see page 17. We will explain our main initiatives for the first three quarters of the current fiscal year. We have raised capital for the last two years in a row, and one of the main uses of the proceeds is the investment in Innovation of Customer Experience. By redesigning the traditional li
Slide 19: Evaluations of customer experience efforts
Please see page 18. These efforts to improve the customer experience is bearing fruit in the form of evaluations from external organization and customers. We believe that it is significant that our stress-free customer experience, which we put focus on, has been highly evaluated by external evaluati
Slide 20: Investment in strengthening sales capabilities
The next is the investment in strengthening our sales capabilities. We have two main sales channels -- the direct Internet sales channel and the White Label channel -- and I will briefly update the status of each. First of all, brand awareness is one of the KPIs for the direct Internet sales channel
Slide 21: Investment in system development
Next, please see page 20. The growth capital raised is also being invested in the system development. Until FY2021, we focused especially on the renewal of the front-end infrastructure, which is the touch point with our customers. We developed the UI/UX of our website, invested in other systems and
Slide 22: Sustainability initiatives
Please see page 21. As for other initiatives, I would like to conclude with our efforts for Sustainability. With the Lifenet Insurance Manifesto as the guiding principle for our executives and employees, we have been working on enhancement of corporate governance, customer-oriented business conduct,
Slide 23: Business forecast for FY2021
Next, I would like to explain our business forecast for FY2021. Please see page 22. The forecast for the current fiscal year has been revised as described here. First of all, we have revised downward our full-year business performance in response to the fact that new business performance in the seco
Slide 24: Business environment and outlook
Please see page 23. I will briefly explain the current business environment and outlook. First, let's take a look at the current state of new business performance. Since the lifting of the state of emergency declaration at the end of September, people’s behavior has changed outwardly, and in general
Slide 25: Status of in-force business KPIs
Next, I would like to explain the status of in-force business. Please see page 24. The following table shows KPIs related to policies-in-force on a quarterly basis. First of all, the number of policies-in-force, shown on the left, has continued to grow steadily, although the pace of growth has been
Slide 26: Growth potential of the online life insurance market
I would like to share our perception of the growth potential of the online life insurance market. As shown in the survey data from the Japan Institute of Life Insurance, we believe that there is a structural growth trend in the business environment of the online life insurance market. In order to ta
Slide 27: Management policy
Finally, the management policy. Our management policy remains unchanged. We will expand the online life insurance market with our own strength and continue to be a leading company in this market, aiming to achieve an EEV of JPY200 billion as soon as possible. This concludes the explanation of the fi
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