Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Investor Presentation (July 2022)
43 slides from Lifenet Insurance's investor presentation, July 2022
Slide 1: Presentation Material for Business Plan and Growth Potential
Presentation Material for Business Plan and Growth Potential July 2022 LIFENET INSURANCE COMPANY Copyright© LIFENET INSURANCE COMPANY All rights reserved. 0
Slide 2: Table of Contents
Table of Contents Ⅰ. Company Overview and Japanese Life Insurance Industry Trends Ⅱ. Business Model Ⅲ. Growth Strategy Ⅳ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 1
Slide 3: Lifenet is…
Lifenet is… ◼ Lifenet’s management philosophy is helping our customers embrace life more fully by offering comprehensible, cost- competitive and convenient products and services based on the highest levels of business integrity. ◼ With the internet as our main sales channel, we utilize technology an
Slide 4: LIFENET Manifesto
LIFENET Manifesto ◼ The Lifenet Manifesto contains the guiding principles for our company. ◼ It was formulated by the company founders through repeated discussions on the direction of the company before business commencement. Comprehensible, Cost-Competitive, Convenient I. Our Guiding Principles II.
Slide 5: Lifenet at a Glance
Lifenet at a Glance History Stock Information • Oct. 23, 2006 Established • Tokyo Stock Exchange, Growth – market of the high growth and emerging stocks • May 18, 2008 Commenced operation • Ticker: 7157 • Mar. 15, 2012 Listed on Tokyo Stock Exchange, Mothers • Total number of authorized shares: 200,
Slide 6: Management Team (as of June 26, 2022)
Management Team (as of June 26, 2022) ◼ Management team is comprised of individuals of various backgrounds across a wide age range. ◼ Lifenet made the transition to a company with an Audit and Supervisory Committee in June 2021 to further strengthen the supervisory function of the Board of Directors
Slide 7: Life Insurance Market in Japan
Life Insurance Market in Japan ◼ Japan's life insurance market is the world’s third largest, worth approximately JPY 30 trillion. ◼ We believe there is a high need for life insurance. There were around 11.3 million new enrollments in fiscal 2020 despite approximately 90% of Japanese households have
Slide 8: Trend of Customer's Purchasing Channel and Intention
Trend of Customer’s Purchasing Channel and Intention ◼ Although sales representative accounts for a large proportion of life insurance’s purchasing channel, the ratio of insurance agent is increasing. In addition, the figure shows that preferred sales channels are diversifying. Trends of Sales Chann
Slide 9: Table of Contents
Table of Contents Ⅰ. Company Overview and Japanese Life Insurance Industry Trends Ⅱ. Business Model Ⅲ. Growth Strategy Ⅳ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 8
Slide 10: Business Model with Manifesto
Business Model with Manifesto High integrity ◼ Actively disclose relevant information ◼ Communicate with customers proactively Comprehensiveness ◼ Provide very simple and pure protection products ◼ Develop easy-to-understand and customer friendly website Cost-Competitiveness ◼ Offer competitively pr
Slide 11: Management with High Level of Business Integrity
Management with High Level of Business Integrity ◼ We provide life insurance online, but we are committed to transparency and communicating openly about management of the company and our products, employees, and work place via our website. Transparent disclosure Transparent Company • Disclosure of i
Slide 12: Simple Products
Simple Products ◼ We offer simple and competitively priced pure protection products. Internet-based low cost operations enable us to be extremely price competitive. ◼ We have provided our main product - term life – with the lowest premium levels in the industry. We offer industry- first coverage3 fo
Slide 13: External Evaluations of Products
External Evaluations of Products ◼ Our products are highly supported by customers and receive high evaluations. Whole-life Cancer Term Life Medical 1. The Most Chosen Insurance Ranking 2022 of HOKEN ICHIBA is based on compiled date from the number of application from January through December 2021. 2
Slide 14: Develop Easy-to-understand and Customer Friendly Website (e.g. Quotes)
Develop Easy-to-understand and Customer Friendly Website (e.g. Quotes) ◼ Our website is simple and easy-to-understand for customers. Select products Select birthday Select sex Total monthly premium All customers need to do to get quotes is select birthday, sex and insurance products Calculated on Ju
Slide 15: Competitively Priced Products
Competitively Priced Products ◼ We do not have sales representatives or branches for selling insurance. We use the Internet to sell our products. This enables us to control sales expenses and maintain strong cost competitiveness, while also providing products with inexpensive insurance premiums. Str
Slide 16: Pursuing Convenience
Pursuing Convenience ◼ We are striving to provide the convenience that only an online insurance company can provide. We use technology to establish an environment that enables customers to request insurance consultation, apply for insurance, and claim benefits 24 hours a day, 365 days a year, as it
Slide 17: Unique Customer Base
Unique Customer Base ◼ New customers in their 20s to 40s make up 77% of our policyholder base, with more than 50% of new policyholders taking out life insurance for the first time. ◼ We have maintained certain level of surrender and lapse ratio since business commencement. Number of new policies by
Slide 18: Annualized premium growth & Initiatives
Annualized premium growth & Initiatives ◼ Due to various initiatives, in-force business has increased steadily since we first commenced business. The number of policies-in-force exceeded 500,000 in February 2022. 21,511 Launched New Long-term Disability Business Alliance with Money Forward Annualize
Slide 19: Reasons for Adopting EV as Key Indicator
Reasons for Adopting EV as Key Indicator ◼ Typically, large expenses are incurred when life insurance policies are acquired (1). However, because the profit is earned over a long period of time, there is a time lag between the recognition of costs and revenue. (2) ◼ In other words, the greater the g
Slide 20: Structure of Embedded Value
Structure of Embedded Value ◼ Embedded value is the indicator of long-term profitability, and is the sum of adjusted net worth and value of in- force business. ◼ The value of in-force business is the future profit stream that will likely be derived from current policies, discounted to present value.
Slide 21: Strong EEV Growth
Strong EEV1 Growth ◼ EEV and value of in-force business have been growing at a CAGR of 20%2 and 33%, respectively since IPO. EEV per share has also steadily increased. ◼ We achieved our 2018 management goal of reaching European Embedded Value of JPY100 billion yen. ¥1,673 ¥1,570 : Value of in-force
Slide 22: FY2021 Results
FY2021 Results ◼ Annualized premium1 of policies-in-force increased by 15% from the end of the previous fiscal year to JPY21.5 billion, continuing double-digit growth. （JPY millions） FY2021 Results FY2020 Results Annualized premium1 of policies-in-force 21,511 18,713 Annualized premium1 of new busin
Slide 23: Overseas Public Offering in September 2021
Overseas Public Offering in September 2021 ◼ We believe that customers‘ needs are diversifying in the online services with backdrop of the structural megatrends of digitalization of financial services. We aim for further growth and transformation into online life insurance platformer with newly rais
Slide 24: Table of Contents
Table of Contents Ⅰ. Company Overview and Japanese Life Insurance Industry Trends Ⅱ. Business Model Ⅲ. Growth Strategy Ⅳ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 23
Slide 25: Management Policy
Management Policy Help our customers embrace life more fully Mission by 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 26: Growth Potential of Online Insurance Market
Growth Potential of Online Insurance Market ◼ We believe that the growth potential of the online life insurance market has been steadily expanding against the backdrop of the structural megatrends of digitalization of financial services. We have achieved steady growth in our in-force policies perfor
Slide 27: Competitive Landscape of Online Life Insurance Market
Competitive Landscape of Online Life Insurance Market ◼ In general, there are three phases in the development process of a new market, as shown in the figure: a period when a small number of players develop the market, a period when the market expands as more players compete with each other, and a p
Slide 28: Our Unique Position
Our Unique Position ◼ By retaining independent administration, Lifenet has consistently realized customer-oriented management based on LIFENET philosophy since our business commencement, while taking advantage of our uniqueness to conduct business online. ◼ We continue to provide Comprehensible, Cos
Slide 29: Growth Strategy
Growth Strategy ◼ We will aggressively invest in three areas: business, system, and organization. We aim for achieving strong growth to maintain and strengthen the competitive advantage we have built up to date as an independent online life insurer, and to solidify our position as the No. 1 online l
Slide 30: Growth on Two Main Channels
Growth on Two Main Channels ◼ We aim to achieve double-digit growth in in-force business performance on two pillars: the Internet direct channel and the White label channel. Internet direct channel White label channel Strengthening touchpoint with Providing new customer experiences with young genera
Slide 31: Journey to Platformer
Journey to Platformer ◼ We established a subsidiary in FY2021 with the goal of becoming an online life insurance platform. From FY2022, we will focus particularly on the online insurance agency business and strive to build the foundation with aim of offering all online insurance products. ◼ In the f
Slide 32: Investment in System Development
Investment in System Development ◼ From FY2022, we will aggressively invest in the development of back-end infrastructure in addition to the front-end infrastructure. ◼ Through these investments, we will build a robust system structure that can improve operating expenses ratio and flexibly accommoda
Slide 33: Human Capital Investment
Human Capital Investment ◼ Since our business commencement in 2008, we have been hiring people with diverse backgrounds, free from industry norms, in order to provide new life insurance value from the customer's perspective. ◼ From FY2022, we will invest in human capital for sustainable growth of co
Slide 34: Initiatives for Sustainability
Initiatives for Sustainability ◼ LIFENET philosophy is the heart of our company's sustainability. ◼ In order to continue to be needed by policyholders as an insurance company and to be supported by shareholders and investors as a publicly listed company, we will promote initiatives for sustainabilit
Slide 35: Adoption of International Financial Reporting Standards
Adoption of International Financial Reporting Standards ◼ We aim for the voluntary adoption of IFRS 17 from FY2023 to provide financial information with high international comparability and to represent our performance more appropriately. After the voluntary adoption of IFRS, we expect to record a p
Slide 36: Business Forecasts FY2022
Business Forecasts FY2022 ◼ We aim for double-digit growth in in-force business in FY2022. Annualized premium1 Policies-in-force (JPY millions) (Business forecast) New business Decreased business2 (Results) 24,400 21,511 (Business forecast) Surrender and (Business forecast) lapse ratio 4,400 6-7% +1
Slide 37: Future Direction
Future Direction ◼ In FY2022, we will continue our efforts to achieve double-digit growth in in-force business. We will also strive to be an online life insurance platformer, while aiming for the voluntary adoption of IFRS 17. ◼ On this basis, in FY2023, we expect to record a profit under IFRS and a
Slide 38: Table of Contents
Table of Contents Ⅰ. Company Overview and Japanese Life Insurance Industry Trends Ⅱ. Business Model Ⅲ. Growth Strategy Ⅳ. Risk Information Copyright© LIFENET INSURANCE COMPANY All rights reserved. 37
Slide 39: Major Risks (1/4)
Major Risks（1/4） ◼ We categorize 27 risks into "business strategy risks," "insurance underwriting risks," "market risks, credit risks and liquidity risks," and "operational risks”. Of these, the risks that are of particular significance in terms of their impact if they occur and possibility of occur
Slide 40: Major Risks (2/4)
Major Risks（2/4） ◼ Our inherent risks in the operation of life insurance business and our measures to the risks are as follows. Priority High Major risk Measures (Occurrence and severity) ■Competition in the life insurance industry With the digitization of financial We design and develop our service
Slide 41: Major Risks (3/4)
Major Risks（3/4） Priority High Major risk Measures (Occurrence and severity) ■Change in Mortality and morbidity In the event of mass casualties due We design appropriate coverage to a massive outbreak of an and underwriting methods at the Life insurance premiums are calculated based on infectious di
Slide 42: Major Risks (4/4)
Major Risks（4/4） Priority High Major risk Measures (Occurrence and severity) ■System failures We have not experienced any The Company has established basic large-scale system troubles since policy and measures for the stable The Company relies on the stable operation of its our business commencement
Slide 43: Investor Relations contact and disclaimer
This material is based on information as of June 2022. 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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