Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q2 2024 Earnings Presentation
40 slides from Lifenet Insurance's earnings presentation, Nov 14, 2024
Slide 1: Presentation Material for Investors Second Quarter for Fiscal 2024
Securities Code: 7157 TSE Growth Presentation Material for Investors Second Quarter for Fiscal 2024 November 14, 2024
Slide 2: 1H for Fiscal 2024 Key Highlights
1H for Fiscal 2024 Key Highlights Key Indicators Corporate Value Growth Profitability Comprehensive Equity1 Annualized premium2 Insurance service (CE) of policies-in-force results ¥ 164,974mn ¥ 32,559mn ¥ 4,565mn (YoY 107.9%) (YoY 119.5%) (YoY 111.7%) Notable Achievements ◼ Achieved CE growth of YoY
Slide 3: Annualized Premium of Policies-in-Force
Annualized Premium of Policies-in-Force ◼ Resulted in ¥32,559mn and achieved significant growth of 19.5% YoY YoY +19.5％ :AP1 of policies-in-force for GCL (JPY millions) :AP1 of policies-in-force for individual life (JPY millions) ¥ 32,559mn Group credit 27,255 6,455 life insurance 2,570 Individual l
Slide 4: Policies-in-Force Movement
Policies-in-Force Movement ◼ Despite individual life being sluggish, GCL achieved strong growth with revision of premium rate :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 individual life (JPY millions) 2,720 Net incr
Slide 5: Summary IFRS P/L
Summary IFRS P/L ◼ Insurance service results and net income resulted in ¥4,565mn and ¥3,152mn, respectively (JPY millions) Items FY2023/1H FY2024/1H Change Insurance service results 4,088 4,565 477 Financial results1 66 (57) (123) Other results (228) (129) 99 Profit before tax 3,926 4,378 452 Net in
Slide 6: Insurance Service Results
Insurance Service Results1 ◼ Progress steadily at 51.3% of business forecasts :Insurance service results (fiscal year, JPY millions) :Insurance service results (1H, JPY millions) Business forecasts 2 8,900 8,222 Progress rate for the business 7,216 forecasts 2 6,606 6,618 51.3％ ￥4,565ｍn 2 YoY ＋11.7％
Slide 7: Insurance Service Results Analysis
Insurance Service Results Analysis ◼ Achieved profit growth of 11.7% YoY by CSM release and GCL results (JPY millions) Insurance service results Items FY2023/1H FY2024/1H Change Insurance Reinsurance 4,565 service results results Results from Expected claims minus incurred CSM release claims 263 26
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 ◼ Strongly growing at a CAGR of 19% since IPO Comprehensive European Embedded Value（EEV）1 Equity (CE) ¥2,054 ¥1,991 : EEV (JPY millions) : GCL contracts value (JPY millions) ¥1,788 164,974 159,802 10,007 : CSM after tax (JPY millions) 6,709 : IFRS Equity (JPY millio
Slide 10: Changing Factors of Comprehensive Equity
Changing Factors of Comprehensive Equity ◼ Increased due to GCL contracts value and net income, while CSM growth limited Equity movement (JPY millions) Net income GCL attributable to CSM (after tax) movement movement owners of the Company Other movement CE 3,152 70 164,974 GCL contracts value Intere
Slide 11: Progress of GCL
Progress of GCL Rebranding Tech & Services Embedded ◼ Plan to launch GCL for joint mortgage to support young homebuyers ◼ Contributed to key indicators by premium revision in July and growth in mortgage loans Offer GCL for joint mortgage from Jan. 2025 Contribution to key indicators (FY2024/1H) GCL
Slide 12: New Product for Young Generation
New Product for Young Generation Rebranding Tech & Services Embedded ◼ Create new market by offering “term” medical insurance online New Market Creation Economic Young environment customer base Launched in Oct. 2024 Sophisticated Unstable income UI/UX Changes in Simple products life plans Asset Affo
Slide 13: Improvement of Capital Market Evaluation
Improvement of Capital Market Evaluation ◼ Maintain P/CE ratio of 1.0x as a base, and further improve capital market evaluation Stock price / CE per share (P/CE) Drivers for improvements 2.00 ¥2,0061 Adopt corporate value • Change indicator from "EV" to 2,000 indicators linked to IFRS-based "CE" 1,8
Slide 14: Introduction of Stock Compensation Plan for Employees
Introduction of Stock Compensation Plan for Employees ◼ Aim to align shareholder and employee interest and invest in human capital to enhance corporate value Increase Strengthen awareness of Develop Enhance 重 engagement stock price motivation teamwork 点 target 重 領 点 域 領 域 Promote employee’s challeng
Slide 15: 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 16: 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 17: Achieving Mid-term Business Plan ¥200-240bn
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 Prime Market Goals in Fiscal 2028 Stock price 159 1241 133 ¥3,000+ Annual growth rate
Slide 18: 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 19: 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 20: Appendix
Appendix
Slide 21: 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 22: 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 23: Breakdown of Policies-in-Force
Individual life Breakdown of Policies-in-Force Component 2023/09 2024/09 ratio Number of policies-in-force 582,784 618,039 100% - Term Life 284,123 301,426 49% - Whole-life Medical 159,705 168,639 27% - Long-term Disability 68,638 70,713 11% - Cancer 62,899 70,157 11% - Other1 7,419 7,104 1% Sum ins
Slide 24: 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 1,051 991 981 969 934 933 923 889 820 747 734 675 689 639 29,864 28,136 27,553 26,918 26,167 24,410 17,174 23,369 23,928 22,164 22,506 22,612 22,128 20,934
Slide 25: 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% 6.0% 6.1% 5.9% 5.5% 5.5% 5.6% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020年度 2021年度 2022年度 2023年度 2024年度 FY2020 FY2021 FY2022 FY2023 FY2024 1. The surren
Slide 26: 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 129 127 138 138 137 121 118 105 97 3.3 3.2 3.5 3.1 3.5 3.4 3.0 82 2.7 2.4 2.0 (fiscal year
Slide 27: 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% 18.9% 18.6% 16.4% 18.4% 16.1% 17.8% 17.4% 16.7% 4,935 4,715 3,896 3,047 2,510 1,171 1,280 1,337 1,215 1,294 (fiscal year) 2020 ’21 ’22 ’23
Slide 28: Summary IFRS P/L (Quarter)
Summary IFRS P/L (Quarter) (JPY millions) Items 2023/2Q 2023/3Q 2023/4Q 2024/1Q 2024/2Q Note Insurance service results 1,813 2,186 1,947 2,340 2,224 Expected claims minus incurred Decreased due to increase in claims1 (104) 331 189 46 (19) claim payments for individual life Risk adjustment release 43
Slide 29: Breakdown of Insurance Service Results
Breakdown of Insurance Service Results (JPY millions) FY2023 FY2024 Items （Ref.）Fiscal Year １H 1H Insurance revenue 24,698 11,766 14,297 Expected claims 10,464 5,177 5,447 Risk adjustment release 1,678 872 797 CSM release 7,056 3,435 3,699 Recovery of IACF 3,647 1,765 2,008 Others (150) (81) (40) Pr
Slide 30: Impact from Rising Interest Rates
Impact from Rising Interest Rates ◼ Impact on Comprehensive Equity and net income is limited Impact on corporate value & net income • CE：Sensitivity to interest rate changes in IFRS equity is limited due to protection type products line-up (See page 34 for details) • IFRS-based net income：By shorten
Slide 31: Breakdown of Financial Results
Breakdown of Financial Results ◼ Decreased by exchange loss from strong yen while interest income rose due to increased foreign securities (JPY millions) Items FY2023/1H FY2024/1H Change Investment results 116 (9) (126) Interest income 151 467 315 Impairment losses on financial assets, net (1) (3) (
Slide 32: Detail of Bond Portfolio
Detail of Bond Portfolio1 As of September 30, 2024 (JPY millions) Available-for-Sale Held-to-Maturity Total JPY Bonds 17,573 30,926 48,499 Duration2 4 years 7 years 6 years Foreign Currency Bonds 10,866 — 10,866 Duration2 4 years Non-Currency Hedged 348 — 348 Currency Hedged 10,518 — 10,518 1. Based
Slide 33: CSM Movement
CSM Movement ◼ Decreased due to slower growth in new business CSM for individual life and negative assumption changes (JPY millions) Items FY2023 FY2024/1H Amortization Interest in current New business accretion CSM, CSM period CSM, beginning of the period 83,604 92,173 483 (3,699) beginning of the
Slide 34: 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 35: Comprehensive Equity Sensitivity Analysis
Comprehensive Equity Sensitivity Analysis1 ◼ Impacts of changes in assumptions (sensitivities) Changes in Comprehensive Equity (CE) as of September 30, 2024 Of which Changes in CE % changes changes in CSM2 (JPY millions) Comprehensive Equity as of September 30, 2024 164,974 ー 61,053 0.5% increase in
Slide 36: Changing Factors of EEV
Changing Factors of EEV1 (JPY millions) Economic Adjustments variances to the values3 Operating and assumption as of Sep. 30, 2024 Expected Assumption existing business experience variances changes changes 527 70 152,131 Value of contribution 833 75 new business 806 2,826 146,991 Adjusted incrementa
Slide 37: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of September 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 1,793.0％ <numerator> ÷ < the denominator> 【Ref.】 43,455 Consolidated 4,847/2 Solvency margin…
Slide 38: 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 39: Summary J-GAAP P/L & B/S
Summary J-GAAP P/L & B/S (JPY millions) (JPY millions) Items FY2023 FY2023/1H FY2024/1H Items FY2023 FY2024/1H Ordinary income 35,964 16,403 20,291 Total assets 84,194 86,734 Insurance premiums 34,264 16,106 19,942 Cash and deposits 20,009 14,852 and other Ordinary expenses 40,634 19,124 22,074 Mone
Slide 40: 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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