Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q1 2023 Earnings Presentation
33 slides from Lifenet Insurance's earnings presentation, Aug 14, 2023
Slide 1: Presentation Material for Investors First Quarter for Fiscal 2023
Securities Code: 7157 TSE Growth Presentation Material for Investors First Quarter for Fiscal 2023 August 14, 2023
Slide 2: IFRS Reporting
IFRS Reporting ◼ IFRS adoption will better present 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 Fin
Slide 3: 1Q for Fiscal 2023 Key Highlights
1Q for Fiscal 2023 Key Highlights Key Indicators Corporate Value Growth Profitability EEV Annualized premium Insurance service (European Embedded Value) of policies-in-force1 results 126,978 million yen 24,408 million yen 2,274 million yen (Y-on-Y 107.5%) (Y-on-Y 110.2%) (Y-on-Y 137.7%) Notable Achi
Slide 4: Annualized Premium of Policies-in-Force
Annualized Premium of Policies-in-Force ◼ Grew 10.2% YoY, maintaining steady growth ◼ Combined annualized premium including GCL was 26,881 million yen as of the end of July 2023 July (Preliminary report) 1 :Annualized premium of policies-in-force for GCL (JPY millions) JPY 26,881 million :Annualized
Slide 5: Policies-in-Force Movement
Policies-in-Force Movement ◼ Continued to grow while individual life was affected by decrease of customer’s demand for insurance FY2021/ FY2022/ FY2023/ 1Q 1Q Net increase of 1Q individual life insurance JPY 375 million 630 759 Annualized premium of policies-in-force JPY 24,408 million Y-on-Y ＋10.2％
Slide 6: Summary IFRS P/L
Summary IFRS P/L ◼ Insurance service results and net income resulted in 2,274 million yen and 1,765 million yen, respectively (JPY millions) （Ref.） Items FY2022/1Q2 FY2023/1Q2 Change FY2022 Insurance service results 1,651 2,274 622 6,618 Financial results1 (293) 367 661 (452) Other results (179) (12
Slide 7: Insurance Service Results
Insurance Service Results1 ◼ Increased 37.7% YoY, 2,274 million yen ◼ 27.7% progress rate for business forecasts of fiscal 2023 Business forecasts announced in May 2023 :Insurance service results (fiscal year, JPY millions) 8,200 :Insurance service results (1Q, JPY millions) 7,216 2 6,606 6,618 5,41
Slide 8: Insurance Service Results Analysis
Insurance Service Results Analysis ◼ Increased due to the calm down of COVID-19 claims and increase of CSM release along with the growth of in-force business (JPY millions) Risk CSM release Insurance adjustment Expected 140 service results minus incurred release (JPY millions) 2,274 552 32 Reinsuran
Slide 9: European Embedded Value
European Embedded Value1 ◼ EEV and value of in-force business have been strongly growing at a CAGR of 19%2 and 31%, respectively since IPO ◼ EEV per share increased steadily to 1,821 yen ¥1,821 ¥1,788 ¥1,673 : Value of in-force business (JPY millions) ¥1,570 124,666 126,978 116,604 ¥1,430 : Adjusted
Slide 10: Changing Factors of EEV
Changing Factors of EEV1 ◼ EEV growth driven by adjusted incremental EV and economic experience variances (JPY millions) Adjusted incremental EV2 126,978 Operating Economic experience Assumption experience Expected variances changes variances existing business 484 2 890 contribution Value of 392 new
Slide 11: Progress of Group Credit Life Insurance Business
Progress of Group Credit Life Insurance Business ◼ Started offering GCL to mortgage loan borrowers of au Jibun Bank from July 1st ◼ Aim for steady growth as a new earnings base with looking to expand partner banks in a mid-term Characteristics of our product Initial start is on track Annualized prem
Slide 12: Collaboration with Habitto
Collaboration with Habitto ◼ Plan to offer our products through Habitto in autumn 2023, a financial services app supporting younger generation Savings Investment Insurance 11
Slide 13: Initiatives for Sustainability
Initiatives for Sustainability ◼ Promote initiatives for Sustainability cherishing life insurance’s original purpose – mutual support Creating the future of life insurance Creating the future Creating the future Creating the future for our customers for a better society with our employees Disclosed
Slide 14: Revision of Consolidated Business Forecasts for FY2023
Revision of Consolidated Business Forecasts for FY2023 ◼ Upwardly revised insurance service results and net income while adjusted annualized premium of policies-in-force based on 1Q performance Growth 【Revised】 (JPY millions) Profitability 【Revised】 (JPY millions) Annualized premium of business fore
Slide 15: Future Direction
Future Direction ◼ Aim for growth in in-force business with both individual life and GCL ◼ Continue 10% profit growth and aim for TSE Prime Market in around FY2025 Mid-term growth path of in-force business Insurance service results Group credit life insurance Continue 10% profit Steadily grow as new
Slide 16: Management Policy
Management Policy Help our customers embrace life more fully by Mission 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 17: 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 18: 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 19: Appendix
Appendix
Slide 20: Glossary
Glossary 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 of
Slide 21: Breakdown of Policies-in-Force
Breakdown of Policies-in-Force Component ’22/06 ’23/06 ratio Number of policies-in-force 522,604 576,852 100% - Term Life 255,049 280,789 49% - Whole-life Medical 143,126 158,403 27% - Term Medical Care 8,389 7,644 1% - Long-term Disability 64,946 68,507 12% - Cancer 51,094 61,509 11% Sum insured of
Slide 22: Annualized Premium / Number of New Business
Annualized Premium / Number of New Business :Annualized premium1 of new business (JPY millions) 1,166 :Number of new business 1,123 1,137 1,104 1,051 990 991 981 969 934 933 923 889 822 818 794 747 18,471 29,864 28,136 27,553 26,918 26,167 23,369 24,410 23,928 23,314 22,506 22,612 22,164 22,128 19,1
Slide 23: Surrender and Lapse Ratio
Surrender and Lapse Ratio :Surrender and lapse ratio1（%） 7.6% 7.6% 7.1% 7.1% 6.4% 7.0% 6.6% 6.4% 6.4% 6.9% 6.8% 6.3% 6.3% 5.9% 6.0% 5.5% 5.5% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY2019 2019年度 FY2020 2020年度 FY2021 2021年度 FY2022 2022年度 FY2023 2023年度 1. The surrender and lapse ratio is t
Slide 24: Insurance Acquisition Cash Flows (IACF) Efficiency
Insurance Acquisition Cash Flows (IACF) Efficiency1 :Insurance acquisition cash flows / Annualized premium of new business :Insurance acquisition cash flows per new business (JPY thousands) Fiscal year Quarter 123 117 114 117 105 103 97 92 82 3.1 2.9 85 2.7 2.9 2.6 2.8 2.4 2.3 2.2 2.0 2019 ’20 ’21 ’
Slide 25: Operating Expenses Ratio
Operating Expenses Ratio1 :Operating Expenses Ratio（％） :Operating expenses excl. insurance acquisition cash flows (JPY millions) Fiscal year Quarter 20.7% 20.9% 21.0% 20.7% 20.0% 19.3% 19.4% 17.8% 4,715 3,896 18.9% 18.9% 3,047 2,757 1,146 1,139 1,181 1,162 1,232 1,146 2019 ’20 ’21 ’22 ’23/1Q (fiscal
Slide 26: Breakdown of Insurance Service Results
Breakdown of Insurance Service Results (JPY millions) FY2022 FY2023 Items （Ref.）Fiscal Year １Q 1Q Insurance revenue 20,732 4,921 5,500 Expected claims 9,569 2,258 2,561 Risk adjustment release 1,698 400 433 CSM release 6,401 1,537 1,677 Recovery of IACF 3,184 752 869 Others (121) (27) (41) Insurance
Slide 27: Breakdown of Financial Results
Breakdown of Financial Results (JPY millions) Items FY2022/1Q FY2023/1Q Change Investment results (263) 392 656 Interest income 74 72 (1) Impairment losses on financial assets, net (0) (0) 0 Other investment income (337) 320 658 Insurance finance income (expense) (35) (29) 5 Reinsurance finance inco
Slide 28: Detail of Bond Portfolio
Detail of Bond Portfolio1 As of June 30, 2023 (JPY millions) Available-for-Sale Held-to-Maturity Total JPY Bonds 19,190 16,487 35,677 Duration2 4 years 12 years 8 years Foreign Currency Bonds 8,829 — 8,829 Duration2 6 years Non-Currency Hedged 1,969 — 1,969 Currency Hedged 6,859 — 6,859 1. Based on
Slide 29: CSM Movements
CSM Movements Impact of assumption (JPY millions) changes, etc. 486 Items FY2022 FY2023/1Q New business CSM 1,132 CSM, Interest CSM, CSM, beginning of the period 74,907 83,604 beginning accretion end of the period of the period 210 83,756 83,604 Amortization New business CSM 6,879 1,132 in current p
Slide 30: Structure of Embedded Value
Structure of Embedded Value Adjusted net worth Value of in-force EV (Net assets at end of period business + adjustments) Profit/loss for the current fiscal year is reflected in end-of- period net assets Revenue Revenue Expense Expense Unrealized future profits/losses on policies-in-force at the end
Slide 31: EV Resilience to Financial Changes
EV Resilience to Financial Changes ◼ Limited sensitivity to interest rates and stock prices Jun. 2023 End Reference: March 2023 End1 Lifenet Lifenet Company A Company B Company C 4% 4% 1.9% 1.9% 1% -0.8% -0.8% -1% -2.0% -2.0% -4% 0.5% interest rate increase -5% -5% -5% 0.5% interest rate decrease -7
Slide 32: EV Sensitivity Analysis
EV Sensitivity Analysis1 ◼ Impacts of changes in assumptions (sensitivities) Change in EEV as of Change in (JPY millions) Jun. 30, 2023 VoNB EEV and new business value as of June 30, 2023 126,978 541 Sensitivity 1a: 1.0% increase in risk-free rate (5,043) (86) Sensitivity 1b: 1.0% decrease in risk-f
Slide 33: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of June 30, 2023 ( (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 3,109.2% <numerator> ÷ < the denominator> 【Ref.】 32,061 Consolidated 2,062/2 Solvency margin…
Lifenet Insurance Company — Q1 2023 Earnings Presentation on 6ix