Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q2 2018 Earnings Presentation
36 slides from Lifenet Insurance's earnings presentation, Nov 12, 2018
Slide 1: Presentation Material for Investor for 2Q of Fiscal 2018
Securities Code:7157 TSE Mothers Presentation Material for Investor for 2Q of Fiscal 2018 November 12, 2018
Slide 2: LIFENET is… Comprehensible, Cost-Competitive, Convenient
LIFENET is… Comprehensible Cost-Competitive Convenient Remembering the original purpose of life insurance – mutual support – Plugged-in way to reach customers who need insurance products with necessary coverage 1
Slide 3: Contents
Contents 1. New Management Policy 2. Results for 2Q of Fiscal 2018 2
Slide 4: Looking Back on Years since Business Commencement
Looking Back on 10 Years since Business Commencement New business performance back on growth track Term Life and Application via Agent au Life Insurance Renewal of 20,000 Whole-life smartphone commission with KDDI Term Life 300,000 Medical rate disclosed 18,000 Renewal of 270,000 Load charge rates
Slide 5: Growth Potential of Online Life Insurance Market
Growth Potential of Online Life Insurance Market Expect growth of online insurance market based on growing consumers intension 14.0 % 12.5 % ダイレクト自動車保険シェア Market share of direct automobile insurance1 12.0 % Market share of online life insurance2 オンライン生命保険シェア（加入） 10.5 % Ratio of life insurance appl
Slide 6: Priority Areas during Years
Priority Areas during 10 Years Responding to changing customer needs for sustainable growth 2008-2012 2013-2015 2016-2018 Previous mid-term Current mid-term Start-up period business plan period business plan period Telephone Telephone consultation consultation experience Customer SPH channel SPH c
Slide 7: New Management Policy
New Management Policy Help our customers embrace life more fully by offering comprehensible, cost- Mission competitive and convenient products and services Be the leading company driving the growth Vision of the online life insurance market • Innovation of customer experience Priority areas Enhancin
Slide 8: Business Indicators
Business Indicators Aim for sustainable growth of Embedded Value Key business Embedded Value European Embedded Value (EEV)1 indicators of (EV) Adjusted incremental EV2 corporate value Growth In-force business performance Business indicators New business performance indicators supporting
Slide 9: Management Goal
Management Goal Aim to achieve EEV of 100 billion yen by business growth in a mid-term EEV 1 （百万円） (JPY mn) 100,000 : Value of in-force business : Adjusted net worth 44,440 36,261 31,284 22,907 25,248 18,547 18,746 12/03 13/03 14/03 15/03 16/03 17/03 18/03 19/03 (YY/MM) 1. Lifenet’s EEV is calcula
Slide 10: Contents
Contents 1. New Management Policy 2. Results for 2Q of Fiscal 2018 9
Slide 11: Overview of 2Q for FY2018
Overview of 2Q for FY2018 (JPY mn) Annualized premium1 of Annualized premium1 of policies-in-force new business 11,979 1,209 (vs end of FY2017 107.5%) (Y-on-Y 165.5%) Adjusted profit2 EEV (European Embedded Value) 1,345 61,465 (Y-on-Y 120.4%) (Adjusted incremental EV3 1,992) Products received extern
Slide 12: Annualized Premium/Number of Policies-in-Force
Annualized Premium /Number of Policies-in-Force As of : Number of policies-in-force 2Q end 11.9 : Annualized premium of policies-in-force (JPY bn) Up 8% 11.1 vs end of FY2017 8.7 9.3 10.0 283,207 263,847 Policies-in-force 215,403 225,534 239,800 Up 7% exceeded 280,000 vs end of FY2017 Increased
Slide 13: Breakdown of Policies-in-force
Breakdown of Policies-in-force Exceeded 180,000 in-force policyholders Component 18/03 18/09 ratio Number of policies-in-force 263,847 283,207 100% - Term Life1 131,256 139,479 49% - Whole-Life Medical1 76,606 80,349 28% - Term Medical Care1 9,924 9,726 3% - Long-term Disability1 42,629 46,013 16%
Slide 14: Annualized Premium/Number of New Business
Annualized Premium /Number of New Business :Number of new business (Fiscal year) :Number of new business (1H of fiscal year) :Annualized premium of new business (1H of fiscal year, JPY mn) Business result grew 1,209 strongly Y-o-Y up 66% 730 Factors of growth 694 548 635 - Enhancement of our 39,
Slide 15: Business Performance Back on Track for Growth
Business Performance Back on Track for Growth Reached record high of monthly new business performance since May 2012 : Number of new business policies 6,242 契約件数 (件) 契約年換算保険料 (百万円) 6,3891 May 2008 May 2012 Oct 2018 (Business commencement) 1. Preliminary figures 14
Slide 16: Marketing Expenses per New Business
Marketing Expenses per New Business : Marketing expenses per new business (JPY thousand) : Marketing expenses / Annualized premium of new business 1H of FY2018 61 Maintained 67 61 59 51 same level despite 1.5 increase in 1.2 1.3 marketing expenses 1.0 1.4 Expecting around 60 thousand yen 2014 15
Slide 17: Operating Expenses Ratio
Operating Expenses Ratio1 :Insurance premiums (JPY mn) :Operating expenses excl. marketing expenses (JPY mn) :Operating expenses ratio¹ (%) 10,421 Operating expenses ratio1 9,628 1H of 9,007 FY2018 22.5% 8,372 25.6 % 22.5% 23.1 % 21.5 % 22.2 % 5,682 Aim for improving operating expenses 2,315 rat
Slide 18: Long-term Profit Not Reflected under Current Statutory Accounting
Long-term Profit Not Reflected under Current Statutory Accounting Taking time to generate profit, as initial cost is recognized at the time of acquisition, and the revenue is collected gradually over long period Approximate profit structure for one policy : Premiums : Operation expenses1 excluding
Slide 19: Key Business Indicators of Corporate Value
Key Business Indicators of Corporate Value Disclosed as key indicators of substantial profitability of insurance companies Adjusted Profit (Ordinary profit(loss) excluding marketing expenses) Indicator of profit generated from policies-in-force EEV (European Embedded Value ) 1 Indicator of long-te
Slide 20: Newly Disclosed Adjusted Profit
Newly Disclosed Adjusted Profit Indicator of profit generated from policies-in-force Significance of Adjusted profit disclosure • As accrual timing of cost and revenue do not match, statutory accounting does not necessarily provide an accurate picture of profitability of our business • Accrual tim
Slide 21: Newly Disclosed Adjusted Profit
Newly Disclosed Adjusted Profit Adjusted profit steadily increased though ordinary profit(loss)1 to be influenced by marketing expenses (JPY mn) (JPY mn) Adjusted Profit Ordinary profit/loss1 ＝Ordinary profit(loss)1 excluding marketing expenses : Fiscal year 2,429 : 1H of fiscal year 1,887 1,910 Y
Slide 22: Structure of Embedded Value
Structure of Embedded Value Adjusted EV Value of in-force net worth (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 Profit/Loss for Unrealized future profits/losses on policies-in-f
Slide 23: European Embedded Value (EEV)
European Embedded Value1 (EEV) CAGR of EEV is 20%2 and value of in-force business is 40% since IPO Steadily growing even in a low interest rate environment 61,465 (JPY mn) 44,440 Value of in-force business Adjusted net worth 45,870 36,261 31,284 28,427 25,248 22,907 20,240 15,198 18,547 18,746 1
Slide 24: Newly Disclosed Adjusted Incremental EV
Newly Disclosed Adjusted Incremental EV Accurately indicates our business growth in a certain period among increase in EEV Adjusted incremental EV Defined as constitution of components below - New business value in the fiscal year - Expected existing business contribution - Operating experience va
Slide 25: Structure Breakdown of EEV
Structure Breakdown of EEV 1 Adjusted incremental EV 1,992 million yen Changed assumptions based on 10 years experience since business commencement 61,465 Economic variances (JPY mn) Assumption and assumption Adjusted changes changes incremental EV 14,621 410 Operating Expected existing experien
Slide 26: Financial Condition
Financial Condition (JPY mn) (YY/MM) 18/03 18/09 Total assets 35,541 37,101 Cash and deposits 926 1,022 Monetary claims 1,999 999 bought Modified duration Money held in trust 2,567 3,029 Securities 28,303 30,222 11.7 years Government bonds 8,398 8,344 Maintain sufficient Municipal bonds 1,505 1,
Slide 27: Evaluation for Products
Evaluation for Products Products highly evaluated by professionals Long-term Cancer Term Life Disability 1. The most popular insurance products in each category from January through December 2017, receiving the highest number of applications of Kakaku.com Insurance, the sales agent company of insu
Slide 28: For Helping Customers Embrace Life More Fully
For Helping Customers Embrace Life More Fully Aim for helping customers embrace life more fully as well as embracing diversified life Enhanced Survivorship Support Services1 to support those who are working while being treated for cancer Received Gold Rating in the PRIDE Index by wwP2 for LGBT3 in
Slide 29: Revision of Business Forecast FY2018
Revision of Business Forecast FY2018 Given new management policy and strong new business result, aim for reaching historical high in a fiscal year (JPY mn) 【Original】 【Revised in Aug】 【Revised in Nov】 Business forecast Business forecast Business forecast for FY2018 for FY2018 for FY2018 Ordinary i
Slide 30: New Management Policy
New Management Policy Help our customers embrace life more fully by offering comprehensible, cost- Mission competitive and convenient products and services Be the leading company driving the growth Vision of the online life insurance market • Innovation of customer experience Priority areas Enhancin
Slide 31: LIFENET Manifesto
LIFENET Manifesto Comprehensible, Cost-Competitive, Convenient I. Our Guiding Principles II. Making Life Insurance Accessible Again - Headache-free (1) Creating the life insurance of the future without losing sight of its original (1) Helping the customers help themselves. By making our materials ea
Slide 32: 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 33: Appendix
Appendix ) LiFENE] LIFENET INSURANCE COMPANY
Slide 34: Condensed Statements of Operation / Fundamental Profit
Condensed Statements of Operation / Fundamental Profit (JPY mn) 2017/1H 2018/1H Change Note Insurance premiums and other 5,196 5,847 650 Other 142 250 107 Ordinary income 5,338 6,097 758 In-force policies business increase Increased by In-force policies business increase. Percentage of Insurance cla
Slide 35: Three Surplus Factors of Fundamental Profit
Three Surplus Factors of Fundamental Profit 2Q of FY2018 Statements of operations Profit analysis Insurance premiums and other 5,847 Ordinary income Net premiums Expense loading Premiums income 5,682 Reinsurance income 164 Reinsurance income Investment income Interest and Gains on sales 129 Reversal
Slide 36: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of Sep 30, 2018 (R 1 + R 8 )2 + (R 2 + R 3 + R 7 )2 + R 4 / 2 Total amount of solvency margin Solvency margin ratio 2,289.3% = <numerator> 20,678 ÷ Total amount of risk/2 < the denominator> 1,806/2 Cash and deposits Other liabilities 1,022 748 Insurance risk R1 1
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