Lifenet Insurance Company · TSE:7157
Lifenet Insurance — Q3 2016 Earnings Presentation
42 slides from Lifenet Insurance's earnings presentation, Feb 9, 2017
Slide 1: Reference Data for Third Quarter Fiscal 2016
Securities Code:7157 TSE Mothers Reference Data for Third Quarter Fiscal 2016 February 9, 2017
Slide 2: Contents
Contents 1. Results for 3Q of Fiscal 2016 2. Progress of Mid-term Business Plan 1
Slide 3: Summary of 3Q for FY2016 Results
Summary of 3Q for FY2016 Results (JPY mn) First 9 months First 9 months of FY2015 of FY2016 Year on year Ordinary income 6,995 7,568 108.2% Operating expenses 2,247 2,714 120.8% Ordinary profit / loss1 639 347 54.3% Cash flows from operating activities 3,487 3,069 88.0% Mortality margin 1,591 1,691
Slide 4: Key Highlight
Key Highlight Launched sales of “au Life Insurance” with Refunds Ordinary income 108% year on year Bottomed out of new business performance Recorded positive ordinary profit1 1. Ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act 3
Slide 5: New Product Launch
New Product Launch Launched sales of “au Life Insurance” with Refunds from Dec. 2016 au user au Life Insurance au smartphone “au Life Insurance” etc. with Refunds Monthly refunds of 200 yen for up to 60 months as refunds of insurance premiums per one policy 4
Slide 6: Enhance au Life Insurance Lineup
Enhance “au Life Insurance” Lineup Newly launched “au Long-term Disability Insurance” au Term Insurance au Medical Insurance with refunds with refunds NEW! au Medical Insurance for Women au Long-term Disability with refunds Insurance with refunds 5
Slide 7: New Long-term Disability Product Hataraku-Hito 2
New Long-term Disability Product “Hataraku-Hito 2” Offered new product in expanding market Hataraku-Hito 2 Product X Product Y Product Z 50, 55～70, Policy term 55, 60, 65, 70 y/o 60, 65 y/o 75, 80 y/o 55, 60, 65, 70 y/o Amount of 100,000～ 50,000～ 500,000～ 100,000 yen/month benefit 500,000 yen/mont
Slide 8: Paperless Application Process
Paperless Application Process Improved customer convenience without sending application form by postal mail Usage of paperless application process via smartphone1 Not used Past 40% Used 60% Paperless Significantly y shortened! 1. Calculated based on data of customers applied in December 2016 7
Slide 9: Highest Rating in the 2016 HDI Benchmarking
Highest Rating in the 2016 HDI Benchmarking Contact center and website awarded highest rating 3 stars for 5th consecutive year1 Phone Support (Contact Center) Web Support (Website) 1. Awarded in the 2016 Benchmarking (Life Insurance Industry) hosted by HDI-Japan 8
Slide 10: Ordinary Income (Quarterly)
Ordinary Income (Quarterly) 108% year on year mainly by increase of insurance premiums and other (JPY mn) 2,594 2,551 2,392 2,421 2,365 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 9
Slide 11: Ordinary Income (Quarterly)
Ordinary Income (Quarterly) Insurance premiums and other steadily increased (JPY mn) 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q Insurance premiums and other 2,280 2,335 2,444 2,413 2,463 Investment income 113 54 51 56 52 Reversal of reserves for outstanding claims (31) ― 96 (53) 30 Other (excl. Reversal of res
Slide 12: Annualized Premium / Number of Policies-in-force (Quarterly)
Annualized Premium / Number of Policies-in-force (Quarterly) In-force business steadily increased : Number of policies-in-force : Annualized premium of policies-in-force (JPY bn) 234,828 231,538 228,846 222,598 225,534 9.5 9.6 9.8 9.3 9.2 15/12 16/03 16/06 16/09 16/12 (YY/MM) 11
Slide 13: Breakdown of Policies-in-force
Breakdown of Policies-in-force 148,509 in-force policyholders (as of Dec. 31) Component 15/12 16/12 ratio Number of policies-in-force 222,598 234,828 100.0％ - Term Life1 116,338 121,208 51.6％ - Whole-Life Medical1 67,393 70,033 29.8％ - Term Medical Care1 11,304 10,645 4.5％ - Long-Term Disability1
Slide 14: Annualized Premium / Number of New Business (Quarterly)
Annualized Premium / Number of New Business (Quarterly) Number of new business keep exceeding same period of last fiscal year : Number of new business : Annualized premium of new business (JPY mn) 7,307 6,980 6,864 6,883 6,312 341 323 316 320 293 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 13
Slide 15: Annualized Premium / Number of New Business (First 9 months)
Annualized Premium / Number of New Business (First 9 months) Bottomed out of new business performance : Number of new business : Annualized premium of new business (JPY mn) Up 13% Y-o-Y 20,599 18,267 872 Up 10% 955 Y-o-Y 15/3Q 16/3Q (accumulated) (accumulated) 14
Slide 16: Insurance Claims and Benefits (Quarterly)
Insurance Claims and Benefits (Quarterly) 21 insurance claims, increased by 14, year on year (JPY mn) 505 130 424 Benefit 134 claims 293 267 225 114 375 134 120 290 Insurance claims 179 105 133 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 15
Slide 17: Provision for Policy Reserves (Quarterly)
Provision for Policy Reserves (Quarterly) Remaining at same level : Provision for policy reserves (JPY mn) : Provision for policy reserves / Premiums income 950 917 911 925 917 41.9% 39.7% 38.8% 38.8% 37.8% 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 16
Slide 18: Operating Expenses (Quarterly)
Operating Expenses (Quarterly) Increased marketing expenses to ensure bottom out of new business performance (JPY mn) 992 997 861 855 787 441 428 Marketing 339 323 312 Customer 135 134 138 153 service 138 System 415 387 393 414 and other 336 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 17
Slide 19: Marketing Expenses per New Business (Quarterly)
Marketing Expenses per New Business (Quarterly) Declined efficiency year on year due to marketing expenses increase : Marketing expenses per new business (JPY thousand) : Marketing expenses / Annualized premium of new business 64 61 51 45 46 1.3 1.3 0.9 0.9 0.9 1.0 1.1 0.9 0.9 0.9 15/3Q 15/4Q 16/1
Slide 20: Ordinary Profit / Loss (Quarterly)
Ordinary Profit / Loss (Quarterly) Decreased year on year due to increased operating expenses (JPY mn) 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q Ordinary profit / loss before amortization of 220 (54) 139 187 19 deferred assets Amortization cost (265) (265) (265) (265) (265) Ordinary profit (loss) (44) (319) (
Slide 21: Condensed Statements of Operation
Condensed Statements of Operation (JPY mn) 15/3Q 16/3Q Change Insurance premiums and other 6,782 7,321 538 Other 212 246 34 Ordinary income (A) 6,995 7,568 573 Insurance claims and other 937 1,384 446 Provision for policy reserves and other 2,847 2,754 (92) Operating expenses 2,247 2,714 466 Other 3
Slide 22: Structure Breakdown of Ordinary Profit
Structure Breakdown of Ordinary Profit Increase of insurance claims and other and operating expenses Transition of ordinary profit1 (First 9 months) Income Expense (JPY mn) Increase of Other Decrease of insurance provision premiums and other 34 for policy reserves and other 538 92 Increase of 639
Slide 23: Fundamental Profit
Fundamental Profit Decreased year on year due to increased expense loss (JPY mn) 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q Mortality margin 532 509 549 589 552 Expense margin (loss) (625) (819) (655) (655) (777) Interest margin 9 11 5 8 1 Fundamental profit (loss) (83) (298) (100) (57) (224) (Reference) Insur
Slide 24: Operating Cash Flows (Quarterly)
Operating Cash Flows (Quarterly) Steadily recorded positive operating cash flows (JPY mn) 1,363 1,235 1,123 947 758 15/3Q 15/4Q 16/1Q 16/2Q 16/3Q 23
Slide 25: Financial Condition
Financial Condition (JPY mn) 15/03 16/03 16/12 Total assets 23,387 30,317 32,505 Invested foreign Cash and deposits 731 734 1,123 Monetary claims bought - 1,999 1,499 Money held in trust 1,033 1,035 1,001 bonds for 17,082 23,067 26,022 Securities Government bonds 8,227 10,102 10,024 investment ass
Slide 26: Solvency Margin Ratio
Solvency Margin Ratio1 Maintained at high level despite of increased asset management risk 2,782% 2,805% 2,778% 2,809% 2,782% Average of 4 major Average of 4 major insurance companies2 insurance companies2 894％ 910％ 15/12 16/03 16/06 16/09 16/12 (YY/MM) 1. The solvency margin ratio measures a life
Slide 27: Impact of Interest Rates
Impact of Interest Rates Limited impact in 3Q of fiscal 2016 Interest Limited because our products are margin all protection type Decreased unrealized gains of government bonds and Balance sheet corporate bonds due to rising interest rates Investment Promote diversification in policy investment as
Slide 28: Contents
Contents 1. Results for 3Q of Fiscal 2016 2. Progress of Mid-term Business Plan 27
Slide 29: New Mid-term Business Plan
New Mid-term Business Plan Summary of new Mid-term Business Plan FY2018 13.5 billion yen in ordinary income Management Positive profitability of ordinary profit (loss) Goal 1. The pillars of business : “Online direct sales”, “KDDI (exclusive alliance agent)” and “Over- the-counter agent” Business
Slide 30: To Achieve New Mid-term Business Plan
To Achieve New Mid-term Business Plan Aiming for returning to growth in new business performance in fiscal 2016 Achieve Establish a system Management Goal realizing sustainable Return to profitability growth in new business 2018 performance 2017 2016 29
Slide 31: Progress of Mid-term Business Plan (Ordinary Income)
Progress of Mid-term Business Plan (Ordinary Income) 8% increase year on year : Fiscal year : First 9 months of fiscal year 13,500 (JPY mn) 10,000 9,387 Progress ratio Up 8% to target Y-o-Y for 3Q 76% 7,568 6,995 FY2015 16 18 30
Slide 32: Progress of Mid-term Business Plan (Ordinary Profit / Loss)
Progress of Mid-term Business Plan (Ordinary Profit / Loss) Aiming for positive ordinary profit1 in fiscal 2018 (JPY mn) Results for first Business forecasts Management 9 months of FY2016 Goal FY2018 FY2016 Ordinary profit (loss) before amortization of deferred assets under Article 113 of (300) -
Slide 33: Key Initiatives
Key Initiatives Strengthen product development and channel utilization Online direct sales →Strengthen Smartphone Online optimization, the way to draw direct customers to the website and sales services for policyholders KDDI (exclusive alliance agent) →Build sales system utilizing au shops and au
Slide 34: Enhanced Insurance Consultation Service via LINE
Enhanced Insurance Consultation Service via LINE Auto-reply service enables customers to consult by Talk1 1. Started auto–reply services via Facebook Messenger as well as LINE in January 2017. 33
Slide 35: Number of Application in Jan. 2017
Number of Application in Jan. 2017 Contributed by “au Life Insurance” and increase of marketing expenses 4,052 3,488 3,494 3,221 3,147 3,121 3,180 3,062 2,956 2,935 2,806 2,824 2,586 16/1 16/4 16/7 16/10 17/1 (YY/MM) 34
Slide 36: Business Forecasts
Business Forecasts Business forecasts for fiscal 2016 announced in Nov. 2016 remain unchanged (JPY mn) Ordinary Ordinary income profit1 Business forecasts FY2016 10,000 (300) (Reference) Results for first 9 months 7,568 347 of FY2016 1. Ordinary profit(loss) before amortization of deferred assets
Slide 37: LIFENET is…
LIFENET is… Comprehensible Cost-Competitive Convenient Returning to the original purpose of life insurance – mutual support – Plugged-in way to reach customers who need insurance products with necessary coverage 36
Slide 38: LIFENET Manifesto
LIFENET Manifesto I. Our Guiding Principles II. Life Insurance will be Comprehensive (1) We believe that our responsibility to society is to return life insurance to its (1) Our products will be simple and comprehensible. There will not be complex original state. Life insurance is for the customers,
Slide 39: http://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 40: Appendix
Appendix oD) LiFENE] LIFENET INSURANCE COMPANY
Slide 41: Three Surplus Factors of Fundamental Profit
Three Surplus Factors of Fundamental Profit 3Q of FY2016 Statements of Operations Profit analysis Insurance premiums and other 7,321 Ordinary income Net premiums Expense loading Premiums income 7,163 Reinsurance income 157 Reinsurance income Investment income Interest and Gains on sales 160 Reversal
Slide 42: Solvency Margin Ratio Calculation
Solvency Margin Ratio Calculation As of Dec. 31, 2016 (R 1 R 8 )2 (R 2 R 3 R 7 )2 R 4 / 2 Solvency margin ratio Total amount of solvency margin Total amount of risk/2 2,782.4% = <numerator> 20,370 ÷ < the denominator> 1,464/2 Cash and deposits Other liabilities 446 Insurance risk R1 1,035
Lifenet Insurance Company — Q3 2016 Earnings Presentation on 6ix