The Latest News in Japan’s Life Insurance Market 2021:
LifenetInsurance Company has thrived with the COVID-19 pandemic and how doesit maintain its momentum?

The number of new businesses hitting all-time record high and policies in-force
reaching 500,000.
Lifenet’s number of new business in FY2020 was a record high of 100,587, a year-on-yearincrease of 24.3%, surpassed 100,000 for the first time.
There are some factors to boost its new business performance; such factors include thecustomer awareness of life insurance needs triggered by the COVID-19 pandemic and thecustomer changes in purchasing behavior which now prefers non-face-to-face sales when
taking out life insurance.
Is Lifenet’s remarkable success in its new business performance still moving forward at thesteady pace into FY 2021?
For the first half of the year, it recorded 53,720, a 4.3% increase from the same period lastyear. This is the weaker performance in the growth rate compared with the first half year ofFY2020, a 35.9% increase from the previous year same period at 51,505. It is also the highest
growth rate for the half year ever recorded for the company.
Even looking at the number of new business by month, all the monthly sales for the first halfof FY2020 from April to September surpassed those of FY2019.
During the first half period of FY2021, however, the sales dipped in April and July.
Especially as far as April goes, if compared with the previous April where the number of newbusiness significantly increased to 11,078, the decline is prominent with the number at 8,890.
In addition, its accumulated number of new business from the first to the third quarter ofFY2021 (from April to December) was 76,226, increased by 3.5% from the same period lastyear, whereas these numbers of the previous year were recorded as 73,669 and 27.9%
respectively.
Especially for the three months from October to December, the business performance didn’t
meet its target numbers. According to Lifenet, this is because the company misjudged theconsumer sentiment. As the declaration of a state of emergency over COVID-19 was lifted in
September, consumer behavior moved outward and it resulted in the temporally decline ofcustomer needs for life insurance over all.
However, after hitting the bottom in November at 7,026, the number of new business has
been on a recovery trend with 7,487 in December and 8,027 in January.

On the other hand, the number of policies in force reached 496,659 as of January 2022, and
it is without doubt that Lifenet will cross 500,000 mark during FY2021. Lifenet started business
in June 2008 and the number of policies in force will surpass 500,000 in about 14 years.
Incidentally, Lifenet’s annualized premiums on policies in force as of January 2022 are JPY
21 billion and the breakdown of the number of in-force policies by product is as follows.
Term Life Kazoku: 242,350
Whole Life Medical Jibun: 135,732
Term Medical Care Jibun Plus: 8,554
Long-term Disability Hataraku-Hito: 63,146
Cancer Double Yell: 46,877
As for the composition ratio of products, Term Life accounts for 48.7%, Whole Life Medicalaccounts for 27.3%, and Long-term Disability－the product that Lifenet has been particularly
promoting－accounts for 12.7%. Cancer, which was released in September 2017, accounts for9.4%.
Furthermore, the annualized premium per policy-in-force is about JPY 42,000.
Providing betterChoice through joint subsidiaryLifenet’s effort in the first half of FY2021 can be summarized into the following threebusiness outcomes.
i. Released new long-term disability insurance Hataraku-Hito 3 in June.
ii. Launched a subsidiary, Lifenet Mirai.
iii. Launched White Label business with Money Forward
Hataraku-Hito 3 features the industry’s first lump-sum benefit to support returning to work.
The benefit is to shoulder the medical costs which might incur even after going back to theworkforce and to support the loss of income due to an inability to work fulltime.
Lifenet is a pioneer to sell individual disability insurance in 2010. In 2016, Hataraku-Hito 2
which allows the policy holder to choose the way of receiving benefits and the term of
insurance was introduced. More than 10 years have passed since the first product was placedin the market and the product was updated with the new concept to support returning to thework.
Looking at Lifenet’s customer base, 76% of new business come from customers in their 20s
to 40s. To be more specific, 30% are in their 30s, 28% are in their 40s and 18% are in their 20s.
That being said, the age group of 50s and 60s also accounts for 17% and 6% respectively,and according to Lifenet, the age range of its customer base has been expanding now thatpeople in their 50s and 60s are becoming to have less hesitation in applying insurance throughonline.
In addition, it should be noted that 53% of those new customers actually purchased life
insurance for the first time. From FY2019 to FY2020, customer needs for reviewing existing
insurance policies increased, such that 23% are those who switched from other life insurancecompanies and 18% are those who purchased as a supplement to existing insurance policies
purchased from other life insurance companies.
The opening of a new subsidiary company, LIFENET MIRAI Inc., has been drawing
attention as well. Lifenet Mirai is a joint venture with MILIZE Inc. and was established in May
last year. MILIZE develops and operates the web platform MILIZE with a mission,
restructuring finance with utilizing technologies.
The service brand name is betterChoice and the services to be provided include insurancecomparison site, policy management and life plan proposal.
On the insurance comparison site, the products, such as dementia insurance that Lifenet
doesn’t cover, are offered by teaming up with group companies of major life insurancecompanies. Nonlife insurance products will be available on the website soon.
Lifenet Mirai aims to develop an online insurance platform; however, the company is also
highly motivated to expand its range of products handled on the website into other areas thaninsurance as well in the future.
White Label Channel, a driving force of med to long term growth
Not only Internet Channel but also White Label Channel has been taking on increasing
importance in Lifenet’s Channel strategy.
The strength of White Label business lies in its usage of the partner companies’ large
customer base and high brand power. Lifenet positions White Label as one of the importantchannels for its medium to long term growth and has high expectations to promote its sales
toward boosting the growth of new business performance with the partner companies.
Lifenet with a telecommunication company KDDI Corporation released its very first WhiteLabel life insurance product, au Life Insurance in December 2016. KDDI’s customer base isabout 27 million.
Following, Lifenet teamed up with a retailing company Seven Financial Service Co., Ltd.,and released White Label product, Seven Financial Service Life Insurance in April 2020. SevenFinancial Service’s customer base is about 72 million.
With the white label business with Money Forward Inc., which was started in July last year,
the services to review insurance policies are provided to the users of Money Forward Fixed
Cost Review service provided by Money Forward. Users may take out Maney Forward Life

Insurance through online.
“In order to successfully lead customers from online services to insurance contracts,
designing a better customer experience is important. We have just started and haven’t seen any
results yet. We’d like to polish our customer experience with Money Forward,” says Lifenet.
Life insurance review services through Money Forward Fixed Cost Review is the second
service followed by electricity bill review services. An online services provider, Money
Forward’s customer base is about 12 million.
For the direct Internet sales channel branding, a brand awareness is one of the important
KPIs, and the investment centered on mass advertising will be a brand equity that willcontribute to the new business acquisition, according to Lifenet. As a matter of fact, its brandawareness has increased to 50%.
Proactively investing on customer experience innovation
Lifenet increased its capital through an overseas public offering two years in a row, in July
2020 and September 2021. The raised capital amounts are JPY13.8 billion and JPY 9.7 billion,respectively.
The fund was used for 1. System development for products and services responding tochanges, 2. Strengthening business alliances, and 3. New business to build an online platform
for life insurance.
Regarding the direct Internet sales channel, Lifenet will mainly develops UI (UserInterface)/UX (User Experience) with a fucus on customer touch points by the end of FY2021
and from FY 2022 onwards, it will proactively invest in the back-end infrastructure.
By so doing, innovation of Customer Experience, or CX, by improving the efficiency of data
analysis and optimizing customer touch points, and reducing operational costs by improving
efficiency of infrastructural costs will be executed.
The motive behind the aggressive investment is the business forecast of the increasing needsfor online life insurance.
The latest result of National Field Survey on Life Insurance conducted by Japan Institute ofLife Insurance were announced in September last year.
Consumer intention to take out insurance through online has been gradually increasing as
the survey result shows that the rate is 17.4%; however, when it comes to the actual insurance
purchase rate through online, it stands at only 4.0%. Being that said, both numbers went upward
compared with the survey conducted three years ago as both numbers were 12.5% and 3.3%,
respectively back then. The data is a source of confidence for Lifenet that online life insurance
market has a huge potential to grow.

In the life insurance industry, Digital Transformation (DX) Strategy has become the urgent
management issue. While working on DX, what does Lifenet have in its mind to differentiate
itself from others?
“What we develop is not only products or policy clauses but also the entire customer
experience including promotions to identify needs for insurance, seamless and frictionlesswebsites, convenient policy managements, smooth and prompt insurance payment. Ourcompetitive strategy is to improve the so-called customer experience that is dedicated to online
activities. This is also the contributing factor for our differentiation. We would like to establish
a solid position as a leading online life insurance company,” says Lifenet.
Lifenet has set EEV, European Embedded Value, as its important management index and it
was JPY 112 billion in the first half of FY2021 which is an increase of 17.8% from the end of
the previous fiscal year, achieving the target number of JPY100 billion set in FY2018. Goingforward, the company aims to achieve the next goal of JPY 200 billion as quick as possible byrealizing further growth.
◇◆◇This is the last article of the series. Thank you for reading and supporting The Latest Newsin Japan’s Life Insurance Market 2019-2021.

About the writer:

Kenichi Suzuki is an insurance journalist working for a major insurance trade paper for 35years. From 2000 onward, he covers a wide range of insurance news including on-line life
insurers, insurance shops, overseas expansion of Japanese major life insurers, businessstrategies, Insurance Council, InsurTech, to name a few. He hosts a private study group,Insurance Marketing Study Group. He occasionally takes a role of a speaker for OLIS seminars
and has previously lectured at OLIS overseas seminars in Taipei, Seoul, Beijing, Bangkok andJakarta.