NEWS RELEASE
August 10, 2018
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 1Q of Fiscal 2018 Ending March 31, 2019
Annualized premium of new business of 572 million yen, up 66.7% year on year
TOKYO, August 10, 2018 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for thefirst quarter of fiscal 2018 ending March 31, 2019.
1．Overview of the financial results for 1Q of fiscal 2018
(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 1Q ended June 30, 2018 was 572 million yen(166.7% of 1Q of fiscal 2017). The number of new business was 13,285 (170.5% of 1Q of fiscal2017). Annualized premium*1 of policies-in-force as of the end of 1Q of fiscal 2018 stands at
11,529 million yen (103.4% of March 31, 2018). The number of policies-in-force resulted in a
total of 272,830 (103.4% of March 31, 2018). Surrender and lapse ratio*2 for 1Q of fiscal 2018
was 6.3% (6.5% for 1Q of fiscal 2017).
*1: Annualized premium is the amount of money equivalent to what is to be paid to have the insurance coverage for one
year. All payments for Lifenet products are in monthly installments, we calculate annualized premium as multiplying
the monthly premium by 12 months.
*2: The surrender and lapse ratio is the annual equivalent of the monthly number of policies surrendered and/or lapsed
divided by the monthly average number of policies-in-force.

Results of operations
Insurance premiums and other for the 1Q of fiscal 2018 increased to 2,882 million yen(111.4% of 1Q of fiscal 2017) due to an increase in the number of policies-in-force. Investment
income grew to 61 million yen (112.9% of 1Q of fiscal 2017). Other ordinary income was 10
million yen. As a result, ordinary income for 1Q of fiscal 2018 amounted to 2,954 million yen(111.4% of 1Q of fiscal 2017).
Insurance claims and other was 600 million yen (128.4% of 1Q of fiscal 2017). The ratio of
insurance payment amounts to insurance premiums increased to 17.7% for 1Q of fiscal 2018,
compared with 15.7% for 1Q of fiscal 2017. Provision for policy reserves and other came to 899
million yen (98.6% of 1Q of fiscal 2017). The ratio of provision for policy reserves to insurance
premiums was 32.2% for 1Q of fiscal 2018, compared with 34.9% for 1Q of fiscal 2017.
Operating expenses amounted to 1,380 million yen (137.3% of 1Q of fiscal 2017). The
components of operating expenses were 739 million yen in marketing expenses (173.7% of 1Qof fiscal 2017), 188 million yen in customer service expenses (112.8% of 1Q of fiscal 2017), and453 million yen in system and other expenses (109.6% of 1Q of fiscal 2017). Other ordinary
expenses was 163 million yen (127.2% of 1Q of fiscal 2017). Consequently, ordinary expenses
for 1Q of fiscal 2018 totaled 3,045 million yen (121.1% of 1Q of fiscal 2017).
As a result, ordinary loss totaled 90 million yen for 1Q of fiscal 2018, compared with 136
million yen profit for 1Q of fiscal 2017. Net loss was 95 million yen, compared with 109 million
yen profit for 1Q of fiscal 2017.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 77 million yen loss, compared with 159 million yen profit for 1Q of fiscal
2017. The components of fundamental profit were 681 million yen in mortality margin, 754 million
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
yen loss in expense margin and 5 million yen loss in interest margin.
(2) Financial condition
Assets, liabilities and net assets
Total assets as of June 30, 2018 amounted to 36,435 million yen (35,541 million yen as ofMarch 31, 2018). The major account balance was 29,498 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings.
Liabilities amounted to 23,044 million yen as of June 30, 2018 (22,153 million yen as ofMarch 31, 2018), owing to an increase in policy reserves. The major account balances were21,656 million yen in policy reserves and 425 million yen in reserves for outstanding claims.
Net assets amounted to 13,391 million yen as of June 30, 2018 (13,387 million yen as ofMarch 31, 2018).
The solvency margin ratio as of June 30, 2018 was 2,402.5% (2,455.8% as of March 31,2018), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For 1Q of fiscal 2018, net cash provided by operating activities amounted to 682 million yen(902 million yen provided for 1Q of fiscal 2017) due to an increase in operating expenses andinsurance premiums and other. Net cash used by investing activities amounted to 1,125 million
yen (927 million yen used for 1Q of fiscal 2017) mainly due to acquisition of securities. Net cashused by financing activities amounted to 4 million yen (4 million yen used for 1Q of fiscal 2017).
Based on these activities described above, cash and cash equivalents as of June 30, 2018
totaled 2,477 million yen (2,926 million yen as of March 31, 2018).
(3) Business forecasts
The business forecasts for fiscal 2018 was revised as shown below, due to further aggressive
investment in marketing expenses to expand the scale of our business as our strong businessperformance in 1Q of fiscal 2018 following fiscal 2017. Accordingly, ordinary loss and net loss
are expected to be lower than prievious forecast, which was announced on May 15, 2018.
(In millions of yen)
Ordinary income

Ordinary profit (loss)

Net income (loss)

Business forecasts(Fiscal 2018)12,300

(800)

(600)

(Reference)
Results (Fiscal 2017)

10,962

(197)

(249)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
About LIFENET URL: https://ir.lifenet-seimei.co.jp/en/
Returning to the original purpose of life insurance - mutual support - LIFENET INSURANCECOMPANY was founded with the goal of offering simple, convenient and competitively priced
products and services based on the highest levels of business integrity. We sell these products
and services directly to customers over the Internet. By using the Internet, we are able to offer
highly cost-competitive products and accept applications from customers at any given time.
Contact:
Investor Relations, Corporate Planning DepartmentTel:+81-3-5216-7900
e-mail: ir@lifenet-seimei.co.jp
Disclaimer: This is a summarized translation of the original Japanese document, prepared and provided
solely for readers' convenience. In case of any discrepancy or dispute, the Japanese document prevails.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3NEWS RELEASE
2. Non-consolidated Financial Statements(1) Balance Sheets(In millions of yen)March 31,
June 30,
2018
2018
ASSETSCash and deposits ·································································

926

977

Monetary claims bought ··························································

1,999

1,499

Money held in trust ································································

2,5672,641

Securities ············································································

28,30329,498

Government bonds····························································

8,3988,402

Municipal bonds ·······························································

1,505

1,506

Corporate bonds ·······························································

13,892

14,997

Stocks ············································································

346

432

Other securities ································································

4,161

4,158

Tangible fixed assets ······························································

10999

Intangible fixed assets ····························································

621613

Agency accounts receivable ····················································

44

Reinsurance accounts receivable··············································

4589

Other assets·········································································

9641,010

Accounts receivable ··························································

802829Other ·············································································

162180Total assets ···························································

35,54136,435LIABILITIESPolicy reserves and other ························································
Reserves for outstanding claims ··········································

21,18622,082429425

Policy reserves ·································································

20,75721,656

Agency accounts payable ·······················································

5946

Reinsurance accounts payable ·················································

108117

Other liabilities ······································································

581539Reserves under the special laws ···············································

3033

Reserve for price fluctuations ··············································

3033

Deferred tax liabilities ·····························································

186225

Total liabilities ·························································

22,15323,044

Capital stock ········································································

12,136

12,136

Capital surplus ······································································

12,136

12,136Retained earnings ·································································(11,365)(11,461)

Shareholders’ equity ················································

12,907

12,812

Valuation difference on available-for-sale securities ······················

480578Valuation and translation adjustments ········································

480578

Total net assets ······················································

13,387

13,391

Total liabilities and net assets·····································

35,54136,435NET ASSETS

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

4NEWS RELEASE(2) Statements of Operations

Ordinary income····························································
Insurance premiums and other ····································
Premiums income ·················································
Reinsurance income··············································
Investment income ····················································
Interest, dividends and other income ·························
Gains on money held in trust ···································
Other ordinary income ···············································
Reversal of reserves for outstanding claims ················
Other ·································································
Ordinary expenses ························································
Insurance claims and other ·········································
Insurance claims ··················································
Benefits ······························································
Other refunds ······················································
Reinsurance commissions ······································
Provision for policy reserves and other ··························
Provision for reserves for outstanding claims ··············
Provision for policy reserves ···································
Investment expenses ·················································
Interest expenses ·················································
Operating expenses ··················································
Other ordinary expenses ············································
Ordinary profit (loss) ······················································
Extraordinary losses ······················································
Provision of reserves under the special laws ···················
Provision of reserve for price fluctuations ···················
Income (loss) before income taxes ····································
Income taxes-current ·····················································
Income taxes ································································Net income (loss) ··························································(In millions of yen)Three months ended June 30
2017
2018
2,651
2,954
2,588
2,882
2,521
2,79266895461515327910－
3962,514
3,045467600
260334134
159－
07310791289933－879899
00001,0051,380128163136(90)121212134(93)251251109(95)Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)Three months ended June 30
2017
Cash flows from operating activities
Income (loss) before income taxes ··································

2018
(93)

Depreciation and amortization ········································

13459

Increase (decrease) in reserves for outstanding claims ········

33(3)Increase (decrease) in policy reserves ······························

879899

Increase (decrease) in reserve for price fluctuations ············

12

Interest, dividends and other income ································

(51)

(53)

Interest expenses ························································

00

Decrease (increase) in agency accounts receivable ············

(0)

(0)

Decrease (increase) in reinsurance accounts receivable·······

(35)

(44)

Decrease (increase) in other assets <excluding assets for investing and financing activities> ··

(25)

(31)

Increase (decrease) in agency accounts payable ····················

(6)

(12)

Increase (decrease) in reinsurance accounts payable ··········
Increase (decrease) in other liabilities <excluding liabilities for investing and financing activities>

48(136)(79)

Other, net ···································································

(2)

(7)

Subtotal ·····································································

853

651

Interest and dividends income received ····························
Interest expenses paid ··················································

52(0)

56(0)

Income taxes paid ························································

(3)

(25)

Net cash provided by (used in) operating activities ·········

902682

Cash flows from investing activities
Purchase of money held in trust ······································

(500)

－

Purchase of securities ···················································(2,100)(1,642)

Proceeds from sales and redemption of securities ··················

1,770600

Total of net cash provided by (used in) investment transactions(830)(1,041)

Total of net cash provided by (used in) operating activities and investment transactions
Purchase of tangible fixed assets ····································
Purchase of intangible fixed assets ··································Net cash provided by (used in) investing activities ··········

71

(358)

(8)
(88)
(927)

(18)
(65)
(1,125)

Cash flows from financing activities
Repayments of lease obligations ·····································

(4)

(4)

66

Net cash provided by (used in) financing activities ·········

(4)

(4)

Net increase (decrease) in cash and cash equivalents ·············

(29)

(448)

Cash and cash equivalents, beginning of the year ···················

3,004

2,926

Cash and cash equivalents, end of the period ··························

2,974

2,477

###

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6