NEWS RELEASE
February 9, 2017
Daisuke Iwase, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 3Q of Fiscal 2016 Ending March 31, 2017
Ordinary income of 7,568 million yen, year on year 8.2% up
TOKYO, February 9, 2017 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President Daisuke Iwase, URL: http://ir.lifenet-seimei.co.jp/en/) discloses financial results for thethird quarter of fiscal 2016 ending March 31, 2017.
1．Overview of the financial results for 3Q of fiscal 2016
(1) Business results
Condition of policies-in-force*1
Annualized premium of new business in 3Q ended December 31, 2016 was 320 million yen(99.0% of 3Q of fiscal 2015). The number of applications was 9,236 (105.3% of 3Q of fiscal
2015), with the number of new business at 6,980 (101.7% of 3Q of fiscal 2015). Annualized*1
premium of new business for the nine months ended December 31, 2016 was 955 million yen(109.5% of the nine months ended December 31, 2015). The number of applications was 27,731(114.3% of the nine months ended December 31, 2015), with the number of new business at
20,599 (112.8% of the nine months ended December 31, 2015).
*1
Annualized premium of policies-in-force as of the end of 3Q of fiscal 2016 stands at 9,856
million yen (105.1% of March 31, 2016). The number of policies-in-force resulted in a total of*2
234,828 (104.1% of March 31, 2016). Surrender and lapse ratio for the nine months ended
December 31, 2016 was 6.5% (6.7% of the nine months ended December 31, 2015).
*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 nine months ended December 31, 2016 increased to
7,321 million yen (107.9% of the nine months ended December 31, 2015) due to an increase in
the number of policies-in-force. Investment income was 160 million yen (78.3% of the ninemonths ended December 31, 2015). Other ordinary income was 86 million yen. As a result,ordinary income for the nine months ended December 31, 2016 amounted to 7,568 million yen(108.2% of the nine months ended December 31, 2015).
Insurance claims and other was 1,384 million yen (147.6% of the nine months ended
December 31, 2015) mainly due to the increased number of insurance claims. The ratio of
insurance payment amounts to insurance premiums increased to 16.7% for the nine months
ended December 31, 2016, compared with 11.7% for the nine months ended December 31, 2015.
Provision for policy reserves and other came to 2,754 million yen (96.7% of the nine months
ended December 31, 2015). The ratio of provision for policy reserves to insurance premiums was
38.5% for the nine months ended December 31, 2016, compared with 42.2% for the nine months
ended December 31, 2015. Operating expenses amounted to 2,714 million yen (120.8% of thenine months ended December 31, 2015). The components of operating expenses were 1,091
million yen in marketing expenses including advertising (126.7% of the nine months ended
December 31, 2015), 427 million yen in customer service expenses (109.3% of the nine months
ended December 31, 2015), and 1,195 million yen in system and other expenses (120.2% of the
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1

NEWS RELEASE
nine months ended December 31, 2015). Amortization of deferred assets under Article 113 of the
Insurance Business Act totaled 795 million yen because the deferred assets recognized before
fiscal 2012 are expected to be amortized using the straight-line method until fiscal 2017, thetenth year after commencing business operations. Consequently, ordinary expenses for the ninemonths ended December 31, 2016 totaled 8,016 million yen (112.1% of the nine months ended
December 31, 2015).
As a result, ordinary loss totaled 447 million yen for the nine months ended December 31,
2016, compared with 155 million yen for the nine months ended December 31, 2015. Ordinary
profit before amortization of deferred assets under Article 113 of the Insurance Business Act
recorded profitable of 347 million yen, compared with ordinary profit of 639 million yen for thenine months ended December 31, 2015. Net loss was 424 million yen, compared with 151 million
yen for the nine months ended December 31, 2015.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 381 million yen loss, compared with 152 million yen loss for the ninemonths ended December 31, 2015. The components of fundamental profit were 1,691 million yen
in mortality margin, 2,088 million yen in expense loss and 15 million yen in interest margin.
(2) Financial condition
Assets, liabilities and net assets
Total assets as of December 31, 2016 amounted to 32,505 million yen (30,317 million yen asof March 31, 2016). The major account balance was 26,022 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Deferred assets
under Article 113 of the Insurance Business Act decreased to 1,325 million yen due toamortization.
Liabilities amounted to 17,370 million yen as of December 31, 2016 (14,893 million yen as ofMarch 31, 2016), owing to an increase in policy reserves as a result of the increased insurance
premiums. The major account balances were 16,306 million yen in policy reserves (including
1,373 million yen in contingency reserves), and 283 million yen in reserves for outstanding
claims.
Net assets decreased to 15,135 million yen as of December 31, 2016 (15,423 million yen as ofMarch 31, 2016) mainly due to the recording of net loss for the nine months ended December 31,
2016.
The solvency margin ratio as of December 31, 2016 was 2,782.4% (2,805.5% as of March 31,2016), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the nine months ended December 31, 2016, net cash provided by operating activities
amounted to 3,069 million yen (3,487 million yen provided for the nine months ended December
31, 2015) due to an increase in insurance premiums and other despite of increased insurance
claims. Net cash used by investing activities amounted to 3,385 million yen (4,982 million yen
used for the nine months ended December 31, 2015) due to acquisition of securities. Net cash
provided by financing activities amounted to 204 million yen (3,033 million yen provided for thenine months ended December 31, 2015).
Based on these activities described above, cash and cash equivalents as of December 31,
2016 totaled 2,623 million yen (2,734 million yen as of March 31, 2016).

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

2

NEWS RELEASE(3) Business forecasts
Business forecasts for fiscal 2016 remain unchanged as shown below since Lifenet
announced on November 10, 2016. These are disclosed ordinary income and ordinary profit(loss) before amortization of deferred assets under Article 113 of the Insurance Business Act.
Ordinary income(In millions of yen)
*1
Ordinary profit (loss)

Business forecasts
for fiscal 2016

10,000(300)(Ref.) Business results
for fiscal 2015

9,387

584

*1 Based on ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act

The deferred assets recognized before fiscal 2012 are to be amortized using the straight-line
method until fiscal 2017, the tenth year after commencing business operations, and amortizationof deferred assets will record 1,060 million yen each year onward. Accordingly, ordinary profit
before amortization of deferred assets under Article 113 of the Insurance Business Act, which isthe effective ordinary profit, is disclosed as the business forecasts.

About LIFENETURL: http://ir.lifenet-seimei.co.jp/en/

Returning to the original purpose of life insurance - mutual support - LIFENET INSURANCE
was founded with the goal of offering simple, convenient and competitively priced products andservices 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.

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NEWS RELEASE
2. Non-consolidated Financial Statements(1) Balance Sheets(In millions of yen)March 31,
Dec. 31,
2016
2016
ASSETSCash and deposits ·································································

734

1,123

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

1,999

1,499

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

1,035

1,001

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

23,06726,022Government bonds····························································

10,102

10,024

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

1,521

1,505

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

10,428

11,271

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

211

310

Foreign securities ·····························································

804

789

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

－

2,120

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

72

114

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

437

490

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

0

1

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

27

35

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

2,941

2,217

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

680

728

Deferred assets under Article 113 of the Insurance Business Act ·····

2,120

1,325

Other ·············································································

141

164

Total assets ···························································

30,31732,505

LIABILITIESPolicy reserves and other ························································
Reserves for outstanding claims ··········································

13,908

16,590357

283

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

13,551

16,306

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

8

26

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

56

65

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

505

354

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

12

17

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

12

17

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

401

315

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

14,893

17,370Capital stock ········································································

12,02012,136

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

12,02012,136

Retained earnings ·································································(9,227)(9,651)

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

14,813

14,622

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

591

513

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

591

513

Subscription rights to shares ····················································

19－

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

15,423

15,135

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

30,31732,505NET ASSETS

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

4NEWS RELEASE(2) Statements of Operations(In millions of yen)
Nine months ended Dec. 31
2015
2016
Ordinary income······························································
6,995
7,568
Insurance premiums and other ····································
6,782
7,321
Premiums income ·················································
6,699
7,163
Reinsurance income··············································
83
157
Investment income ····················································
204
160
Interest, dividends and other income ·························
135
160
Gains on money held in trust ···································
33－
Gains on sales of securities ····································
35－
Other ordinary income ···············································
7
86
Reversal of reserves for outstanding claims ················－
73
Other ·································································
7
12
Ordinary expenses ························································
7,150
8,016
Insurance claims and other ·········································
937
1,384
Insurance claims ··················································
456
798
Benefits ······························································
329
399
Other refunds ······················································
0
0
Reinsurance commissions ······································
152
187
Provision for policy reserves and other ··························
2,847
2,754
Provision for reserves for outstanding claims ··············
19－
Provision for policy reserves ···································
2,827
2,754
Investment expenses ·················································
0
0Interest expenses ·················································
00
Losses on money held in trust ·································－
0
Operating expenses ··················································
2,247
2,714
Other ordinary expenses ············································
1,118
1,162
Ordinary profit (loss) ······················································
(155)
(447)
Extraordinary losses ······················································
2
4
Provision of reserves under the special laws ···················
2
4
Provision of reserve for price fluctuations ···················
2
4
Income (loss) before income taxes ····································
(158)
(452)
Income taxes-current ·····················································
53
27
Income taxes-deferred ····················································
(61)
(56)
Income taxes ································································(7)(28)
Net income (loss) ··························································
(151)
(424)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)
Nine months ended Dec. 31
2015

2016

Cash flows from operating activities
Income (loss) before income taxes ·····································

(158)

(452)

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

164

180

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

19

(73)

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

2,827

2,754

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

2

4

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

(135)

(160)

Loss (gain) related to securities ··········································

(35)

－

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

00Decrease (increase) in agency accounts receivable ···············

(0)

(0)

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

14

(8)

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

748

749

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

3

18

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

8

9

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

(92)

(70)

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

(32)

1

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

3,335

2,953

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

157
(0)

228
(0)

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

(3)

(111)

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

3,487

3,069

Cash flows from investing activities
Purchase of securities ······················································(7,012)(4,410)

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

2,110

1,300

Total of net cash provided by (used in) investment transactions ···(4,901)(3,110)Total of net cash provided by (used in) operating activities and investment transactions ···(1,413)(40)

Purchase of tangible fixed assets ·······································
Purchase of intangible fixed assets ·····································Net cash provided by (used in) investing activities ·············

(5)
(75)
(4,982)(36)(238)(3,385)

Cash flows from financing activities
Proceeds from issuance of common stock ····························

3,040

－

Proceeds from issuance of stock resulting from exercise of subscription rights to shares ···－213

Repayments of lease obligations ········································(6)

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

3,033

(8)
204

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

1,539

(110)

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

731

2,734

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

2,271

2,623

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6