NEWS RELEASE
August 8, 2019
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 1Q of Fiscal 2019 Ending March 31, 2020
Annualized premium of new business of 822 million yen, up 43.7% year on year
TOKYO, August 8, 2019 - LIFENET INSURANCE COMPANY (TSE Mothers 7157, President
Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for the firstquarter of fiscal 2019 ending March 31, 2020.
1．Overview of the financial results for 1Q of fiscal 2019(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 1Q ended June 30, 2019 was 822 million yen(143.7% of 1Q of fiscal 2018). The number of new business was 19,117 (143.9% of 1Q of fiscal
2018). Annualized premium*1 of policies-in-force as of the end of 1Q of fiscal 2019 stands at
13,652 million yen (104.3% of March 31, 2019). The number of policies-in-force resulted in a
total of 321,829 (104.2% of March 31, 2019). Surrender and lapse ratio*2 for 1Q of fiscal 2019was 7.6% (6.3% for 1Q of fiscal 2018).
*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 1Q of fiscal 2019 increased to 3,774 million yen (130.9% of
1Q of fiscal 2018) due to an increase in the number of policies-in-force, and modified coinsurance*3. Investment income grew to 70 million yen (115.5% of 1Q of fiscal 2018). Other
ordinary income was 50 million yen. As a result, ordinary income for 1Q of fiscal 2019 amounted
to 3,895 million yen (131.9% of 1Q of fiscal 2018).
Insurance claims and other was 772 million yen (128.6% of 1Q of fiscal 2018). The ratio of
insurance payment amounts to insurance premiums increased to 18.7% for 1Q of fiscal 2019,
compared with 17.7% for 1Q of fiscal 2018. Provision for policy reserves and other came to
1,015 million yen (112.9% of 1Q of fiscal 2018). The ratio of provision for policy reserves toinsurance premiums was 31.0% for 1Q of fiscal 2019, compared with 32.2% for 1Q of fiscal
2018. Operating expenses amounted to 2,199 million yen (159.3% of 1Q of fiscal 2018). The
components of operating expenses were 1,502 million yen in marketing expenses (203.3% of
1Q of fiscal 2018) mainly due to proactive investment in advertising, 211 million yen in customer
service expenses (112.0% of 1Q of fiscal 2018), and 486 million yen in system and otherexpenses (107.2% of 1Q of fiscal 2018). Other ordinary expenses was 228 million yen (139.5%
of 1Q of fiscal 2018). Consequently, ordinary expenses for 1Q of fiscal 2019 totaled 4,216
million yen (138.5% of 1Q of fiscal 2018).
As a result, ordinary profit totaled 321 million yen loss for 1Q of fiscal 2019, compared with 90
million yen loss for 1Q of fiscal 2018. Net income was 325 million yen loss, compared with 95
million yen loss for 1Q of fiscal 2018. From fiscal 2019 onward, we are reinsuring a portion of
new business in modified co-insurance which has resulted in raising ordinary income by 387
million yen, ordinary profit by 370 million yen, and net income by 370 million yen in 1Q of fiscal
2019.
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NEWS RELEASE
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 428 million yen loss, compared with 77 million yen loss for 1Q of fiscal
2018. The components of fundamental profit were 757 million yen in mortality margin, 1,180
million yen loss in expense margin and 5 million yen loss in interest margin.
*3: These reinsurance transactions are agreements that transfer a certain part of the risk and the profit (loss) structure
including operating expenses of the reinsured business to the reinsurance company for a designated period of time.
In the first policy year of acquisition, we receive ceding commission corresponding to a part of acquisition expensesof the reinsured policies. After establishing reinsurance receivable for the amount of ceding commission, it isamortized by the prescribed amount based on the profit of reinsured policies of each accounting period.

(2) Financial condition
Assets, liabilities and net assets
Total assets as of June 30, 2019 amounted to 39,002 million yen (38,247 million yen as ofMarch 31, 2019). The major account balance was 31,351 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings.
Liabilities amounted to 27,464 million yen as of June 30, 2019 (26,474 million yen as ofMarch 31, 2019), owing to an increase in policy reserves. The major account balances were
25,802 million yen in policy reserves and 431 million yen in reserves for outstanding claims.
Net assets amounted to 11,538 million yen as of June 30, 2019 (11,773 million yen as ofMarch 31, 2019), due to the recording of net loss for 1Q of fiscal 2019.
The solvency margin ratio as of June 30, 2019 was 2,216.0% (2,085.2% as of March 31,2019), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For 1Q of fiscal 2019, net cash provided by operating activities amounted to 258 million yen(682 million yen provided for 1Q of fiscal 2018) despite the increase in operating expenses. Net
cash used by investing activities amounted to 559 million yen (1,125 million yen used for 1Q of
fiscal 2018) mainly due to acquisition of securities. Net cash used by financing activities
amounted to 3 million yen (4 million yen used for 1Q of fiscal 2018).
Based on these activities described above, cash and cash equivalents as of June 30, 2019
totaled 1,886 million yen (2,192 million yen as of March 31, 2019).
(3) Business forecasts
The business forecasts for fiscal 2019 is as shown in the table below.
We are participating in reinsurance transactions from fiscal 2019 by modified co-insurance onpart of new business as a means of capital enhancement. By utilizing reinsurance appropriately,
we will ease the temporary burden imposed on statutory capital by expenses associated withnew business and maintain fiscal soundness.
We expect the impact of reinsurance on fiscal 2019 results forecasts to increase ordinary
income by around 2,000 million yen, ordinary profit by around 1,400 million yen and net income
by around 1,400 million yen, given that new business will be acquired as expected. We also
expect amortization over a designated period to decrease ordinary profit by around 350 million
yen each year from fiscal 2020. Accordingly, Lifenet is forecasting ordinary income of 16,200
million yen, ordinary loss of 2,000 million yen and net loss of 2,000 million yen for fiscal 2019.
Such reinsurance agreements can also be continued for new business in the next fiscal year
and thereafter, depending on the status of capital.

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NEWS RELEASE

Business forecasts
for fiscal 2019
(Reference)
Business results
for fiscal 2018

Ordinary income

Ordinary profit (loss)(In millions of yen)
Net income (loss)

16,200(2,000)(2,000)12,560(1,719)(1,735)As the table below indicates, we project annualized premium of new business of 3,000 million
yen.
(Reference) Annualized premium(In millions of yen)
Business forecasts
3,000
for fiscal 2019
Business results
for fiscal 2018

About LIFENET

2,773

URL: https://ir.lifenet-seimei.co.jp/en/

Remembering 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. We aim to be the leading company driving
the growth of the online life insurance market.
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 andprovided 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,
June 30,
2019
2019
ASSETSCash and deposits ·································································

1,192

1,086

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

999

799

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

3,114

3,305

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

30,98931,351Government bonds····························································

8,071

8,102

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

1,394

1,403

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

16,76317,023

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

363

345

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

45

43

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

4,352

4,433

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

99

86

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

629

678

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

7

8

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

69

477

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

1,146

1,207

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

955

1,002

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

191

204

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

38,24739,002

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

25,256

26,233469

431

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

24,78625,802

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

72

65

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

160

182

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

707

668

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

42

45

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

42

45

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

233

268

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

26,474

27,464

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

12,136

12,136

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

12,136

12,136

Retained earnings ·································································(13,101)(13,426)

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

11,172

10,846

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

600

691

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

600

691

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

11,773

11,538

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

38,24739,002NET ASSETS

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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 policy reserves ···································
Investment expenses ·················································
Interest expenses ·················································
Foreign exchange losses ········································
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
2018
2019
2,954
3,895
2,882
3,774
2,792
3,279
89
494
61
70
53
60
7
9
10
50
3
38
6
11
3,045
4,216
600
772
334
386
159
227
0
0
107
159
899
1,015
899
1,015
0
0
0
0
－
0
1,380
2,199
163
228
(90)
(321)
2
3
2
3
2
3
(93)
(324)
1
0
1
0
(95)
(325)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)Three months ended June 30
2018

2019

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

(93)

(324)

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

66

63

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

(3)

(38)

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

899

1,015

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

2

3

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

(53)

(60)

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

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

(0)

(1)

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

(44)

(408)

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

(31)

(45)

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

(12)

(7)

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

8

21

(79)

(31)

(7)

(8)

651

177

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

56
(0)

84
(0)

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

(25)

(3)

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

682

258

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

－

(250)

Purchase of securities ···················································(1,642)(600)

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

600

395

Total of net cash provided by (used in) investment transactions(1,041)(454)

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 ··········

(358)
(18)
(65)
(1,125)

(196)
(22)
(82)
(559)

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

(4)

(3)

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

(4)

(3)

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

(448)

(305)

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

2,926

2,192

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

2,477

1,886

###

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