NEWS RELEASE
November 12, 2018
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 2Q of Fiscal 2018 Ending March 31, 2019
Annualized premium of new business of 637 million yen, up 64.5% year on year
TOKYO, November 12, 2018 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for thesecond quarter of fiscal 2018 ending March 31, 2019.
1．Overview of the financial results for 2Q of fiscal 2018
(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 2Q ended September 30, 2018 was 637 million yen(164.5% of 2Q of fiscal 2017). The number of new business was 14,763 (170.7% of 2Q of fiscal
2017). Annualized premium*1 of new business for the six months ended September 30, 2018
was 1,209 million yen (165.5% of the six months ended September 30, 2017). The number of
new business for the six months ended September 30, 2018 was 28,048 (170.6% of the six
months ended September 30, 2017).
Annualized premium*1 of policies-in-force as of the end of 2Q of fiscal 2018 stands at 11,979
million yen (107.5% of March 31, 2018). The number of policies-in-force resulted in a total of283,207 (107.3% of March 31, 2018). Surrender and lapse ratio*2 for the six months ended
September 30, 2018 was 6.2% (6.1% for the six months ended months ended September 30,2017).
*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 six months ended September 30, 2018 increased to
5,847 million yen (112.5% of the six months ended September 30, 2017) due to an increase in
the number of policies-in-force. Investment income grew to 129 million yen (107.7% of the six
months ended September 30, 2017). Other ordinary income was 120 million yen. As a result,ordinary income for the six months ended September 30, 2018 amounted to 6,097 million yen(114.2% of the six months ended September 30, 2017).
Insurance claims and other was 1,251 million yen (128.8% of the six months ended
September 30, 2017). The ratio of insurance payment amounts to insurance premiums was
18.1% for the six months ended September 30, 2018, compared with 16.2% for the six months
ended September 30, 2017. Provision for policy reserves and other came to 1,885 million yen(105.5% of the six months ended September 30, 2017). The ratio of provision for policy
reserves to insurance premiums decreased to 33.2% for the six months ended September 30,
2018, compared with 35.1% for the six months ended September 30, 2017. Operating expenses
amounted to 2,997 million yen (130.6% of the six months ended September 30, 2017) mainly
due to increasing our marketing spend including advertising. The components of operating
expenses were 1,721 million yen in marketing expenses (154.3% of the six months ended
September 30, 2017), 367 million yen in customer service expenses (112.2% of the six months
ended September 30, 2017), and 908 million yen in system and other expenses (106.6% of the
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1

NEWS RELEASE
six months ended September 30, 2017). Other ordinary expenses was 339 million yen (119.7%of the six months ended September 30, 2017). Consequently, ordinary expenses for the six
months ended September 30, 2018 totaled 6,473 million yen (121.3% of the six months ended
September 30, 2017).
As a result, ordinary loss totaled 376 million yen for the six months ended September 30,
2018, compared with 1 million yen profit for the six months ended September 30, 2017. Net loss
was 384 million yen, compared with 15 million yen for the six months ended September 30,
2017.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 319 million yen loss, compared with 50 million yen profit for the six
months ended September 30, 2017. The components of fundamental profit were 1,442 million
yen in mortality margin, 1,756 million yen loss in expense margin and 6 million yen loss in interest
margin.
(2) Financial condition
Assets, liabilities and net assets
Total assets as of September 30, 2018 amounted to 37,101 million yen (35,541 million yen asof March 31, 2018). The major account balance was 30,222 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings.
Liabilities amounted to 23,983 million yen as of September 30, 2018 (22,153 million yen as ofMarch 31, 2018), owing to an increase in policy reserves. The major account balances were
22,642 million yen in policy reserves and 323 million yen in reserves for outstanding claims.
Net assets decreased to 13,118 million yen as of September 30, 2018 (13,387 million yen asof March 31, 2018), by recording the net loss.
The solvency margin ratio as of September 30, 2018 was 2,289.3% (2,455.8% as of March
31, 2018), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the six months ended September 30, 2018, net cash provided by operating activities
amounted to 1,475 million yen (1,906 million yen provided for the six months ended September
30, 2017) despite increased of operating expenses. Net cash used by investing activities
amounted to 2,370 million yen (2,010 million yen used for the six months ended September 30,2017) mainly due to acquisition of securities. Net cash used by financing activities amounted to
9 million yen (9 million yen used for the six months ended September 30, 2017).
Based on these activities described above, cash and cash equivalents as of September 30,
2018 totaled 2,022 million yen (2,926 million yen as of March 31, 2018).

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

2

NEWS RELEASE(3) Business forecasts
The business forecasts for fiscal 2018 which was announced on August 10, 2018, wasrevised as shown below.
(In millions of yen)
Ordinary income
Ordinary profit (loss)
Net income (loss)
Previous forecasts(August 10, 2018)12,300

(800)

(600)

Revised forecasts(November 12, 2018)

12,600(1,600)(1,600)(Reference)
Results (Fiscal 2017)

10,962

(197)

(249)

Reasons for Revision
The company has performed well with new business and continued to raise the number in thefirst quarter of fiscal 2018, thanks to the launch of Cancer Insurance in fiscal 2017, as we madeaggressive investment in marketing with a focus on advertising and promotions. Under thisvirtuous cycle that currently stands, we announced a revised business forecast on August 10,
2018 and we have spent aggressively so as to further scale our business. The success of thisstrategy resulted in the company achieving a near record high level of new business in thesecond quarter of fiscal 2018 and we reached record high of monthly new businessperformance in October 2018, while maintaining consistent operating efficiency from fiscal 2017
to gain each new policy in the first half of fiscal 2018.
As we announced “Lifenet Insurance’s New Management Policy” dated November 12, 2018,
today, in light of the strong results and consistent spending efficiency in gaining new business,
we have determined that following the newly formulated management policy to continue with theaggressive spending in a way that perpetuates this virtuous cycle will help scale the business byboosting brand power and raising recognition. That decision led to this second revision to thebusiness forecast for the current fiscal year.
As the table below indicates, we project annualized premium1 of new business of 2,600
million yen, up from 1,800 million yen in the initial business forecast. We aim to achieve thisrecord high in new business.

(Reference)

Annualized premium1of new business1.

Initial forecast(May 15, 2018)

Revised forecast(Aug. 10, 2018)

1,800

2,200

(In millions of yen)
Second revised
business forecast(Nov. 12, 2018)
2,600

The amount of money equivalent to what is to be paid to have the insurance coverage for one year. All payments
are monthly installments; thus the annualized premium is calculated as multiplying the monthly premium by 12months.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

NEWS RELEASE

About LIFENET 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. 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.

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

926

1,022

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

1,999

999

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

2,567

3,029

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

28,30330,222Government bonds····························································

8,398

8,344

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

1,505

1,490

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

13,892

15,528Stocks ············································································

346

487

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

4,161

4,370

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

109

92

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

621

633

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

4

4

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

45

74

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

964

1,022

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

802

857

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

162

165

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

35,541

37,101

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(In millions of yen)March 31,
Sep. 30,
2018
2018
LIABILITIESPolicy reserves and other ························································
Reserves for outstanding claims ··········································

21,18622,965429

323

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

20,75722,642

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

59

49

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

108

125

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

581

574

Income taxes payable ·····················································

23

1

Accrued expenses ··························································

427

469

Lease liabilities ······························································

33

24

Asset retirement obligations··············································

33

33

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

64

45

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

30

37

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

30

37

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

186

231

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

22,15323,983

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

12,136

12,136

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

12,136

12,136

Legal capital surplus ·······················································

12,136

12,136

Retained earnings ·································································(11,365)(11,750)

Other retained earnings ···················································(11,365)(11,750)

Retained earnings brought forward ·····························(11,365)(11,750)

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

12,907

12,523

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

480

594

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

480

594

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

13,387

13,118

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

35,541

37,101

NET ASSETS

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

6

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 ·················································
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)Six months ended Sep. 30
2017
2018
5,338
6,097
5,196
5,847
5,083
5,682
112
164
120
129
114
113
6
16
21
120
3
105
18
14
5,337
6,473
971
1,251
533
710
288
318
－
0
149
222
1,786
1,885
1,786
1,885
0
0
0
0
2,295
2,997
283
339
1
(376)
4
6
4
6
4
6
(3)
(382)
11
2
11
2
(15)
(384)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

7

NEWS RELEASE(3)

Statements of Changes in Net Assets(In millions of yen)Six months ended Sep. 30
2017
2018

Shareholders' equity:
Capital stock
Balance at the beginning of the year ···························
Changes of items during the period
Total changes of items during the period ··············
Balance at the end of the period ································
Capital surplus
Legal capital surplus
Balance at the beginning of the year····················
Changes of items during the period
Total changes of items during the period ·······
Balance at the end of the period ·························
Total capital surplus
Balance at the beginning of the year····················
Changes of items during the period
Total changes of items during the period ·······
Balance at the end of the period ·························
Retained earnings
Other retained earnings
Retained earnings brought forward
Balance at the beginning of the year ············
Changes of items during the period
Net income (loss) ······························
Total changes of items during theperiod·············································
Balance at the end of the period ··················
Total retained earnings
Balance at the beginning of the year····················
Changes of items during the period
Net income (loss) ·····································
Total changes of items during the period ·······
Balance at the end of the period ·························
Total shareholders' equity
Balance at the beginning of the year ···························
Changes of items during the period
Net income (loss) ············································
Total changes of items during the period ··············
Balance at the end of the period ································

12,136

12,136－
12,136－
12,136

12,136

12,136－
12,136－
12,136

12,136

12,136－
12,136－
12,136(11,116)(11,365)

(15)

(384)

(15)
(11,131)(384)(11,750)(11,116)(11,365)(15)(15)(11,131)

(384)
(384)
(11,750)

13,157

12,907(15)(15)
13,141(384)(384)
12,523Copyright© LIFENET INSURANCE COMPANY All rights reserved.

8

NEWS RELEASE(In millions of yen)Six months ended Sep. 30
2017
2018
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Balance at the beginning of the year ···························
Changes of items during the period

488

480

3
3
492

114
114
594

488

480

3
3
492

114
114
594

13,645

13,387(15)
3(11)
13,633

(384)
114
(269)
13,118Net changes of items other than shareholders' equity ·····

Total changes of items during the period ··············
Balance at the end of the period
Total valuation and translation adjustments
Balance at the beginning of the year ···························
Changes of items during the period
Net changes of items other than shareholders' equity ·····

Total changes of items during the period ··············
Balance at the end of the period ································Net assets:
Balance at the beginning of the year ···························
Changes of items during the period
Net income (loss) ···········································Net changes of items other than shareholders' equity ····

Total changes of items during the period··············
Balance at the end of the period ·································

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

9

NEWS RELEASE(4) Statements of Cash Flows(In millions of yen)Six months ended Sep. 30
2017

2018

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

(3)

(382)

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

122

126

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

(3)

(105)

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

1,786

1,885

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

4

6

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

(114)

(113)

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

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

(0)

(0)

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

(16)

(29)

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

(31)

(53)

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

(1)

(9)

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

7

16

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

(6)

45

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

(6)

(16)

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

1,738

1,369

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

156
(0)

132
(0)

Income taxes (paid) refund ················································

12

(25)

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

1,906

1,475

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

(500)

(300)

Purchase of securities ······················································(3,802)(2,641)

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

2,470

715

Total of net cash provided by (used in) investment transactions ···(1,832)(2,226)

Total of net cash provided by (used in) operating activities and investment transactions ···

73

(751)

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

(17)
(160)
(2,010)(18)(124)(2,370)Net cash provided by (used in) financing activities ············

(9)
(9)

(9)
(9)

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

(114)

(903)

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

3,004

2,926

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

2,890

2,022

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

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

10