Securities Code: 7157
TSE GrowthPresentation
Material for
Investors
Fiscal 2022

May 11, 2023

LIFENET is...

Comprehensible
Cost-Competitive
Convenient◼ Remembering the original purpose oflife insurance – mutual support◼ Helping our customers embrace life more fully
1

FY2022 Key Highlights
FY2022 Results◼

Annualized premium1 of policies-in-force up 11.7% YoY to
JPY 24.0 billion◼

EEV up 6.9% YoY to JPY 124.6 billion

Future Initiatives

1.
2.
3.

◼

Re-accelerate Internet channel growth in the mid-term
and work on expansion of business domains◼

FY2023 business forecasts under IFRS2:
insurance service results of JPY 8.2 billion and net income3 of
JPY 5.3 billion◼

Aim to achieve 10% continuous growth in insurance service results
and change to the Prime Market segment in around FY2025

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 12 months
International Financial Reporting Standards
Net income attributable to owners of parent

2

Table of Contents

1. Financial Results for Fiscal 2022
2. Future Initiatives

3

Annualized Premium /Number of Policies-in-Force: Annualized premium of policies-in-force1 (JPY billions): Number of policies-in-force

24.0

21.5

18.7

568,674

507,42815.5
13.0
308,854

365,171439,945◼ Achieved continuous
double digit growth◼ Year-on-year
annualized premium
111.7%,
number ofpolicies-in-force
112.1%

2018 4Q
2019 4Q
2020 4Q
2021 4Q
2022 4Q（YY/MM）
2019/03’20/03’21/03’22/03’23/03
1.

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 12 months.

4

Policies-in-Force Movement◼ Continued to grow in the mid-term whilefurther acceleration is needed
FY2019FY2020

FY2022

FY2021New
Decreasedbusiness business1

Number of policies

98,532 Surrender &lapse ratio2
6.5%(33,153)
100,636 Surrender &lapse ratio2
6.6%(25,813)(24,594)

80,911 Surrender &lapse ratio2
7.0%

In-force(37,286) business△24,594 100,587 Surrender &lapse ratio2
6.0%

568,674+12.1%
439,945

365,171
308,854+15.3%

507,428+20.5%+18.2%

2019/031.
2.

’20/03’21/03

Decreased number of policies include death, expiration and others in addition to surrender and lapse.
Surrender and lapse ratio is annualized.

’22/03’23/03（YY/MM）
5

Marketing Efficiency: Marketing expenses per new business (JPY thousands): Marketing expenses / Annualized premium of new business1

82

88

75
66

65

2.0
1.5

1.7

2.2

1.5

◼ Aim to improvein the mid-term(fiscal year)

2018

’19

’20

’21

’22

Marketingexpenses

4,216

6,146

6,712

8,262

8,672

(JPY millions)1.

◼ Deteriorated due todecrease in demand
for life insurance

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 12 months.

6

Operating Expenses Ratio: Operating expenses ratio¹ (%): Insurance premiums (JPY millions): Operating expenses excl. marketing expenses (JPY millions)

22,469◼ Increased mainly
due to investments in
new initiatives

19,835
16,892
13,982◼ Aim to improve in the
mid-term by further
22.8 %
21.6 %
21.3% business expansion
19.6 %
19.5 %
4,790
and productivity
3,877
3,317
3,023
2,699
improvement

11,845

2018
1.

’19

’20

（fiscal year)

’21

’22

Operating expenses ratio is calculated by dividing operating expenses excluding marketing expenses by insurance premiums.

7

COVID-19 Claims Condition◼ Settled down after revising the claim requirements,
resulting in total payment of JPY 1.37 billion
Total actual results from April 2022 to March 2023
approx.

JPY

1.37 billion

September 26
Revised the requirements of
COVID-19 claims

The amount of COVID-19 claims：Actual results

Claims for the seventh wave

Claims for the sixth wave

Jan.

Feb.
FY2021

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

FY2022

Nov.

Dec.

Jan.

Feb.

Mar.

8

Profit Structure under
Current Statutory Accounting◼ Time lag is caused between the recognition of costs andrevenue as marketing expenses is recognized at thetime of acquisition, and revenue is collected gradually
over a long period
Insurance policy profit structure

Total profit/loss
Revenue collected
over long period

Accounting
profit/loss
Initialfiscal
初年度
year

RevenueYear 22年目

Year 33年目

Year 44年目…

Year X
X年目

Premiums

ExpenseMarketingexpenses1.

Heavy initial cost

Costs for policy management, payment of insurance claims and benefit claims, etc.

: Premiums: Operating expenses1 excluding
marketing expenses: Marketing expenses

9Adjusted Profit◼ Steadily recorded profit generated from in-force
business, while affected by COVID-19 claims of
JPY 1.37 billion
The method for calculating adjusted profit
Adjusted profit＝ⅰ) Ordinary profit（loss)＋ⅱ) Marketing expenses－ⅲ) Impact of modified co-insurance±ⅳ) Adjustment based on standard
policy reserves1
JPY millions / fiscal year

2018

2019

2020

2021

2022

ⅰ) Ordinary profit(loss)(1,719)(2,382)(3,089)(3,245)(4,949)ⅱ) Marketing expenses

4,216

6,146

6,712

8,262

8,672

－

(1,526)(804)(1,283)

(608)

347

546

739

721

194

2,844

2,784

3,558

4,455

3,307

ⅲ) Modified co-insuranceⅳ) Adjustment

Adjusted profit
1.

The amount of the adjustment to the policy reserve provision is the adjustment calculated by excluding the provision for contingency reserves andadjusting for the switch in method for calculating the provision from the Zillmer method to provision based on the standard policy reserves.

10Structure of Embedded ValueEV

Adjusted
net worth

Value of in-force
business(Net assets at end of period+ adjustments)

Profit/loss for thecurrent fiscal year isreflected in end-ofperiod net assets

Revenue

Revenue
ExpenseExpenseProfit/loss for
current fiscal year

Unrealized future profits/losses
on policies-in-force
at the end of current fiscal year

11

Strong EEV1 Growth
EEV and value of in-force business have been growing
at a CAGR of 19%2 and 32%, respectively since IPO◼ EEV per share has also steadily increased¥1,788◼

¥1,673¥1,570¥1,430: Value of in-force business (JPY millions): Adjusted net worth (JPY millions): EEV/share (JPY)¥1,239124,666

116,604

95,14073,431
91,43563,378106,299

76,149¥441

48,51860,87818,547
5,122
13,425

14,86012,55318,99025,16818,367

2012/03 ’13/03 ’14/03 ’15/03 ’16/03 ’17/03 ’18/03 ’19/03 ’20/03 ’21/03 ’22/03 ’23/03 (YY/MM)
1.
2.

Lifenet’s EEV is calculated following the EEV Principles and Guidance and in terms of allowance for risk, MCEV Principles (The European Insurance CFO Forum Market
Consistent Embedded Value Principles©) is referred. From fiscal 2016 onward, a predetermined ultimate forward rate has been used to extrapolate the level of ultralong-term interest rates past the last liquid data point. This method of extrapolation has also been used to restate EEV as of March 31, 2016.
The calculation includes JPY 3,040 million in proceeds from a third-party allotment in May 2015 and JPY 9,005 million from overseas public offering in July 2020 and JPY
9,771 million from overseas public offering in September 2021.

12

Changing Factors of EEV1
◼ Increased due to VoNB and assumption changes
despite impact of COVID-19 claims, rising interest
rate and inflation(JPY millions)

124,666

Adjusted incremental EV2
Expected
existing
business
contribution
Value ofnew business

1,430

Operatingexperiencevariances(560)

Assumptionchanges

4,281

Economic
Adjustments
variancesto the values3
and assumption
as ofchangesMar. 31, ’23

(639)

43

3,506

116,604
total JPY

’22/03
1.
2.
3.

4,376

million’23/03 (YY/MM)

Lifenet’s EEV is calculated following the EEV Principles and Guidance and in terms of allowance for risk, MCEV Principles (The European Insurance CFO Forum Market
Consistent Embedded Value Principles©) is referred.
Adjusted Incremental EV accurately indicates our business growth during a certain period within increase in EEV.
Item for change in capital13

EV Resilience to Financial Changes◼ Limited sensitivity to interest rates andstock prices

Mar. 2023
End
Lifenet1.9%

Reference: March 2022 End1
Lifenet4%4%Company C

-1.9%

- 0%

-1.0%

0.5% interest rate increase
0.5% interest rate decrease
10% decrease in equity andreal estate value and other1.

Company B

1.8%

-0.8%
-2.0%

Company A-1%-5% -5%Prepared by Lifenet based on disclosed information of domestic public life insurance companies.

-4%-6% -7%14

Financial Condition’22/03’23/0367,82068,600Cash and deposits

3,761

5,719

Monetary claims bought

3,999

4,499

Money held in trust

5,460

5,322

47,42545,606

8,946
1,469
24,042492
98
12,375

7,689
1,442
24,994435
596
10,44745,74953,02643,54250,99622,071

15,574697(678)

3,182％

3,158％

1.
2.

9.9

8.2

3.

(JPY millions)(YY/MM)

Total assets

Securities
Government bonds
Municipal bonds
Corporate bonds
StocksForeign securities
Other securities1

Total liabilities
Policy reserves and otherTotal net assets
Valuation difference on
available-for-sale securities

Solvency margin ratio2
Modified duration (year)3◼ Maintained sufficientfinancial stability as
indicated by solvency
margin ratio2◼ Mitigating negative
impact on net assets
by reducing yen
interest rate risk

Investment trust including foreign bonds and others.
The solvency margin ratio is a key benchmark for industry
regulators. It measures a life insurance company's ability to
pay out claims when unforeseen events occur.
Duration of yen-denominated bonds

15

Growing Value of In-Force Business◼ Value of in-force business up 16% YoY,
along with the growth of value of in-force
business per policy
Number of policies-in-force

Value of in-force businessper policy

Value of in-force business（Unrealized future value on policies-in-force）(JPY billions)(JPY thousands)
568,674173

507,428

180

186

106.2
91.4

439,94576.1＋12.1%

2021/03
21/03
2020/06’22/03
22/03＝

×＋15.3%’23/03
23/03（YY/MM）

2021/03
21/03’22/03
22/03’23/03
23/03（YY/MM）＋16.3%＋20.1%

2020/06
2021/03
21/03’22/03
22/03’23/03
23/03（YY/MM）

16

Summary of FY2022◼ Launched new initiatives under tough environment
FY2022 Results• Achieved continuous double-digit growth of in-force business while
affected by COVID-19 situation• Increased EEV steadily despite of the negative impacts by deteriorationin efficiency, COVID-19 claims, rising interest rate and inflation
Major Initiatives• Prepared various initiatives to achieve sustainable growthover the mid- to long-term

Financial Reporting• Resolved the voluntary adoption of IFRS from fiscal 2023
17

Table of Contents

1. Financial Results for Fiscal 2022
2. Future Initiatives

18

Growth Potential of
Online Life Insurance Market◼ Expect sustainable market growth based on structuralchanges in the digitalization of financial services
Further increasing intentions to purchase policy online
with COVID-19 as opportunity1

Penetrating wide range of generations1
Change in intention to purchase online
by age group over the last 3 years

Latestsurveyresults

18.0%: Year 2019
: Year 2022

21.3%

Ratio of respondents who have intention to purchase online
Ratio of respondents who purchased online

20.5%
18.2%

18.0%

10.9
12.0%

COVID

5.9

12.2%

13.1%

12.3%
11.1%

4.4%

6.5%

2.8
1.0

2010
1.

2013

2016

2019

Source: Survey on Life Protection by the Japan Institute of Life Insurance

2022 (year)

20’s
20代

30’s
30代

40’s
40代

50’s
50代

60’s
60代

19

Competitive Landscape◼ Lead expansion of online life insurance market withinvestments although new entrants increaseas the market expands
Phase1

Phase2Market development

Competition by new entrants

Phase3
Narrowing down toa few main companies

Expansion of online life insurance market and Lifenet’s position(Image for illustrative purpose）

Keep the position by
aggressive investment though
efficiency deteriorates due tothe competition

Become a dominant
player in the market

Reaped the merit
as a pioneer

Business
Commencement

Present

Future20

Growth Loop Leveraging No.1 Position◼ Aim to unleash great market growth potential
by self-reinforcing

Unique positioning
as No.1 online insurer

Increasing
opportunities
with partners

Embedded insurance
business with partners
creating ecosystem
Online life
insurance

Selfreinforcing

Expanding online
insurance market
21

Individual Insurance◼ Focus on building foundation to re-accelerate
in-force business
Internet direct channel

Partner business channel

Adapt to customers’ needs that change withthe time period centering on younger generation

Further grow in the mid-term with broadcustomer base and strong brand of partners

Marketing/
Promotion

Web/App

SNS

CRM

Payments

Telecommunications

RetailHealthcare
Internet
services

Products

22

Group Credit Life Insurance◼ Aim to ensure the launch as the first step innew business base and new earnings opportunities
Initiative

Start offering group credit life insurance to au Jibun Bank’s
mortgage borrowers from July 1st, 2023 (planned)

Online Mortgage Loans

In approx. 6 years and
11 months, the amountexceeded JPY 2.5 tn.

Group Credit Life Insurance• Change au Jibun Bank’s
underwriting insurer of existinggroup credit life insurance
policies to Lifenet• Provide products and services
with utilizing online business

From au Jibun Bank’s news release in Nov. 15, 2022

23

Platform Business◼ Expand scale of online insurance agency andlaunch B2B domain from FY2023
to Consumer (individuals)

to Business（corporate）

Further development of UI/UX
as online platform

Provision of system and digital tools to
operate for online insurance businessSubsidiary

LIFENET MIRAI Inc.

virtuous
cycle

non-financial
companies

Service to manage insurance policy

financial
institutions

Price comparison website

Service to make to-do list relatedwith money and insurance24Mid-term Growth Path
◼ Aim to accelerate growth in policies-in-force

by business for individuals and GCL1
Group credit life insurance
Steadily grow as new earnings base andconsider expansion of alliance partners
2023

Launch GCL1

Individual insurance

2021

Accelerate growth of core Internet directchannel and expand Partner business channelStartplatform
business

2016

2008
Start Internet directchannel for individuals

FY2008
1.
2.

FY2013

Group credit life insurance
Annualized premium of policies-in-force

Launch white label
business with partners

Annualized
premium2
JPY

24bn

Expand business domains

FY2018FY2022Future25

Human Capital for Growth◼ Strengthen HR initiatives based on Diversity and
Growth opportunities

Value
diversity

Rate of women in
leadership position1
target30％+

Return rate aftermaternity/childcare leavetarget100％

Createopportunities
for growth

Rate of 1-on-1 meetings2
implementation
target90％+(FY2022)(FY2022)(FY2022)

26.1%

100%

80.3%

Training hours
per employee
target24hrs+(FY2022)19.6hrs

Become the organization that can keep adapting to change andachieve sustainable business growth under uncertain circumstances
1.
2.

Rate of women in positions of department head or higher
Rate of meetings with supervisors conducted during the period out of 12 meetings per year (once a month)26

Voluntary Adoption of IFRS1◼ Update priority indicators according to new
Financial Reporting Standards
Schedule
May 2023
FY2022 financial results

Aug. 2023
FY2023 1Q financial results• Disclose FY2023 consolidated forecasts under IFRS (P.28)• Disclose IFRS major figures for the past five fiscal years (P.45)• Announce financial results under IFRS

Indicators
Corporate Value

GrowthProfitability

EEV

Annualized
premium ofpolicies-in-force2

Insurance service
results(European Embedded Value)

1. Capital adequacy and dividends will be regulated by statutory accounting standards (J-GAAP) even after the adoption of IFRS
2. Annualized premium of policies-in-force for individual insurance and group credit life insurance combined（IFRS)

27

FY2023 Consolidated Business Forecasts◼ Expect JPY 8.2 bn in insurance service results and
JPY 5.3 bn in net income
GrowthProfitability

Annualized premium of policies-in-force1(JPY millions)(Business forecast）

24,033Group
Individual approx. 2,600
approx. 1,9002023/03

Insurance service results (JPY millions)(Business forecast)

28,500

8,200

6,618

2024/03

FY2022

FY2023

FY2022 Results2

FY2023 Forecasts3

Annualized premium of policies-in-force1

24,03328,500Insurance revenue

20,732

24,900Insurance service results

6,618

8,200

Net income attributable to owners of parent

3,575

5,300

(JPY millions)

1. Annualized premium of policies-in-force is the figures for individual insurance and group credit life insurance combined. 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. unaudited figures
3. The business forecasts for fiscal 2023 includes the impact of group credit life insurance business which starts in July 2023 (planned)28

Future Direction◼ Achieve expansion of business scale andhigh profitability, aiming to further enhance
corporate value
FutureFY2023 and after

FY2022• Deteriorated
efficiency ofInternet directchannel• Announced new
business alliancesincl. group credit
life insurance• Re-accelerateInternet directchannel growth in
the mid-term• Achieve EEV of
JPY 200 billion(Management Goal)• Expand businessdomains• Continue 10%
growth in insurance
service results• Change to the Prime
Market segment inaround FY2025
29

MissionBe the leading company driving the growthof the online life insurance market

Management goal

Priority
areas

Help our customers embrace life more fully
by offering comprehensible, cost-competitiveand convenient products and services

VisionManagement Policy• Innovation of customer experience

Enhancing and evolving the quality of all services with digital technology• Enhancement of promotion capabilities

Generating massive customer traffic by active promotion and expansion of
agent sales and white label business

Aim to achieve EEV (European Embedded
Value) of 200 billion yen by business growth
in a mid-term
30

LIFENET Manifesto
Comprehensible, Cost-Competitive, ConvenientI.

Our Guiding Principles(1) Creating the future of the life insurance without losing sight of
its original premise: “an ounce of prevention is worth more thana pound of cure.”(2) Listening to what our customers are saying. Recognizing theirneeds and acting accordingly. Allowing our actions to be borneout of their voices and needs.
(3) Delivering the caliber of products and services that we would
feel confident recommending to our own friends and families.
(4) Being a “straight-shooter”. Committing to transparency.
Communicating openly about our management team, ourproducts, and our employees.
(5) Embracing diversity and dialogue to keep us abreast of changing
needs and preferences. Delivering peace of mind that we’ll bearound in 100 years.
(6) Acting in good faith means always taking the high road when it
comes to compliance and ethics.

III.

Making Life Insurance Accessible Again - Affordable(1) Giving the customer what he/she needs. No more, no less at afair price.
(2) Staying vigilant as to how we can provide our products morecost-efficiently.
(3) Always putting ourselves in our customers’ shoes in thinking
about how to minimize their premiums.

II.

Making Life Insurance Accessible Again - Headache-free(1) Helping the customers help themselves. By making ourmaterials easy to understand, customers can determine which
coverage is truly the best fit.
(2) Turning “clauses” in the insurance contract into succinct points
that your grandmother could grasp.
(3) Making all touch points headache-free. Beyond the application
process, ensuring the claims and billing processes are also easy
to understand.

IV.

Making Life Insurance Accessible Again - Convenient(1) Thinking about our customers’ convenience from every angle
and every touch point along the way.
(2) Forming alliances with like-minded partners who can add value
above and beyond our products and services to our customers.
(3) Providing health and wellness tips beyond the framework of life
insurance to create value in our policyholders’ lives.
(4) Creating a precedent for future generations as to what life
insurance is (and should be) all about.

We wish to be a company that helps our customers embrace life more fully.
In order to live out that vision, we continue to challenge ourselves.

31All information on this document that is nothistorical fact constitutes forward-looking
information and is based on assumptions andforecasts available to the company at the time of
preparation. The company cannot guarantee theaccuracy of these assumptions and forecasts.
Earnings projections and other information on thismay differ materially from actual performance due
to various risks and uncertainties.
This is a translation of the original Japanese
document, prepared and provided solely forreaders' convenience. In case of any discrepancy or
dispute, the Japanese document prevails.

https://ir.lifenet-seimei.co.jp/en/
Subscribe to our "IR email service" to receive
news releases and website updates via email.

Appendix

Annualized Premium /Number of New Business (Quarter): Annualize premium1 of new business (JPY millions): Number of new business
1,166
1,104

1,137

1,123

1,051
991

990

981
934

822

822

794

933

969
923

818

889

22,128

741
637
572

28,13623,36923,314
17,312
13,285

1Q

19,075 19,117 18,795 19,685

22,50622,164

24,410 23,928

22,612

14,7632Q

3Q

FY2018
1.

29,864

26,918 27,553 26,167

4Q

1Q

2Q

3Q

FY2019

4Q

1Q

2Q

3Q

FY2020

4Q

1Q

2Q

3Q

FY2021

4Q

1Q

2Q

3Q

4Q

FY2022

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 12 months.

34

Surrender and Lapse Ratio（Quarter）:Surrender and lapse ratio1 (%)

6.9%

7.5%
6.3%

1Q

6.1%

2Q

7.1%

6.5%

3Q

FY2018
1.

7.6%

7.1%

7.0%
6.4%

4Q

1Q

2Q

3Q

FY2019

4Q

5.5%

5.5%

1Q

2Q

7.6%
6.3%

5.9%

3Q

FY2020

4Q

1Q

2Q

6.6%

6.4%

6.3%

6.4%

4Q

1Q

2Q

3Q

6.0%

3Q

FY20214Q

FY2022The 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 policiesin-force.

35

Marketing Efficiency (Quarter): Marketing expenses per new business (JPY thousands): Marketing expenses / Annualized premium of new business1

98

96
86

2.4

72

2.3

101
2.5

2.1
1.8

(fiscal year)

2021/4Q’22/1Q’22/2Q’22/3Q’22/4Q

Marketingexpenses

2,400

2,079

2,157

2,187

2,247

(JPY millions)1.

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 12 months.

36

Breakdown of Policies-in-Force’22/03Component
ratio

Number of policies-in-force

507,428

568,674100%- Term Life

247,754

276,566

49%- Whole-life Medical

138,749

156,40228%- Term Medical Care

8,485

7,870

1%

- Long-term Disability

63,847

68,142

12%- Cancer

48,59359,69410%

3,351,278

3,633,704

322,231360,364

Sum insured of policies-in-force1(JPY millions)

Number of policyholders

1.

’23/03

Sum insured of polices-in-force are the sum of death coverage, and do not include third-sector insurance.

37

Life Time Value and Customer Acquisition Cost
Key Metrics for a SaaS Company and Lifenet

ARR per Contract(Annual Recurring Revenue)

Life Time1(Term of Contract)

Gross Profit Margin2(Marketing Expenses per
New Policy)

1.
2.
3.

Annualized Premiums per
Policy-in-force

Annualized Premiums per
Policy-in-force

JPY 42,536

×

JPY 42,394
×Annualized Premiums per
Policy-in-force

Average Policy Term

Average Policy Term

Average Policy Term

43%

44%

16.7 years
×15.2 years
×

JPY 42,262
×15.4 years
×
39%
(46%)

＝

Customer Acquisition Cost3

FY2022＝(Annualized Premiums per
Policy * Life Time * Gross Profit
Margin)FY2021＝

Life Time ValueFY2020

JPY 305,451

JPY 283,531

JPY 253,826

JPY 66,737

JPY 82,113

JPY 88,013

1 / Churn rate. Churn rate represents the percentage of users who cancelled out their insurance policies.
(Insurance premiums – Insurance claims and benefits - Provision for policy reserves and others) / Insurance premiums.
Marketing expenses / Number of new business.

(JPY 299,384)*Figures in () exclude theimpact of COVID-19 claimsof JPY 1.37 billion
38

Condensed Statements of Operation/ Fundamental Profit
FY2021

FY2022

ChangeInsurance premiums and other

25,4203,787

Increased due to growth in in-force business and reinsuranceincome from modified co-insurance.

Other

747
26,167

29,2071,060
30,268313
4,100

Includes utilization of modified co-insurance of JPY 5,671M.

(JPY millions)

Fundament
al profit

Condensed statements of operation

Ordinary income
Insurance claims and
other

8,668

12,445

3,776

Insurance claims

2,546

3,123

577

Benefit claims

1,563

3,030

1,467

6,903

7,453

550

Ordinary expenses

12,140
8,262
1,278
2,599
1,701
29,413

1,322
409
228
685
153
5,803

Ordinary profit (loss)(3,245)

13,463
8,672
1,506
3,284
1,855
35,217(4,949)Provision for policy
reserves and other
Operating expenses
Marketing expenses
Customer service
System and other
Other

Note

Increased due to an increase in COVID-19 claims (JPY 1,378M) andreinsurance commissions from modified co-insurance. Percentage
of insurance claims and benefit claims to insurance premiums is
27.4%.
Increased from 214 cases in FY21 to 281 cases in FY22.
Increased from 14,910 cases in FY21 to 38,189 cases in FY22.
Percentage of provision for policy reserves (JPY 7,074M) to
insurance premiums is 31.5%.
Includes JPY 6,964M for advertising expenses.

(1,703) Includes profit of JPY 608M for utilization of modified co-insurance.

Extraordinary losses andincome taxes
Net income (loss)

73

214

(3,319)(5,164)(1,844) Includes profit of JPY 608M for utilization of modified co-insurance.

Mortality margin

3,348

2,292

(1,056) Includes JPY 637M loss due to utilization of modified co-insurance.

Expense margin (loss)(6,648)Interest margin (loss)

86(3,213)(7,429)64(5,072)Fundamental profit

141
Decreased due to an increase in COVID-19 claims (JPY 1,378M).

Includes JPY 1,246M expense margin for utilization of modified co-(781) insurance.

(21)(1,859) Includes profit of JPY 608M for utilization of modified co-insurance.

39

Detail of Bond Portfolio1
As of March 31, 2023
(JPY millions)

JPY Bonds
Duration2

Foreign
Currency Bonds

Availablefor-Sale

Heldto-Maturity

19,63415,08834,7234 years

13 years

8 years

9,420

—

9,420

Duration2

Total

6 years

Non-Currency Hedged

2,355

—

2,355

Currency Hedged

7,065

—

7,065

1. Based on balance sheet as of March 31, 2023
2. Calculated by Lifenet

40

Three Surplus Factors ofFundamental Profit
FY2022(JPY millions)

Profit analysis

Statements of operations
Ordinary income

Insurance premiums and other 29,207

Premiums income 22,469

Net premiums

Expense loading

Reinsurance income 6,738

ReinsuranceincomeOther reinsuranceincomeInterest anddividends

Investment income 977

Gains on salesof securities

Other ordinary
incomeOther ordinary income 83

Ordinary expenses

Insurance claims and other 12,445

Insurance claims and benefits
6,153

Insurance claims
and benefits

Reinsurance commissions
6,290

Reinsurance
commissions

Other reinsurance
commissions

Provision for policy
reserves and others 7,453

Change in policy
reserves

Change inpolicy reserves

Interest
expenses

Investment expenses 185
Operating expenses
13,463Operatingexpenses

Other ordinary expenses
1,669

Other ordinary
expenses

Income taxes 4

Mortality
margin (loss)

Expensemargin (loss)

Interest
margin (loss)

2,292(7,429)64

Net profit (loss) (5,164)1.

Some items with minimal amounts have been omitted.

Losses on salesof securities

Capital gains(losses)317

Ordinary profit (loss)(4,949)Extraordinary profit (loss)(209)

Provision forcontingency
reserves

Projected
interest

Other onetime
gains (losses)(194)

Extraordinary profit (loss)(209)
Income taxes 4

Net profit (loss) (5,164)
41

Solvency Margin Ratio Calculation
As of March 31, 2023

( (𝑅 1 + 𝑅 8 )2 + (𝑅 2 + 𝑅 3 + 𝑅 7 )2 + 𝑅 4 )/2(JPY millions)

Solvency margin ratio
3,158.2%
Cash and deposits
5,719
Monetary claims bought

4,499

Money held in trust
5,322

=

Total amount of solvency margin<numerator>
31,943

Other liabilities
1,904

Excess over the fullZillmerized reserve 13,824
Price fluctuation reserves 124

Securities
45,606

Risk of change in mortality rate (calculated based on value ofpolicies in force)

1,364

Contingency reserves 2,420

Deferred tax liabilities onavailable-for-sale securities－1

Valuation difference on
securities available-for-sale(678)1

Total amount of risk/2< the denominator>
2,022/2

Insurance risk R1 1,043

Reserves for outstanding claims

Policy reserves
49,632

÷

Add liabilities
with strong
capitalcharacteristics
such as pricefluctuation
reserves andcontingency
reserves

Medical insurance risk R8 400
Risk of change in medical incidence rate (hospital admission
rate , etc.)

Assumed interest rate risk R2 4
Risk that the actual investment return will fall below the
expected return used as a basis for calculating policy
reserves[Minimum guarantee risk] R7 －Risk related to products, such as variable annuities withminimum guarantees

Asset management risk R3 1,291

Tangible fixed assets

75
Intangible fixed assets
1,544

Other assets
5,831
1.
2.

Capital stock andother assets
16,252

Net assets
15,574[Credit risk] Risk that asset values decline due todeterioration in financial condition of creditees[Price fluctuation risk]Risk of incurring losses due to decline inmarket value of stocks and bonds, etc.

Business management risk R4 82
3% of the total of the amounts of the other 5 risks (in the
Company’s case)

90% of the valuation difference on available-for-sale securities and deferred gains or losses on hedges (pre-tax) (if negative, 100%)
Items that do not apply to the Company or for which the amount is minimal have been omitted, except for certain bracketed items.

42

EV Sensitivity Analysis1
Impacts of changes in assumptions (sensitivities)(JPY millions)

Change in
VoNB

124,666

3,506

Sensitivity 1a: 1.0% increase in risk-free rate

(4,995)(429)

Sensitivity 1b: 1.0% decrease in risk-free rate

4,695

334

Sensitivity 1c: 0.5% increase in risk-free rate

(2,484)(206)

Sensitivity 1d: 0.5% decrease in risk-free rate

2,413

183

(970)

－

Sensitivity 3: 10% decrease in operating expenses

5,166

818

Sensitivity 4: 10% decrease in lapse rate

1,169

217

Sensitivity 5: 5% decrease in claim incidence rates for life business

6,517

736

Sensitivity 6: Change the required capital to the statutory minimum

263

32

EEV and new business value as of March 31, 2023

Sensitivity 2: 10% decrease in equity and real estate value and other1.

Change in EEV as ofMar. 31, 2023

For each sensitivity, only one specific assumption is changed and other assumptions remain unchanged. It should be noted that the effect of the change of more than
one assumption at a time is likely to be different from the sum of sensitivities carried out separately. As Japanese policy reserves are calculated in accordance with the
IBR, the sensitivities carried out do not affect the reserves at the valuation date. The sensitivity on the value of new business excludes the impact on the adjusted net
worth.

43

Purpose of IFRS Adoption◼ Provide financial information with high international
comparability to better represent our performance
Statutory accounting(J-GAAP)

Useful for investors’decision-making• Conservative• Historical locked-inassumptions at
policy inception• Best estimate basedon experience• Review periodically• Best estimate basedon experience• Review periodically

The expense isrecognized at the time ofacquisition.

The expected profit for thepolicy period isimmediately recognized.

The expected profit isallocated over the termof the policy.

Policyholder protection

Evaluation of
insurance liabilities
Timing ofprofit recognition(impact of new businessacquisition)

IFRS 17

Economic value of
insurance policies

Main objective(policy reserves)

Embedded value/
Value of new businessprofit・・・・

present
value ofprofitprofit
・・・・

loss

44

IFRS Major Accounts in Past Years1
FY2018(JPY millions)

FY2019FY2020

FY2021

FY2022IFRS PL
Insurance service results

4,885

5,419

6,606

7,216

6,618

Insurance revenue

10,56012,55015,22017,987

20,732

Insurance service expenses

5,509

7,038

8,468

10,42913,874

Reinsurance results

(165)

(92)

(144)

(341)

(239)

Financial results

-

-

-

-

(435)

Other results

-

-

-

-

(822)

-

5,360

2

Profit before tax
Net income attributable toowners of parent

No- retrospective
calculation
-

-

-

-

3,575

-

-

-

71,87175,71622,97944,835

55,10365,73674,907

3,536

4,813

8,908

7,690

6,879

Increase from interests

309

461

595

640

710

Assumption change, etc.

21,497

9,293

6,369

6,597

7,508

Amortization of CSM(3,486)(4,300)(5,241)(5,757)(6,401)

CSM, end of the year

44,835

55,10365,73674,907

83,604

Insurance acquisition cash flows3

5,225

7,484

8,339

9,854

10,390

Maintenance costs4

2,070

2,386

2,761

3,480

4,049

IFRS BS
Equities
CSM, beginning of the year
New business CSM

Others

1.

2.
3.
4.

Each figure from FY2018 to FY2021 is the result based on calculation of historical figures in the process of retroactive calculation and is unaudited. The figures in
FY2022 haven’t been audited
Total of investment results from financial assets, insurance finance results and reinsurance finance results
Insurance acquisition cash flows incurred in the period
Maintenance costs are the costs directly related to fulfilling contracts and not included in insurance acquisition cash flows

45

Management Team1
Directors
Ryosuke Mori
Representative Director and President
Goldman Sachs Japan Co., Ltd.
Head of Corporate Planning Department and General Manager
of Corporate Strategy Division at Lifenet

Ryosuke Kondo
Director
Executive Officer of Sales & Marketing Division
and Data Science Promotion OfficeJAPAN POST INSURANCE CO., Ltd.
Head of Corporate Planning Department and Executive Officer ofCorporate Planning, Product Development and Investment at Lifenet
Director, LIFENET MIRAI INC.

Jun Hasebe
OutsideRepresentative Director and President,
Tokyo Relations Inc.

Yasuhiro Koba
Director, Executive Vice President
Executive Officer of Business Development Department,
Product Development Department, Creditor Insurance
Business Department and Investment Department
Ministry of Health, Labour and Welfare Head of Legal Department,
General Manager of Corporate Administration Division andGeneral Manager of Sales & Marketing Division at Lifenet

Junpei Yokozawa
Director
Executive Officer of Information Systems Strategy Division
NTT DATA Net’s CORPORATIONHead of KDDI Business Department and head of Operations
Planning Department at Lifenet

Takeshi Saito
OutsideSenior Managing Director and Chief Financial Officer,
au Financial Holdings Corporation

Directors (the Audit and Supervisory Committee Member)
Takahiro Yamasaki
Full-time
Nippon Life Insurance Company
Nippon Venture Capital Co., Ltd.
Full-Time Audit and Supervisory board member at Lifenet
Corporate Auditor, LIFENET MIRAI INC.

1.

Keiko Hayashi
OutsideProfessor Faculty of Commerce Graduate School of Accountancy,
Waseda University

Tomoyuki Yamashita

Emima Abe

OutsideRepresentative Director and President,
Aon Solutions Japan Ltd.

OutsideAttorney, Miyamasuzaka the Firm Law & Accounting OfficeElection of Directors is subject to approval at the 17th Annual General Meeting of the Shareholders on June 25, 2023

46