４Securities Code:7157
TSE Mothers

Reference DataforFirst Quarter
Fiscal 2017
August 9, 2017

Contents

1. Progress of Mid-term Business Plan
2. Results for 1Q of Fiscal 20171

Mid-term Business Plan Summary of mid-term business plan
FY2018
ManagementGoal

13.5 billion yen in ordinary income
Positive profitability of ordinary profit (loss)

BusinessStrategy

1. The pillars of business : Online direct sales,
KDDI (exclusive alliance agent) and Overthe-counter agent
2. Continuous creation of unique sales point inall channels
3. Commitment to business development forfuture growthOrganization

Change, Challenge and Unity
2

To Achieve Mid-term Business Plan Aiming for establishing system realizing
sustainable profitability in fiscal 2017
 Achieve
Management Goal
 Return togrowth in new
businessperformance Establish a system
realizing sustainableprofitability

2018

2017
2016
3

Progress of Mid-term Business Plan
(Ordinary Income) 102% year on year
(JPY mn)

13,500: Fiscal year
: First 3 months

Business forecastsof fiscal year

9,387

11,00010,096

Up 2%
Y-on-Y

2,284

2,594

2,651

FY201516

17184

Progress of Mid-term Business Plan
(Ordinary Profit/Loss) Aiming for positive profitability1 ofordinary profit (loss) in fiscal 2018
(JPY mn)

Resultsfor FY2016

Business forecasts
FY2017

ManagementGoal FY2018

Ordinary profit (loss) before
amortization of deferred assets
under Article 113 of IBA

88--

Amortization of deferred assets
under Article 113 of IBA

2,120--(300)Turn
profitable

Ordinary profit (loss)

2(2,031)1.

Management indicator for Mid-term Business Plan before FY2016 is the ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act, the ordinaryprofit (loss) is after FY2017.

2.

Amortization of the deferred assets under Article 113 of the Insurance Business Act was 2,120 million yen due to the one-time amortization.

5Contents

1. Progress of Mid-term Business Plan
2. Results for 1Q of Fiscal 20176

Summary of 1Q for FY2017 Results(JPY mn)

Ordinary income
Operating expenses
Ordinary profit (loss)1Net income (loss)
Mortality margin
Annualized premium2 ofpolicies-in-force
Number of policies-in-force
Annualized premium2 of newbusiness
Number of new business1.
2.

2016/1Q

2017/1Q

Year on year

2,594861139(124)
549
9,551
228,846
341
7,307

2,651
1,005
136
109616
10,263
243,610343
7,793

102.2%
116.8%
98.0%
112.3%
107.5%
106.5%
100.5%
106.7%The ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act in 1Q for 2016
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 asmultiplying the monthly premium by 12 months.

7Key Accomplishment in 1Q for FY2017
Ordinary income increased steadily Y-o-Y
New business performance grew Y-o-Y

Ordinary profit was recorded
Mortality margin was steadily recorded8Ordinary Income (Quarterly) Steadily increased as insurance premiums
and other increased(JPY mn)

2,594

2,551

2,528

16/3Q

16/4Q

2,651

2,421

16/1Q

16/2Q

17/1Q

9

Ordinary Income (Quarterly) Steadily increased as insurance premiums
and other increased(JPY mn)

16/1Q

16/2Q

16/3Q

16/4Q

17/1Q

2,444

2,413

2,463

2,494

2,588

Investment income

5156

5256

54

Reversal of reserves foroutstanding claims
Other(excl. Reversal of reserves
for outstanding claims)

96(53)

30(27)-2455

92,594

2,421

2,551

2,528

2,651

Insurance premiums andother

Ordinary Income

10Number of Policies-in-force/
Annualized Premium (Quarterly) In-force business and premium steadily increased

243,610:Number of policies-in-force:Annualized premium of policies-in-force (JPY bn)

228,846 231,538
9.5

9.6

16/06

16/09

234,828

9.8

16/12

239,800

10.0

10.2

17/03

17/06

(YY/MM)11

Breakdown of Policies-in-force
 155,817 in-force policyholders (as of June 30)(YY/MM)

Number of policies-in-force- Term Life1- Whole-life Medical1- Term Medical Care1- Long-term Disability1
Sum insured of policies-in-force2(JPY mn)
Number of policyholders

16/06

17/06

228,846
119,081
68,961
10,95529,849243,610
124,325
72,092
10,29936,894

1,924,095

1,981,955

143,123

155,817

16/1Q(Reference) Surrender and lapse ratio3

7.0％

Ratio

100.0％
51.0％
29.6％
4.2％
15.1％

17/1Q

6.5％

1.

Term Life insurance: Kazoku and au Term Insurance, Whole-life Medical insurance: Jibun, New Jibun, New Jibun for Women, au Medical Insurance and au Medical Insurance for Women, Term Medical
Care insurance: Jibun Plus, Long-term Disability insurance: Hataraku-Hito, Hataraku-Hito 2 and au Long-term Disability Insurance.

2.

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

3.

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.

12

Number of New Business/Annualized Premium (Quarterly) Number of new business exceeded 1Q for
FY2016:Number of new business:Annualized premium of new business(JPY mn)

7,307
6,312

341
293

16/1Q

16/2Q

9,142
6,980

406

343

320

16/3Q

7,793

16/4Q

17/1Q

13

Amount of Insurance Claims
and Benefits (Quarterly) Insurance claims totaled 18 payments, down
5 payments year on year
(JPY mn)

505

424
375

343
267

290

133

207

394
260

Insurance
claimsBenefitclaims

130

134

134

136

134

16/1Q

16/2Q

16/3Q

16/4Q

17/1Q14Provision for Policy Reserves (Quarterly) Decreased slightly due to performanceof new business:Provision for policy reserves (JPY mn):Provision for policy reserves/Premiums income (%)

911

925

917

883

879

38.8%

38.8%

37.8%

35.8%

34.9%

16/1Q

16/2Q

16/3Q

16/4Q

17/1Q

15

Operating Expenses (Quarterly) Plan to invest in new product promotion
from August
1,332(JPY mn)

997
861
339

731

855
323

428

1,005
425

Marketing

138

153

142

166

Customer
service

387

393

414

459

413

Systemand other

16/1Q

16/2Q

16/3Q16/4Q

17/1Q

134

16

Marketing Expenses per New Business(Quarterly) Declined year on year due to marketing
expenses increase:Marketing expenses per new business (JPY thousand):Marketing expenses/Annualized premium of new business

79

61
46

54

51
1.8

0.9

1.1

16/1Q

16/2Q

1.3

16/3Q

1.2
16/4Q

17/1Q

17

Ordinary Profit/Loss (Quarterly) Ordinary profit (loss) and net income (loss)
recorded profitability
16/1Q

16/2Q

16/3Q

16/4Q

139

187

19(258)Net income (loss)

(265)
(125)
(124)

(265)
(77)
(66)

Ordinary profit1

139187,

Ordinary profit (loss)1
before amortization of deferredassets under Article 113 of IBA

Amortization cost
Ordinary profit (loss)(JPY mn)(265) (1,325)2(245) (1,584)2(232) (1,465)(JPY mn)

17/1Q

136
136
109

136
19(258)1.
2.

The ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act for FY2016, the ordinary profit (loss) for FY2017
Amortization of the deferred assets under Article 113 of the Insurance Business Act was 1,325 million yen due to the one-time amortization.

18Structure Breakdownof Ordinary Profit/Loss1
 Slightly declined due to increase ofoperating expenses
Transition of ordinary profit (loss)1(JPY mn)

ExpenseIncome139

Increaseof insurance
premiums
and otherDecreaseof insurance
claimsand other143

96
Other

(86)

Increase ofoperating
expenses

136
Other

(11)

(144)
16/1Q
1.

The ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act for FY2016, the ordinary profit (loss) for FY2017

17/1Q

19

Condensed Statements of Operation(Quarterly)(JPY mn)

16/1Q
2,444
150
2,59417/1Q
2,588
63
2,651

564
911
861
117
2,455

467
912
1,005
128
2,514

(96)
0
144
1059

Ordinary profit (loss) before amortization ofdeferred assets under Article 113 of IBA1139

136

(2)

Amortization of deferred assets under Article
113 of IBA

265―(265)

Ordinary profit (loss)

(125)

136

262

(1)
(124)

27
109

28
233

Insurance premiums and other
Other
Ordinary income
Insurance claims and other
Provision for policy reserves and other

Operating expenses
Other
Ordinary expenses

Extraordinary losses and income taxes

Net income (loss)
1.

The ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act for FY2016, the ordinary profit (loss) for FY2017

Change143(86)5620Fundamental Profit Continuously recorded mortality margin(JPY mn)

16/1Q

16/2Q

16/3Q

16/4Q

17/1Q

616(454)
(2)
159
2,588

Fundamental profit (loss)

549(655)
5(100)

589(655)
8(57)

552
(777)
1(224)

601(2,158)2(1,554)(ref.) Insurance
premiums and other

2,444

2,413

2,463

2,494

Mortality margin
Expense margin (loss)
Interest margin (loss)

Adjusted
fundamental
profit1(JPY mn)

164

208

159
40(229)1.

The Fundamental profit before amortization of deferred assets under Article 113 of the Insurance Business Act for FY2016, the fundamental profit for FY2017

21

Financial Condition
16/03

17/03

17/06

30,31731,93432,826

Cash and deposits

734

1,004

974

Monetary claimsbought

1,999

1,999

1,999

Money held in trust

1,035

995

1,501

Securities

23,067
10,102
1,521
10,428211
804-

26,372
9,876
1,496
11,751
334
819
2,095

26,6918,772
1,496
12,5663378002,717

14,893

18,28819,06813,90817,501

18,414

15,423

13,645

13,757(JPY mn)(YY/MM)

Total assets

Government bonds
Municipal bonds
Corporate bonds
Stocks1
Foreign securities2
Other securities3

Total liabilities
Policy reserves andotherTotal net assets
Solvency margin
ratio

2,809％

2,723％

2,689％

 Promotediversification
in investment
assets Modified
duration 12.4
years
1.

Lifenet is holding shares of Advance Create Co., Ltd., its insurance sales agent,
for the purpose of maintaining equity and business partnership.

2.

Investment in Kyobo Lifeplanet Life Insurance Company in Korea

3.

Investment trust including foreign bonds and stocks

22

Utilization of au Shop Channel
 Started trial sales through some au shops
among Japan
3 sales channels

au SAPPORO

au OSAKAWebsite

au SENDAI
au SHINJUKUau FUKUOKA
au HAKATA

New!

Follow-up call by au
Financial Support Center

au MINATOMIRAI
au NAGOYANew!

Sales at some
au shops

23

Customer-Oriented Business Conduct
 Disclosed our policy based on Manifesto

http://www.lifenet-seimei.co.jp/profile/cs_policy/24

High Evaluation by Outsider
 Term Life and Long-term Disability

highly evaluated1

Term Life Kazoku and Long-term Disability Hataraku-Hito 2 ranked 1stin Kakaku.com Insurance Award 2017

1.

The most popular insurance products in each category from January through December 2016, receiving the highest number of applications of Kakaku.com Insurance, the sales agent company of insurance
products.

25Insurance for Workers
 Cancer Insurance as new product followed
Long-term Disability

Approx. 60％ of
payment for cancer(actual)Launchedin Feb. 2010
Renewedin June 2016

Long-term
DisabilityCancer
Insurance

Launchedin Aug. 2017

Support working patients receiving treatment for cancer(75％1 of cancer patients are working)
1. Data from Bureau of Social Welfare and Public Health, Tokyo Metropolitan Government

26

Launched Cancer Insurance in August Provides double support for treatment
while working
Treatment
expenses

Incomedecrease

Treatment
supportbenefit

Incomesupportbenefit
Lifenet Cancer Insurance
Double Yell

＋ Survivorship Support Services
27

Survivorship Support Services
 Introduce necessary services by partnering
companies based on cancer survivors’ voice
Housekeeping services
Appearance care

Support taxi

http://www.lifenet-seimei.co.jp/survivorship/28

Future Direction
 Support life of workers × child-rearing
generation utilizing technology
Workers ×Child-rearing generation
Money

Raisingchildren

WorkInsurance
Medicalcare

Digital Technology
FinTechInsurTech

HealthTech

HealthLife support by insurance and related information/services

29

Utilization of Three Core Channels
 Aim for steady growth of new businessperformance
Online direct sales→ Improve services via
smartphone and promote
Cancer Insurance

Onlinedirectsales

KDDI(exclusiveallianceagent)

AgentKDDI (exclusive alliance agent)→ Utilize au Financial Support
Center and au shops
Agent→ Promote Long-term Disabilityand Cancer Insurance via
over-the-counter agent
30

Business Forecasts FY2017
 Business forecasts disclosed in May 2017
remains unchanged(JPY mn)

Business forecasts(Reference)for FY2017
Results for FY2016
Ordinary income
Ordinary profit (loss)
Net income (loss)

11,000(300)(300)

10,096(2,031)1(1,889)1

1. Amortization of the deferred assets under Article 113 of the Insurance Business Act was 2,120 million yen due to the one-time amortization.

31

LIFENET ManifestoI.

Our Guiding Principles(1) We believe that our responsibility to society is to return life insurance to its
original state. Life insurance is for the customers, not for the company. Inorder to achieve this goal, we will only offer products we can recommend
with confidence.
(2) We will be transparent. We will disclose information on our management,products and company as a whole on our website to actively communicate
with customers and society.
(3) We will be fair. We believe that our services will be more benevolent if theemployees are free of any and all limitations they may feel in the work
environment, and as such, we will not discriminate against education,
gender, age, nationality, or familial situations.
(4) We will adhere to laws protecting personal information and comply withlaws, regulations, and other social standards. We pledge to be respectableglobal citizens, acting fairly and ethically.

III.

Life Insurance will be Cost-Competitive(1) We believe that no one should pay premiums that are more expensive thannecessary, and will be innovative and creative in order to develop andmaintain the most cost-competitive products possible.
(2) We will handle every step of the process in providing good products to ourcustomers; from the development of the products to the sales. This allows
for us to maintain our cost-competitive prices.
(3) Our products will be cost-competitive, but the content of the products andour services will not be sacrificed. All communication with customers will
be conducted accurately and quickly, including claim processes.
(4) Life insurance is a very expensive purchase, and life is also very expensive.
We want for our customers to spend less on life insurance, and more on
enjoying life.

II.

Life Insurance will be Comprehensive(1) Our products will be simple and comprehensible. There will not be complex
policies with special provisions.
(2) Life insurance is a financial product designed to mitigate risk, and we believe
the customer should decide what products are necessary for them. As we
feel it is critical for customers to be well informed of products and policies,
we will make accessible any and all relevant information on our website
for customers to make logical and rational decisions. The Customer
Contact Center is also available for further clarifications and questions.
(3) Our website will promote the understanding of not only our company'sproducts, but of life insurance in general.
(4) We will make life insurance products tangible via clearly written policies andcomprehensible terms and conditions.

IV.

Life Insurance will be Convenient(1) We know our customers have very busy lives. That is why our customers canapply for our life insurance policies via the internet, 24 hours a day, 7 daysa week.
(2) Our documents require only a signature. There are no other typical official
items required to verify personal identification.
(3) Our definition of surgery is aligned with the national healthcare insurance
point table, making the claim process much more convenient andcomprehensible.
(4) We have a proxy claim system, allowing for the third party designated by
the claim holder to file a claim. The appointed proxy need simply to makea phone call to our contact center for necessary documents.

This manifesto is not simply as a declaration. This is how we do things.
Join us on our journey.

32

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 ofpreparation. 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.

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

Appendix

Three Surplus Factors of Fundamental Profit
1Q of FY2017
Ordinary income

Statements of operations
Insurance premiums and other 2,588

Premiums income 2,521

Reinsurance income 66

Investment income 54
Other ordinary income 9
Insurance claims and other 467

Ordinary expenses

Profit analysis
Net premiums

ReinsuranceincomeReversal ofreserves foroutstanding
claimsReinsurance commissions
73

Insurance claims
and benefits
Reinsurance
commissions

Provision for policy reserves
and others 912

Change inpolicy reserves

Insurance claims and benefits
394

Expense loading

Interest anddividends
Other ordinary
incomeChange inpolicy reserves

Investment expenses 0
Operating expenses 1,005

Operatingexpenses

Other ordinary
expenses 128

Other ordinary
expenses

Projected
interest
Interest
expenses

Provision forcontingency
reserves
Losses on salesof securities

Capitalgains
0Ordinary profit 136

Otheronetime
loss
23

Extraordinary losses 1

Mortality
marginExpensemarginInterest
marginExtraordinary losses 1

Income taxes 25616(454)(2)

Income taxes 25

Net profit 109
1.

Gains on salesof securities

Some items with minimal amounts have been omitted.

Net profit 10935

Solvency Margin Ratio Calculation
As of June 30, 2017

(R 1  R 8 )2  (R 2  R 3  R 7 )2  R 4 / 2

Solvency margin ratio
2,689.5%
Cash and deposits
974
Monetary claims bought
1,999
Money held in trust
1,501=Total amount of solvency margin<numerator>
20,610

Other liabilities
442

Excess over the fullZillmerized reserve 5,283

Price fluctuation reserves
21Securities
26,691

Deferred tax liabilities onavailable-for-salesecurities
1711

Valuation difference onavailable-for-salesecurities 4411

Intangible fixed assets

Capital stockand otherassets
13,266534
Other assets
1,009

Net assets
13,757

Tangible fixed assets
114

Risk of change in mortality rate (calculated based onvalue of policies in force)

345

Contingency reserves 1,425

Total amount of risk/2< the denominator>
1,532/2

Insurance risk R1 1,051

Reserves for outstanding claims

Policy reserves
18,068÷Add liabilities
with strong
capitalcharacteristics
such as pricefluctuation
reserves andcontingency
reserves

Medical insurance risk R8 331Risk of change in medical incidence rate (hospitaladmission rate , etc.)

Assumed interest rate risk R2 2
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
with minimum guarantees

Asset management risk R3 514[Credit risk] Risk that asset values decline due todeterioration in financial condition of creditees[Price fluctuation risk]Risk of incurring losses due todecline in market value of stocks and bonds, etc.

Business management risk R4 56
3% of the total of the amounts of the other 5 risks (in theCompany’s case)1.

90% of the valuation difference on available-for-sale securities and deferred gains or losses on hedges (pre-tax) (if negative, 100%)2.

Items that do not apply to the Company or for which the amount is minimal have been omitted, except for certain bracketed items.

36