NEWS RELEASE
February 9, 2021
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 3Q of Fiscal 2020 Ending March 31, 2021
Annualized premium of in-force business of 17,922 million yen,up 15.5% from March 31, 2020
TOKYO, February 9, 2021 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for thethird quarter of fiscal 2020 ending March 31, 2021.
1．Overview of the financial results for 3Q of fiscal 2020
(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 3Q ended December 31, 2020 was 934 million yen(114.1% of 3Q of fiscal 2019). The number of new business was 22,164 (112.6% of 3Q of fiscal
2019). Annualized premium of new business for the nine months ended December 31, 2020
was 3,093 million yen (127.0% of the nine months ended December 31, 2019). The number of
new business for the nine months ended December 31, 2020 was 73,669 (127.9% of the ninemonths ended December 31, 2019). Regarding the impact from the spread of the novel
coronavirus disease for the nine months ended December 31, 2020, it led to a great increase in
the new business in the short term under the state of emergency in April because of expanding
consumers’ needs for life insurance.
Annualized premium of policies-in-force as of the end of 3Q of fiscal 2020 stands at 17,922
million yen (115.5% of March 31, 2020). The number of policies-in-force resulted in a total of
421,073 (115.3% of March 31, 2020). Surrender and lapse ratio*2 for the nine months ended
December 31, 2020 was 5.6% (7.0% for the nine months ended December 31, 2019).
*1: Annualized premium is the amount of money equivalent to what is to be paid to have the insurance coverage for one
year. All payments for Lifenet products are in monthly installments, we calculate annualized premium as multiplying
the monthly premium by 12 months.
*2: The surrender and lapse ratio is the annual equivalent of the monthly number of policies surrendered and/or lapsed
divided by the monthly average number of policies-in-force.

Results of operations
Insurance premiums and other for the nine months ended December 31, 2020 increased to
14,694 million yen (123.0% of the nine months ended December 31, 2019) due to an increasein the number of policies-in-force and an increase in reinsurance income from modified coinsurance. Investment income was 303 million yen (117.5% of the nine months ended
December 31, 2019). Other ordinary income was 146 million yen. As a result, ordinary income
for the nine months ended December 31, 2020 amounted to 15,144 million yen (123.7% of thenine months ended December 31, 2019).
Insurance claims and other was 4,205 million yen (153.3% of the nine months ended
December 31, 2019) mainly due to an increase in reinsurance commissions from modified coinsurance. The ratio of insurance payment amounts to insurance premiums decreased to 18.6%
for the nine months ended December 31, 2020, compared with 19.7% for the nine months
ended December 31, 2019. Provision for policy reserves and other came to 4,597 million yen(127.5% of the nine months ended December 31, 2019). The ratio of provision for policy
reserves to insurance premiums was 37.1% for the nine months ended December 31, 2020,
compared with 35.0% for the nine months ended December 31, 2019. Operating expenses
amounted to 6,999 million yen (103.3% of the nine months ended December 31, 2019) mainly
due to the investment in our marketing spend including advertising. The components of
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
operating expenses were 4,615 million yen in marketing expenses (101.1% of the nine months
ended December 31, 2019) , 758 million yen in customer service expenses (113.6% of the ninemonths ended December 31, 2019), and 1,625 million yen in system and other expenses(105.4% of the nine months ended December 31, 2019). Other ordinary expenses was 1,056
million yen (136.5% of the nine months ended December 31, 2019) mainly due to shareissuance costs through overseas public offering in July and an increase in the consumption tax
rate in October 2019. Consequently, ordinary expenses for the nine months ended December
31, 2020 totaled 16,858 million yen (120.9% of the nine months ended December 31, 2019).
As a result, ordinary profit totaled 1,714 million yen loss for the nine months ended December
31, 2020, compared with 1,699 million yen loss for the nine months ended December 31, 2019.
Net income was 1,731 million yen loss, compared with 1,711 million yen loss for the ninemonths ended December 31, 2019.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 1,568 million yen loss, compared with 1,675 million yen loss for the ninemonths ended December 31, 2019. The components of fundamental profit were 2,713 million yen
in mortality margin, 4,260 million yen loss in expense margin and 21 million yen loss in interest
margin.
We are participating in reinsurance transactions from fiscal 2019 by modified co-insurance onpart of new business to achieve continuous growth. By utilizing reinsurance appropriately, we willease the temporary burden imposed on statutory capital by expenses associated with new
business and maintain fiscal soundness. The reinsurance transactions are agreements thattransfer the risk and the profit (loss) structure of the reinsured business to the reinsurancecompany for a certain period of time. We receive ceding commission in accordance with the new
business costs associated with the reinsured business in the initial fiscal year. This leads to anincrease in ordinary income. On the other hand, after the ceding commission is recorded
reinsurance accounts receivable as asset, it is amortized by the profit generated from thereinsured business over following fiscal years. This leads to a decrease in ordinary profit and net
profit. Once the balance of reinsurance accounts receivable is amortized to zero, the reinsurance
agreement terminates, and subsequent profit on the reinsured business belongs to Lifenet.
Accordingly, for the nine months ended December 31, 2020, the modified co-insurance resulted inraising ordinary income by 1,892 million yen (1,367 million yen of the nine months ended
December 31, 2019) , ordinary profit by 555 million yen (1,096 million yen of the nine months
ended December 31, 2019), and net income by 555 million yen (1,096 million yen of the ninemonths ended December 31, 2019).
(2) Financial condition
Assets, liabilities and net assets
Total assets as of December 31, 2020 amounted to 53,751 million yen (41,144 million yen asof March 31, 2020). The major account balance was 38,865 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Reinsurance
accounts receivable was 2,234 million yen including 2,100 million yen of the balance of
unamortized ceding commission for modified co-insurance.
Liabilities amounted to 36,614 million yen as of December 31, 2020 (31,744 million yen as ofMarch 31, 2020), owing to an increase in policy reserves. The major account balances were34,288 million yen in policy reserves and 544 million yen in reserves for outstanding claims.
Net assets amounted to 17,136 million yen as of December 31, 2020 (9,400 million yen as ofMarch 31, 2020) mainly due to raising new capital through overseas public offering despite therecording of net loss for the nine months ended December 31, 2020. It includes the effect ofraising retained earnings due to the utilization of modified co-insurance. On the other hand, after
the ceding commission is recorded reinsurance accounts receivable as asset, it is amortized by
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
the profit generated from the reinsured business over following fiscal years. This leads to adecrease in net assets accordingly.
The solvency margin ratio as of December 31, 2020 was 2,811.8% (2,117.1% as of March 31,2020), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the nine months ended December 31, 2020, net cash provided by operating activities
amounted to 2,417 million yen (1,018 million yen provided for the nine months ended December
31, 2019) mainly because of an increase in insurance premium. Net cash used by investing
activities amounted to 8,447 million yen (1,475 million yen used for the nine months ended
December 31, 2019) mainly due to acquisition of securities. Net cash provided by financing
activities amounted to 8,868 million yen (76 million yen provided for the nine months ended
December 31, 2019) mainly due to issuance of new shares through overseas public offering in
July.
Based on these activities described above, cash and cash equivalents as of December 31,
2020 totaled 4,516 million yen (1,677 million yen as of March 31, 2020).
(3) Business forecasts
The business forecasts for fiscal 2020 which was announced on August 11, 2020 remainunchanged as shown below. We will proactively invest in marketing for the fourth quarter offiscal 2020.
(In millions of yen)
Ordinary income
Ordinary profit (loss)
Net income (loss)
Business forecasts
for fiscal 2020
(Reference)
Business results
for fiscal 2019
Change20,000(3,200)(3,200)16,850(2,382)(2,400)

18.7%

-

-

The business forecasts for fiscal 2020 includes the impact of reinsurance transactions fromfiscal 2019 by modified co-insurance. We expect the impact on fiscal 2020 results forecasts toincrease ordinary income by around 2,700 million yen, ordinary profit by around 650 million
yen and net income by around 650 million yen, given that new business will be acquired as
expected. This impact includes the effects of amortization of reinsurance accounts receivable
generated from reinsured business in the past fiscal year.
The expecting annualized premium of new business for fiscal 2020 will be 4,000 million
yen.
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. 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,
Dec. 31,
2020
2020
ASSETSCash and deposits ·····························································
Monetary claims bought ······················································
Money held in trust ·····························································
Securities ·········································································
Government bonds ························································
Municipal bonds ····························································
Corporate bonds ···························································
Stocks ·········································································
Foreign securities ··························································
Other securities·····························································
Tangible fixed assets ··························································
Intangible fixed assets ························································
Agency accounts receivable ·················································
Reinsurance accounts receivable ··········································
Other assets ·····································································
Accounts receivable ·······················································
Other ··········································································
Total assets·························································

1,377
299
3,539
32,058
8,065
1,391
18,119
313
0
4,167
96
742
9
1,663
1,356
1,132
224
41,144

2,516
1,999
5,422
38,8659,024
1,488
21,219
355
0
6,778
105
1,042
7
2,234
1,555
1,311
244
53,751

LIABILITIESPolicy reserves and other ····················································
Reserves for outstanding claims ·······································
Policy reserves ·····························································
Agency accounts payable ····················································
Reinsurance accounts payable ·············································
Other liabilities···································································
Reserves under the special laws ···········································
Reserve for price fluctuations ···········································
Deferred tax liabilities ·························································
Total liabilities ······················································NET ASSETS
Capital stock ·····································································
Capital surplus ··································································
Retained earnings ······························································
Treasury shares ·································································

30,328638
29,690
55
225
882
56
56
195
31,744

34,832544
34,288
72
286
995
70
70
357
36,614

12,20012,200(15,502)－

16,725
16,725(17,233)(0)

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

8,898

16,217

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

502

919

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

502

919

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

9,400

17,136

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

41,14453,751

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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 ·······························
Gain on sales of securities ··································
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 reserves for outstanding claims ·············
Provision for policy reserves ··································
Investment expenses ·············································
Interest expenses ··············································
Loss on valuation of securities ·····························
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)
Nine months ended Dec. 31
2019
2020
12,242
15,144
11,945
14,694
10,26912,406
1,675
2,287
258
303
218
205
22
94
16
2
39
146
－
94
39
52
13,941
16,858
2,743
4,205
1,316
1,479
704
826
0
0
721
1,899
3,604
4,597
14
－
3,590
4,597
46
0
0
0
46
－
0
0
6,772
6,999
773
1,056
(1,699)(1,714)
9
14
9
14
9
14
(1,708)(1,728)22
2
2(1,711)(1,731)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)
Nine months ended Dec. 31
2019
2020
Cash flows from operating activities
Income (loss) before income taxes ·····························
Depreciation and amortization ···································
Increase (decrease) in reserves for outstanding claims ··Increase (decrease) in policy reserves ························
Increase (decrease) in reserve for price fluctuations ······
Interest, dividends and other income ··························
Loss (gain) related to securities ·································
Interest expenses ···················································
Share issuance costs ·················································

Decrease (increase) in agency accounts receivable·······
Decrease (increase) in reinsurance accounts receivable·
Decrease (increase) in other assets <excluding assets for investing and financing activities>
Increase (decrease) in agency accounts payable ·············
Increase (decrease) in reinsurance accounts payable ····
Increase (decrease) in other liabilities <excluding liabilities for investing and financing activities>··················································································································
Other,
net ·····································································································································
Subtotal ································································
Interest and dividends income received ·······················
Interest expenses paid ·············································
Income taxes (paid) refund ·······································Net cash provided by (used in) operating activities ····Cash flows from investing activities
Purchase of money held in trust·································
Purchase of securities ·············································
Proceeds from sales and redemption of securities ············
Total of net cash provided by (used in) investment transactions
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 ····Cash flows from financing activities
Proceeds from issuance of common stock ······················
Proceeds from issuance of stock resulting from exercise of subscription rights to shares

Purchase of treasury shares ·····································
Repayments of lease obligations ·······························Net cash provided by (used in) financing activities ····Net increase (decrease) in cash and cash equivalents ·······Cash and cash equivalents, beginning of the year ·············Cash and cash equivalents, end of the period·····················(1,708)
227
14
3,590
9
(218)
29
0
－
(2)
(1,134)
(118)
(17)
45
46
(0)
762
251
(0)
4
1,018

(1,728)
231
(94)
4,597
14
(205)
(2)
0
137
1
(571)
(175)
17
60
(35)
(63)
2,183
230
(0)
3
2,417

(450)
(3,130)2,412(1,167)
(148)
(34)
(273)
(1,475)(1,500)(7,868)1,310(8,057)(5,640)(23)(365)(8,447)

－
85
－
(8)
76
(380)
2,192
1,812

8,868
4
(0)
(3)
8,868
2,839
1,677
4,516

###

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6