NEWS RELEASE
November 11, 2020
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 2Q of Fiscal 2020 Ending March 31, 2021
Annualized premium of in-force business of 17,234 million yen,up 11.1% from March 31, 2020
TOKYO, November 11, 2020 - 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 2020 ending March 31, 2021.
1．Overview of the financial results for 2Q of fiscal 2020
(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 2Q ended September 30, 2020 was 991 million yen(124.9% of 2Q of fiscal 2019). The number of new business was 23,369 (124.3% of 2Q of fiscal
2019). Annualized premium of new business for the six months ended September 30, 2020 was
2,158 million yen (133.5% of the six months ended September 30, 2019). The number of new
business for the six months ended September 30, 2020 was 51,505 (135.9% of the six months
ended September 30, 2019). Regarding the impact from the spread of the novel coronavirus
disease for the six months ended September 30, 2020, it led to a great increase in the new
business in the short term because of expanding consumers’ needs for life insurance.
Annualized premium of policies-in-force as of the end of 2Q of fiscal 2020 stands at 17,234
million yen (111.1% of March 31, 2020). The number of policies-in-force exceeded 400,000 in
September 2020 and resulted in a total of 405,403 (111.0% of March 31, 2020). Surrender andlapse ratio*2 for the six months ended September 30, 2020 was 5.5% (7.3% for the six months
ended September 30, 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 six months ended September 30, 2020 increased to
9,493 million yen (122.4% of the six months ended September 30, 2019) due to an increase in
the number of policies-in-force and an increase in reinsurance income from modified coinsurance. Investment income was 237 million yen (136.1% of the six months ended September
30, 2019). Other ordinary income was 119 million yen. As a result, ordinary income for the six
months ended September 30, 2020 amounted to 9,849 million yen (123.8% of the six months
ended September 30, 2019).
Insurance claims and other was 2,574 million yen (152.5% of the six months ended
September 30, 2019) mainly due to an increase in reinsurance commissions from modified coinsurance. The ratio of insurance payment amounts to insurance premiums decreased to 17.5%
for the six months ended September 30, 2020, compared with 19.2% for the six months ended
September 30, 2019. Provision for policy reserves and other came to 3,029 million yen (129.6%of the six months ended September 30, 2019). The ratio of provision for policy reserves toinsurance premiums was 37.5% for the six months ended September 30, 2020, compared with33.9% for the six months ended September 30, 2019. Operating expenses amounted to 4,633

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1

NEWS RELEASE
million yen (100.6% of the six months ended September 30, 2019) mainly due to the investment
in our marketing spend including advertising. The components of operating expenses were3,054 million yen in marketing expenses (95.9% of the six months ended September 30, 2019) ,478 million yen in customer service expenses (112.7% of the six months ended September 30,2019), and 1,100 million yen in system and other expenses (110.8% of the six months ended
September 30, 2019). Other ordinary expenses was 741 million yen (150.9% of the six months
ended September 30, 2019) mainly due to share issuance costs for issuance of new sharesthrough overseas public offering in July and an increase in the consumption tax rate in October
2019. Consequently, ordinary expenses for the six months ended September 30, 2020 totaled
10,978 million yen (119.7% of the six months ended September 30, 2019).
As a result, ordinary profit totaled 1,128 million yen loss for the six months ended September
30, 2020, compared with 1,214 million yen loss for the six months ended September 30, 2019.
Net income was 1,138 million yen loss, compared with 1,223 million yen loss for the six months
ended September 30, 2019.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 1,049 million yen loss, compared with 1,232 million yen loss for the six
months ended September 30, 2019. The components of fundamental profit were 1,898 million
yen in mortality margin, 2,938 million yen loss in expense margin and 9 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, the modified co-insurance resulted in raising ordinary income by 1,153 million yen(852 million yen of the six months ended September 30, 2019) , ordinary profit by 360 million yen(743 million yen of the six months ended September 30, 2019), and net income by 360 million yen(743 million yen of the six months ended September 30, 2019).
(2) Financial condition
Assets, liabilities and net assets
Total assets as of September 30, 2020 amounted to 52,270 million yen (41,144 million yen asof March 31, 2020). The major account balance was 36,419 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Reinsurance
accounts receivable was 2,026 million yen including 1,901 million yen of the balance of
unamortized ceding commission for modified co-insurance.
Liabilities amounted to 34,736 million yen as of September 30, 2020 (31,744 million yen as ofMarch 31, 2020), owing to an increase in policy reserves. The major account balances were
32,719 million yen in policy reserves and 552 million yen in reserves for outstanding claims.
Net assets amounted to 17,533 million yen as of September 30, 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 six months ended September 30, 2020. It includes the effect ofraising retained earnings due to the utilization of modified co-insurance. On the other hand, after
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

2

NEWS RELEASE
the ceding commission is recorded reinsurance accounts receivable as asset, it is amortized by
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 September 30, 2020 was 2,957.1% (2,117.1% as of March
31, 2020), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the six months ended September 30, 2020, net cash provided by operating activities
amounted to 1,546 million yen (586 million yen provided for the six months ended September
30, 2019) mainly because of an increase in insurance premium. Net cash used by investing
activities amounted to 5,446 million yen (897 million yen used for the six months ended
September 30, 2019) mainly due to acquisition of securities. Net cash provided by financing
activities amounted to 8,865 million yen (7 million yen used for the six months ended September
30, 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 September 30,
2020 totaled 6,643 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.
(In millions of yen)
Business forecasts
for fiscal 2020
(Reference)
Business results
for fiscal 2019
ChangeOrdinary income

Ordinary profit (loss)

Net income (loss)

20,000(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 fiscal 2019. Subsequently, 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.

3

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

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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

2,143
4,499
4,734
36,4198,632
1,388
20,611
393
0
5,394
92
873
7
2,026
1,472
1,244
228
52,2704

NEWS RELEASE(In millions of yen)March 31,
Sep. 30,
2020
2020
LIABILITIESPolicy reserves and other ························································
Reserves for outstanding claims ··········································

30,32833,272

638

552

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

29,69032,719Agency accounts payable ·······················································

55

63

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

225

251

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

882

802

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

3

1

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

775

674

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

7

5

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

33

33

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

62

86

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

56

64

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

56

64

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

195

282

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

31,74434,736

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

12,20016,723

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

12,20016,723

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

12,20016,723Retained earnings ·································································(15,502)(16,641)

Other retained earnings ···················································(15,502)(16,641)

Retained earnings brought forward ·····························(15,502)(16,641)

Treasury shares ····································································－(0)

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

8,898

16,806

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

502

727

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

502

727

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

9,400

17,533

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

41,14452,270

NET ASSETS

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5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)Six months ended Sep. 30
2019
2020
7,953
9,849
7,754
9,493
6,697
8,079
1,056
1,414
174
237
152
140
16
93
5
2
24
119
－
85
24
33
9,167
10,978
1,688
2,574
832
879
455
537
0
0
400
1,157
2,337
3,029
65
－
2,271
3,029
46
0
0
0
46
－
0
0
4,604
4,633
491
741
(1,214)(1,128)6
8
6
8
6
8(1,221)(1,136)11
1
1(1,223)(1,138)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

6

NEWS RELEASE(3)

Statements of Changes in Net Assets(In millions of yen)Six months ended Sep. 30
2019
2020

Shareholders' equity:
Capital stock
Balance at the beginning of the year ··························
Changes of items during the period
Issuance of new shares ···································
Issuance of new shares-restricted stock ··············
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
Issuance of new shares ····························
Issuance of new shares-restricted stock ·······
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
Issuance of new shares ····························
Issuance of new shares-restricted stock ·······
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 the period ····
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 ························
Treasury shares
Balance at the beginning of the year ··························
Changes of items during the period
Purchase of treasury shares ·····························
Total changes of items during the period ·············
Balance at the end of the period ·······························

12,136

12,200－20
20
12,157

4,502
20
4,523
16,723

12,136

12,200－20
20
12,157

4,502
20
4,523
16,723

12,136

12,200－20
20
12,157

4,502
20
4,523
16,723(13,101)(15,502)(1,223)(1,223)(14,324)(1,138)(1,138)(16,641)(13,101)(15,502)(1,223)(1,223)(14,324)(1,138)(1,138)(16,641)

－

－

－
－
－

(0)
(0)
(0)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

7

NEWS RELEASE(In millions of yen)Six months ended Sep. 30
2019
2020
Total shareholders' equity
Balance at the beginning of the year ··························
Changes of items during the period
Issuance of new shares ···································
Issuance of new shares-restricted stock ··············Net income (loss) ···········································
Purchase of treasury shares ·····························
Total changes of items during the period ·············
Balance at the end of the period ·······························

11,172

8,898－
41(1,223)－(1,181)
9,990

9,005
41
(1,138)(0)
7,908
16,806

600

502

176
176
777

224
224
727

600

502

176
176
777

224
224
727

11,7739,400－
41(1,223)－176(1,004)
10,7689,005
41(1,138)
(0)
224
8,133
17,533

Valuation and translation adjustments:
Valuation difference on available-for-sale securities
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 ·······························
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
Issuance of new shares ··································
Issuance of new shares-restricted stock ·············Net income (loss) ··········································
Purchase of treasury shares ····························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.

8

NEWS RELEASE(4) Statements of Cash Flows(In millions of yen)Six months ended Sep. 30
2019

2020

Cash flows from operating activities
Income (loss) before income taxes ·····································(1,221)(1,136)

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

143

154

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

65

(85)

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

2,271

3,029

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

6

8

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

(152)

(140)

Loss (gain) related to securities ··········································

41

(2)

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

00

Share issuance costs ·······················································－

137

Decrease (increase) in agency accounts receivable ···············(1)

1

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

(773)

(363)

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

(60)

(95)

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

(24)

8

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

30

25

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

65

(98)

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

(4)

(73)

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

386

1,369

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

192
(0)

172
(0)

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

7

4

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

586

1,546

Cash flows from investing activities
Purchase of money held in trust ·········································(250)(1,000)Purchase of securities ······················································(1,831)(5,297)

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

1,407

1,110

Total of net cash provided by (used in) investment transactions ···(674)(5,186)

Total of net cash provided by (used in) operating activities and investment transactions ···(87)(3,640)Purchase of tangible fixed assets ·······································
Purchase of intangible fixed assets ·····································Net cash provided by (used in) investing activities ·············

(34)
(188)
(897)

(23)
(236)
(5,446)

Cash flows from financing activities
Proceeds from issuance of common stock ····························

－

8,868

Purchase of treasury shares ··············································－(0)

Repayments of lease obligations ········································

(7)

(2)

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

(7)

8,865

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

(317)

4,965

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

2,192

1,677

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

1,874

6,643

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