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

Financial Results for 1Q of Fiscal 2020 Ending March 31, 2021
Annualized premium of in-force business of 16,461 million yen, up 6.1% of March 31, 2020
TOKYO, August 11, 2020 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for the
first quarter of fiscal 2020 ending March 31, 2021.
1．Overview of the financial results for 1Q of fiscal 2020
(1) Business results
Condition of policies-in-force
New business performance in 1Q ended June 30, 2020 achieved a record high on a quarterly
basis mainly because of expanding customers’ needs for life insurance raised by the spread of
the novel coronavirus disease (COVID-19). Annualized premium*1 of new business in 1Q of
fiscal 2020 was 1,166 million yen (141.9% of 1Q of fiscal 2019). The number of new business
was 28,136 (147.2% of 1Q of fiscal 2019). Annualized premium*1 of policies-in-force as of theend of 1Q of fiscal 2020 stands at 16,461 million yen (106.1% of March 31, 2020). The numberof policies-in-force resulted in a total of 387,775 (106.2% of March 31, 2020). Surrender andlapse ratio*2 for 1Q of fiscal 2020 was 5.5% (7.6% for 1Q of fiscal 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 1Q of fiscal 2020 increased to 4,633 million yen (122.8% of
1Q of fiscal 2019) due to an increase in the number of policies-in-force, and effect from modified
co-insurance. Investment income was 73 million yen (103.5% of 1Q of fiscal 2019). Other
ordinary income was 19 million yen. As a result, ordinary income for 1Q of fiscal 2020 amounted
to 4,726 million yen (121.3% of 1Q of fiscal 2019).
Insurance claims and other was 1,236 million yen (160.0% of 1Q of fiscal 2019) mainly due toan increase in in-force business. The ratio of insurance payment amounts to insurance
premiums decreased to 18.1% for 1Q of fiscal 2020,
compared with 18.7% for 1Q of fiscal 2019. Provision for policy reserves and other came to1,497 million yen (147.4% of 1Q of fiscal 2019). The ratio of provision for policy reserves toinsurance premiums was 38.0% for 1Q of fiscal 2020, compared with 31.0% for 1Q of fiscal
2019. Operating expenses amounted to 2,341 million yen (106.4% of 1Q of fiscal 2019). The
components of operating expenses were 1,506 million yen in marketing expenses (100.2% of
1Q of fiscal 2019) mainly due to proactive investment in advertising, 242 million yen in customer
service expenses (114.8% of 1Q of fiscal 2019), and 592 million yen in system and otherexpenses (121.9% of 1Q of fiscal 2019). Other ordinary expenses was 299 million yen (131.1%
of 1Q of fiscal 2019). Consequently, ordinary expenses for 1Q of fiscal 2020 totaled 5,374
million yen (127.5% of 1Q of fiscal 2019).
As a result, ordinary profit totaled 647 million yen loss for 1Q of fiscal 2020, compared with
321 million yen loss for 1Q of fiscal 2019. Net income was 652 million yen loss, compared with
325 million yen loss for 1Q of fiscal 2019.
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NEWS RELEASE
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 562 million yen loss, compared with 428 million yen loss for 1Q of fiscal
2019. The components of fundamental profit were 877 million yen in mortality margin, 1,424
million yen loss in expense margin and 15 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 558 million yen (387
million yen of 1Q of fiscal 2019) , ordinary profit by 212 million yen (370 million yen of 1Q of fiscal
2019), and net income by 212 million yen (370 million yen of 1Q of fiscal 2019).
(2) Financial condition
Assets, liabilities and net assets
Total assets as of June 30, 2020 amounted to 42,298 million yen (41,144 million yen as ofMarch 31, 2020). The major account balance was 32,846 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Reinsurance
accounts receivable was 1,884 million yen including 1,749 million yen of the balance of
unamortized ceding commission for modified co-insurance.
Liabilities amounted to 33,346 million yen as of June 30, 2020 (31,744 million yen as ofMarch 31, 2020), owing to an increase in policy reserves. The major account balances were31,187 million yen in policy reserves and 634 million yen in reserves for outstanding claims.
Net assets amounted to 8,951 million yen as of June 30, 2020 (9,400 million yen as of March
31, 2020), due to the recording of net loss for 1Q of fiscal 2020. It includes the effect of raisingretained earnings due to the utilization of modified co-insurance. On the other hand, after theceding 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 June 30, 2020 was 2,093.9% (2,117.1% as of March 31,2020), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For 1Q of fiscal 2020, net cash provided by operating activities amounted to 675 million yen(258 million yen provided for 1Q of fiscal 2019) mainly because of an increase in insurance
premium. Net cash used by investing activities amounted to 785 million yen (559 million yen
used for 1Q of fiscal 2019) mainly due to acquisition of securities. Net cash used by financing
activities amounted to 1 million yen (3 million yen used for 1Q of fiscal 2019).
Based on these activities described above, cash and cash equivalents as of June 30, 2020
totaled 1,566 million yen (1,677 million yen as of March 31, 2020).

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE(3) Business forecasts
The business forecasts for fiscal 2020 ending March 31, 2021 was undetermined because it
was difficult to estimate reasonable, appropriate forecasts due to the impact of COVID-19. We
disclose the business forecasts for fiscal 2020 as shown in the table below based on
information available at this time.

Business forecasts
for fiscal 2020
(Reference)
Business results
for fiscal 2019
ChangeOrdinary income

Ordinary profit (loss)(In millions of yen)
Net income (loss)

20,000(3,200)(3,200)16,850(2,382)(2,400)

18.7%

-

-

Lifenet aims for further business growth by undertaking initiatives for the “innovation ofcustomer experience” and “enhancement of promotion capabilities” as disclosed as priority
areas in the Management Policy. We will proactively invest in marketing to aim for new businessgrowth, and also invest in core system for the future in order to respond flexibly to changes inthe business environment.
We are participating in reinsurance transactions from fiscal 2019 by modified co-insurance andcontinue to utilize the reinsurance in fiscal 2020. We expect the impact of these reinsurance
transactions on fiscal 2020 results forecasts to increase 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 ofamortization of reinsurance accounts receivable generated from reinsured business in fiscal
2019.
Accordingly, Lifenet is forecasting ordinary income of 20,000 million yen, ordinary profit of
3,200 million yen loss and net profit of 3,200 million yen loss for fiscal 2020, including theimpact of modified co-insurance. As the table below indicates, we project annualized premium*1of new business of 4,000 million yen.
(Reference) Annualized premium(In millions of yen)
Business forecasts
4,000
for fiscal 2020
Business results
for fiscal 2019

3,425

Actual results of ordinary profit (loss) and net income (loss) may greatly diverge fromforecasts if the amount of insurance claims and benefits fluctuates beyond our expectation.
Future prospects remain uncertain due to COVID-19. Any items requiring disclosure will beannounced promptly.
*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.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

NEWS RELEASE
About LIFENETURL: 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.

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

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

1,566
－
3,710
32,846
8,034
1,386
18,684
388
0
4,352
88
764
7
1,884
1,428
1,206
221
42,298LIABILITIESPolicy 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

31,822634
31,187
73
240
876
59
59
274
33,346

12,20012,200(15,502)－

12,20012,200(16,154)(0)

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

8,898

8,245

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

502

705

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

502

705

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

9,400

8,951

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

41,14442,298

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(2) Statements of Operations(In millions of yen)Three months ended June 30
2019
2020
Ordinary income ························································
3,895
4,726
Insurance premiums and other ·································
3,774
4,633
Premiums income ·············································
3,279
3,940
Reinsurance income ··········································
494
693
Investment income ················································
70
73
Interest, dividends and other income ·····················
60
58
Gains on money held in trust ·······························
9
12
Gain on sales of securities ··································－
2
Other ordinary income ············································
50
19
Reversal of reserves for outstanding claims ············
38
3
Other ······························································
11
16
Ordinary expenses ·····················································
4,216
5,374
Insurance claims and other······································
772
1,236
Insurance claims ···············································
386
447
Benefits···························································
227
267
Other refunds ···················································
0
0
Reinsurance commissions ··································
159
521
Provision for policy reserves and other ······················
1,015
1,497
Provision for policy reserves ································
1,015
1,497
Investment expenses ·············································
0
0Interest expenses ··············································
00Foreign exchange losses ····································
0－
Operating expenses ···············································
2,199
2,341
Other ordinary expenses ·········································
228
299
Ordinary profit (loss) ···················································
(321)
(647)
Extraordinary losses ···················································
3
3
Provision of reserves under the special laws ···············
3
3
Provision of reserve for price fluctuations ···············
3
3
Income (loss) before income taxes ································
(324)
(651)
Income taxes-current ··················································
0
0
Income taxes ····························································
00
Net income (loss) ·······················································
(325)
(652)

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6

NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)Three months ended June 30
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 ···················································
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
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·····················

(324)
63
(38)
1,015
3
(60)
－
0
(1)
(408)
(45)
(7)
21
(31)
(8)
177
84
(0)
(3)
258

(651)
76
(3)
1,497
3
(58)
(2)
0
2
(221)
(68)
18
14
(9)
2
600
80
(0)
(4)
675

(250)
(600)
395
(454)
(196)
(22)
(82)
(559)

－
(1,299)
602
(697)
(21)
(10)
(78)
(785)

－
(3)
(3)
(305)
2,192
1,886

(0)
(1)
(1)
(110)
1,677
1,566

###

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7