NEWS RELEASE
November 10, 2022
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Growth)

Financial Results for 2Q of Fiscal 2022 Ending March 31, 2023
Annualized premium of in-force business of 22,947 million yen,up 6.7% from March 31, 2022
TOKYO, November 10, 2022 - LIFENET INSURANCE COMPANY (TSE Growth 7157,
President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for thesecond quarter of fiscal 2022 ending March 31, 2023.
1．Overview of the financial results for 2Q of fiscal 2022
(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 2Q ended September 30, 2022 was 1,137 million
yen (108.2% of 2Q of fiscal 2021). The number of new business was 29,864 (114.1% of 2Q offiscal 2021). Annualized premium of new business for the six months ended September 30,
2022 was 2,107 million yen (96.9% of the six months ended September 30, 2021). The numberof new business for the six months ended September 30, 2022 was 53,792 (100.1% of the six
months ended September 30, 2021).
Annualized premium of policies-in-force as of the end of 2Q of fiscal 2022 stands at 22,947
million yen (106.7% of March 31, 2022). The number of policies-in-force resulted in a total of543,635 (107.1% of March 31, 2022). Surrender and lapse ratio*2 for the six months ended
September 30, 2022 was 6.3% (6.9% for the six months ended September 30, 2021).
*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, 2022 was 14,146
million yen (115.0% of the six months ended September 30, 2021) due to an increase inpremium income by growth of in-force business, and effect from modified co-insurance.
Investment income was 558 million yen (215.4% of the six months ended September 30, 2021)
mainly due to the increase in gains on money held in trust. Other ordinary income was 41
million yen. As a result, ordinary income for the six months ended September 30, 2022
amounted to 14,746 million yen (116.6% of the six months ended September 30, 2021).
Insurance claims and other was 5,738 million yen (141.1% of the six months ended
September 30, 2021) mainly due to an increase in insurance benefits related to COVID-19 andreinsurance commission from modified co-insurance. The ratio of insurance payment amounts
to insurance premiums was 25.8% for the six months ended September 30, 2022, comparedwith 21.0% for the six months ended September 30, 2021. In addition, payment of insurance
claims and benefits related to COVID-19 was 883 million yen for the six months ended
September 30, 2022. Provision for policy reserves and other came to 4,050 million yen (126.3%of the six months ended September 30, 2021). The ratio of provision for policy reserves toinsurance premiums was 31.9% for the six months ended September 30, 2022, compared with33.5% for the six months ended September 30, 2021. Investment expenses was 92 million yen
mainly due to the recording of loss on sale of securities. Operating expenses amounted to 6,551

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1

NEWS RELEASE
million yen (111.3% of the six months ended September 30, 2021) mainly due to the investment
in our marketing spend including advertising. The components of operating expenses were
4,237 million yen in marketing expenses (105.2% of the six months ended September 30,2021) , 713 million yen in customer service expenses (115.1% of the six months ended
September 30, 2021), and 1,600 million yen in system and other expenses (129.4% of the six
months ended September 30, 2021). Other ordinary expenses was 806 million yen (88.5% of
the six months ended September 30, 2021). Consequently, ordinary expenses for the six
months ended September 30, 2022 totaled 17,239 million yen (122.5% of the six months ended
September 30, 2021).
As a result, ordinary profit totaled 2,492 million yen loss for the six months ended September
30, 2022, compared with 1,427 million yen loss for the six months ended September 30, 2021.
Net income was 2,509 million yen loss, compared with 1,476 million yen loss for the six months
ended September 30, 2021.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 2,601 million yen loss, compared with 1,316 million yen loss for the six
months ended September 30, 2021, mainly due to an increase in insurance benefits related to
COVID-19. The components of fundamental profit were 852 million yen in mortality margin, 3,496
million yen loss in expense margin and 42 million yen in interest margin.
We are participating in reinsurance transactions from fiscal 2019 by modified co-insurance onpart of our 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 2,786 million yen(2,380 million yen of the six months ended September 30, 2021) , ordinary profit by 444 million
yen (787 million yen of the six months ended September 30, 2021), and net income by 444 million
yen (787 million yen of the six months ended September 30, 2021).
(2) Financial condition
Assets, liabilities and net assets
Total assets as of September 30, 2022 amounted to 68,065 million yen (67,820 million yen asof March 31, 2022). The major account balance was 48,526 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Reinsurance
accounts receivable was 4,316 million yen including 4,116 million yen of the balance of
unamortized ceding commission for modified co-insurance.
Liabilities amounted to 49,414 million yen as of September 30, 2022 (45,749 million yen as ofMarch 31, 2022), owing to an increase in policy reserves. The major account balances were46,031 million yen in policy reserves and 1,562 million yen in reserves for outstanding claims.
Net assets amounted to 18,650 million yen as of September 30, 2022 (22,071 million yen asof March 31, 2022) mainly due to the recording of net loss for the six months ended September
30, 2022 and a decrease in valuation difference on available-for-sale securities. It includes theeffect of raising 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
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

2

NEWS RELEASE
amortized by the profit generated from the reinsured business over following fiscal years. This
leads to a decrease in net assets accordingly.
The solvency margin ratio as of September 30, 2022 was 3,187.0% (3,182.8% as of March
31, 2022), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the six months ended September 30, 2022, net cash provided by operating activities
amounted to 983 million yen (1,119 million yen provided for the six months ended September
30, 2021) mainly because of an increase in insurance premium. Net cash used by investing
activities amounted to 2,550 million yen (1,965 million yen used for the six months ended
September 30, 2021) mainly due to acquisition of securities. Net cash used by financing
activities amounted to 1 million yen (9,736 million yen provided for the six months ended
September 30, 2021).
Based on these activities described above, cash and cash equivalents as of September 30,
2022 totaled 6,193 million yen (7,761 million yen as of March 31, 2022).
(3) Business forecasts
The business forecasts for fiscal 2022 which was announced on May 12, 2022 was revised
as shown below.
(In millions of yen)
Ordinary income
Ordinary profit (loss)
Net income (loss)
Previous forecasts(May 12, 2022)

30,300(3,400)(3,400)

Revised forecasts(November 10, 2022)

30,000(5,000)(5,000)(Reference)
Business results
for fiscal 2021

26,167(3,245)(3,319)Reasons for revision
The payments of insurance claims and benefits related to COVID-19 increased due to the
spread of COVID-19 and the amount of the payments reached 883 million yen for the six
months ended September 30, 2022. Based on this, Lifenet has revised its business forecasts
for fiscal year 2022 ending March 31, 2023, as the amount of insurance claims and benefits is
expected to be higher than initially expected.
In addition, as for the reserves for outstanding claims, which is required to be accumulated
under the Insurance Business Acts, we expect to record higher amount as a provision forreserves for outstanding claims than innitailly expected due to an increase in payments of
insurance claims and benefits for the six months ended September 30, 2022. We have included
the impact in our revision of the business forecasts.
Since April 2020, Lifenet has regarded patients with COVID-19 recuperating at home oraccommodations as equivalent to those who have been hospitalized and are eligible forclaiming benefits. However, in line with the recent government's policy to simplify COVID-19
case count rules, benefit payments are limited to those who have high risk when they are
diagnosed with COVID-19 after September 26. As a result, future payments of claims andbenefits related to COVID-19 are expected to be limited, while we carefully monitor the situation
and will promptly announce any events that should be disclosed.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

NEWS RELEASE
The business forecasts for fiscal 2022 includes the impact of reinsurance transactions bymodified co-insurance. We expect the impact of these reinsurance transactions on fiscal 2022
forecasts to increase ordinary income by around 5,900 million yen (6,300 million yen as ofprevious forecast), ordinary profit and net income by around 800 million yen (1,000 million yen
as of previous forecast). This impact includes the effects of amortization of reinsurance
accounts receivable generated from reinsured business in past years.
Subsequently, the forecasts for annualized premium of new business and of policies-in-force
were also revised for the performance has not progressed as expected. Lifenet continuously
aims to achieve double-digit growth in in-force business.
(Reference) Annualized premium
Annualized premiumof policies-in-force(In millions of yen)
Annualized premiumof new business

Previous forecasts(May 12, 2022)

24,400

4,400

Revised forecasts(November 10, 2022)

24,3004,200(Reference)
Business results
for fiscal 2021

21,511

4,089

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

4NEWS RELEASE
2. Non-consolidated Financial Statements(1) Balance Sheets(In millions of yen)March 31,
Sep. 30,
2022
2022
ASSETSCash and deposits ·································································

3,761

3,193

Monetary claims bought ··························································

3,999

2,999

Money held in trust ································································

5,460

5,635

Securities ············································································

47,42548,526

Government bonds····························································

8,946

8,870

Municipal bonds ·······························································

1,469

1,450

Corporate bonds ·······························································

24,042

24,986

Stocks ············································································

492

550

Foreign securities ·····························································

98

497

Other securities ································································

12,375

12,170

Tangible fixed assets ······························································

97

86

Intangible fixed assets ····························································

1,293

1,271

Agency accounts receivable ····················································

7

8

Reinsurance accounts receivable ··············································

3,881

4,316

Other assets·········································································

1,892

2,027

Accounts receivable ··························································

1,585

1,682

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

306

345

Total assets ···························································

67,82068,065

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(In millions of yen)March 31,
Sep. 30,
2022
2022
LIABILITIESPolicy reserves and other ························································

43,54247,593

Reserves for outstanding claims ··········································

984

1,562

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

42,55846,031

Agency accounts payable ·······················································

48

75

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

404

436

Other liabilities ······································································
Income taxes payable ·····················································
Accrued expenses ··························································
Lease liabilities ······························································
Asset retirement obligations··············································
Other ···········································································
Reserves under the special laws ···············································

1,379
3
1,270
7
34
64
102

1,192
1
1,083
6
34
66
115

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

102

115

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

271－

Total liabilities ·························································NET ASSETS
Capital stock ········································································
Capital surplus ······································································
Legal capital surplus ·······················································
Retained earnings ·································································
Other retained earnings ···················································
Retained earnings brought forward ·····························
Treasury shares ····································································
Shareholders’ equity ·········································
Valuation difference on available-for-sale securities ······················
Valuation and translation adjustments ········································
Total net assets ···············································
Total liabilities and net assets ·····························

45,74949,414

21,65521,65521,655(21,936)(21,936)(21,936)(0)21,373697
697
22,071
67,82021,676
21,676
21,676(24,446)(24,446)(24,446)(0)
18,907(257)(257)
18,65068,065

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

6

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 sales of securities ·····································
Foreign exchange losses ·······································
Operating expenses ·················································
Other ordinary expenses ···········································
Ordinary profit (loss) ·····················································
Extraordinary losses ·····················································
Loss on disposal of fixed assets ··································
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
2021
2022
12,644
14,746
12,30114,146
9,566
10,893
2,734
3,252
259
558
215
273
26
169
17
115
84
41
45
－
38
41
14,071
17,239
4,066
5,738
1,315
1,240
693
1,570
0
0
2,057
2,926
3,208
4,050
－
577
3,208
3,473
0
92
0
1
－
91
0
－
5,885
6,551
911
806
(1,427)(2,492)
47
14
36
1
10
13
10
13
(1,474)(2,507)111
1(1,476)(2,509)Copyright© LIFENET INSURANCE COMPANY All rights reserved.

7

NEWS RELEASE(3) Statements of Changes in Net Assets(In millions of yen)Six months ended Sep. 30
2021
2022
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 ··············
Issuance of new shares-exercise of subscription rights to shares ·········
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 ·······
Issuance of new shares-exercise of subscription rights to shares ··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 ·······
Issuance of new shares-exercise of subscription rights to shares ··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 ························

16,731

21,655

4,885
21
13
4,920
21,652－21－
21
21,676

16,731

21,655

4,885
21
13
4,920
21,652－21－
21
21,676

16,731

21,655

4,885
21
13
4,920
21,652－21－
21
21,676(18,616)(21,936)(1,476)(1,476)(20,093)(2,509)(2,509)(24,446)(18,616)(21,936)(1,476)(1,476)(20,093)(2,509)(2,509)(24,446)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

8

NEWS RELEASE(In millions of yen)Six months ended Sep. 30
2021
2022
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 ·······························
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 ··············
Issuance of new shares-exercise of subscription rights to shares ·········Net income (loss) ···········································
Purchase of treasury shares ·····························
Total changes of items during the period ·············
Balance at the end of the period ·······························
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 ·············
Issuance of new shares-exercise of subscription rights to shares ········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 ································

(0)

(0)

－
－
(0)

(0)
(0)
(0)

14,846

21,3739,771
43
26(1,476)－
8,365
23,211－43－(2,509)(0)(2,465)
18,907

960

697

213
213
1,173

(954)
(954)
(257)

960

697

213
213
1,173

(954)
(954)
(257)

15,80622,0719,771
43
26(1,476)－213
8,578
24,385－43－(2,509)(0)(954)(3,420)18,650

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

9

NEWS RELEASE(4) Statements of Cash Flows(In millions of yen)Six months ended Sep. 30
2021

2022

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 ···························································
Loss (gain) property plant and equipment ·····························
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 ······································································(1,474)
206
(45)
3,208
10
(215)
(17)
0
－
130
0
(736)
(119)
(13)
34
(198)
31

(2,507)
197
577
3,473
13
(273)
(24)
1
0
－
(0)
(435)
(108)
27
31
(183)
(145)

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

801

642

Interest and dividends income received ·······························
Interest expenses paid ·····················································
Income taxes (paid) refund ················································

325
(0)
(6)

343
(1)
(0)

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

1,119

983

Cash flows from investing activities
Purchase of money held in trust ·········································
Proceeds from decrease in money held in trust ·····················
Purchase of securities ······················································
Proceeds from sales and redemption of securities ······················－
500(2,759)576(0)－(6,796)
4,411

Total of net cash provided by (used in) investment transactions ···(1,683)(2,385)

Total of net cash provided by (used in) operating activities and investment transactions ···(563)(1,401)

Purchase of tangible fixed assets ·······································
Purchase of intangible fixed assets ·····································

(15)
(267)

(0)
(164)

Net cash provided by (used in) investing activities ·············(1,965)(2,550)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 ········································

9,712
26
－
(2)

－
－
(0)
(1)

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

9,736

(1)

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

8,891(1,568)Cash and cash equivalents, beginning of the year ······················

3,059

7,761

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

11,9506,193

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

10

NEWS RELEASE
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.

11