ＤＤNEWSRELEASE

November 12, 2018
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Announcement of New Management Policy
Be the leading company expanding the online life insurance market
TOKYO, November 12, 2018 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) announces the completed
formulation of a new management policy.
Since our business commencement in May 2008, with the mission of offering simple,
convenient and competitively priced products and services, Lifenet has realized a stable growth
to this day, by means of establishing the online direct sales channel as the main channel,
offering highly cost-competitive products and accepting applications from customers at any
given time. As a result, the number of policies-in-force exceeded 280,000 in September 2018
and we reached record high of monthly new business performance in October 2018.
Aiming for steady growth onward, Lifenet formulated a new management policy, followed bychange of management team in June 2018. The summary is as follows.
Summary of New Management Policy

MissionHelp our customers embrace life more fully by offering
comprehensible, cost-competitive and convenient products andservices

VisionBe the leading company driving the growth of the online life
insurance market
Innovation of customer experience
Enhancing and evolving the quality of all services with digitaltechnology

Enhancement of promotion capabilities
Generating massive customer traffic by active promotion andexpansion of agent sales and white label businessPriority areas

Management
goal

Aim to achieve EEV (indicator of corporate value) of 100 billion yen
by business growth in a mid-term

Looking back on our business until today and the overview of new management policy are asfollows.

1. Looking back on Ten Years since Business Commencement
Since our business commencement, we have taken innovative initiatives to pursue ourmission of offering simple, convenient and competitively priced products and services as anindependent life insurance company.

LIFENET INSURANCE COMPANY
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1ＤＤNEWSRELEASEStart-up period （fiscal 2008-fiscal 2012）
We realized business growth, developing comprehensible, cost-competitive product andpromoting our new insurance products through website with an advanced marketingstrategy. Also, we have been engaging in thorough disclosure of information.

Previous mid-term business plan period （fiscal 2013- fiscal 2015）
Afterward, as customers shifted from computers to smartphones to access the Internet,
we could not meet the customer needs enough and the business results slowed downwith less marketing expenses, while we had been developing our website for smartphone
as our “shop”.

Current mid-term business plan period (fiscal 2016- fiscal 2018)
Based on our challenges recognized in previous mid-term business plan, we improved
our website for smartphones, diversified sales channels, started to sell white label
product through KDDI channel as a sales agent and launched new products
aggressively. After a business foundation was built through these efforts, we proactivelyinvested in marketing. Finally, the business results had been improved again, and in
October 2018 we reached record high of monthly new business performance that had
stood for some time.

2. New Management Policy
Looking back on the decade since our business commencement as above, to pursue ourmission, we recognized the importance of providing customers with what they want in a waythat suits their lifestyle and furthermore informing customers of these benefits.
According to research by the Japan Institute of Life Insurance released in September 2018,about 12% of potential subscribers of life insurance intended to acquire a policy through theInternet in the future although only around 3% of life insurance subscribers actually did so.
Additionally, in our fellow industry of non-life insurance, the share of direct automobile insurance
has reached approximately 8% as the market has been steadily growing. Given thesecircumstances, we believe that the room for growth in the online life insurance market certainly
exists, however, the suppliers including us could not fully respond the customer needs yet at
this stage.
Accordingly, we formulated a new management policy. We will continue to pursue ourmission, “helping our customers embrace life more fully by offering comprehensible, costcompetitive and convenient products and services”. To realize the mission, we shall strongly
lead the expansion of online life insurance market through the initiatives below.

 Innovation of customer experience
We have realized and improved customer convenience by promoting initiatives suchas application via smartphone, paperless application process and insurance
consultation via SNS. Going forward, we continue to enhance and evolve the quality ofservices, adopting changes on the times and circumstance, further utilizing digitaltechnologies, so that to offer new customer experience on life insurance.

LIFENET INSURANCE COMPANY
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

2ＤＤNEWSRELEASE Enhancement of promotion capabilities
We have strengthened promotion capabilities with high quality products and services
to deliver to more customers. Continuously, we will appeal to customers by aggressive
investment in marketing as well as expand online sales through our agents and whitelabel business to generate massive customer traffic.
In terms of management goal, the indicators of our management goal of the current mid-termbusiness plan was ordinary income and ordinary profit(loss). However, under current statutory
accounting, initial cost is recognized at the time of acquisition, on the other hand, insurance
premiums as revenue is collected gradually over the long period. Therefore, our long-term profit
is not reflected accurately as our new business accounts for large proportion of policies-in-force.
Given the above, we consider EEV (European Embedded Value) as a key management
indicator of corporate value and aim to achieve EEV of 100 billion yen in a mid-term. Moreover,
we also disclose Adjusted Profit (ordinary profit(loss) excluding marketing expenses to acquirenew business) as an indicator of profit generated from policies-in-force.

About LIFENET (Website： https://www.lifenet-seimei.co.jp/)
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. By using the Internet, we are able to offer
highly cost-competitive products and accept applications from customers at any given time.
Through complete information disclosure and insurance consultations via email, over thetelephone and in-person, we wish to offer customers a transparent way to choose a life
insurance policy so they can compare, understand and approve of plans before signing up, as
well as to spread the idea that LIFENET is the customer's connection to life insurance.
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 and provided
solely for readers' convenience. In case of any discrepancy or dispute, the Japanese document prevails.

LIFENET INSURANCE COMPANY
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

Securities Code:7157
TSE Mothers

Presentation on
New Management
PolicyNovember 12, 2018

Looking Back on 10 Years
since Business Commencement New business performance back on growth track
20,000Term Life andWhole-life
MedicalApplication via
smartphone

18,00016,000

Renewal ofTerm Life andWhole-life
MedicalLoad charge rates
disclosed
Application via
feature phone

14,00012,000au Life Insurancewith KDDI

Agentcommission
rate disclosed

Long-term
DisabilityRenewal ofTerm Life

300,000
270,000

Renewal ofLong-term
Disability

Online claim ofWhole-life
Medical240,000

CancerInsurance

210,000
180,000

10,000150,000

8,000

120,000

6,000

90,0004,000

60,0002,000

30,000001Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY2008FY2009FY2010FY2011FY2012FY2013
FY2014FY2015
Number of new business
Number of policies in-force
保有契約件数（件、右軸）新契約件数（件、左軸）(right axis)(right axis)

FY2016FY2017 FY2018

1

Growth Potential of
Online Life Insurance Market

 Expect growth of online insurance market
based on growing consumers intension
14.0 %

12.5 %

Market share of direct automobile insurance1
ダイレクト自動車保険シェア

12.0 %
10.0 %

Market share of online life insurance2
オンライン生命保険シェア（加入）10.5 %

Ratio of life insurance application intention via online3
オンライン生命保険シェア（加入意向）

9.1 %
8.0 %

7.9 %
8.0 %

5.9 %
6.0 %
4.0 %

4.5 %

2.0 %
0.0 %

2.9 %
0.2 %

0.8 %

1.8 %

3.3 %

2.2 %

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
1.

Ratio of direct automobile insurance to direct writing premiums in whole automobile insurance market

2.

Ratio of online application to whole application channels of life insurance

3.

Ratio of consumers who intend to apply via online in case he/she applies life insurance in the future2Priority Areas during 10 Years

Start-up period

Previous mid-termbusiness plan period

Current mid-termbusiness plan period

Telephoneconsultation

Telephoneconsultation

SPH channel

SPH channel

PC channel

PC channel

PC channel

BrandBrandBrandProductProductProductPR

PRPR

Promotion

Promotion

Promotion

AgentAgent andwhite label (KDDI)

competitiveness2016-2018

Product

2013-2015

Visit

Apply

Promotion
capabilities

2008-2012

Customerexperience Responding to changing customer needs
for sustainable growth3

Mission

Help our customers embrace life more fully
by offering comprehensible, costcompetitive and convenient products andservices

VisionBe the leading company driving the growthof the online life insurance market

Priority areas

New Management Policy• Innovation of customer experience
Enhancing and evolving the quality of all services with digital technology• Enhancement of promotion capabilities
Generating massive customer traffic by active promotion and expansion ofagent sales and white label business4

Long-term Profit Not Reflectedunder Current Statutory Accounting
 Taking time to generate profit, as initial cost isrecognized at the time of acquisition, and the revenue iscollected gradually over long period
Approximate profit structure for one policy: Premiums: Operation expenses1 excludingmarketingexpenses: MarketingexpensesTotal profit/loss

Collect revenue
over long period

Accounting
profit/loss
Initialfiscal year
初年度

Year 22年目

Year 33年目

Year 44年目…

Year X
X年目

Revenue
ExpenseHeavy initial cost1.

Costs for policy management, payment of insurance claims and benefit claims, etc.

5Business Indicators
 Aim for sustainable growth ofEmbedded Value
Key businessindicators ofcorporate value

Business
indicators
supporting
sustainablegrowth ofcorporate value

1.
2.

Embedded Value(EV)

Growthindicators
Profitability
indicators
Soundnessindicators

 European Embedded Value (EEV)1
 Adjusted incremental EV2

 In-force business performance New business performance Adjusted profit(Ordinary profit excl. marketing expenses)- Operating expenses ratio excluding marketing expenses Marketing efficiency of new business Solvency margin ratio

EEV is one of the calculation metrology of EV. The EEV Principles and related guidance were published in May 2004 by the CFO Forum, an organization comprising the chief
financial officers of Europe's leading life insurers, in order to improve consistency and transparency in EV reporting.
Adjusted incremental EV consisted of components accurately reflecting our business growth in 1H of FY2018

6Management Goal
 Aim to achieve EEV of 100 billion yenby business growth in a mid-term
1（百万円）
EEV(JPY mn)

100,000: Value of in-force business: Adjusted net worth

44,44031,284
18,547 18,746

36,261

22,907 25,248

12/03 13/03 14/03 15/03 16/03 17/03 18/03 19/03
1.

(YY/MM)

Lifenet’s EEV is calculated following the EEV Principles and Guidance and in terms of allowance for risk, MCEV Principles (The European Insurance CFO Forum Market Consistent Embedded ValuePrinciples©) is referred. From fiscal 2016 onward, a predetermined ultimate forward rate has been used to extrapolate the level of ultra-long-term interest rates past the last liquid data point.
This method of extrapolation has also been used to restate EEV as of March 31, 2016.

7

LIFENET Manifesto
Comprehensible, Cost-Competitive, ConvenientI.

Our Guiding Principles(1) Creating the life insurance of the future without losing sight of its original
premise: “an ounce of prevention is worth more than a pound of cure.”(2) Listening to what our customers are saying. Recognizing their needs andacting accordingly. Allowing our actions to be borne out of their voices andneeds.
(3) Delivering the caliber of products and services that we would feel
confident recommending to our own friends and families.
(4) Being a “straight-shooter”. Committing to transparency. Communicating
openly about our management team, our products, and our employees.
(5) Embracing diversity and dialogue to keep us abreast of changing needs
and preferences. Delivering peace of mind that we’ll be around in 100years.
(6) Acting in good faith means always taking the high road when it comes tocompliance and ethics.

III.

Making Life Insurance Accessible Again - Affordable(1) Giving the customer what he/she needs. No more, no less at a fair price.
(2) Staying vigilant as to how we can provide our products more costefficiently.
(3) Always putting ourselves in our customers’ shoes in thinking about how tominimize their premiums.

II.

Making Life Insurance Accessible Again - Headache-free(1) Helping the customers help themselves. By making our materials easy tounderstand, customers can determine which coverage is truly the best fit.
(2) Turning “clauses” in the insurance contract into succinct points that yourgrandmother could grasp.
(3) Making all touch points headache-free. Beyond the application process,ensuring the claims and billing processes are also easy to understand.

IV.

Making Life Insurance Accessible Again - Convenient(1) Thinking about our customers’ convenience from every angle and every
touch point along the way.
(2) Forming alliances with like-minded partners who can add value above andbeyond our products and services to our customers.
(3) Providing health and wellness tips beyond the framework of life insurance
to create value in our policyholders’ lives.
(4) Creating a precedent for future generations as to what life insurance is(and should be) all about.

We wish to be a company that helps our customers embrace life more fully.
In order to live out that vision, we continue to challenge ourselves.

8All information on this document that is nothistorical fact constitutes forward-looking
information and is based on assumptions andforecasts available to the company at the time ofpreparation. The company cannot guarantee theaccuracy of these assumptions and forecasts.
Earnings projections and other information on thismay differ materially from actual performance due
to various risks and uncertainties.
This is a translation of the original Japanese
document, prepared and provided solely forreaders' convenience. In case of any discrepancy ordispute, the Japanese document prevails.

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