NEWS RELEASE
August 10, 2016
Daisuke Iwase, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 1Q of Fiscal 2016 Ending March 31, 2017
Ordinary income of 2,594 million yen, year on year 13.6% up
TOKYO, August 10, 2016 - LIFENET INSURANCE COMPANY (TSE Mothers 7157, President
Daisuke Iwase, URL: http://ir.lifenet-seimei.co.jp/en/) discloses financial results for the firstquarter of fiscal 2016 ending March 31, 2017.
1．Overview of the financial results for 1Q of fiscal 2016
(1) Business results
Condition of policies-in-force*1
Annualized premium of new business in 1Q ended June 30, 2016 was 341 million yen(122.1% of 1Q of fiscal 2015). The number of applications was 10,129 (129.3% of 1Q of fiscal
2015), with the number of new business at 7,307 (126.9% of 1Q of fiscal 2015). Annualized*1
premium of policies-in-force as of the end of 1Q of fiscal 2016 stands at 9,551 million yen(101.9% of March 31, 2016). The number of policies-in-force resulted in a total of 228,846*2(101.5% of March 31, 2016). Surrender and lapse ratio for 1Q of fiscal 2016 was 7.0% (7.0% of
1Q of fiscal 2015).
*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 1Q of fiscal 2016 increased to 2,444 million yen (109.1%
of 1Q of fiscal 2015) due to an increase in the number of policies-in-force. Investment income
grew to 51 million yen (124.1% of 1Q of fiscal 2015). Other ordinary income was 99 million yen
due to recording reversal of reserves for outstanding claims. As a result, ordinary income for 1Q
of fiscal 2016 amounted to 2,594 million yen (113.6% of 1Q of fiscal 2015).
Insurance claims and other was 564 million yen (187.3% of 1Q of fiscal 2015) mainly due to theincreased number of insurance claims. The ratio of insurance payment amounts to insurance
premiums increased to 21.5% for 1Q of fiscal 2016, compared with 11.5% for 1Q of fiscal 2015.
Provision for policy reserves and other came to 911 million yen (95.4% of 1Q of fiscal 2015). The
ratio of provision for policy reserves to insurance premiums was 38.8% for 1Q of fiscal 2016,
compared with 42.4% for 1Q of fiscal 2015. Operating expenses amounted to 861 million yen(114.7% of 1Q of fiscal 2015). The components of operating expenses were 339 million yen inmarketing expenses including advertising (121.5% of 1Q of fiscal 2015), 134 million yen incustomer service expenses (104.7% of 1Q of fiscal 2015), and 387 million yen in system andother expenses (112.9% of 1Q of fiscal 2015). Amortization of deferred assets under Article 113of the Insurance Business Act totaled 265 million yen because the deferred assets recognized
before fiscal 2012 are expected to be amortized using the straight-line method until fiscal 2017,
the tenth year after commencing business operations. Consequently, ordinary expenses for 1Q
of fiscal 2016 totaled 2,720 million yen (113.9% of 1Q of fiscal 2015).
As a result, ordinary loss totaled 125 million yen for 1Q of fiscal 2016, compared with 103
million yen for 1Q of fiscal 2015. Ordinary profit before amortization of deferred assets under
Article 113 of the Insurance Business Act recorded profitable of 139 million yen, compared with

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
ordinary profit of 161 million yen for 1Q of fiscal 2015. Net loss was 124 million yen, comparedwith 94 million yen for 1Q of fiscal 2015.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 100 million yen loss, compared with 81 million yen loss for 1Q of fiscal
2015. The components of fundamental profit were 549 million yen in mortality margin, 655 million
yen in expense loss and 5 million yen in interest margin.
(2) Financial condition
Assets, liabilities and net assets
Total assets as of June 30, 2016 amounted to 31,179 million yen (30,317 million yen as ofMarch 31, 2016). The major account balance was 24,252 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Deferred assets
under Article 113 of the Insurance Business Act decreased to 1,855 million yen due toamortization.
Liabilities amounted to 15,668 million yen as of June 30, 2016 (14,893 million yen as of March
31, 2016), owing to an increase in policy reserves as a result of the increased insurance
premiums. The major account balances were 14,463 million yen in policy reserves (including
1,332 million yen in contingency reserves), and 260 million yen in reserves for outstanding
claims.
Net assets increased to 15,511 million yen as of June 30, 2016 (15,423 million yen as of March
31, 2016) mainly due to increased valuation difference on available-for-sale securities along withan increase in unrealized gains of government bonds and corporate bonds despite the recordingof net loss for 1Q of fiscal 2016.
The solvency margin ratio as of June 30, 2016 was 2,778.7% (2,805.5% as of March 31, 2016),
which indicated that an adequate level of payment capacity was maintained.
Cash flows
For 1Q of fiscal 2016, net cash provided by operating activities amounted to 758 million yen(1,057 million yen provided for 1Q of fiscal 2015) due to an increase in insurance premiums andother despite of increased insurance claims. Net cash used by investing activities amounted to889 million yen (2,614 million yen used for 1Q of fiscal 2015) due to acquisition of securities. Net
cash used by financing activities amounted to 2 million yen (3,037 million yen provided for 1Q of
fiscal 2015).
Based on these activities described above, cash and cash equivalents as of June 30, 2016
totaled 2,601 million yen (2,734 million yen as of March 31, 2016).
(3) Business forecasts
The business forecasts for fiscal 2016 is as shown below. This will be disclosed ordinary
income and ordinary profit (loss) before amortization of deferred assets under Article 113 of the
Insurance Business Act.
(In millions of yen)
*1
Ordinary income
Ordinary profit (loss)
Business forecasts (Fiscal 2016)

10,000profitable(Reference) Results (Fiscal 2015)

9,387

584

*1 Based on ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
The deferred assets recognized before fiscal 2012 are to be amortized using the straight-line
method until fiscal 2017, the tenth year after commencing business operations, and amortizationof deferred assets will record 1,060 million yen each year onward. Accordingly, ordinary profit
before amortization of deferred assets under Article 113 of the Insurance Business Act, which isthe effective ordinary profit, is disclosed as the business forecasts.

About LIFENET URL: http://ir.lifenet-seimei.co.jp/en/
Returning to the original purpose of life insurance - mutual support - LIFENET INSURANCE
was founded with the goal of offering simple, convenient and competitively priced products andservices 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.
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.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

NEWS RELEASE
2. Non-consolidated Financial Statements(1) Balance Sheets(In millions of yen)March 31,
June 30,
2016
2016
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 ························································
Deferred assets under Article 113 of the Insurance Business Act ··Other ·················································································

734
1,999
1,035
23,067
10,102
1,521
10,428
211
804
－
72
437
0
27
2,941
680
2,120
141

1,101
1,499
999
24,252
10,264
1,566
10,967
213
731
509
66
457
0
97
2,703
692
1,855
156

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

30,317

31,179LIABILITIESPolicy reserves and other ························································

13,90814,723

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

357

260

Policy reserves ······························································
Agency accounts payable ·······················································
Reinsurance accounts payable ·················································
Other liabilities ······································································
Reserves under the special laws ···············································
Reserve for price fluctuations ············································
Deferred tax liabilities ·····························································

13,551
8
56
505
12
12
401

14,463
18
59
371
14
14
481

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

14,893

15,668NET ASSETS
Capital stock ········································································
Capital surplus ······································································
Retained earnings ·································································

12,02012,020(9,227)

12,02012,020(9,351)

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

14,813

14,689Valuation difference on available-for-sale securities ······················

591

802

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

591

802

Subscription rights to shares ····················································

19

19

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

15,423

15,511

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

30,317

31,179Copyright© 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 ·························
Gains 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 ········································
Losses on money held in trust ························
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-deferred ················································
Income taxes ····························································Net income (loss) ······················································(In millions of yen)Three months ended June 30
2015
2016
2,284
2,594
2,241
2,444
2,198
2,347
42
97
41
51
38
51
2
－
0
－
1
99
－
96
1
2
2,387
2,720
301
564
154
375
99
130
0
－
48
59
954
911
23
－
931
911
0
0
0
0
－
0
751
861
380
382
(103)
(125)
0
1
0
1
0
1
(104)
(126)
11
0
(22)
(3)
(10)
(2)
(94)
(124)

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5NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)Three months ended June 30
2015
2016
Cash flows from operating activities
Income (loss) before income taxes ·····································

(104)

(126)

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

54

58

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

23

(96)

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

931

911

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

0

1

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

(38)

(51)

Loss (gain) related to securities ··········································(0)－Interest expenses ···························································

00Decrease (increase) in agency accounts receivable ···············

(0)

(0)

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

(18)

(69)

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

253

251

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

0

10

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

2

2

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

(77)

(146)

Other, net ······································································(2)0

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

1,025

745

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

36
(0)

87
(0)

Income taxes paid ···························································

(4)

(73)

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

1,057

758

Cash flows from investing activities
Purchase of securities ······················································(3,179)(1,001)

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

574

200

Total of net cash provided by (used in) investment transactions ···(2,604)(801)

Total of net cash provided by (used in) operating activities and investment transactions ···(1,547)(42)

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

(5)
(4)

－
(87)

Net cash provided by (used in) investing activities ·············(2,614)(889)

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

3,040

－

Repayments of lease liabilities ···········································

(2)

(2)

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

3,037

(2)

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

1,480

(132)

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

731

2,734

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

2,212

2,601

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6