Presentation Material for
Business Plan and Growth Potential

July 2022
LIFENET INSURANCE COMPANY

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

0Table of Contents

Ⅰ. Company Overview and Japanese Life Insurance
Industry Trends

Ⅱ. Business Model

Ⅲ. Growth Strategy

Ⅳ. Risk Information

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1Lifenet is…
◼ Lifenet’s management philosophy is helping our customers embrace life more fully by offering comprehensible, costcompetitive and convenient products and services based on the highest levels of business integrity.
◼ With the internet as our main sales channel, we utilize technology and strive to be the leading company driving the
growth of the online life insurance market through our customer-centric products and services.

Comprehensible

Cost-Competitive
Convenient

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

2

LIFENET Manifesto◼ The Lifenet Manifesto contains the guiding principles for our company.
◼ It was formulated by the company founders through repeated discussions on the direction of the company before
business commencement.

Comprehensible, Cost-Competitive, ConvenientI.

II.

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 100
years.
(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.

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.
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

Lifenet at a Glance
History

Stock Information•

Tokyo Stock Exchange, Growth– market of the high growth and emerging stocks

Listed on Tokyo Stock Exchange,
Mothers•

Ticker:•Total number of authorized shares:

Issuance of new shares throughthird-party allotment to KDDI
CORPORATION•

Total number of issued shares:•

Number of Shareholders: 5,845 (as of Mar. 31, 2022)•

Oct. 23, 2006

Established•May 18, 2008

Commenced operation•

Mar. 15, 2012
May 22, 2015•

Jul. 20, 2020•

200,000,000

69,679,538 (as of Mar. 31, 2022)

Issuance of new shares by way
of international offering

Sep. 15, 2021

Issuance of new shares by way
of international offering
Key Figures (FYE 2022/3)••

Annualized Premiums1of Policies-in-force:•

Number of Policies-in-force:•

Sum insured:•

Premium and Other Income：

JPY 25,420mn•

Total Assets:

JPY 67,820mn•

Net Assets:

JPY 22,071mn•

Embedded Value：

JPY 116,604mn•

Number of Employees：－Sales Representative：

•
1.

7157

Solvency Margin Ratio：

Major Shareholders (as of March 31, 2022)•

au Financial Holdings Corporation

18.36%•JP MORGAN CHASE BANK 380742

8.15%

•

GOLDMAN SACHS INTERNATIONAL

7.62%

•

Seven Financial Service Co., Ltd.

4.66%

•

Custody Bank of Japan, Ltd.(Trust Account)

3.83%

•

GOVERNMENT OF NORWAY

2.89%

•

The Master Trust Bank of Japan, Ltd.
(Trust Account)

2.65%

174

•

STATE STREET BANK AND TRUST COMPANY 505103 2.48%

0•

INTERACTIVE BROKERS LLC

3,182%•

STATE STREET BANK AND TRUST COMPANY 510312 1.83%

JPY 21,511mn
507,428

JPY 3,351,278mn

2.03%

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, thus the annualized premium is calculated as multiplying the monthly premium by 12 months.
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

4

Management Team (as of June 26, 2022)◼ Management team is comprised of individuals of various backgrounds across a wide age range.
◼ Lifenet made the transition to a company with an Audit and Supervisory Committee in June 2021 to further
strengthen the supervisory function of the Board of Directors and enhance its corporate governance.
Directors
Yasuhiro Koba
Ryosuke Mori

Director, Executive Vice President
Executive Officer of Product Development
and Investment

Representative Director and President
Goldman Sachs Japan Co., Ltd.
Head of Corporate Planning Department andGeneral Manager of Corporate Strategy
Division at Lifenet

Ministry of Health, Labour and Welfare
General Manager of Corporate Administration Division,
General Manager of Corporate Planning and General
Manager of Sales & Marketing Division at Lifenet

Ryosuke Kondo

Junpei Yokozawa

Director
General Manager of Sales & Marketing Division

Director
General Manager of Customer Services Division
General Manager of Information Systems Strategy DivisionJAPAN POST INSURANCE CO., Ltd.
Head of Corporate Planning Department andExecutive Officer of Corporate Planning, ProductDevelopment and Investment at Lifenet
Director, LIFENET MIRAI INC.

NTT DATA Net’s CORPORATIONHead of KDDI Business Department and head of Operations
Planning Department at Lifenet

Takeshi Saito

Jun Hasebe
OutsideOutsideRepresentative Director and President,
Tokyo Relations Inc.

Managing Director and Chief Financial Officer,
au Financial Holdings Corporation

Directors (the Audit and Supervisory Committee Member)
Takahiro Yamasaki
Full-time

Keiko Hayashi

Tomoyuki Yamashita

Nippon Life Insurance Company
Nippon Venture Capital Co., Ltd.
Full-time audit and supervisoryboard member at Lifenet
Corporate Auditor, LIFENET MIRAI
Inc.

OutsideOutside

Executive Board Member,
The Japanese Institute of Certified
Public Accountants
Partner, Deloitte Touche Tohmatsu LLC

Representative Director andPresident, Aon Solutions JapanLtd.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5Life Insurance Market in Japan◼ Japan's life insurance market is the world’s third largest, worth approximately JPY 30 trillion.
◼ We believe there is a high need for life insurance. There were around 11.3 million new enrollments in fiscal 2020
despite approximately 90% of Japanese households have already taken out life insurance.

Market size by industry in Japan1

32.0 trillion yen

LifeinsuranceBank
Telecommunications
business
Conveniencestore
Non-life
insurance

26.2 trillion yen
14.8 trillion yen
10.6 trillion yen

Ratio of householdswith policies2:

89.8%
Average annual
premiums
per household2:

JPY 371 thousand

8.6 trillion yen

Number of new policies
for fiscal 20203:

11.3 million
1.

2.
3.

life insurance: Insurance premiums and other, bank: Ordinary income, telecommunication business and convenience store: operating revenue, non-life insurance: Net
premiums written. Annual statistics (FY2021) compiled by The Life Insurance Association of Japan, Financial Statements Statistics of Corporation by Industry (fiscal
2019) compiled by Ministry of Finance, The Basic Survey Result for information and communications industry (FY2019) compiled by the Ministry of Internal Affairs andCommunications and Ministry of Economy, Trade and Industry, Convenience store FC statistics compiled (2020) by Japan Franchise Association, Data by insurance type
(FY2020) compiled by The General Insurance Association of Japan.
Data for FY2021 compiled by a nationwide report on the life insurance industry (2021) by Japan Institute of Life Insurance.
Annual statistics by The Life Insurance Association of Japan (2020)
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

6

Trend of Customer’s Purchasing Channel and Intention◼ Although sales representative accounts for a large proportion of life insurance’s purchasing channel, the ratio of
insurance agent is increasing. In addition, the figure shows that preferred sales channels are diversifying.

Trends of Sales Channels and Preferred Sales Channels
in the future

The Industry and Lifenet’s Number of
Policies-in-force

4.0%

4.5%
11.5%

12.8%

6.9%

Japanese individuallife insurance market:

17.4% Online

190mm

2

15.3%

6.4%

26.6%
8.8%

Others,Unknown

Insurance agents

12.3% Staffs
9.0%

70.7%
59.1%

Post office,Bank or
Securities
brokers

Lifenet’s number ofpolicies-in-force:

In-house

34.8% sales

0.5mm

3

representatives

2012
2012年

2015
2015年

2018
2018年

Trends of Sales Channels
1.
2.
3.

2021
2021年

2021
2021年

(year)

今後の加入意向
Preferredsales
channel in the future

Nationwide Report on the Life Insurance Industry (2021) by the Japan Institute of Life Insurance
The Life Insurance Association of Japan, “Annual Statistics, Summary of Life Insurance Business”, data for FY2020“May 2022: MONTHLY DISCLOSURE” by Lifenet
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

7

Table of Contents

Ⅰ. Company Overview and Japanese Life Insurance
Industry Trends

Ⅱ. Business Model

Ⅲ. Growth Strategy

Ⅳ. Risk Information

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

8

Business Model with Manifesto

High integrity◼ Actively disclose relevant information◼ Communicate with customers proactively

Comprehensiveness◼ Provide very simple and pure protection products◼ Develop easy-to-understand and customer friendly website

Cost-Competitiveness◼ Offer competitively priced products by Internet-based low cost operation

Convenience◼ Provide convenient services utilizing smartphones◼ All procedures provided online, from applying to claiming benefits

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

9

Management with High Level of Business Integrity◼ We provide life insurance online, but we are committed to transparency and communicating openly about
management of the company and our products, employees, and work place via our website.

Transparent Company

Transparent disclosure• Disclosure of insurance premiums• Regular policyholder meetings• Disclosure of agent commission rates• Introduction of employees and company through• Disclosure of monthly operating figures

employee’s blog since commencement of business• Diverse employee backgrounds

Term life Kazoku
E.g. 30 years old, male,insurance term 10 years,
insurance coverage amount 30 million yen

Premium

Net premium

Disclosure of breakdown of insurance premium (example)

Net premium

2,000yen(74%)

Expense loading

704yen(26%)

Expenseloading

Premium（Net premium＋Expense
loading）(half of employees from other industries)
Lifenet JOURNAL Online including employee’s blog

2,704yen(100%)(As of June 30, 2022)

https://media.lifenet-seimei.co.jp/(Japanese version only)
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

10

Simple Products◼ We offer simple and competitively priced pure protection products. Internet-based low cost operations enable us
to be extremely price competitive.
◼ We have provided our main product - term life – with the lowest premium levels in the industry. We offer industryfirst coverage3 for long-term disability. Cancer Insurance has a broad range of coverage.

Long-term
Disability
Hataraku-Hito 3

Term Life
KazokuFor death due to illness, accident or disaster

Whole-life
MedicalJibun 3For hospitalization, surgery
and advanced medical care

For being unable to work
due to disease or injuries

Whole-life Medical
Jibun 3for Women
For more extensive coverage for womenCancer
Double Yell
For double support of treatment
and income decreases
1.
2.
3.

Our products have no maturity insurance, no dividends and no cash surrender value on our products.
As of June 2022, we offer au Life Insurance with Refunds through KDDI CORPORATION, Seven Financial Service Life Insurance through Seven Financial Service Co., Ltd.
and Money Forward Life Insurance through Money Forward, Inc.
Lifenet Research as of the end of April 2021
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

11External Evaluations of Products◼ Our products are highly supported by customers and receive high evaluations.

Whole-life
MedicalTerm Life

Cancer

1. The Most Chosen Insurance Ranking 2022 of HOKEN ICHIBA is based on compiled date from the number of application from January through December 2021.
2. The most popular insurance products in the category from January through December 2021, receiving the highest number of applications of Kakaku.com Insurance,
the sales agent company of insurance products.
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

12

Develop Easy-to-understand and Customer Friendly Website (e.g. Quotes)◼ Our website is simple and easy-to-understand for customers.
Selectproducts

SelectbirthdaySelect sex

Total monthly
premium

All customers need to do to get quotes isselect birthday, sex and insurance
products
Calculated on June 30, 2022

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

13

Competitively Priced Products◼ We do not have sales representatives or branches for selling insurance. We use the Internet to sell our products.
This enables us to control sales expenses and maintain strong cost competitiveness, while also providing productswith inexpensive insurance premiums.
Structure of premium(Life insurance)

Savings of insurance premium1
after switching to Lifenet

Average annual saving
88,536 yen
・Office costs

Load
Charge・Personnel costs

・Utility costs
・Other costs

・Personnel costs

Averagemonthly
premium
15,573yen

・Utility
Othercosts
costs
・Other costs

1.

Net premiums(Used forinsurance
payouts andother payments)

Netpremiums

Face-to-facesalesLifenetAveragemonthly
premium

8,195
yen
BeforeswitchingAfterswitching2021 survey results of the “Customer-oriented business management policy” by Lifenet. Average annual cost saving does not take into account any
changes in scope of insurance coverage.
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

14

Pursuing Convenience◼ We are striving to provide the convenience that only an online insurance company can provide. We use technology
to establish an environment that enables customers to request insurance consultation, apply for insurance, andclaim benefits 24 hours a day, 365 days a year, as it fits into their lifestyles.
Provide convenient services by utilizing smartphones

Insurance
Consultation•

Using LINE enables
customers to seek
consultation on insurance
via chat.

（Launched in Jul. 2016)
1.
2.

Application•

A paperless application
process that customers cancomplete by submitting
photos of necessary
documents（Launched in Dec. 2016)

Procedures while
enrolled in a policy•

Enable to log-in to My Page,
using fingerprint and facerecognition technology

Claim payments••（Launched in Jun. 2018)

Medical certification
submission no longer
necessary for mostmedical claims1
Claim medical insurance
benefits online, 24 hours
a day, 7days a week

Fiscal 2021
Average Claims
Payment Period2
2.84 days

It is possible to omit the medical certification submission only for medical insurance. The submission is required under certain conditions.
Not including the number of days required to obtain lacking documents. Cases which required fact confirmation before insurance payments were made are not included when calculating the average
number of days required for payment.

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15

Unique Customer Base
◼ New customers in their 20s to 40s make up 77% of our policyholder base, with more than 50% of newpolicyholders taking out life insurance for the first time.
◼ We have maintained certain level of surrender and lapse ratio since business commencement.
Number of new policies by age group

Customer Situation3

Lifenet1

The share of households taking out life insurance forthe first time accounted for the majority, despite thepercentage of households holding policies being 90%.

Ratio of 20s to 40s

6%
18%
17%

77%

Additional or switching policies
by existing Lifenet’s customers

7%First time50%

Supplementing existing coverby different insurance

28%

18%

30%
-19
20-29
30-39
40-49

Reference: Industry average2

Taking out life insurance
for the first time50%
Switching fromdifferent insurers

24%

50-59

18%
13%
17%

12%

60-

Surrender and lapse ratio
Maintaining a ratio of between around 6% to 7%
since business commencement in May 2008.

20%
Surrender and lapse ratio in fiscal 2021: 6.6%

19%

1.
2.
3.

Lifenet Insurance new customer data (FY2020, N = 100,587) compiled by Lifenet customer survey.
Annual statistics on customer age and gender (FY2020) compiled by The Life Insurance Associationof Japan. Based on number of new policies.
FY2021 valid responses of 2,022.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

16

Annualized premium growth & Initiatives◼ Due to various initiatives, in-force business has increased steadily since we first commenced business.
The number of policies-in-force exceeded 500,000 in February 2022.
21,511
Launched New Long-term Disability
Business Alliance with Money Forward

Annualized premium (million yen)

18,713Business Alliance with
Seven Financial Service
Renewal of
Whole-life Medical

CancerInsurance
Paperlessapplication process

15,514

Renewal ofTerm Life

13,085

Launched
au Life Insurancewith KDDI

11,147
Capital & Business Alliance with KDDI

9,377

Started application via
smartphone

Business
Commencement

10,088

8,793
8,077

IPO & Listing on
the TSE “Mothers”
Launched
Long-term Disability

6,875

4,870

2,659

Expense loading
rates disclosed

1,041

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

FY2018FY2019FY2020

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Sep.

Dec.

Jun.

Mar.

Dec.

Jun.

Sep.

Mar.

Sep.

Dec.

Jun.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

Mar.

Dec.

Jun.

Sep.

247

FY2021

17

Reasons for Adopting EV as Key Indicator◼ Typically, large expenses are incurred when life insurance policies are acquired (1). However, because the profit isearned over a long period of time, there is a time lag between the recognition of costs and revenue. (2)◼ In other words, the greater the growth in new business, the greater the negative impact on current period profits (3),thus necessary to look at embedded value (EV) to evaluate the corporate value of a life insurance company as it is anindicator of long-term profitability.

: Premiums: Operation expenses1 excluding marketing expenses: Marketing expenses

Accounting
profit/loss (3)Initialfiscal year
初年度

Year 22年目

Year 33年目

Year 44年目

Insurance premiums
are revenue that isrecognized over a long…time (2)period ofYear X
X年目

Revenue
ExpenseMarketingexpenses

The expenses incurred to acquire new businessare mostly recognized in the initial fiscal year.
The greater the growth in new business, thegreater the increase in costs (1)Economic Value

Long-term profitability must be considered.
1.

Costs for policy management, payment of insurance claims and benefit claims, etc.
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18

Structure of Embedded Value◼ Embedded value is the indicator of long-term profitability, and is the sum of adjusted net worth and value of inforce business.
◼ The value of in-force business is the future profit stream that will likely be derived from current policies,
discounted to present value.
◼ Profit/loss for the current fiscal year is reflected in end-of-period net assets. In general, an increase in new
business contributes to the increase in the value of in-force business in the period.

EV

Adjusted
net worth

Value of in-force
business(Net assets at end of period + adjustments)

Profit/loss for thecurrent fiscal year isreflected in end-ofperiod net assets

Revenue

Revenue
ExpenseExpenseProfit/Loss for
current fiscal year

Unrealized future profits/losses on policies-in-force
at the end of current fiscal year

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19

Strong EEV1 Growth◼ EEV and value of in-force business have been growing at a CAGR of 20%2 and 33%, respectively since IPO. EEV pershare has also steadily increased.
◼ We achieved our 2018 management goal of reaching European Embedded Value of JPY100 billion yen.

¥1,673¥1,570: Value of in-force business (JPY millions)¥1,430: Adjusted net worth (JPY millions)

116,604: EEV/share (JPY)
95,14073,431

91,43576,149¥441

60,87818,547
5,122
13,425

2012/03 ’13/03 ’14/03 ’15/03

12,553’16/03 ’17/03 ’18/03

18,99025,168’19/03 ’20/03 ’21/03 ’22/03(YY/MM)

1. 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 Value Principles©) is referred. From fiscal 2016 onward, a predetermined ultimate forward rate has been used to extrapolate the level of ultralong-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.
2. The calculation includes 3,040 million yen in proceeds from a third-party allotment in May 2015 and 9,005 million yen from overseas public offering in July 2020 and
9,771 million yen from overseas public offering in September 2021.
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

20

FY2021 Results◼ Annualized premium1 of policies-in-force increased by 15% from the end of the previous fiscal year to JPY21.5 billion,
continuing double-digit growth.

（JPY millions）

FY2021 Results

1.

FY2020 Results

Annualized
premium1 ofpolicies-in-force

21,511

18,713

Annualized
premium1 of new
business

4,089

4,197

Of which: impact
of modified
co-insurance

Of which: impact
of modified
co-insurance

Ordinary income

26,167

4,852

20,7892,778

Ordinary profit (loss)(3,245)

1,283(3,089)804

Net income (loss)(3,319)1,283(3,114)804

The amount of money equivalent to what is to be paid to have the insurance coverage for one year. All payments are monthly installments, thus the annualized
premium is calculated as multiplying the monthly premium by 12 months.
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21

Overseas Public Offering in September 2021
◼ We believe that customers‘ needs are diversifying in the online services with backdrop of the structural megatrendsof digitalization of financial services. We aim for further growth and transformation into online life insurance
platformer with newly raised capital.

Offering Summary
Number of
Shares Offered

9,000,000 shares

Amount Raised

JPY 9.7 billion

Contents

Use ofProceeds

Applicable
PeriodAmount Raised（JPY millions）

Amount Allocated（JPY millions）
As of Mar. 2022

Operating expenses, primarily comprisingmarketing expenses for acquiring new
business

6,800

680

System development costs aimed at
responding to business environmentchanges

1,372

46

Investments in new businesses aimed atbuilding an online insurance platform andinitiatives with Lifenet’s business partners

1,500

3

Between the fiscal year ending 31 March 2022 and the fiscal year ending 31 March 2026

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22

Table of Contents

Ⅰ. Company Overview and Japanese Life Insurance
Industry Trends

Ⅱ. Business Model

Ⅲ. Growth Strategy

Ⅳ. Risk Information

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

23

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

Management goal

Priority
areas

Help our customers embrace life more fully
by offering comprehensible, cost-competitiveand convenient products and services

VisionManagement 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 of
agent sales and white label business

Aim to achieve EEV (European Embedded
Value) of 200 billion yen by business growth
in a mid-term
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

24

Growth Potential of Online Insurance Market◼ We believe that the growth potential of the online life insurance market has been steadily expanding against the
backdrop of the structural megatrends of digitalization of financial services. We have achieved steady growth in our
in-force policies performance accordingly.

Ratio of intention to purchase online1

17.4

9.1% →（2015）

Intention increased in all
generations
Ratio of intention to purchase insurance
online by age group1％（2021）

Lifenet’s annualized
premium2 of policies-in-force

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
FY2015

1.
2.

FY2016FY2017FY2018FY2019FY2020

FY2021

2015

2021

29 or
lower

12.5%

19.2%

30s

11.2%

19.0%

40s

14.6%

23.7%

50s

13.3%

20.9%

60s

7.9%

19.9%

70 and
over

2.2%

7.4%

Nationwide Report on the Life Insurance Industry (2021) by the Japan Institute of Life Insurance
The amount of money equivalent to what is to be paid to have the insurance coverage for one year. All payments are monthly installments, thus the annualized premium is calculated as
multiplying the monthly premium by 12 months.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

25

Competitive Landscape of Online Life Insurance Market◼ In general, there are three phases in the development process of a new market, as shown in the figure: a period
when a small number of players develop the market, a period when the market expands as more players competewith each other, and a period when a small number of dominant players enjoy the fruits of the expanded market.
◼ We will maintain and strengthen the competitive advantage and will enhance investment for growth more than everto solidify our position as the number one player in the online life insurance market.
Expansion of online life insurance market and Lifenet’s position (Image for illustrative purpose）

MarketMarket developmentby pioneers

Market expansion and increased
competition due to new entrants

Narrowing down toa few main companies

Lifenet: Market size (Image for illustrative purpose）

Becoming a dominant
player in the market
Strengthen
competitive advantagesby aggressive investment

Keeping stable
operating efficiency

Present

FutureReaped the merit
as a challenger

Businesscommencement

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

26

Our Unique Position◼ By retaining independent administration, Lifenet has consistently realized customer-oriented management basedon LIFENET philosophy since our business commencement, while taking advantage of our uniqueness to conductbusiness online.
◼ We continue to provide Comprehensible, Cost-competitive and Convenient products and services through direct
sales on the Internet, and we also utilize various partnerships to deliver our value to customers.

Our Position in the life insurance market

Our Unique Value

Independent◼ Strength of “Independent”• Customer-oriented business• Partnership with companies oragencies that empathize
LIFENET philosophy

Unique Position“Independent × Online”
Insurance
Agencies◼ Strength of “Online Channel”
In-person
ChannelOnlineChannelMajor Life Insurance
Companies

Life Insurance
Companies with
Ecosystem

Subsidiary Insurer ofMajor insurancecompanies

Group
Management• Simple and easy-to understandcoverage• Competitively priced products• 24H available application withsmartphone

Utilizing the Internet to provide New andCustomer-Oriented life insurance value
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

27

Growth Strategy◼ We will aggressively invest in three areas: business, system, and organization. We aim for achieving strong growth tomaintain and strengthen the competitive advantage we have built up to date as an independent online life insurer,
and to solidify our position as the No. 1 online life insurer.

Business• Continuously enhance UI/UX for website
and strengthen sales channel• Expand platform business

System• Optimize customer touchpoint• Deploy a cloud-based system andimprove infrastructure cost efficiencies

Organization• Promote recruitment of diverse talent• Provide opportunities for challenge
and growth

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

28

Growth on Two Main Channels◼ We aim to achieve double-digit growth in in-force business performance on two pillars: the Internet direct channel
and the White label channel.

Internet direct channel
Strengthening touchpoint withyoung generation• Work on diversification of promotions and appeal toyoung generations effectively

White label channel
Providing new customer experiences withexisting partners• Aim to lead initiatives leveraging the assets ofpartner companies• Exploring the possibility of new partners
Annualized premium2 of policies-in-force from white label channel

New policyholders' distribution by age group1

20s-40s

FY2017
1.
2.

FY2021(YY/MM)

Based on the number of Lifenet’s new policyholders in each fiscal year
The amount of money equivalent to what is to be paid to have the insurance coverage for one year. All payments are monthly installments, thus the annualized premium is calculated as
multiplying the monthly premium by 12 months.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

29

Journey to Platformer◼ We established a subsidiary in FY2021 with the goal of becoming an online life insurance platform. From FY2022, wewill focus particularly on the online insurance agency business and strive to build the foundation with aim of offering
all online insurance products.
◼ In the future, we will become a platform that provides online solutions to consumers' concerns and issues regarding
financial services, including insurance.
Online insurance platform（Image for illustrative purpose）
Customers

Online platform
connecting customers and services

Policyholders

Products & Services

Other
companies’
products

Potential
customers

Mortgage

AssetManagement

FamilyOther
companies’
services
CompareReview Manage

Claim

Healthcare+

FY2021

FY2022

Established Lifenet MIRAI Inc.

Focus on online insurance agency business• Launched insurance agency business andinsurance policy management services• Approximately 20 products are listed on ourplatform••

Expand the number of products and aim for listing all online
insurance products (about 100 products) in the future
Enhance function and customer attraction of our website

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

30

Investment in System Development◼ From FY2022, we will aggressively invest in the development of back-end infrastructure in addition to the front-end
infrastructure.
◼ Through these investments, we will build a robust system structure that can improve operating expenses ratio andflexibly accommodate future business expansion.

FY2021

Revamping the frontend infrastructure
Agiledevelopment

Cloud
migration• Accelerate speed of UI/UXdevelopment andimprovement• Improve scalability andon-demand performance

Enhancementof scalability
Speeding up
development

Front-end

CX platform

From FY2022

Renewal of the backend infrastructure
Cloud
migration

CRM

Data driven marketing• Innovate CX by improving
the efficiency of data
Data analysis
analysis and optimizing
touch points with customers• Reduce operating expenses
by improving efficiency ofinfrastructure cost

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

Back-end

Cost
Reduction

CRM

Marketingautomation

31

Human Capital Investment◼ Since our business commencement in 2008, we have been hiring people with diverse backgrounds, free fromindustry norms, in order to provide new life insurance value from the customer's perspective.
◼ From FY2022, we will invest in human capital for sustainable growth of corporate value through aggressive
recruitment, promotion of diversity and our personnel system that supports the growth and challenges of theorganization and individuals.
Our Guiding
Principles

Lifenet philosophy:

Embracing diversity and dialogue to keep us abreast of changing
needs and preferences.
Areas

PRIDE Index Gold Ratingfor 6th consecutive year1

the 2022 Certified Health &Productivity Management
Outstanding Organizations
Recognition Program2

Ongoing Initiatives

Diversity &Inclusion• Retain diverse workforce (1)(2)Engagement of
employees• Quarterly engagement surveys

Human resource
development• Support career enhancement• Training program for employees

1. Strengthen
recruitment activities
centering on systemengineers• Periodical 1-on-1 meetings• Personnel system to encourage thegrowth and challenge (3)2. Target 30%+ ofwomen in leadership
positions• Support system for work with cancer
treatment

Healthcare• Periodical physical/mental healthcheck-ups

Comfortableworkplace1.
2.

New investment
from FY2022• System for flexible working system andwork-from-home

3. Promoteorganizational andindividual growth andchallenge• Selectable working style

The PRIDE Index hosted by work with Pride is the benchmark for better working environment for LGBTQ in Japan.
Operated by the Ministry of Economy, Trade and Industry and The Nippon Kenko Kaigi

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

32

Initiatives for Sustainability◼ LIFENET philosophy is the heart of our company's sustainability.
◼ In order to continue to be needed by policyholders as an insurance company and to be supported by shareholders
and investors as a publicly listed company, we will promote initiatives for sustainability and enhance disclosure basedon our philosophy.

FY2021

From FY2022• Explained the following
initiatives sincebusiness commencement⁃ Enhancement of corporate
governance⁃ Customer-oriented businessconduct⁃ Adaption to social changes• Further information
disclosure based on
LIFENET philosophy• Continue to communicate
with ESG rating agencies• Launched new
Sustainability webpage
https://ir.lifenet-seimei.co.jp/en/sustainability.html

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

33

Adoption of International Financial Reporting Standards◼ We aim for the voluntary adoption of IFRS 17 from FY2023 to provide financial information with high international
comparability and to represent our performance more appropriately. After the voluntary adoption of IFRS, we expect
to record a profit continuously from the initial year of adoption under IFRS1.
◼ Capital adequacy2 and dividends will be regulated by statutory accounting standards (J-GAAP) even after the
adoption of IFRS.

Statutory accounting(J-GAAP)

Useful for investors’decision-making• Conservative• Historical locked-inassumptions at
policy inception• Best estimate basedon experience• Review periodically• Best estimate basedon experience• Review periodically

The expense isrecognized at the time ofacquisition.

The expected profit for thepolicy period isimmediately recognized.

The expected profit isallocated over the termof the policy.

Policyholder protection

Evaluation of
insurance liabilities
Timing ofprofit recognition(impact of new businessacquisition)

IFRS 17

Economic value of
insurance policies

Main objective(policy reserves)

Embedded value/
Value of new businessprofit・・・・

present
value ofprofitprofit
・・・・

loss

1.
2.

IFRS adoption is still in the preliminary stage, and the estimate is based on the current approximation. It is unaudited information and may differ from the actual financial information under
IFRS to be disclosed in the future.
Regarding capital adequacy, economic value-based solvency regulation is being considered for implementation toward 2025.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

34

Business Forecasts FY2022◼ We aim for double-digit growth in in-force business in FY2022.
Annualized premium1(JPY millions)(Results)

New business

Decreased business2(Business forecast)(Business forecast)
Surrender andlapse ratio

21,511

4,400

Policies-in-force(Business forecast)

24,4006-7%+13%2023/032022/03
FY2022 Forecastof which impact
of modified
co-insurance

Ordinary income

30,3006,300

26,167

4,852

Ordinary profit (loss)(3,400)1,000(3,245)

1,283

Net income (loss)(3,400)1,000(3,319)1,283(JPY millions)

1.
2.

(YY/MM)

FY2021 Resultsof which impact
of modified
co-insurance

The amount of money equivalent to what is to be paid to have the insurance coverage for one year. All payments are monthly installments, thus the annualized premium is calculated as
multiplying the monthly premium by 12 months.
Including death, expiration and others in addition to surrender and lapse.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

35

Future Direction◼ In FY2022, we will continue our efforts to achieve double-digit growth in in-force business. We will also strive to be
an online life insurance platformer, while aiming for the voluntary adoption of IFRS 17.
◼ On this basis, in FY2023, we expect to record a profit under IFRS and aim to achieve our management goal of
JPY200 billion in EEV in a medium term.

FY2023
FY2022

FY2021• Achieved JPY100
billion in EEV, andupdated the Goal to
JPY 200 billion• Exceeded 500,000
number of policiesin-force, up to 15%
YoY• Raised growth
capital1.

• Continue doubledigit growth in inforce business under
the structuralchanges• Invest intransformation into
online life insurance
platformer

Expect to record an
accounting profit
under IFRS 171
Mid-term
Management goal

Achieve EEV of
JPY 200 billion• Aim for voluntary
adoption of IFRS in
FY2023IFRS adoption is still in the preliminary stage, and the estimate is based on the current approximation. It is unaudited information and may differ from the actual financial information under
IFRS to be disclosed in the future.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

36

Table of Contents

Ⅰ. Company Overview and Japanese Life Insurance
Industry Trends

Ⅱ. Business Model

Ⅲ. Growth Strategy

Ⅳ. Risk Information

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

37

Major Risks（1/4）◼ We categorize 27 risks into "business strategy risks," "insurance underwriting risks," "market risks, credit risks andliquidity risks," and "operational risks”. Of these, the risks that are of particular significance in terms of their impact ifthey occur and possibility of occurrence are as follows.
Category

A. Business strategy risks

B. Insurance underwriting risks

C. Market risks, credit risks andliquidity risks

D. Operational risks

Major Risks

Severity

A-1 Competition in the life insurance industry
A-2 Investment in marketing expenses〇

A-3 Change in relationship with, or performance of business partners
A-4 Demographic movements in Japan
A-5 Climate change
A-6 Sustainability
A-7 Change in regulations
A-8 Change in social security system
A-9 Failure of other life insurance companies
A-10 Reputation in the online life insurance industry
A-11 Significant acceleration of IT innovationーB-1 Change in Mortality and morbidity

〇

B-2

ー

Accumulation of policy reserves

C-1 Change in interest rates

〇

C-2
C-3
C-4
C-5

Reinsurance transactions
Change in stock price, foreign exchange rates and others
Credit risks related to corporate bonds
Liquidity risksー

D-1 System failures
D-2 Violation of laws and ethical deviation from social norms
D-3 Information leakage

〇

D-4
D-5
D-6
D-7
D-8
D-9

ー

Business continuity amid catastrophes
Administrative risks
Misses on claim benefits payment
Human resource employment
Litigation
Risk management system

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

38

Major Risks（2/4）◼ Our inherent risks in the operation of life insurance business and our measures to the risks are as follows.
Priority High
(Occurrence and severity)

Major risk

■Competition in the life insurance industry
In the Japanese life insurance market, Lifenet faces
intense competition with domestic and foreignaffiliated life insurance companies as well as large
domestic financial institutions with insurance
subsidiaries.
If we are not able to maintain our competitive
advantages in the Internet direct channel, which is
our main sales channel, the number of new businessdeclines and the number of policies-in-force declines
due to surrender, which could have an adverse effecton the Lifenet’s business and our financial
performance.

■Investment in marketing expenses
The Company actively engages in various types ofadvertising campaigns, such as TV commercials andsearch-linked advertisements, with the aim ofincreasing awareness and acquiring new business.
If sales activities are not sufficiently effective or
properly conducted, or if consumer behavior forpurchasing insurance products online is not as
widespread as we anticipate, marketing expenses
efficiency may decrease, which could have an
adverse effect on the Lifenet’s business and ourfinancial performance.

Measures

With the digitization of financial
services and the spread of the
COVID-19 pandemic,
new players are entering themarket because life insurancecompanies with face-to-facechannel are pressured to go online
partially. We believe thatcompetitive environment is likely to
become severer as the online life
insurance market expands.

We design and develop our
products and services from thecustomer's perspectives to increasecustomer engagement andmaintain our competitiveness.
We will maintain and strengthen
the competitive advantage wehave built up in the online life
insurance market by taking
advantages of our experience todate such as aggressively investingin marketing expenses, expanding
our white-label business, sellingother companies' products throughour agency representation program.

There are a variety of short-termand long-term factors that
influence changes in customer
needs and trends in thesocioeconomic environment, whichconstantly affect the change inmarketing expenses efficiency. We
believe that regular monitoring andanalysis and appropriate controls
will reduce the potential of risk
occurrence related to theinvestment in marketing expenses.

The Company will make decisions
on the investment in marketing
expenses while regularly
monitoring and analyzing thebalance between the growth of
new business and marketing
expense efficiency.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

39

Major Risks（3/4）
Priority High
(Occurrence and severity)

Major risk

■Change in Mortality and morbidity
Life insurance premiums are calculated based on
actuarial assumption for premium such as expectedmortality rate, expected morbidity rate, expectedsurrender rate, and expected operating expense rate.
Thus, for example, actual mortality rate may become
higher than expected mortality rate, or may increase
from historical mortality experience, which could
cause higher claims payment than we expect.

■Change in interest rates
The Company mainly holds public and corporate
bonds with high credit ratings as its primary means ofasset investment.
If market interest rates rise significantly in the future,
the market value of our bonds may decline beyond
our expectations.
In addition, the value of future cash flows of
insurance policies and EEV (European Embedded
Value) or economic value-based capital, whichreflects these future cash flows and represents
corporate value, are also affected by changes ininterest rates.
If market conditions were to fluctuate significantly
beyond our ability to cope with, our financial
condition and results of operations could be adversely
affected.

MeasuresIn the event of mass casualties due
to a massive outbreak of an
infectious disease beyond the
COVID-19 pandemic or acatastrophe such as an earthquake,tsunami, or terrorist attack in adensely populated area like Tokyo or
Osaka, the Company is exposed to
the risk of large unpredictableobligations related to insurance
benefits and claims.
On the other hand, in light of current
trends in national mortality rates andmorbidity of diseases and disabilities,
we believe that the likelihood of suchan outbreak is low at this time.

We design appropriate coverage
and underwriting methods at thetime of product development toensure that mortality andmorbidity rates do not exceed
appropriate ranges.
The Company also regularly
monitor mortality and morbidity
rates and other experiences andcan revise underwriting methods
and products as necessary.
Also, stress tests are conducted toconfirm the impact and response in
the event of a large-scale disaster.

We recognize that the probabilityof interest rate fluctuations has
increased amid the current
significant changes in the world
economy and international politicalsituation under the influence of the
COVID-19 pandemic and thesituation in Ukraine.
We believe that we are wellcapitalized at present and that the
impact of interest rate fluctuations
is limited in terms of economic
value due to our product portfolio,
which is centered on protectiontype products.

We set risk limits for market risk
including interest rate risk andregularly monitor their status. We
review asset investment policies asnecessary.
In addition, through organizations
like the ALM Committee which isestablished for ALM (Asset Liability
Management: comprehensive
management of assets andliabilities), the Company manages
the balance of interest rate risk
carried by both assets andliabilities.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

40

Major Risks（4/4）
Priority High
(Occurrence and severity)

Major risk

■System failures
The Company relies on the stable operation of its
information systems to conduct its business
operations, including the sales, underwriting, policy
management and the recording and storage ofstatistical data and customer information.
Accidents, disasters, power outages, userconcentration, human error, sabotage, unauthorizedinternal or external access, virus infection or network
intrusion, external denial-of-service attacks, softwareor hardware malfunctions and other factors could
cause our information systems to fail. Problems may
also arise in the renewal of the information system.
In these cases, we could lose opportunities and pay
additional costs.

We have not experienced any
large-scale system troubles since
our business commencement, andwe have been operating oursystem stably. While we believethat the likelihood of large-scale
system problems due tounforeseen causes is low in the
future, it exists in the samemanner as other financial
institutions.

Measures
The Company has established basic
policy and measures for the stable
operation of information systems in
its internal regulations, anddevelops information systems,
monitors their operational status,
maintains backup systems, andtakes measures in the event of
failures based on these regulations.
In addition, in preparation for
external attacks, etc., we preventand monitor unauthorized intrusion
and abuse through firewalls andanti-virus software, etc., diagnose
software vulnerabilities, andoperate a CSIRT (Computer
Security Incident Response Team)to ensure an appropriate responsein the event of an emergency.

※The information in this section does not cover all risks.
For other risks, please refer to “Business and Other Risks” in the Annual Securities Report (Japanese version only).

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

41

This material is based on information as of June 2022.
All information on this document that is not historicalfact constitutes forward-looking information and isbased on assumptions and forecasts available to thecompany at the time of preparation. The company
cannot guarantee the accuracy of these assumptions
and forecasts. Earnings projections and otherinformation on this may differ materially from actual
performance due to various risks and uncertainties.

https://ir.lifenet-seimei.co.jp/en/

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Investor Relations, Corporate Planning Departmente-mail: ir@lifenet-seimei.co.jp