NEWS RELEASE
November 10, 2021
Ryosuke Mori, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 2Q of Fiscal 2021 Ending March 31, 2022
Annualized premium of in-force business of 20,231 million yen,up 8.1% from March 31, 2021
TOKYO, November 10, 2021 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President Ryosuke Mori, URL: https://ir.lifenet-seimei.co.jp/en/) discloses financial results for thesecond quarter of fiscal 2021 ending March 31, 2022.
1．Overview of the financial results for 2Q of fiscal 2021
(1) Business results
Condition of policies-in-force
Annualized premium*1 of new business in 2Q ended September 30, 2021 was 1,051 million
yen (106.0% of 2Q of fiscal 2020). The number of new business was 26,167 (112.0% of 2Q offiscal 2020). Annualized premium of new business for the six months ended September 30,
2021 was 2,174 million yen (100.7% of the six months ended September 30, 2020). The
number of new business for the six months ended September 30, 2021 was 53,720 (104.3% of
the six months ended September 30, 2020). Annualized premium of new business and thenumber of new business for the six months ended September 30, 2021 increased, comparedwith those of the six months ended September 30, 2020 which had an impact from the spreadof the novel coronavirus disease (COVID-19) and led to a great increase in the new business ina short term.
Annualized premium of policies-in-force as of the end of 2Q of fiscal 2021 stands at 20,231
million yen (108.1% of March 31, 2021). The number of policies-in-force resulted in a total of
476,906 (108.4% of March 31, 2021). Surrender and lapse ratio*2 for the six months ended
September 30, 2021 was 6.9% (5.5% for the six months ended September 30, 2020). Lifenet
has extended grace period for insurance premium payment as one of the special measures in
the COVID-19 pandemic. Surrender and lapse ratio for the six months ended September 30,
2021 includes the impact of extended policies that were recorded as lapsed policies in a lumpsum.
*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, 2021 increased to
12,301 million yen (129.6% of the six months ended September 30, 2020) due to an increase inpremium income by growth of in-force business, and effect from modified co-insurance.
Investment income was 259 million yen (109.4% of the six months ended September 30, 2020).
Other ordinary income was 84 million yen. As a result, ordinary income for the six months ended
September 30, 2021 amounted to 12,644 million yen (128.4% of the six months ended
September 30, 2020).
Insurance claims and other was 4,066 million yen (158.0% of the six months ended
September 30, 2020) mainly due to an increase in reinsurance commission from modified coinsurance. The ratio of insurance payment amounts to insurance premiums increased to 21.0%

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1

NEWS RELEASE
for the six months ended September 30, 2021, compared with 17.5% for the six months ended
September 30, 2020. Provision for policy reserves and other came to 3,208 million yen (105.9%of the six months ended September 30, 2020). The ratio of provision for policy reserves toinsurance premiums was 33.5% for the six months ended September 30, 2021, compared with37.5% for the six months ended September 30, 2020. Operating expenses amounted to 5,885
million yen (127.0% of the six months ended September 30, 2020) mainly due to the investment
in our marketing spend including advertising. The components of operating expenses were
4,029 million yen in marketing expenses (131.9% of the six months ended September 30,2020) , 619 million yen in customer service expenses (129.6% of the six months ended
September 30, 2020), and 1,236 million yen in system and other expenses (112.4% of the six
months ended September 30, 2020). Other ordinary expenses was 911 million yen (122.9% of
the six months ended September 30, 2020) . Consequently, ordinary expenses for the six
months ended September 30, 2021 totaled 14,071 million yen (128.2% of the six months ended
September 30, 2020).
As a result, ordinary profit totaled 1,427 million yen loss for the six months ended September
30, 2021, compared with 1,128 million yen loss for the six months ended September 30, 2020.
Net income was 1,476 million yen loss, compared with 1,138 million yen loss for the six months
ended September 30, 2020.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 1,316 million yen loss, compared with 1,049 million yen loss for the six
months ended September 30, 2020. The components of fundamental profit were 1,825 million
yen in mortality margin, 3,197 million yen loss in expense margin and 55 million yen in interest
margin.
We are participating in reinsurance transactions from fiscal 2019 by modified co-insurance onpart of new business to achieve continuous growth. By utilizing reinsurance appropriately, we willease the temporary burden imposed on statutory capital by expenses associated with new
business and maintain fiscal soundness. The reinsurance transactions are agreements thattransfer the risk and the profit (loss) structure of the reinsured business to the reinsurancecompany for a certain period of time. We receive ceding commission in accordance with the new
business costs associated with the reinsured business in the initial fiscal year. This leads to anincrease in ordinary income. On the other hand, after the ceding commission is recorded
reinsurance accounts receivable as asset, it is amortized by the profit generated from thereinsured business over following fiscal years. This leads to a decrease in ordinary profit and net
profit. Once the balance of reinsurance accounts receivable is amortized to zero, the reinsurance
agreement terminates, and subsequent profit on the reinsured business belongs to Lifenet.
Accordingly, the modified co-insurance resulted in raising ordinary income by 2,380 million yen(1,153 million yen of the six months ended September 30, 2020) , ordinary profit by 787 million
yen (360 million yen of the six months ended September 30, 2020), and net income by 787 million
yen (360 million yen of the six months ended September 30, 2020).
(2) Financial condition
Assets, liabilities and net assets
Total assets as of September 30, 2021 amounted to 66,204 million yen (54,501 million yen asof March 31, 2021). The major account balance was 42,306 million yen in securities mainly
consisting of government bonds and corporate bonds with high credit ratings. Reinsurance
accounts receivable was 3,305 million yen including 3,149 million yen of the balance of
unamortized ceding commission for modified co-insurance.
Liabilities amounted to 41,819 million yen as of September 30, 2021 (38,694 million yen as ofMarch 31, 2021), owing to an increase in policy reserves. The major account balances were
39,009 million yen in policy reserves and 792 million yen in reserves for outstanding claims.
Copyright© LIFENET INSURANCE COMPANY All rights reserved.

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NEWS RELEASE
Net assets amounted to 24,385 million yen as of September 30, 2021 (15,806 million yen asof March 31, 2021) mainly due to raising new capital through overseas public offering despite
the recording of net loss for the six months ended September 30, 2021. It includes the effect ofraising 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 amortized by
the profit generated from the reinsured business over following fiscal years. This leads to adecrease in net assets accordingly.
The solvency margin ratio as of September 30, 2021 was 3,462.0% (2,647.1% as of March
31, 2021), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the six months ended September 30, 2021, net cash provided by operating activities
amounted to 1,119 million yen (1,546 million yen provided for the six months ended September
30, 2020) mainly because of an increase in insurance premium. Net cash used by investing
activities amounted to 1,965 million yen (5,446 million yen used for the six months ended
September 30, 2020) mainly due to acquisition of securities. Net cash provided by financing
activities amounted to 9,736 million yen (8,865 million yen provided for the six months ended
September 30, 2020) mainly due to issuance of new shares through overseas public offering.
Based on these activities described above, cash and cash equivalents as of September 30,
2021 totaled 11,950 million yen (3,059 million yen as of March 31, 2021).
(3) Business forecasts
The business forecasts for fiscal 2021 which was announced on May 13, 2021 was revised
as shown below.
(In millions of yen)Previous forecasts(May 13, 2021)
Revised forecasts(November 10, 2021)(Reference)
Business results
for fiscal 2020

Ordinary income

Ordinary profit (loss)

Net income (loss)

25,500(3,800)(3,800)26,100(3,600)(3,700)20,789(3,089)(3,114)

Lifenet’s business performance has been growing and achieved new half-year record high in
new business for the six months ended September 30. Under such circumstances, Lifenet aims
to expand new business performance by more investment in marketing than initially planned. In
addition, we will increase the utilization of modified co-insurance for the further growth. These
led to the revision of the business forecasts for fiscal 2021 ending March 31, 2022.
The business forecasts for fiscal 2021 includes the impact of reinsurance transactions bymodified co-insurance. We expect the impact on fiscal 2021 revised forecasts to increase
ordinary income by around 5,000 million yen (4,400 million yen as of previous forecast),
ordinary profit by around 1,400 million yen (700 million yen as of previous forecast), and net
income by around 1,400 million yen (700 million yen as of previous forecast). This impact
includes the effects of amortization of reinsurance accounts receivable generated fromreinsured business in past years.
Subsequently, the forecast for annualized premium of policies-in-force and of new businesswere revised as shown below. Lifenet aims to achieve record high in new business for four
consecutive years and double-digit gworth in in-force business.

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

3

NEWS RELEASE(Reference) Annualized premium(In millions of yen)Previous forecasts(May 13, 2021)
Revised forecasts(November 10, 2021)(Reference)
Business results
for fiscal 2020

Annualized premium

Annualized premiumof policies-in-forceof new business

21,8004,400

21,9004,500

18,713

4,197

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.

4NEWS RELEASE
2. Non-consolidated Financial Statements(1) Balance Sheets(In millions of yen)March 31,
Sep. 30,
2021
2021
ASSETSCash and deposits ·································································

2,059

3,950

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

999

7,999

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

5,895

5,496

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

40,00742,306

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

9,004

9,006

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

1,482

1,484

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

21,301

22,251

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

397

550

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

0100

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

7,821

8,913

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

95

101

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

1,252

1,264

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

9

8

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

2,569

3,305

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

1,612

1,770

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

1,362

1,492

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

250

278

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

54,501

66,204

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(In millions of yen)March 31,
Sep. 30,
2021
2021
LIABILITIESPolicy reserves and other ························································
Reserves for outstanding claims ··········································

36,63939,802

837

792

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

35,80139,009Agency accounts payable ·······················································

69

56

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

301

335

Other liabilities ······································································

1,234

1,081

Income taxes payable ·····················································

3

1

Accrued expenses ··························································

1,082

953

Lease liabilities ······························································

11

9

Asset retirement obligations··············································

33

34

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

102

82

Reserves under the special laws ···············································

76

87

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

76

87

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

373

456

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

38,694

41,819

Capital stock ········································································

16,731

21,652

Capital surplus ······································································

16,731

21,652

Legal capital surplus ·······················································

16,731

21,652Retained earnings ·································································(18,616)(20,093)

Other retained earnings ···················································(18,616)(20,093)

Retained earnings brought forward ·····························(18,616)(20,093)

Treasury shares ····································································

(0)

(0)

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

14,84623,211

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

960

1,173

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

960

1,173

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

15,80624,385

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

54,501

66,204

NET ASSETS

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 policy reserves ··································
Investment expenses ················································
Interest expenses ················································
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
2020
2021
9,849
12,644
9,493
12,301
8,079
9,566
1,414
2,734
237
259
140
215
93
26
2
17
119
84
85
45
33
38
10,97814,071
2,574
4,066
879
1,315
537
693
0
0
1,157
2,057
3,029
3,208
3,029
3,208
0
0
0
0
0
0
4,633
5,885
741
911
(1,128)(1,427)
8
47
－
36
8
10
8
10
(1,136)(1,474)11
1
1(1,138)(1,476)

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
2020
2021

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 ························

12,20016,731

4,502
20
－
4,523
16,723

4,885
21
13
4,920
21,652

12,20016,731

4,502
20
－
4,523
16,723

4,885
21
13
4,920
21,652

12,20016,731

4,502
20
－
4,523
16,723

4,885
21
13
4,920
21,652(15,502)(18,616)(1,138)(1,138)(16,641)(1,476)(1,476)(20,093)(15,502)(18,616)(1,138)(1,138)(16,641)(1,476)(1,476)(20,093)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

8

NEWS RELEASE(In millions of yen)Six months ended Sep. 30
2020
2021
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)

8,898

14,846

9,005
41－(1,138)(0)
7,908
16,8069,771
43
26(1,476)－
8,365
23,211

502

960

224
224
727

213
213
1,173

502

960

224
224
727

213
213
1,173

9,400

15,806

9,005
41－(1,138)
(0)
224
8,133
17,5339,771
43
26(1,476)－213
8,578
24,385

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

9

NEWS RELEASE(4) Statements of Cash Flows(In millions of yen)Six months ended Sep. 30
2020

2021

Cash flows from operating activities
Income (loss) before income taxes ·····································(1,136)(1,474)

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

154

206

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

(85)

(45)

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

3,029

3,208

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

8

10

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

(140)

(215)

Loss (gain) related to securities ··········································

(2)

(17)

Interest expenses ···························································

00

Share issuance costs ·······················································

137

130

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

10

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

(363)

(736)

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

(95)

(119)

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

8

(13)

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

25

34

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

(98)

(198)

Other, net ······································································

(73)

31

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

1,369

801

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

172
(0)

325
(0)

Income taxes (paid) refund ················································

4(6)

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

1,546

1,119

Cash flows from investing activities
Purchase of money held in trust ·········································(1,000)－

Proceeds from decrease in money held in trust ·····················－

500

Purchase of securities ······················································(5,297)(2,759)Proceeds from sales and redemption of securities ······················

1,110

576

Total of net cash provided by (used in) investment transactions ···(5,186)(1,683)

Total of net cash provided by (used in) operating activities and investment transactions ···(3,640)(563)

Purchase of tangible fixed assets ·······································
Purchase of intangible fixed assets ·····································Net cash provided by (used in) investing activities ·············

(23)
(236)
(5,446)(15)(267)(1,965)

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

8,868

9,712

Proceeds from issuance of stock resulting from exercise of subscription rights to shares ···－26

Purchase of treasury shares ··············································(0)－

Repayments of lease obligations ········································

(2)

(2)

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

8,865

9,736

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

4,965

8,891

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

1,677

3,059

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

6,643

11,950

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