NEWS RELEASE
February 9, 2016
Daisuke Iwase, President & COO
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

Financial Results for 3Q of Fiscal 2015 Ending March 31, 2016
Ordinary profit before amortization of deferred assets
under Article 113 of the Insurance Business Act recorded profitable
TOKYO, February 9, 2016 - LIFENET INSURANCE COMPANY (TSE Mothers 7157,
President & COO Daisuke Iwase, URL: http://ir.lifenet-seimei.co.jp/en/) discloses financial results
for the third quarter and the nine months ended December 31, 2015.
1．Overview of the financial results for 3Q of fiscal 2015
(1) Business results
Condition of policies-in-force*1
Annualized premium of new business in 3Q ended December 31, 2015 was 323 million yen(107.2% of 3Q of fiscal 2014). The number of applications was 8,771 (105.8% of 3Q of fiscal
2014), with the number of new business at 6,864 (113.6% of 3Q of fiscal 2014). Annualized*1
premium of new business for the nine months ended December 31, 2015 was 872 million yen(87.5% of the nine months ended December 31, 2014). The number of applications was 24,267(85.0% of the nine months ended December 31, 2014) with the number of new business at
18,267 (86.6% of the nine months ended December 31, 2014).
*1
Annualized premium of policies-in-force as of December 31, 2015 stands at 9,220 million yen(104.9% of March 31, 2015). The number of policies-in-force resulted in a total of 222,598*2(103.3% of March 31, 2015). Surrender and lapse ratio for the nine months ended December
31, 2015 was 6.7% (7.4% for the nine months ended December 31, 2014).
*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 nine months ended December 31, 2015 increased to
6,782 million yen (107.5% of the nine months ended December 31, 2014) due to an increase in
the number of policies-in-force. Investment income grew to 204 million yen (249.0% of the ninemonths ended December 31, 2014). Other ordinary income was 7 million yen. As a result,ordinary income for the nine months ended December 31, 2015 amounted to 6,995 million yen(107.7% of the nine months ended December 31, 2014).
Insurance claims and other was 937 million yen (88.7% of the nine months ended December
31, 2014). The ratio of insurance payment amounts to premiums income decreased to 11.7% for
the nine months ended December 31, 2015, compared with 15.1% for the nine months ended
December 31, 2014. Provision for policy reserves and other came to 2,847 million yen (108.3%of the nine months ended December 31, 2014) mainly due to the increased premiums income.
The ratio of provision for policy reserves to premiums income was 42.2% for the nine months
ended December 31, 2015, compared with 42.3% for the nine months ended December 31,
2014. Mainly due to control of advertising expenses, operating expenses amounted to 2,247
million yen (76.3% of the nine months ended December 31, 2014). The components of operating
expenses were 861 million yen in marketing expenses including advertising (63.8% of the ninemonths ended December 31, 2014), 391 million yen in customer service expenses (92.3% of thenine months ended December 31, 2014), and 994 million yen in system and other expenses

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

1

NEWS RELEASE(85.0% of the nine months ended December 31, 2014). Amortization of deferred assets under
Article 113 of the Insurance Business Act totaled 795 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 since commencing business operations. Consequently, ordinary
expenses for the nine months ended December 31, 2015 totaled 7,150 million yen (91.7% of thenine months ended December 31, 2014).
As a result, ordinary loss totaled 155 million yen for the nine months ended December 31,
2015, compared with 1,305 million yen for the nine months ended December 31, 2014. Ordinary
profit before amortization of deferred assets under Article 113 of the Insurance Business Act
recorded profitable of 639 million yen for the nine months ended December 31, 2015, comparedwith ordinary loss of 510 million yen for the nine months ended December 31, 2014. Net loss was
151 million yen for the nine months ended December 31, 2015, compared with 1,290 million yen
for the nine months ended December 31, 2014.
In addition, fundamental profit, which is an indicator for the profitability of life insurancecompanies, amounted to 152 million yen loss, compared with 1,288 million yen loss for the ninemonths ended December 31, 2014. The components of fundamental profit were 1,591 million yen
in mortality margin, 1,776 million yen loss in expense margin and 31 million yen in interest margin.
(2) Financial condition
Assets, liabilities and net assets
Total assets as of December 31, 2015 amounted to 29,001 million yen (23,387 million yen asof March 31, 2015). The major account balance was 21,983 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 2,385 million yen due toamortization.
Liabilities amounted to 13,640 million yen as of December 31, 2015 (10,899 million yen as ofMarch 31, 2015), owing to an increase in policy reserves as a result of the increased premiums
income. The major account balances were 12,634 million yen in policy reserves (including 1,285
million yen in contingency reserves), and 297 million yen in reserves for outstanding claims.
Net assets increased to 15,360 million yen as of December 31, 2015 (12,487 million yen as ofMarch 31, 2015) due to raising new capital of 3,040 million yen through the third-party allotmentof new shares to KDDI CORPORATION in May 2015 despite the recording of net loss for thenine months ended December 31, 2015.
The solvency margin ratio as of December 31, 2015 was 2,782.0% (2,244.7% as of March 31,2015), which indicated that an adequate level of payment capacity was maintained.
Cash flows
For the nine months ended December 31, 2015, net cash provided by operating activities
amounted to 3,487 million yen (2,098 million yen provided for the nine months ended December
31, 2014) due to an increase in insurance premiums and other and control of operating expenses.
Net cash used by investing activities amounted to 4,982 million yen (1,946 million yen used forthe nine months ended December 31, 2014) due to acquisition of securities. Net cash provided
by financing activities amounted to 3,033 million yen (6 million yen used for the nine months
ended December 31, 2014) due to the third-party allotment of new shares to KDDI
CORPORATION.
Based on these activities described above, cash and cash equivalents as of December 31,
2015 totaled 2,271 million yen (731 million yen as of March 31, 2015).

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2

NEWS RELEASE(3) Business forecasts
The business forecasts for fiscal 2015 remain unchanged as shown below.
This is the same as the management goal in our mid-term business plan and is disclosed as
items in accordance with the management goal until fiscal 2015.
(In millions of yen)
*1
Ordinary income
Ordinary profit (loss)
Business forecasts (Fiscal 2015)

9,500

Turn profitable(Reference) Results (Fiscal 2014)

8,729

(472)

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

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 management goal of mid-term business plan andthe 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,
Dec. 31,
2015
2015
ASSETSCash and deposits ·································································
Monetary claims bought ··························································
Money held in trust ································································
Securities ············································································
Government bonds ·························································
Municipal bonds ·····························································
Corporate bonds ····························································
Stocks ·········································································
Foreign 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 ·················································································

731
－
1,033
17,082
8,227
851
6,894
222
886
114
468
0
23
3,933
639
3,180
113

771
1,499
1,035
21,983
10,057
1,450
9,413
227
834
83
410
0
9
3,208
673
2,385
149

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

23,38729,001

LIABILITIESPolicy reserves and other ························································

10,084

12,932

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

277

297

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

9,806
4
45
353
9
9
403

12,634
7
53
299
11
11
336

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

10,89913,640

NET ASSETS
Capital stock ········································································
Capital surplus ······································································
Retained earnings ·································································

10,50010,500(8,798)12,02012,020(8,949)

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

12,202

15,091

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

265

249

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

265

249

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

19

19

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

12,487

15,360Total liabilities and net assets ····································

23,38729,001

Copyright© 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 ········································
Other investment expenses ···························
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)
Nine months ended Dec. 31
2014
2015
6,495
6,995
6,310
6,782
6,213
6,699
97
83
82
204
80
135
1
33
0
35
101
7
91
－
10
7
7,801
7,150
1,057
937
600
456
337
329
0
0
120
152
2,629
2,847
－
19
2,629
2,827
0
0
0
0
0
－
2,944
2,247
1,169
1,118
(1,305)
(155)
2
2
2
2
2
2
(1,308)
(158)
2
53
(21)
(61)
(18)
(7)
(1,290)(151)

Copyright© LIFENET INSURANCE COMPANY All rights reserved.

5NEWS RELEASE(3) Statements of Cash Flows(In millions of yen)
Nine months ended Dec. 31

2014

2015

Cash flows from operating activities
Income (loss) before income taxes ·····································(1,308)(158)

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

166

164

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

(91)

19

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

2,629

2,827

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

2

2

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

(80)

(135)

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

(0)

(35)

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

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

0(0)Decrease (increase) in reinsurance accounts receivable ··········

(32)

14

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

756

748

Increase (decrease) in agency accounts payable ························(0)3

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

23

8

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

(59)

(92)

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

(1)

(32)

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

2,003

3,335

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

99
(0)

157
(0)

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

(4)

(3)

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

2,098

3,487

Cash flows from investing activities
Purchase of securities ······················································(5,201)(7,012)

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

3,415

2,110

Total of net cash provided by (used in) investment transactions ···(1,786)(4,901)

Total of net cash provided by (used in) operating activities and investment transactions ···312(1,413)Purchase of tangible fixed assets ·······································
Purchase of intangible fixed assets ·····································

(80)
(79)

(5)
(75)

Net cash provided by (used in) investing activities ·············(1,946)(4,982)

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

－

3,040

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

(6)

(6)

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

(6)

3,033

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

146

1,539

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

418

731

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

565

2,271

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6