How is your surrender and lapse ratio?



Lifenet calculates its surrender and lapse ratio annualizing the average monthly number of policies-in-force for a specific duration divided by the average monthly number of surrendered and lapsed policies during the same duration. Our surrender and lapse ratio has been around 6% to 7% since business commencement. Surrender and lapse of policies generally tend to occur from new policies of policies-in-force. Due to Lifenet having a higher ratio of new policies in comparison to other life insurance companies as we have been in business for fewer years, it may be expected that we have a higher surrender and lapse ratio than other companies. We believe that our surrender and lapse ratio is not high comparatively.


Although the surrender and lapse ratio for fiscal 2019 was 7.0%, it improved to 5.5% for 2Q of fiscal 2020. There are two main reasons for its improvement: the COVID-19 impact and the positive effect of our initiatives. We will continue to endeavor to improve this ratio by enriching customer services.









What is your business forecast for fiscal 2020?



We disclosed the business forecast for fiscal 2020 ending March 31, 2021 in August. We forecast ordinary income of 20 billion yen, ordinary profit of 3.2 billion yen loss and net profit of 3.2 billion yen loss for fiscal 2020, including the impact of modified co-insurance. We also project annualized premium of new business of 4 billion yen.


See details of Business forecasts, Financial Results for 1Q of Fiscal 2020, Ending March 31, 2021








How are Lifenet's products and services evaluated externally?


What kinds of initiatives are you taking to aim for growth of in-force business performance?



We have designated “Innovation of customer experience” and “Enhancement of promotion capabilities” as priority areas in our management policy and we are striving to maintain the strong new business performance, improve the surrender and lapse ratio, and achieve sustained growth in in-force business performance. We will also actively pursue investment in core systems to achieve these goals.


Major initiatives for Innovation of customer experience

We will aim to provide convenient life insurance services that exceed the expectations of customers. We will achieve this by designing and improving stress-free services from the perspective of the customer’s experience (CX) in the entire series of processes ranging from insurance consultation, to application and post-policy enrollment procedures, and submitting insurance claims and other benefit claims, in addition to developing insurance products that meet the needs of customers. More specifically, we will provide products and services mainly via smartphone by using digital data analysis and technology that make use of the strengths of online insurance. We also aim to increase customer engagement through the use of advertising and promotions, our contact center and website, SNS, and meetings for policyholders.

Major initiatives for Enhancement of promotion capabilities

We will operate our business using two pivotal channels, the Internet channel and the agency channel, which includes white label products using partner company brands. We will work to increase the number of customers who choose the company through efforts to further raise its recognition and strengthen brand power via continuous advertising and promotion by utilizing the expertise we have accumulated through the Internet channel, which has been our main channel since the company first opened for business. At agency channel, we are cooperating with corporate partners that possess customer bases and brand power to expand white label business in selling our products under corporate partner brands. We have been selling au life insurance using KDDI Corporation as an agent since April 2016, and Seven Financial Service life insurance using Seven Financial Service Co., Ltd. as an agent since April 2020, with the goal of providing our comprehensible, cost-competitive, convenient products and services to a wider range of customer segments.







What kind of services do you offer with utilizing Smartphone?



When considering insurance products, we provide customers to use consultation service via LINE as well as phone and mail. When applying for them and claiming for medical insurance, we realized the paperless procedure and accept application documents via website captured by Smartphone. We continue to offer convenience services with utilizing Smartphone. 










What is your asset management strategy?



Most of our assets are invested in yen-denominated fixed income assets, such as public bonds and corporate bonds with high credit ratings. We also started investing in investment trust including foreign bonds to promote diversification of asset. 










What is the fundamental of profit for a life insurance company?



Life insurance premiums are calculated based on three factors: expected incidence rate (such as mortality and morbidity rate, etc), expected business expense rate (covered by expense loading), and expected return on investments. Fundamental profit at a life insurance company is generated by the difference between these expected rates and actual rates.
Lifenet has been continuously recording mortality margin since its business commencement while recording negative expense margin.