Basic Sustainability Policy

Our company values the concept of mutual aid, which is the foundation of life insurance, in our approach to sustainability as well. 

We believe that continuing to create new value in life insurance, while valuing the mutual relationships with our various stakeholders, will contribute to a sustainable future while enhancing our corporate value. 

Based on this belief, we have established the following Basic Sustainability Policy with the approval of the Board of Directors. 

<Basic Sustainability Policy> 

  1. The Company establishes the Basic Sustainability Policy, acknowledging the significance of implementing sustainability-focused management at the group level to achieve a sustainable society and environment, as well as to enhance the Company's medium- to long-term corporate value.
  2. The Company undertakes initiatives to contribute to a sustainable society and environment and to enhance its medium- to long-term corporate value through its corporate activities. This is based on the recognition that operating the business in accordance with the LIFENET Manifesto while maintaining insights into the original purpose of life insurance as mutual support leads to the resolution of social issues. 
  3. The Company undertakes initiatives for various stakeholders including society and responses to global environmental issues. The Company also continuously strengthens its governance as a foundation for corporate management to promote sustainability.
  4. The Company delivers products and services to support the security of society and individuals including future generations.
  5. The Company adheres to the "Basic Policy on Compliance with Laws and Regulations," conducts its operations with integrity, and prioritizes ethical considerations, in consideration of the public nature and social responsibility inherent in the insurance industry, as well as the importance of policyholder protection.
  6. The Company values diversity and provides opportunities for professional challenges and growth to each employee.
  7. The Company fulfills its corporate social responsibility by implementing environmentally conscious practices as a global citizen in addressing global environmental issues.
  8. The Company establishes governance and internal systems to promote sustainability, develops pertinent regulations, and actively encourages awareness related to sustainability within the organization.
  9. The Company recognizes societal expectations and requirements through dialogue with various stakeholders. It endeavors to provide appropriate information disclosure regarding sustainability-related matters, such as global environmental issues, human capital, and governance, to fulfill its accountability as a corporate entity.

 Established October 2024

Materiality

We have identified materiality (priority sustainability issues) that should be addressed over the long term with the aim of achieving a sustainable society and improving corporate value. Under the theme of “Creating the future of the life insurance,” we recognize the following items 1 to 10 as our materiality. We will promote initiatives for our stakeholders, including “customers,” “society” and “employees,” as we continue to enhance “corporate governance,” which is the foundation of our management. 

Diagram showing Lifenet Materiality of “Creating the future of life insurance.” The three main initiatives are Creating the future for our customers, Creating the future for a better society, and Creating the future with our employees. The company also has “Corporate governance to create the future” based on the three points to strengthen corporate governance, enhance risk management, and respect corporate ethics.
Diagram showing Lifenet Materiality of “Creating the future of life insurance.” The three main initiatives are Creating the future for our customers, Creating the future for a better society, and Creating the future with our employees. The company also has “Corporate governance to create the future” based on the three points to strengthen corporate governance, enhance risk management, and respect corporate ethics.

Process for identifying materiality

STEP 1: Extracting issues

Based on the “LIFENET Manifesto” and our Management Policy, we extract issues by referring to the opinions of shareholders and investors, guidelines including the Sustainability Accounting Standards Board (“SASB”), and evaluation criteria of ESG-rating organizations. 

STEP 2: Selecting possible material issues

Among the extracted issues, selection for possible materiality is made from two viewpoints: importance to stakeholders and importance to Lifenet. 

STEP 3: Identifying materiality

Identify materiality through discussions at the Board of Directors and Management Meetings. The materiality items are reviewed annually and revised as necessary based on changes in the external environment and our business environment. 

Overview of opportunities and risks related to materiality

For details on each risk listed under "Major Risks," please refer to pages 23 to 30 of the Securities Report. 

Business Environment

Risks

Overview of opportunities and risks

Related Materiality

Advances in digital technology
  • Obsolescence of our business model, a decline in customer satisfaction, and loss of competitive advantage due to an inability to keep up with technological innovation
  • Impact of AI advancements on the insurance business
  • Capturing growth opportunities in the online life insurance market by providing new value through the use of advanced technologies
  • Improving operational efficiency and enhancing quality through the automation of customer service and administrative processes

 

 1. Be Sincere, Easy-to-understand, Affordable, and Convenient

 3. Actively utilize partnerships

 9. Enhance risk management

 10. Respect corporate ethics

Demographic changes
  • Decline in demand for flagship product and reduced profitability due to a decrease in the younger population, our main customer base
  • Increased costs to support elderly policyholders in fulfilling their rights and obligations
  • Developing products and services that help reduce the burden on the younger generation amid a declining birthrate and aging population.
  • Creating new value by strengthening collaboration with partners to address issues in an aging society
  • Increased earnings opportunities for online life insurance due to business model changes driven by a declining workforce

1. Be Sincere, Easy-to-understand, Affordable, and Convenient

3. Actively utilize partnerships

 

Diversification of consumer lifestyles
  • Decline in competitiveness, market shrinkage, and reduced profitability due to an inability to respond to diversifying customer needs for insurance
  • Decrease in opportunities for insurance consideration due to the diversification of family structures and values

 
  • Creating value by providing new products and services that address the diversification of lifestyles

 1. Be Sincere, Easy-to-understand, Affordable, and Convenient

 3. Actively utilize partnerships

 

Changes in the competitive environment
  • Decline in competitiveness due to the loss of uniqueness in business models, products, and services caused by the entry of competitors from the same and different industries
  • Decline in market share and profitability due to intensified competition
  • Shrinking of the market due to the withdrawal of competitors from the online life insurance market
  • Creating new customer value through alliances with companies from other industries
  • Expansion of the market and promotion of innovation
  • Establishing a solid position as competitors are eliminated through intensified competition

 1. Be Sincere, Easy-to-understand, Affordable, and Convenient

 3. Actively utilize partnerships

Human resources
  • Decline in innovation-creation capabilities and competitiveness because of difficulty to secure diverse talent due to intensifying competition for human resources
  • Loss of competitiveness and growth opportunities as the company's expansion leads to a lack of unified organizational direction and a decline in the venture sprit
  • Creating new value through acquiring diverse talent with high levels of expertise and entrepreneurial spirit
  •  Creating a virtuous cycle that promotes business growth by linking individual growth through challenges to organizational growth
  • Creating new value through mechanisms that leverage individual diversity to inspire mutual innovation

6. Value diversity

7. Create opportunities for growth

Information security
  • Risk of business suspension and loss of business opportunities due to system failures caused by information security vulnerabilities
  •  Business suspension, liability for damages, and decline in trust from stakeholders due to incidents such as customer information leaks

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2. Increase security

9. Enhance risk management

 

Corporate Governance and Compliance
  • Risk of business suspension and financial loss due to failures in corporate governance or internal control functions
  • Decline in trust from stakeholders caused by legal violations, and damage to corporate value due to increased related costs
  • Risk of business suspension and decline in public reputation due to the inability to respond appropriately to unforeseen circumstances
  • Gaining the trust of stakeholders by improving the transparency of decision-making
  • Capturing growth opportunities and creating innovation responding to changes in the external environment and taking appropriate risks

8. Strengthen corporate governance

9. Enhance risk management

10. Respect corporate ethics

Investment and financing
  • Decline in social reputation due to inability to meet societal demands
  • Decline in indirect social reputation as an investor due to investees' inadequate responses to social issues
  • Customer churn and decline in trust if financial soundness deteriorates and affects the payment of insurance claims, etc
  • Contributing to a sustainable society through investment and financing
  • Enhancing our reputation as a company that fulfills its social responsibilities

5. Make responsible investments

Climate change

4. Respond to climate change

Materiality indicators

The list of indicators linked to each materiality is as follows:

Structure for promoting sustainability

To promote sustainability initiatives, we established the Sustainability Committee (hereinafter referred to as "the Committee") in October 2024. Chaired by the President and Representative Director, the Committee is composed of sustainability stakeholders, including internal directors, executive officers, and employees appointed by the Chairman. The Committee discusses and provides advice from a company-wide perspective on matters contributing to social and environmental sustainability as well as the enhancement of our corporate value, such as reviewing sustainability-related policies and frameworks and addressing sustainability materiality (key issues) in light of changes in the external environment and stakeholder expectations and demands. The contents of discussions in the Committee are reported to the Board of Directors.
In addition, risk management across overall business operations, including sustainability perspectives, is conducted by the Risk Management Committee, which is also chaired by the President and Representative Director and composed of relevant officers and department heads. The contents of discussions in the Risk Management Committee are reported to the Board of Directors. Furthermore, discussions and reporting take place at the Executive Officers' Meeting (composed of executive officers, including those concurrently serving as directors, with the President and Representative Director acting as Chair) as necessary, and important matters are reported to the Board of Directors. The Board of Directors engages in discussion and oversight regarding the Group’s sustainability initiatives and other matters from the perspective of enhancing medium- to long-term corporate value, while deliberating and deciding on important matters.