Dai ichi Life : Medium-Term Management Plan Re-connect 2023 covering fiscal years 2021 to 2023

[Unofficial Translation]

March 31, 2021

Dai-ichi Life Group Medium-Term Management Plan covering fiscal years 2021 to 2023

-- Contributing to the well-being of all and achieve a bright future in harmony with society --

Dai-ichi Life Holdings, Inc. (the "Company"; President: Seiji Inagaki) today released the Dai-ichi Life Group medium-term management plan "Re-connect 2023" covering fiscal years 2021 to 2023.

1. Review of the previous plan "CONNECT 2020" covering fiscal years 2018 to 2020

Under the previous plan, we went back again to our roots as an insurance provider amid the COVID- 19 crisis and took on various initiatives to resolve social issues and improve the quality of life of our policyholders. We also took action from both growth and discipline aspects, including expanding our business foundation, promoting digitalization and establishing a risk-reduction policy.

On the other hand, incidents that shook the confidence of policyholders and society in us were discovered, leaving major challenges to be addressed in the new plan, ranging from how we interact with policyholders to changing employee mindset to reform our corporate culture.

With regard to quantitative targets we set forth, while taking into account changes in the external environment, we engaged in initiatives to further strengthen the "Three Growth Engines (domestic life insurance, overseas life insurance and asset management)." Indicators generally made steady progress over the initial two years with group adjusted profit exceeding our target level in fiscal year 2019.

For fiscal year 2020, the final year covered by the plan, with the exception of the economic solvency ratio, a soundness indicator, quantitative targets are expected to fall short due to the impact of self- restraint on sales activities and changes in financial market conditions triggered by COVID-19.

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2. Direction of the new plan "Re-connect 2023" covering fiscal years 2021 to 2023

In fiscal year 2022, we will celebrate the 120th anniversary of our founding. We wish to continue to support well-being* in which people can live a prosperous and healthy life with peace of mind across generations. We will extend our business to offer four experiential values (protection, asset formation and succession, health promotion and enhancing connections) to be truly customer centric.

We pursue the well-being of all, and at the same time believe that a sustainable society is essential as we consider a sustainable society to be the foundation of our business. We will extend our efforts to resolve material issues to ensure the sustainability of local communities and society.

• The World Health Organization (WHO) defines well-being as "A state of complete physical, mental and social well-being and not merely the absence of disease or infirmity." We strive to support a safe, prosperous and happy life for people all over the world through our business.

Based on this belief, we will to work together to contribute to the well-being of all by offering experiential values in which we have confidence in, namely peace of mind, prosperity and good health. Our pursuit for well-being of all drove us to change our group vision to "Protect and improve the well-being of all." Under this new vision, Re-connect 2023 sets out to revisit our approach to stakeholders and develop our four key initiatives (domestic strategy, overseas strategy, financial strategy and sustainability & business foundation).

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3. "Re-connect" with all stakeholders

Under the new medium-term management plan, we will review our existing approaches to stakeholders and strive to restore their confidence in us and meet their expectations.

1. Re-connectwith policyholders
   The misconducts discovered last year at Dai-ichi Life are important lessons for the entire group.

We take them very seriously and will revisit our approach to policyholders with hopes to re-engage. Particularly in our domestic business, we will go back to our roots yet again and transform ourselves

to be truly customer centric with our beliefs embedded in our existing products and distribution channels. We aim to become an insurance group of choice. Our core strategy in the new plan is to offer a superior customer experience (CX) through four values leveraging digital technology and provide policyholders with services that enable them to regularly be in touch with us.

1. Re-connectwith business partners
   Under our CX strategy, we will reach out to many more external partners with strong digital

capabilities, mainly in the healthcare and medical domains while acquiring new organizational capabilities to develop services that contribute to health promotion and disease prevention.

1. Re-connectwith society and environment

A sustainable society is the foundation for our business to create a better future. And to contribute to well-being across generations, we will extend our efforts to resolve material issues to ensure sustainability such as implementing measures to combat climate change.

1. Re-connectwith employees
   To restore confidence of our policyholders and society in us, we will build a corporate culture so

that each employee can work together to become an effective team.

We will further promote diversity and inclusion, support diverse work styles and exchange talent in order to create an environment in which employees can work with a sense of excitement, connect with colleagues and share ideas to create synergies.

1. Re-connectwith shareholders
   In our financial strategy we pursue disciplined capital management based on the ERM framework

aimed to overcome our undervalued stock prices with capital efficiency that exceed our capital cost. We will accelerate risk profile reform initiatives, improve financial standing, renew our shareholder payout policy and raise the level of disclosure and dialogue with investors with initiatives that are not simply an extension of past practices.

Please refer to the following attachment for details.

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Dai-ichi Life Group

Medium-Term Management Plan

Covering FY2021 to 2023

March 31, 2021

Dai-ichi Life Holdings, Inc.

Positioning of MMP and Group Vision

Key Indicators (KPIs)

2

Positioning of Our New Medium-Term Management Plan

• Revisit our approach to stakeholders and re-engage amid social changes triggered by the global pandemic
• Spend the next three years on extensive transformation for sustainable growth with determination as a group

2010 …	2018 2019 2020	2021	2022	2023		Future
New Management Plan
IPO	Previous Plan	2026
			Efforts to transform		Generating results

	Review of our Previous Plan
Deliver products and services	Address social issues
that improve quality of life	through our business		Social
				Impact of
	CONNECT	CONNECT		COVID-19
	better with	deeper with
	customers	communities

Revisit our approach to stakeholders and re-engage

Harmonize values to transform with a stronger bond among all employees

Strengthen Relationships

Expand opportunities with	Further synergies
outside partners	between group companies
CONNECT	CONNECT
Misconduct
with diverse	tighter as a	in Sales Rep
partners	group	Channel

Take on challenges to transform in three years to secure a foundation for sustainable growth

3

New Group Vision Based on Sustainability and Materiality

• Our underlying purpose is to support well-being for a sustainable society over the next 100 years
• Contribute to resolve material issues through value propositions beyond the insurance domain

	Well-being of all	Achieving a sustainable society
Future	over the next 100 years
(including future generations)
～Essential for well-being～

New Vision of the Dai-ichi Life Group

Protect and improve the well-being of all

As a lifetime partner, we safeguard and contribute to the peace of mind, prosperity and wellness of all the people we serve

FY2021 to FY2023

(covered by new plan)							Sustainability &
Execute Strategy	Domestic Strategy	Overseas Strategy		Financial Strategies
	Business Foundation
based on Materiality	Policyholders	Business Partners	Society and	Employees	Shareholders
	Environment

Four Experiential Values

Sustainability of Society

Materiality

Asset

Protection

Livelihood stability

Formation/

Sense of security

Improving governance

Responding to

Defending

Succession

through insurance

in later life

and risk management

climate change

human rights

Enhancing

Creating technology that

Improving efficiency

Empowerment

Health

Promote health

Building a safe and

Promotion

Connections

offers reassurance

of energy use

of women

for all

secure community

Contributing to society

Promoting

Creating job satisfaction

Optimal experiential value

through responsible

clean energy

Regional development

loans and investments

that meet customer needs

4

*DX: Digital Transformation

*CX: Customer Experience

Current Management Challenges and Key Medium-Term Initiatives

• Revisit our approach to stakeholders in order to restore their confidence in us and meet their expectations
• Strive for sustainable growth with our four key initiatives

Management

Challenges

Policyholders

• Address changes in needs and behavior
• Incorporate medical and digital technology
• True customer centricity

Business Partners

• Expand insurance-related services from a customer perspective
• Seek collaboration to help resolve social issues

Society and Environment		Employees		Shareholders
 Secure sustainability		 Improve employee		 Achieve high capital
	engagement and well-being
 Eco-friendly and combat		 Promote active participation		efficiency
climate change			 Enhance shareholder payout
		of diverse talent

Domestic

Business

Overseas

Business

Expand existing business while exploring for opportunities beyond insurance

Domestic business model transformation and CX boost by leveraging four experiential values Structural reform of the sales representative channel and raise efficiency

Build a business portfolio that drives growth

Increase profits in the existing markets and further drive business Leverage DX to increase CX and further enhance operational efficiency

Key Medium-Term Initiatives

Finance/

Capital

Sustainability

&

Business

Foundation

Improve financial standing and disciplined capital management

Drastically improve capital efficiency by mainly reducing market related risks

Strike a balance between disciplined capital allocation and strong shareholder payouts

Create a universally bright future by fulfilling our part in enhancing sustainability

Promote the enhancement of sustainability as an entire group (Drive initiatives for carbon neutral) Group human capital strategy and group governance to support business foundation

5

Background of Key Performance Indicators for the New Three Year Plan

• No. 1 priority on qualitative improvements (capital efficiency) to secure foundation for sustainable growth
• Group adjusted profit expected to increase to between ¥250bn and ¥280bn for FY 2023 with some volatility

Capital Efficiency, Adjusted Profit and Group EEV Outlook

ROEV (3 year avg.) Adjusted ROE (Group)

[Reference] Adjusted ROE (Dai-ichi Life)

Group Adjusted Profit

Group EEV

Overseas interest

rates

(10y US Gov.Bonds)

Domestic interest

rates

(20y JGB)

[Self-assessed Cost of Capital]

10%

Highly volatile

capital efficiency

below cost of capital

Constant profit levels amid major changes in market environment

Impact on

insurance business

Changes in Customer

needs from COVID

Impact on

Investment returns

Globally low interest rates

No. 1 Priority for the Medium-Term (FY2021 to 2023)

Reduce cost of capital

No. 1 Priority Challenge

AdjustedROE	≧ Cost of Capital	Improvement of
ROEV	capital efficiency

Est. Group Adjusted Profit	[Assumed range for FY2023]
	¥250bn to ¥280bn

Decrease expected for FY2021 due to

absence of one-time factors

(Illustrative)

• Volatility in earnings expected due to proactive market risk reduction efforts by Dai-ichi Life such as impact from capital gains and reinsurance transactions
• Recent three-year average applied for group adjusted profit (source of shareholder payouts) considering sporadic volatility (*no change in definition)

[Ambition]

Capital efficiency

stably above cost of capital

Stable profit

Increase

2016	2018	2020 (E)	6

Key Indicators (KPIs) of the Group and Major Domestic Business Initiatives

			Medium-Term (FY2023)
	Group KPIs			Long-Term Direction
		Target Level
Capital Efficiency
Adjusted ROE		approx. 8％		approx. 9％ (around FY2026)
(Accounting Profit)	(Based on Adjusted Profit)

Expected cost of capital: reduced to 8％ (currently self assessed at 10％)

Capital Efficiency	ROEV
(Economic Value)
Risk Profile Reform	Market Risk Reduction
(Interest rate risk and
	equity risk vs March-21)
Financial Soundness	Economic Solvency Ratio
(Economic Value)
Profit Indicator	Adjusted Profit

Medium-Term Target: approx. average 8％ (around FY2026)

Risk Reduction -¥520bn	Additional Risk Reduction -¥280bn
(equivalent to approx. 20% of
(Total of approx. ¥800bn from Mar-21)
March-21 market risk)

Maintain a stable level of 170% to 200％ in the long-term

Reduction of sensitivity to financial market

Expected Range	Value of new business targets are set annually
approx. ¥250bn to ¥280bn	Forecast for FY2021 to be announced in May

	Improve Customer Satisfaction	Net Promoter Score (NPS®)	NPS® for Dai-ichi Life:	Top Level in Japan	(by FY2026)
	Number of Customers	Total No. of Customers:	approx. 10mn
Domestic
Business		Fixed Cost Reduction	Reduction (Dai-ichi Life):	approx. -¥30bn
	Improve productivity	(by FY2026)
	Optimize Talent Placement	Strategic Personnel Shift:	around 3,100 ppl.

Assuming the economic environment and other factors will not deviate significantly from the current (end of March 2021) level	7
Certain targets are based on current forecasts and may change after the FY2020 financial results are finalized

Group Business Strategy (Domestic and Overseas)

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Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Expand Existing Business While Exploring for Opportunities Beyond Insurance

• Improve efficiency in core business while exploring potential overseas markets for sustainable growth
• Explore new domains to enhance group capabilities at the same time

Domains to expand and explore

Overseas

(Asset mgt. and channels, etc.)

Existing Domestic business domains (Asset mgt. and

channels, etc.)

Further operational efficiency

Explore new capabilities

Expand core business (Protection and asset formation)

Pursue further operational efficiency in existing business domain Explore protection business opportunities in markets neighboring existing overseas markets

(Expand insurance risk taking)

Strike a	Expand core business and enhance group
capabilities at the same time
balance	Further diversify and expand business portfolio
	with small-scale investments under strict discipline

Explore new domains to enhance group capabilities

New

Overseas

Markets Existing

Overseas

Markets Domestic

Market

Asset formation and Succession

Protection	Health and
Medical care

• Promote various business partnerships in the "Enhancing Connections" domain

Dedicated business units are established within the holding company and Dai-ichi Life

Obtain health/medical care and digital capabilities in addition to expertise in asset formation

(Digitalization and enhancement of non-insurance domain) Explore new beneficial capabilities in existing business domains

9

Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Value Creation Through Resolving Social Issues and CX Design Strategy

• Expand value propositions in insurance and non-insurance domains as social issues surface
• Offer experiential value through our CX design strategy under a new business landscape

Social Issues	Multiple points of contact
with our customers
			Multi-brand/Multi-channel
				Sales Representatives
●Declining
Birthrate
	●Annuities	Customers	Financial Institutions
			Community/Society

●Nursing Care

Dai-ichi Frontier Life

	●Medical Care	Walk-in Shops/Agents
●Rural
Depopulation		Neo First Life
	…	Compile/Analyze/Utilize
	Customer Point of Contact Information

Surfacing social issues and our value propositions

[Protection] Support stable lifestyles of customers

•	Diversified needs	●●Protection/medical products
•	Digital Oriented
●●Small-coverage insurance (Dai-ichi Smart)

[Asset Formation/Succession] Realize a Prosperous Future

•	Post-retirement savings		●Savings products/Investment trust
•	Social security concerns
	●Group annuity business
			＋
[Health Promotion] Support the Good Health of People
•	Increase of chronic illnesses		●●Health Check-up Discount, etc.
• Risk of infectious diseases
	●●Healthcare financial support for employees
[Enhancing Connections]	Realize an Ideal Lifestyle
•	Staying unmarried		●Community vitalization support
•	Community dilution
	●Day-care center support, etc.

Insurance

Domain

Non-

Insurance

Domain

Supporting the sustainability of social security and communities

New Business

Landscape

 Business processes based on further acceleration in		Needs for protection and asset formation as a means to maintain livelihood
digitalization and non-contact communication

 Merger with interactive communication	 More people want to stay healthy and prevent illness

CX	▶ Life insurance business is a highly recurring involving a long-term relationship with customers
▶ Take a leap forward from traditional life insurance practices and build a business process based on non-contact
Strategy
	communication and recent advancements in digitalization with a focus on customer experience (CX).	10

Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Transform the Domestic Business Model Through Our CX Design Strategy

• Leverage our CX design strategy to transform are approach to customers
• Be the chosen insurer by providing optimal products/services/info timely with the optimal channel

Changes in Point of Contact with Customers

	Contact	Until Now	Vision
	Dots (events in life)	Lines (life activities)
	Opportunities
	Method	Face-to-face/Direct Contact	Digital (non-contact)+
	Face-to-face
	Products and	Protection Centric	Insurance+Non-insurance
	Services
	Customer Preference	Recognized by Sales Reps.	Big data and AI Analysis
	and Behavior
	Customers	Passive Entry	More Active Entry

Our approach until now

Events in life of

customers

Retire-

ment

Employ-

(Face-to-face)ment

Vision for CX Design Strategy (OMO: Online Merges with Offline)

	FY2021 System Development
	FY2022 Launch
Near end of life support	Online registration via referrals
	Life Activities
[Inheritance/Succession]	of Customers
Digital entry
Utilization of insurance
to insurance
products
	(Employment)
Inheritance	Insurance
enrollment
information
[Protection]

	Matchmaking
[Asset formation]	support
Savings-type	CustomersChoose Channels
insurance	Physical/Digital
enrollment
Pension-related	(Marriage) Review insurance
information
Childcare-related	Medical-related services

Dai-ichi Frontier Life

Marriage

Neo First Life

services
(Childbirth) Review insurance	11

Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Four Experiential Values Set Forth in the New Medium-Term Plan

• Efforts to provide a superior customer experience by expanding and exploring four experiential values
• Aim for 10mn customers and top level NPS® in Japan by leveraging our CX design strategy

Protection

• Expand product lineup/underwriting and related services to address (at the time) diversifying protection needs of each customer

Sharpen competitive edge with	Asset Formation/Succession
existing life insurance business

• Leverage the group strengths in asset management, product development and sales force to develop products, consult and develop related services for asset formation and succession

	Increase efficiency of sales representatives
	to support financial needs in conjunction
	with consulting based on social security
	Differentiate medical products (made-to-
	order, etc.) and expand to affinity/digital
Neo First Life	channels
	Develop simple/full-digital insurance for
	millennials and Z generation who will drive
	the coming era

Health Promotion

• Tapping into the prevention domain (Commercialization and utilization of accumulated data by creating an ecosystem)

Tapping into the health/medical field

[No. of Customers in Japan]

approx. 10mn

(approx. 9mn as of FY2019 end)

[Net Promoter Score (NPS®)]

Top Level in Japan

Asset Management	Individual Savings	Group Annuity
Investment and	Sales and product	Sales and product
product development	development expertise	development expertise
expertise		(Separate account, etc.)

Dai-ichi Frontier Life

• Related Domains (supplementary fields)

Enhancing Connections

• Create new points of contact with customers and insurance opportunities through efforts to resolve issues for an ideal society

Proactive business partnerships

Healthcare financial support for employees (1)

• Medical cost assumptions via AI/consulting
• Health initiative support (partnering)
• Health promotion app (QOLism)

Matchmaking	Succession Near end of life
Obtain new capabilities	＋ and more
for innovation and
strengthen competitiveness	12

(1) Joint effort by Dai-ichi Life Group/Mizuho Financial Group

Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Sales Representative Channel Reform for Higher Efficiency

• Next three years are key in the transformation process as we emphasize on quality over quantity
• Initiate a makeover of framework to develop a more efficient sales channel by offering high level CX

Efforts for Transformation

Taking a leap forward from traditional practices

Sale Performance Indicator	FY2023	after FY2026
2019	(end of new plan)
(pre-COVID)	Decrease versus
pre-COVID
	vs pre-COVID
2020(E)		over +10％

Performance

Appraisal

• Revision of appraisal system (qualifications/salaries, etc.)
• More focus on consumer satisfaction indicators

Consulting

• Increase contact points through CX design
• Expand use of digital tools
• Visualization of future cash-flow and non-daily risks to customers

Sustainable growth trend with

Individual efficiency to recover to pre-COVID level high efficiency and CX with revised recruitment and training framework

Dramatic Improvement in

Consumer Experience (CX)

and Net Promoter Score (NPS®)

Individual Efficiency
(revenue per sales rep)		vs pre-COVID
2019	Flat versus	over +20％
(pre-COVID)	pre-COVID

2020(E)

Recruitment and training

• Implement a more strict selection process (New recruitment in the next fiscal year to be about 70% YoY)
• Training program for high level customer experience
  (Enhance training material and follow-ups)

Products

• Expansion of protection and asset formation products
  ("segmented protection"/"risk applied asset formation" products, etc.)
• Add-onservices in the prevention domain

No. of highly efficient sales reps	Decrease in	No. of highly efficient
	sales reps
2020(E)	short-term due
over 10,000
to retirement
% of highly efficient		% of highly efficient
	sales reps
sales reps
approx. 20％		approx. 30％	13

Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Target for Customer Satisfaction

• Need to adjust our customer centric mindset in light of changes in customer behavior amid COVID
• Adopt NPS® as a core indicator to promptly solidify a truly customer centric corporate culture

Current status and NPS® as a core indicator

Correlation between customer

satisfaction and growth[Current Status]

Medium-Ranked satisfaction level

Adoption of Net Promoter Score (NPS®)

▶ Adopt NPS® as a core indicator to measure the level of

recommendation in place of the previously adopted

customer satisfaction survey to enable deeper analysis

Customer Satisfaction Standing (1)

Dai-ichi Life (Stand-alone)

Premium Growth Rate

(in-force based,

company estimates)

• Items with lower degree of satisfaction compare to peers(1)

Product Expertise Product

PresentationAdequacy

Product	Product	Contract	Volume of
Pricing	Simplicity	Simplicity	Documents

Product Policy Ancillary

Originality Certificate Services

(1) Based on third-party customer satisfaction survey results

▶ Solidify a truly customer centric corporate culture and

implement a fast-paced PDCA cycle based on business

operations from a customer perspective

▶ To be adopted by domestic group companies other than

Dai-ichi Life going forward

[Target]

[FY2026]

Top Level

in the industry

• Urgent need to adjust our customer centric mindset in light of rapid changes in customer values and behavior amid COVID
• Restore confidence of customer and other stakeholder in us following misconduct in the sales rep channel and solidify a new corporate culture

Current

Status

NPS® is a registered trademark of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

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Domestic Insurance Business Model Transformation "Expand existing business while exploring for opportunities beyond insurance"

Business

Improving Dai-ichi Life Business Productivity

• Essential to improve productivity to ensure competitiveness of existing business in the long-term
• Promote early achievement our six-year initiative of reducing approximately ¥30bn in costs

	Cost Structure and Reduction of Fixed Costs	FY2023	FY2026
									(New Plan End)
							2020
	Improve productivity to
		(Current)	(FY2023)
	ensure competitiveness in
			approx. -¥5bn
	the mid- to long-term
								Fixed costs subject to
	Direct Expenses				Sales support expenses at
					efficiency improvement
	(Salaries, etc.)				head office and branches			(FY2020) approx. ¥240bn
							Operating expenses	Fixed personnel
							(including real-estate and	expenses
	Structural reform of the sales						IT-related expenses)
	representative channel and
	raise efficiency				Fixed cost reductions
					and increase productivity			[Fixed cost reduction target]
					by strategically shifting
					human resources			approx. -¥30bn by FY2026
					(approx. -¥30bn)
Transform to a highly efficient
					- Equivalent to about 13％ of subject cost
	channel emphasizing on
						- Excluding CX/DX-related investments
	quality
						- Includes effects of personnel shift

Fixed personnel expenses

Strategic personnel shift to profit centers and new business domains while pursuing efficiency through digital

• Remote management of sales reps centralized operations
• Self-sufficiencyof sales office tasks and consumer-direct features
• RPA/digitalization of head office tasks, etc.

	Strategic personnel shift	approx. 3,100 people
	about 23% of all employees
	in the next six years
	excluding sales reps

Operating expenses

Streamline operations to adapt to changes in work-style

• Consolidation and area reduction based on new work styles and consider possibility for use as investment properties
• Save transportation expenses through remote operations and digitization and more paperless operations, etc.

CX/DX-related investment

approx. +¥13bn

Invest resources in carefully selected domains to carry out CX design strategy

Establishment of foundation for business model reform, creation of new business and digital innovation, etc.

15

Overseas Build a business portfolio that drives growth

Business

Increase Profits in the Existing Markets and Further Drive Business

• Build a resilient foundation for sustainable growth through business/regional diversification
• Aim for adjusted profit of approx. ¥85bn in FY2023 and improve in capital efficiency

Overseas Business Portfolio Strategy

[Target Level for FY2023]

Business

Market Development

Regional

Diversification

Phase Diversification

Diversification

Developed Market

U.S./AUS

Life Insurance

Business

Developing Market

Vietnam/India/

(Expand)

Indonesia/Thailand

Early

Cambodia/Myanmar

Phase

New Business

Early to Developed

Existing/New Markets

(Explore)

Expected

Impact

Stable Growth Generate profit in the "short-term"

High growth Generate profit in the "medium-term"

First-mover advantage Generate profit in the "long-term"

Innovation/

New business

Adjusted Profit (Overseas) approx. ¥85bn

(of which Protective Life approx. ¥45bn)

Impact of Strategic Investments

(Illustrative)

Capital Efficiency

Secure foundation for

Investment infuture growth new business

Investment in

Emerging markets

Investment in

Developed countries

Efforts for Further Growth

Deal with prolonged low interest rates and product strategy to address protection needs Improve operational efficiency in the new normal business environment

Pursue capital efficiency based on business development phase and strategic decisions based on the quality of the business portfolio

Expand to other regions leveraging existing business foundations

Contributes to short to long-term growth while reducing cost of capital of the group

Reduction in cost of capital

Group basis

(current)

Cost of Capital

16

Overseas Business

Build a business portfolio that drives growth

Initiatives for Driving CX with DX and Efforts to Improve Productivity

• Strengthen competitiveness in the new normal business environment and drive CX by utilizing DX
• Continuous efforts in operational efficiency mainly in developed markets to improve productivity

Initiatives for Driving CX with DX

• Sales Channel Digital Support

Improve customer satisfaction with high service quality through digitalization

Efforts to Improve Productivity (Protective Life/TAL)

• Protective and TAL have established an advantage over competitors in cost efficiency with cost synergies and economies of scale through M&A
• Continue efforts in operational efficiency for further productivity

New policy tool "Velocity"	Online advisor training program	Digital sales tool
"TAL Risk Academy"
for sales channel and	Advisor support tool	"Digi Quick" enhancement
customers	"TAL Adviser Centre"

Online application	Improve adviser skillset	Improve operational
Support sales efficiency	efficiency and quality

• Digital Healthcare Services

Create new experiential value with healthcare services utilizing digital data

2017 2018 2019 2020

Cost-to-revenue efficiency(1) 14.3%

12.3%

11.3% 11.0%

[For Further Productivity]

• Cost benefits from M&A
  System integration of acquired blocks
• Digitalization of maintenance
  AI for claim payment processing
• Efficient use of office space
• Consolidation of captive subsidiaries

Health support tool "Cora"(chatbot)	Health support for emerging Asian
countries/considering remote medical
Health promotion support "Health Sense＋"
services

• Enhance Customer Convenience

Improve customer convenience with introduction of digital tools

Claims app	App for customers
"Claims Assist"	"Daiichi Connect"
Claims settlement via	Premium payment/claims
smartphone	settlement via online

2018	2019	2020(E)
			• Synergies from Asteron Life
				integration
14.9%			•	Reduction of operating expenses
				based on new work-style
	13.2%		•	Optimize sales and marketing
				expenses
		11.3%
(1) Excludes post-acquisition integration costs and commissions.	17

For Protective cost is relative to revenue, for TAL cost relative to premium income.

Group Financial and Capital Strategy

18

Finance/

Capital

Improve financial standing and disciplined capital management

Disciplined Capital Management Through Evolution of the ERM Cycle

• Sustainable corporate growth through disciplined capital management with upgraded ERM cycle
• Aim for capital efficiency above cost of capital while securing stable economic value based soundness

Capital Efficiency

Aim	ROE/ROEV above cost of capital

Initiatives

▶ Reassessed our cost of capital (currently 10%)

▶ Enhance return on investment monitoring by hurdle rate

setting based on the assumed cost of capital for each

business category (individual company)

▶ Capital deployment including M&A after considering the

effectiveness of shareholder payouts measures in addition to

strategic conformance

▶ Shifted operations to free cash-flow based remittance to

Profit

Sustain-

able

Growth

CapitalRisk

Financial Soundness

Risk-Return

Aim	Insurance risk-centric risk profile

Initiatives

• Develop protection products and capital-light asset formation products based on risk and return assessments
• Overseas business growth considering risk profile improvement
• Obtain fee-based business profit from domains surrounding insurance including health care and digital technology
• Drive market risk reductions measures based on risk appetite

holding company

Aim	Stable Economic Solvency Ratio

Initiatives

• Decrease market sensitivities by driving market risk reduction measures
• Updated ESR measurement standards based on International Insurance Capital Standards (ICS) and economic value regulations under development in Japan.

(Changes in ultimate forward rate (UFR) assumptions and improvement of various measurement techniques based on other ICS, etc.)

19

Finance/

Capital

Improve financial standing and disciplined capital management

Recognition of Our Current Cost of Capital and Efforts to Reduce Cost of Capital Level

• We recognize our cost of capital to be 10% amid the changing business environment
• Aim for β levels comparable to global peers by weighing more to the less volatile insurance business

Our Cost of Capital Based on CAPM(1)	Efforts to Reduce Cost of Capital

Recognition	Exceeded our previous assumption (8%) at a level of 10%
of our cost of	amid changes in the business environment
capital

Increase in equity risk premium (expected return)

1.8

Reduce cost of capital (vs market beta) by weighing more to insurance business that is inherently less volatile

	vs market
	beta
Our rationale behind our high cost of capital	(β)
High volatility of economic value capital and risk (EEV			1.8
and ESR) and periodic profit attributable to DL's assets

Our stock price

vs market beta (β)(2)

Our stock price

20-year JGB

yield

TOPIX

High at β1.4 and above even after the introduction of negative interest rates

1.4

(bonds, stocks, etc.)	Financial sensitivity to EEV and
	stock price β
	~high correlation～		1.6

1.4

1.2

Aim for beta levels comparable to global insurers by further reducing market risk

1.0

Insurance risk-centric

global insurers

0.8

Mar. 2010	Mar. 12		Mar. 14		Mar. 16		Mar. 18		Mar. 2020
(IPO)

High	Sensitivity to financial market fluctuation in economic	Low
value capital (interest rates and stock markets)
	20

(1) Capital Asset Pricing Model	(2) vs TOPIX beta (past three years, weekly basis)	*Image (Sensitivity of economic value-based capital to financial market fluctuations and beta at the end of Mar. 20)

	Improve financial standing and disciplined capital management	*Market-related risk reduction efforts are basically by Dai-ichi Life (non-consolidated) assuming the economic
Finance/	environment and other factors will not deviate significantly from the current (end of March 2021) level.
Capital		*Figures are estimates and are subject to change after the FY2020 financial results are finalized.
		.
	Drastically Improve Group Capital Efficiency Through Risk Profile Reform

• Focuscontinues to be onmarket risk reduction to draw near to risk profile of global insurers

• Aim for sustainable growth/improvementin capital efficiency by effective capitalreallocation

Reduce interest rate and equity risk by 20％	Drive market risk reductions aiming to	[Ambition]
	achieve our ambition at an early stage

Reduction initiatives in the new plan(FY2021 to 2023) are readjusted in light of	Expected time frame to reach our risk profile target is "early in the medium to long
significant progress in the first year since the initial plan rolled-out (FY2019 end)	term time horizon" in light of current market fluctuations and updated ESR standards	Insurance risk-centric
Risk Profile
							Risk Profile
(based on updated ESR								(Risk profile of global insurers)
measurement standard)				Insurance Risk, etc.
	28％		approx. 31％
	End of		End of			Insurance Risk, etc.	Market Related Risk
				Mar. 2024
			Mar. 2021				(Operational risk included)	approx. 50％
				Milestone
		Starting point(1)		Market Related Risk		approx. 50％
			68％
					approx. 65％
			of which			of which
			interest rate/equity risk 42％	interest rate/equity risk 36％
Costof Capital						[Long-Term Direction]	Over Cost of Capital
					Secure Two-Digit Level
(Estimate)		10％		[Target for NewPlan]	(by FY2026)
Capital Efficiency					(FY2023)		approx. 9％
&	[Outlook for FY2020]					Cost of Capital Reduction
Soundness		approx. 8％		approx. 8％
						(Illustrative)

Adjusted ROE	6～7％	(Achieve approx. average 8% in the Medium-Term)
ROEV	6～7％(1)
	Low Sensitivity
Economic Solvency	approx. 206％(2)	(Improve sensitivity to financial market fluctuations, ensuring 170% to 200％)
Maintain Stable Level
Ratio (ESR)

Timeline

markets-capital in propositions Value

21

(1) The average of the last three years (estimated for FY2018-2020) is shown. (2) Figures after changes in standards such as UFR.

Finance/

Capital

Improve financial standing and disciplined capital management

Changes in UFR and LLP in ESR Measurement

• Stricter risk management based on ICS and regulations under development in Japan

Impact of Changes in UFR and LLP

Main Changes

① Reduction of Ultimate Forward Rate (UFR) Level

[Current] 3.5% → [New] 2.5% (Potential growth rate forecast + BoJ inflation target)

Change in Last Liquid Point (LLP)

• Changes in measurement assumptions based on stricter internal control (These changes are reflected to EEV measurement assumptions as well)
• The revised standards will be applied to risk-management, including market risk reduction going forward

Estimate ESR at the	*Estimates based on market fluctuations and market risk
end of March 2021	reduction measures from the end of Dec. 2020 and may
	change after the FY2020 financial results are finalized

② [Current] 30th yr. → [New] 40th yr. (UFR level converged from 40th year to 70th year)

(Other)

Improvement of various measurement techniques based on ICS (mainly DFL)

Changes in
forward interest rate assumptions	②LLP
(Illustrative)
(Current)	40th	(Current)
30th yr.	yr.	3.5%

① UFR

2.5%

Market forward

interest rate

0

10

20

30

40

50

60

70 Year

[Before Change] ① UFR 2.5%	②LLP 40th
approx. 226%	approx.
yr.	(Other)
	- 9pt
		approx.	approx.
		- 14pt	+3pt

Own Capital
¥8.0tn	Decrease of approx. ¥600bn
Integrated Risk
¥3.5tn	Nearly Flat
	(marginal increase)

[After Change]

approx.

206%

approx.

¥7.4tn

approx.

¥3.5tn

22

Improve financial standing and disciplined capital management

Finance/

Capital

*Market-related risk reduction efforts are basically by Dai-ichi Life (non-consolidated) assuming the economic environment and other factors will not deviate significantly from the current (end of March 2021) level. *Figures are estimates and are subject to change after the FY2020 financial results are finalized.

.

Risk Reduction Targets in the Medium-Term Plan

• Reduced 70% of initial targets for a four-year span to reduce 20% market risk in FY2020 alone
• In the new plan (three years from FY2021) we set a more ambitious new 20% risk reduction plan

2020

New Medium-Term Plan (FY2021 to 2023)

from FY2024

	Interest Rate		Initial Plan
	Risk
	[Risk reduction Measures]
	Risk reduction of approx. -¥310 bn
	Buy/Replace long-term bonds
•	(equivalent to -20% in four years)
•	Reinsurance
•	Derivatives, etc.

approx. -¥75bn

(equivalent to -5％)

[Actual risk reduction]

approx. -¥300bn

Three-year cumulative of

approx. -¥230bn (equivalent to -15％)

▶ Nearly achieved in the first year of a four-year plan

	[Interest Rate Risk]
	End of Mar. 2021
Risk Reduction Targets	¥1.3tn(1)
(-¥0.4tn vs Mar-20)
in the New Medium-Term
Plan
[Interest rate and equity risk]

[New Plan]

During the new plan (three-years)

Targets set to reduce risk by 20％

(as of end of Mar. 2021 after UFR standard change)

[Target] Risk approx. -¥260bn(1)

Aim to achieve ahead of schedule based on market environment Aggressive liability structure reform through reinsurance

Addition risk reduction of

approx. -¥280bn(1)

planned for FY2024 to 2026

approx.		Equity Risk
	[Risk reduction Measures]
-¥520bn(1)(2)
•	Sale of equity holdings
	•	Hedge positioning through

	derivatives and investment
Approx. 1.5 times the scale	trusts, etc.
[Equity Risk]
compared to the initial four-
End of Mar. 2021

	Initial Plan	approx. -¥60bn	Three-year cumulative of approx. -¥150bn
Risk reduction of approx. -¥210bn	(equal to -6％)	(equivalent to -14％)
sale of equity: approx. ¥200bn	Sale of equity: approx. ¥500bn

(equivalent to -20% in four years)
Equity sale of approx. ¥700bn	[Actual sale of equity]
	▶ Executed according to plan(approx. -¥52bn in risk reduction)
	approx. ¥200bn

year plan	¥1.3tn(2)
	(+¥0.3tn vs Mar-20)
	[Domestic listed equity held]
	Market value ¥3.3tn
	(＋¥0.6tn vs Mar-20)

[New Plan]

During the new plan (three-years)

Targets set to reduce risk by 20％

(as of end of Mar. 2021 after hedging adjustments)

[Target] Risk approx. -¥260bn

- Equity sale of approx. ¥600bn at market value	Looking to further
- Hedge positioning at approx. ¥600bn
reduce risk

Hedging to accelerate risk reduction effects (majority of position has been established)
Hedging position to be maintained for the time being looking to further risk reduction	23

(1) Figures after changes in standards such as UFR (2) Excluding the effects of front-loading hedging

Finance/

Capital

Improve financial standing and disciplined capital management

Free-Cash-Flow Generation and Business Investment for Growth

• Generate more than ¥800bn in free-cash during the period of the new medium-term plan
• Enhance return on investment monitoring considering cost of capital of each group business

Pool free-cash-flow (FCF) to holding company

Optimal group-wide capital reallocation/shareholder payout Capital

Circulation

Shift to FCF based discipline capital management

Strong Shareholder Payout

Strike a balance

between investment and

shareholder payout

Strict investment return assessment (hurdle-rate)

Investment in high-growth/high-capital-efficient businesses

Until now  Set a remittance rate against profit level of subsidiaries

Monitoring based on cost of capital of each group business

Remittance to holding company going forward

• FCF is defined as the sum of transferable surplus capital after considering economic value, local regulations and accounting standards
• Set remittance rate to FCF based on business strategy of each subsidiary (remittance from subsidiaries based on periodic profit expected to rise)
• Upgrade capital circulation between the holding company and subsidiaries

Until now  8% cost of capital across the board for all group entities

(Difference in interest rates are added to cost of capital for overseas businesses)

Calculate cost of capital for each business (individual company) by taking into account betas according to risk profile and market risk premiums by country of domicile,

Outlook of cash at holding company

FY2019 Cash inflow (past standard)

[Group Adjusted Profit]	approx. ¥250bn
[Remittance rate] ×approx. 55%
[Cash to holding company]	approx. ¥140bn

[Cash Outlook During New Plan]

balance at Mar. 2021+3 years(FY2021 to 2023)

Total Cash Inflow

approx. ¥800bn or more

and evaluate investment effectiveness

Current cost of capital of the group (10%)

*After deduction of expected interest payments by the holding company.		24
Share buyback announced today is not deducted

* Shareholder payout policy is subject to change in light of changes in the external environment and other factors.

Improve financial standing and disciplined capital management

Change in Basic Policy for Shareholder Payouts

• Consider flexible additional payouts on top of dividend payout ratio of 30% or more for each fiscal year

• Aim for an average total payout ratio of 50% in the medium-termwith strategic additional payouts

Finance/

Capital

Basic

Policy

▶ Stable cash dividends based on group adjusted profit (realistic profit indicator)

(Dividend payout ratio is calculated based on the historical three-year averages of group adjusted profit)

• Consider additional payouts through share repurchases, etc. considering ESR, cash-flow and strategic investment opportunities

Stable Dividends

[Dividend Payout Ratio]

Consider flexible

Based on Profit

30% or more each FY

＋ additional payouts

(from FY2021)

•

Basically no reduction in dividends per share

(from FY2020)

Shareholder Payouts & New Policy

[Applied for FY2020]

(NEW) Basic Policy for

Share Buyback(1)

approx. 200bn

Shareholder Payouts

Consider additional payouts looking at a

medium-term total payout avg. of 50％

Share Buyback

40%

Total Dividends

(Illustrative)

Total payout ratio

[Dividend Payout Ratio]

30％ or more each FY

(vs three-year average of group adjusted profit)

Dividend payout ratio

2010

2012

2014

2016

2018

2020(E)

(1) Maximum amount of share buyback resolved at the Board of Directors meeting held on March 31, 2021

• Strategical in scale and timing
• Rough guide for total payout ratio:

Medium-term avg. 50％

Considerations for additional payouts

ESR Level

Status of market risk and sensitivity reduction

Cash position of the holding company

Group Financial Leverage

Existence of strategic

investment opportunities

Our stock price, etc.

Strategic scale and timing decisions

* After considering the size of holdings, treasury stocks from the scheduled	25
buyback of approx. ¥200 billion to be cancelled in principle

Finance/

Capital

Improve financial standing and disciplined capital management

Implementation Capital Policies Based on Economic Solvency Ratio (ESR) Level

• Consider capital policies based on ESR target between 170% and 200％
• Decided buyback after considering ESR condition, strategic opportunities and our stock price, etc.

ESR Level and Capital Policy Concept

•	Maintain stable dividends in line with profits
•	Actively consider strategic investments

Regarding the share buyback of approx. ¥200bn

and/or flexible additional payouts

	approx. 206% : Current (Mar. 2021 estimate)
	200%
Target Level	▶ Maintain stable dividends in line with profits
▶ Consider strategic investments and/or flexible
170 to 200%
additional payouts based on financial soundness
	170%
	• Maintain stable dividends in line with profits
	• Consider strategic investments and/or flexible
	additional payouts based on prospect of
	improvement to medium-term target
	(Reconsider risk-taking and/or shareholder payouts as needed)

	•
ESR Level	•

Market risk and sensitivity reduction

•

Cash position of the holding company

Group Financial Leverage

•

Existence of strategic
investment opportunities	•
Our stock price, etc.

ESR above target level

Steady decline in market risk and sensitivity

Expected remittances from group companies and Funds for the sale of stake in Janus Henderson

Financial leverage expect to maintain a certain level

Implementation of capital investment return analysis

130%

• Consider risk-reduction and

Reconsider shareholder payouts

(Consider recapitalization as needed)

Management	Decision to initiate
Action
share buyback of approx.
	¥200bn

*Period of repurchase of shares: From April 1, 2021 to March 31, 2022 26

Group Sustainability and

Business Foundation

27

Sustainability

&

Business

Foundation

Create a universally bright future by fulfilling our part in enhancing sustainability

Promote the Enhancement of Sustainability as an Entire Group

• Promote sustainability initiatives that would contribute to well-being of all through establishment of the Group Sustainability Promotion Committee and set of quantitative indicators

Select sustainability targets	To contribute to the "Well-being" of all,
establish quantitative indicators linked to each target
to solve group important issues (materiality)
and work toward their achievement

Group Sustainability Promotion Committee to be established in order to plan group policies and strategies regarding non- financial areas from a super-long-term perspective across the group and monitor the progress of initiatives at each company

Important issues that we must solve to continue

protecting the well-being of all including future generations

Material Issues		Sustainability targets
(Materiality)

Important issues that we must solve to ensure future sustainable society, which is an essential for realizing the well-being of all

Material Issues		Sustainability targets
(Materiality)

Livelihood stability through insurance

Sense of security in later life

Four	Promote health
Experiential
for all
Values
	Building a safe and
	secure community
	Optimal experiential
	value that meet
	customer needs

• Elimination of the protection gap
• Extension of asset life
• Improve the health age
• Control social protection benefit costs
• Enhancement of mental wellbeing (Contributing to a sense of security in the community)
• Improve customer loyalty

Sustainability

of Society

Responding to climate change

Improving efficiency of energy use and promoting clean energy

Defending

human rights

Empowerment

of women

Contributing to society

through responsible

loans and investments

• Achieve carbon neutral to ensure the sustainability of the global environment, which is the foundation of people's lives
• Maximize the potential of each individual to realize the success of a diverse people Pursue Group Employees Value Proposition (EVP)
• Expand investments and loans that contribute to creating a positive social impact

*Description of major issues and sustainability targets

28

Sustainability

&

Business

Foundation

Create a universally bright future by fulfilling our part in enhancing sustainability

Drive Initiatives for Carbon Neutral

• Accelerate initiatives for early realization of carbon neutral to ensure the sustainability of the global environment, which is the foundation of people's lives

Set new targets for CO2 emission reduction

(50% reduction by FY2025, 100% reduction by FY2040)

• For CO2 emission reduction (Scope 1+2)
  plan to achieve target ahead of previous schedule

Material Issues

(Materiality)

Towards net zero greenhouse gas emissions

of investment portfolio (Dai-ichi Life)

Responding to	Improving efficiency
of energy use and
climate change
promoting clean energy

(Scope 1+2) vs. FY2019

FY2025- 50% reduction FY2040- 100% reduction

Set policy to achieve 100%

renewable energy (Dai-ichi Life)

• Join Net-Zero Asset Owner Alliance, an international initiative in which institutional investors aim to transition to portfolios with net-zero greenhouse gas emissions by 2050

• Set targets reducing Scope 3 of CO2 emissions for items that should be emphasized from the perspective of leading change in business and employee behavior* (Dai-ichi Life)

*Limited to identifiable items

Dai-ichi Life (Scope 3) vs. FY2019

FY2030- 30% reduction

FY2050- 100% reduction

Specific Initiatives

• Set interim five years targets (stocks, bonds, real estate)
• Strengthen engagement with investee companies (dialogue on climate change response, etc.)
• Supporting transition to a low-carbon society and creation of environmental innovation through investments

• Joined international initiative "RE100" (August 2019)
• Set a policy to procure 100% of the electricity consumed in business activities from renewable energy by FY2023 (For real estate with investment purpose achieve during FY2021)
• Establish a scheme to supply electricity to our owned real estate from invested and financed renewable energy power plants (51 domestic and overseas plants with a total output of about 6,500MW), utilizing FiT-certified renewable electricity with tracking option

29

Sustainability Create a universally bright future by fulfilling our part in enhancing sustainability

&

Business

Foundation

Group Human Capital Strategy and Group Governance to Support Business Foundation

• Develop highly engaging employees and organizations to be the driving force for business transformation in the new management plan
• Continuous evolution of group governance in light of various changes in the domestic and global external environment

Group Human Capital Strategy for Business Transformation

Organization with diverse talents that realize 4 experiential values Maximize potential through proactive career development of each

Start a full-scale operation of new HR system

• From emphasizing seniority to diversity and flexibility
• Establishment of professional positions

Evolution of Group Governance

Efforts to Strengthen Global Governance (GLC: Global Leaders Committee)

▶ Global Leaders Committee (GLC) was established in the previous medium-term

management plan, composed of the president of the holdings, the CEOs and related

directors of the group overseas companies, with the aim of utilizing global knowledge

Various job rotations Side businesses that broaden horizons E-Learning programs

Job-type new recruitment Year-round recruitment Promote industry-academia partnerships

CX design	DX promotion
capabilities

•	Penetration of the	•	Business development
	customer's perspective		using digital capabilities
•	Fostering innovation	•	IT experts development
	through design thinking		and IT standardization

"Behavioral Change"

"Corporate Culture Change"

"Management Change"

Organizational

designGlobalization

capabilities

Development of

data analytics experts IT literacy education

Expansion of mid-career recruitment and effective use of group specialists

and enhancing management.

▶ In the new management plan, we will promote initiatives so that each company, who

is an expert in overseas business, can proactively be involved in management, and

accelerate the creation of a more essential global management framework, such as

the formulation of overseas strategies and the consideration of the utilization of

overseas human capital.

Establishment of the Group Sustainability Promotion Committee Strengthening the monitoring of the medium-term management plan by the Board of Directors

▶ Establishment of the Group Sustainability Promotion Committee:

In order to realize a sustainable society, from a group-wide and super-long-term

	•	Improve management	•	Sophistication of global
		quality		management
Introduction of	•	Business leaders	•	Providing new growth
	development		opportunities
management licenses

Sophistication of human capital
data management
Diversity promotion	Strategic allocation of human capital
			for realizing 4 experiential values
			[QOL improvement for employees and their families]
			Self-Career Dock(career counseling), Work Style Reform,
			and Productivity Improvement

Expansion of global human capital pool Employee mobility among group companies

Introduction of global HR system

perspective, implement group-wide policies and strategies related to non-financial

areas, monitoring of the implementation status of initiatives at group companies, etc.

(formation of project teams at operating companies level to accelerate activities)

▶ Strengthen monitoring of medium-term management plan:

The Board of Directors strengthen their monitoring of the progress of business

strategies (expand and explore), financial and capital strategies in terms of both

quantity and quantity in the medium-term management plan.

30

Reference Materials

31

(Reference)

Changes in the Risk Profile in FY2020 and the Status of Market Risk Reduction Efforts

Mar-20	Mar-21 Estimate
[Before changes to UFR, etc.]	[Before]	[After]

ESR

Shareholders' Equity/Risk

Amount (¥ in trillions)

Of which, market-related

Amount of risk

Interest

Rate Risk

Equity Risk

Exchange rate

Credit

Real estate

Other market-related

Operational risk, etc.

Insurance

Risk

195％ 7.2/3.7

69％		Decrease of
	approx. ¥200bn
		Market fluctuation factors, etc.
		(including changes in other
		companies in the group)
		Approx. +250 billion yen
25%
Interest rate + equity risk amount	Approx.
	before diversification effect
	¥2.6tn		¥2.4 tn
18%
6%	(DL) Estimated effects of risk reduction
11%	initiatives approx. 440 billion yen
6%	Interest Rate Risk	Approx.¥300bn
[金利リスク削減]
	Reduction
4%	Purchase and replacement of super-long-term bonds:
3%		approx. ¥1.7tn (converted to 30Y JGBs)
	New ceded reinsurance: approx. ¥300bn (policy reserve)
	Equity Risk	Approx.¥140bn
	[株式リスク削減]
	Reduction
28%	Sale of equity holdings: approx. ¥200bn (market value)

※Including risk-reduction effect of approx. ¥90bn for approximately ¥400bn hedging positions for new medium-term management plan.

Appox.

226％

Appox.8.0/3.5

Approx.

69％

19%

21%

8%

10%

6%

5%

3%

29%

Approx.

206％

7.4/3.5

Approx.

68％

21%

20%

7%

10%

6%

3%

3%

28%

• Interest rate and equity risk decreased by approx. ¥200 billion YoY

[Effects of risk reduction initiatives]

• Achieved an approximately ¥440 billion by substantial progress in reducing interest rate risk and sale of our equity holdings in line with our plan.
  (of which ¥90 billion is a hedging position established with the aim of accelerating risk- reduction benefits during new medium-term management plan)

[Market fluctuation factors, etc.]

• Increased by approximately ¥250 billion due to market fluctuations, reflecting a sharp recovery in the stock market

*Figures are estimates and are subject to change after the FY2020 financial results are finalized.

.

32

(Reference)

Impact of UFR Standards Changes for Group EEV and New Business Value (estimated value for FY2019)

Dai-ichi Life

Dai-ichi

Frontier Life

Main Revisions

Reflecting changes in Ultimate Forward Rates (UFR) and Last Liquidity Point (LLP)

Application of UFR(2.5%) and LLP (40th year)

Reflecting corporate bond spreads in the discount rate used for insurance liability valuation, etc.

Adding a discount rate calculated with reference to International Insurance Capital Standards (ICS)

• Implemented standard changes in conjunction with changes to UFRs, etc. in economic solvency ratio (ESR)
• The changes at Dai-ichi Frontier Life are mainly for single premium savings-type products denominated in foreign currencies, based on the actual state of asset management in which matching investment is conducted by foreign currency-denominated corporate bonds
• Scheduled to adopt this change from the FY2020 for EEV measurement

*Estimates prior to verification by third-party, and may change after finalization of financial results

Impact on Group EEV (Mar-20)

Impact on new business value (FY2019)

Group

Decrease of

approx. ¥300bn

Dai-ichi Life	Dai-ichi Frontier Life

Group

Increase of

approx.¥30bn

Dai-ichi Life	Dai-ichi Frontier Life

¥5.6tn	approx.
	¥5.3tn
[Before]	[After]

Decrease of

approx. ¥500bn

¥4.2tn	approx.
	¥3.7tn
[Before]	[After]

Increase of

approx.¥220bn

	approx.
	¥410bn
¥191.2bn
[Before]	[After]

	approx.
¥180.0bn
¥150.3bn
New Business
Margin
3.3%	3.9%
[Before]	[After]

Decrease of
approx. ¥10bn
¥141.0bn	Increase of
approx.¥40bn
	approx.
	130.0bn		approx.
			¥10bn
		(2.4%)	0.9%
6.8%	6.3%	¥(27.7)bn
[Before]	[After]	[Before]	[After]	33

(Reference) Adjusted ROE Definition

Adjusted ROE ＝ [Numerator] Adjusted profit ÷ [Denominator] Adjusted net assets (Average of year beginnning and ending value) Adjusted net assets ＝ Net assets - Goodwill - Unrealized gains/losses on fixed-income assets* + MVA balance at Dai-ichi Frontier Life

• Dai-ichiLife, Neo First Life: Amount classified as net unrealized gains on securities within fixed-income assets(1)
  Dai-ichi Frontier Life, Protective Life: Net unrealized gains on securities, net of tax

Adjusted ROE historical data

			FY2016		FY2017		FY2018		FY2019
		( in billions/ %)
Group Adjusted ROE	8.6%	8.5%	7.6%	9.5%
	Numerator (Adjusted Profit)	210.1	243.2	236.3	274.5
	Denominator (Average Adjusted net assets)	2,448.5	2,856.5	3,095.8	2,875.3
	Denominator (FY end Adjusted net assets)	2,612.3	3,100.8	3,090.7	2,659.9
	[Calculation of denominator]
	Net assets	3,136.0	3,747.9	3,712.4	3,775.8
		(－) Goodwill	57.9	51.4	48.9	39.4
		(－) Unrealized gains / losses on fixed-income assets	477.1	603.5	595.6	1,258.8
		(＋) [DFL] MVA balance	11.3	7.9	22.8	182.4
	Net assets for Adjusted ROE	2,612.3	3,100.8	3,090.7	2,659.9
		o/w Shareholder's equity	1,300.7	1,589.6	1,708.8	1,641.5
Dai-ichi Life Adjusted ROE	5.8%	8.0%	7.6%	7.8%
	Numerator (Adjusted Profit)	125.4	169.8	171.4	150.2
	Denominator (Average Adjusted net assets)	2,154.8	2,127.4	2,243.6	1,913.8
	Denominator (FY end Adjusted net assets)	1,945.3	2,309.6	2,177.7	1,650.0
	[Calculation of denominator]
	Net assets	2,481.6	2,888.2	2,885.2	2,549.9
		(－) Unrealized gains / losses on fixed-income assets	536.3	578.6	707.5	899.8
	Net assets for Adjusted ROE	1,945.3	2,309.6	2,177.7	1,650.0
		o/w Shareholder's equity	561.2	696.0	684.1	630.1

Definition of Group Adjusted Profit

Adjusted profit of

subsidiaries

	Group
			Gain on adjustment
	Adjusted
		of affiliates
	Profit
				Holding company
				profit and loss, etc.
[Adjustment 1]	Provision for contingency and price fluctuation reserves, etc.
		(in excess of statutory requirement, net of tax)

In addition, if there are retained earnings of overseas subsidiaries and affiliates, adjustments will be made case-by-case basis.

[Adjustment 2] MVA related gains (losses), net of tax, etc.

Adjusted for technical accounting valuation gains and losses

[Adjustment 3] Amortization of goodwill, gains/losses on acquisition phase, gains/losses on change in shareholding, etc.

Adjusted for gains/losses on organizational restructuring and amortization of goodwill, etc. in the consolidation procedures of each company.

(1) It mainly defines unrealized gains/losses on yen-denominated bonds, purchased monetary claims, hedged foreign currency-denominated bonds, and investment	34
trusts whose main investment targets are fixed-income assets.

Investor Contact

Dai-ichi Life Holdings, Inc. Investor Relations Group Corporate Planning Unit [phone]

Disclaimer

The information in this presentation is subject to change without prior notice. Neither this presentation nor any of its contents may be disclosed or used by any other party for any other purpose without the prior written consent of Dai-ichi Life Holdings, Inc. (the "Company").

Statements contained herein that relate to the future operating performance of the Company are forward-looking statements. Forward-looking statements may include - but are not limited to - words such as "believe," "anticipate," "plan," "strategy," "expect," "forecast," "predict," "possibility" and similar words that describe future operating activities, business performance, events or conditions. Forward-looking statements are based on judgments made by the Company's management based on information that is currently available to it and are subject to significant assumptions. As such, these forward-looking statements are subject to various risks and uncertainties and actual business results may vary substantially from the forecasts expressed or implied in forward-looking statements. Consequently, you are cautioned not to place undue reliance on forward-looking statements. The Company disclaims any obligation to revise forward-looking statements in light of new information, future events or other findings.

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