Dai ichi Life : November 14, 2022 Presentation Material with Speech Text

• This is Taisuke Nishimura, Chief of Financial Planning Unit.
• Thank you for joining our conference call today.
• Today, I will make a general overview of our financial results, followed by a question and answer session.
• Please turn to page 2.

• Here are today's three key highlights.
• First I will review consolidated results. Continuing from the first quarter, Group adjusted profit declined YoY due to the impacts of COVID-19 spread in Japan and rising overseas interest rates.
• DL secured an increase in adjusted profit YoY. An increase in positive spread and a decrease in reinsurance ceding cost offset a deterioration in gains from core insurance activities due to an increase in hospitalization payment related to the COVID-19, etc. Meanwhile, the impact of rising overseas interest rates continued to depress profits on DFL and PLC. Consolidated net income was negatively affected by MVA-related losses at DFL.
• Regarding new business performance. Although DL and NFL sales remained weak, DFL sales increased significantly thanks to expanded sales contribution from DL channel amid rising overseas interest rates. Overseas sales at PLC and DLVN were steady. Group VNB decreased YoY, affected by low levels of sales at DL and NFL.
• Group EEV declined from end of March 2022, as the positive impact of rising domestic interest rates was outweighed by the impact of rising overseas interest rates and falling equity markets.
• Based on these results, full-year profit forecast and VNB forecast were revised. Group adjusted profit is expected to be approximately ¥240 billion due to an increase in hospitalization payment and higher hedging cost than originally expected, and lower profit at PLC. Group VNB forecast was revised downward to approximately ¥135 billion.
• On the other hand, the dividend per share forecast remains unchanged from the initial forecast of ¥86. Considering the discussions with group subsidiaries, at the present time, we still assume that we will be able to secure ¥240 billion in remittances from subsidiaries to the holding company based on the current fiscal year's performance.
• Finally, on November 7, we announced a tender offer for ipet Holdings, a major pet insurance company, to make it a wholly owned subsidiary. I will explain this later.
• Please refer to the following page.

• Here, I will explain profit indicators.
• At DL, fundamental profit decreased YoY due to an increase in hospitalization payment related to the COVID-19. Regarding the capital and extraordinary gains (losses) and other items, an improvement in foreign exchange gains/losses excluding hedging costs and gains on derivatives due to rising domestic interest rates and yen depreciation contributed to an increase in adjusted profit.
• Continuing from the first quarter, DFL incurred an increase in regular policy reserves for foreign currency denominated products due to strong sales amid a sharp rise in overseas interest rates.
• At PLC, insurance payment related to the COVID-19 was lower than expected at the beginning of the fiscal year, and operating income improved significantly. However, non- operating income had a significant negative impact from the valuation losses due to rising interest rates and falling equity markets.
• TAL's adjusted profit increased due to an improvement in underlying profit, as well as recovery from the losses recorded in the previous comparable period caused by the flattening of interest rate curve in Australia.
• Finally, consolidated net income was mainly affected by the deterioration in MVA related gains (losses) at DFL. This was mainly due to a deterioration in valuation gains (losses) related to interest rate fluctuation derived from mark-to-market of money held in trust which is aimed to mitigate the impact of MVA gains (losses)
• Please refer to the following page.

• Next, I will explain sales performance.
• Domestic new business sales increased significantly YoY, driven by DFL, which increased its appeal for foreign currency denominated products due to rising overseas interest rates.
• On the other hand, DL sales remained at low levels due to a reactionary decline from the expansion in sales of new medical insurance products in the previous comparable period and continuous shift of sales activities to DFL products. In addition, it still need time to instill new initiatives through integrated reform of consulting process and product mix started from July.
• Regarding NFL, whose main products is medical insurance, sales were continuously weak mainly at shop agents due to the impact of product revisions by competitors and other factors. We launched a new cancer insurance product in September. Although the premium per policy is small compared to medical insurance, the number of sales is progressing at a faster pace than planned.
• In overseas business, while sales of personal insurance at TAL were weak, PLC sales of insurance products for senior executives were strong, supported by rising interest rates. In addition, DLVN maintained its strong performance in the bank alternative channel, and overseas as a whole increased YoY even excluding the impact of foreign exchange rates.
• At TAL, the acquisition of the former Westpac Life, which was announced in the previous fiscal year, was completed on August 1 and consolidation began in this second quarter.
• Please refer to the following page.