Dai ichi Life : Supplementary Materials for the Three Months Ended June 30, 2020 (The Neo First Life Insurance Company, Limited)

[Unofficial Translation]

August 12, 2020

Seiji Inagaki

President and Representative Director

Dai-ichi Life Holdings, Inc.

Code: 8750 (TSE First section)

Supplementary Materials for the Three Months Ended June 30, 2020 (The Neo First Life Insurance Company, Limited)

August 12, 2020

Financial Results for the Three Months Ended June 30, 2020

The Neo First Life Insurance Company, Limited (the "Company"; President: Yuji Tokuoka) announces its financial results for the three months ended June 30, 2020.

[Contents]

Financial Summary for the Three Months Ended June 30, 2020

1.	Business Highlights .........................................................................................................................	P.1
2.	Investment Results of General Account ...........................................................................................	P.3
3.	Unaudited Quarterly Non-Consolidated Balance Sheet ....................................................................	P.5
4.	Unaudited Quarterly Non-Consolidated Statement of Earnings .......................................................	P.6
5.	Breakdown of Ordinary Profit (Fundamental Profit)........................................................................	P.8
6.	Solvency Margin Ratio ....................................................................................................................	P.9
7.	Status of Separate Account ..............................................................................................................	P.9
8.	Consolidated Financial Summary ....................................................................................................	P.9

* Please note that this is an unofficial translation of the original disclosure in Japanese.

1. Business Highlights

(1) Annualized Net Premiums

Policies in Force			(millions of yen except percentages)
			As of March 31, 2020	As of June 30, 2020
				% of March 31,
								2020 total
	Individual insurance	139,508		139,631			100.1
	Individual annuities	10		10			100.0
	Total	139,518		139,641			100.1
		Medical and	18,667		20,408			109.3
		survival benefits
New Policies			(millions of yen except percentages)
			Three months ended		Three months ended
					% of June 30,
			June 30, 2019	June 30, 2020
					2019 total
	Individual insurance	1,972		2,496			126.6
	Individual annuities	―	―			―
	Total	1,972		2,496			126.6
		Medical and	1,864		1,997			107.1
		survival benefits

(Notes) 1. Annualized net premiums are calculated by using multipliers for various premium payment terms to the premium per payment.

2. Annualized net premium for medical and survival benefits includes (a) premiums related to medical benefits such as hospitalization and surgery benefits, (b) premiums related to survival benefits such as specific illness and nursing benefits, and (c) premiums related to premium waiver benefits, in which the disability cause is excluded but causes such as specific illness and nursing care are included.

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The Neo First Life Insurance Company, Limited

1. Sum Insured of Policies in Force and New Policies Policies in Force

	As of March 31, 2020		As of June 30, 2020
	Number of	Amount	Number of policies	Amount
	(thousands)	(billions of yen)
	policies	(billions of
		% of March		% of March
	(thousands)	yen)
		31, 2020 total		31, 2020 total
Individual insurance	354	1,208.8	379	107.1	1,256.4	103.9
Individual annuities	0	0.1	0	100.0	0.1	98.6
Group insurance	―	―	―	―	―	―
Group annuities	―	―	―	―	―	―

(Note) The amount of individual annuities shows policy reserves for policies after the commencement of annuities.

New Policies

	Three months ended June 30, 2019		Three months ended June 30, 2020
	Number of		Amount		Number of policies		Amount
	policies	(billions of yen)	(thousands)		(billions of yen)
	(thousands)		New	Net increase		% of June		% of June	New	Net increase
			by		30, 2019		30, 2019	by
			Business			Business
			conversions		total		total	conversions
Individual insurance	29	65.9	65.9	―	29	101.4	52.2	79.2	52.2	―
Individual annuities	―	―	―	―	―	―	―	―	―	―
Group insurance	―	―	―	―	―	―	―	―	―	―
Group annuities	―	―	―	―	―	―	―	―	―	―

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The Neo First Life Insurance Company, Limited

2. Investment Results of General Account

(1) Asset Composition

					(millions of yen)
			As of March 31, 2020	As of June 30, 2020
			Carrying	%	Carrying	%
			amount	amount
Cash, deposits, and call loans	159,503	65.3	190,791	68.7
Securities repurchased under resale	―	―	―	―
agreements
Deposit paid for securities borrowing	―	―	―	―
transactions
Monetary claims bought	―	―	―	―
Trading account securities	―	―	―	―
Money held in trust	―	―	―	―
Securities	35,833	14.7	40,250	14.5
	Domestic bonds	26,428	10.8	30,317	10.9
	Domestic stocks	986	0.4	1,218	0.4
	Foreign securities	8,418	3.4	8,714	3.1
		Foreign bonds	8,418	3.4	8,714	3.1
		Foreign stocks and other securities	―	―	―	―
	Other securities	―	―	―	―
Loans	730	0.3	2,508	0.9
Real estate	99	0.0	96	0.0
Deferred tax assets	―	―	―	―
Others	48,237	19.7	43,930	15.8
Reserve for possible loan losses	(4)	(0.0)	(8)	(0.0)
Total	244,399	100.0	277,568	100.0
	Foreign currency-denominated assets	―	―	―	―

(Note) The amounts of buildings were posted for real estate.

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The Neo First Life Insurance Company, Limited

(2) Fair Value Information on Securities (securities with fair value except for trading securities)

(millions of yen)

As of March 31, 2020

As of June 30, 2020

Book

Fair

Gains (losses)

Book

Fair

Gains (losses)

value

Value

Gains

Losses

value

Value

Gains

Losses

Held-to-maturity bonds

34,749

34,497

(251)

61

313

38,935

38,548

(386)

43

429

Policy-reserve-matching

―

―

―

―

―

―

―

―

―

―

bonds

Stocks of subsidiaries and

―

―

―

―

―

―

―

―

―

―

affiliated companies

Available-for-sale

1,110

1,083

(27)

32

59

1,110

1,315

204

207

3

securities

Domestic bonds

―

―

―

―

―

―

―

―

―

―

Domestic stocks

1,010

986

(24)

32

57

1,010

1,218

207

207

―

Foreign securities

100

97

(2)

―

2

100

96

(3)

―

3

Foreign bonds

100

97

(2)

―

2

100

96

(3)

―

3

Foreign stocks and

―

―

―

―

―

―

―

―

―

―

other securities

Other securities

―

―

―

―

―

―

―

―

―

―

Monetary claims

―

―

―

―

―

―

―

―

―

―

bought

Certificates of deposit

―

―

―

―

―

―

―

―

―

―

Others

―

―

―

―

―

―

―

―

―

―

Total

35,860

35,581

(279)

93

373

40,046

39,863

(182)

250

433

Domestic bonds

26,428

26,200

(228)

48

276

30,317

29,980

(337)

34

371

Domestic stocks

1,010

986

(24)

32

57

1,010

1,218

207

207

―

Foreign securities

8,420

8,394

(25)

13

38

8,717

8,664

(53)

8

62

Foreign bonds

8,420

8,394

(25)

13

38

8,717

8,664

(53)

8

62

Foreign stocks and

―

―

―

―

―

―

―

―

―

―

other securities

Other securities

―

―

―

―

―

―

―

―

―

―

Monetary claims bought

―

―

―

―

―

―

―

―

―

―

Certificates of deposit

―

―

―

―

―

―

―

―

―

―

Others

―

―

―

―

―

―

―

―

―

―

(Note) The table above includes assets which are considered appropriate to handle as securities as defined in the Financial Instruments and Exchange Act.

Carrying values of securities whose fair value is deemed extremely difficult to recognize are as follows: Not applicable.

1. Fair Value Information on Money Held in Trust Not applicable.

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The Neo First Life Insurance Company, Limited

3. Unaudited Quarterly Non-Consolidated Balance Sheet

					(millions of yen)
			As of March 31, 2020		As of June 30, 2020
			(summarized)
			Amount		Amount
	(ASSETS)
	Cash and deposits		159,503		190,791
	Securities		35,833		40,250
	[Corporate bonds]		[26,428]		[30,317]
	[Domestic stocks]		[986]		[1,218]
	[Foreign securities]		[8,418]		[8,714]
	Loans		730		2,508
	Policy loans		730		2,508
	Tangible fixed assets		239		229
	Intangible fixed assets		1,722		2,114
	Reinsurance receivables		38,206		34,317
	Other assets		8,168		7,365
	Reserve for possible loan losses		(4)		(8)
	Total assets		244,399		277,568
	(LIABILITIES)
	Policy reserves and others		236,073		253,825
	Reserves for outstanding claims		1,503		1,657
	Policy reserves		234,570		252,167
	Reinsurance payable		310		231
	Other liabilities		4,772		3,684
	Corporate income tax payable		8		2
	Other liabilities		4,764		3,682
	Reserve for price fluctuations		5		5
	Deferred tax liabilities		―		57
	Total liabilities		241,162		257,804
	(NET ASSETS)
	Capital stock		32,599		42,599
	Capital surplus		24,599		34,599
	Legal capital surplus		24,599		34,599
	Retained earnings		(53,934)		(57,582)
	Other retained earnings		(53,934)		(57,582)
	Retained earnings brought		(53,934)		(57,582)
	forward
	Total shareholders' equity		3,264		19,616
	Net unrealized gains (losses) on		(27)		147
	securities, net of tax
	Total of valuation and translation		(27)		147
	adjustments
	Total net assets		3,237		19,763
	Total liabilities and net assets		244,399		277,568

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The Neo First Life Insurance Company, Limited

4 . Unaudited Quarterly Non-Consolidated Statement of Earnings

		(millions of yen)
	Three months ended	Three months ended
	June 30, 2019	June 30, 2020
	Amount	Amount
ORDINARY REVENUES	28,997	31,395
Premium and other income	28,969	31,350
[Premium income]	[27,335]	[28,599]
Investment income	25	45
[Interest and dividends]	[25]	[45]
Other ordinary revenues	2	0
ORDINARY EXPENSES	32,234	35,041
Benefits and claims	5,403	10,851
[Claims]	[211]	[256]
[Annuities]	[32]	[3]
[Benefits]	[526]	[1,072]
[Surrender values]	[297]	[2,320]
[Other refunds]	[155]	[503]
Provision for policy reserves and others	20,445	17,751
Provision for reserves for outstanding claims	110	154
Provision for policy reserves	20,334	17,597
Investment expenses	0	4
[Interest expenses]	[0]	[0]
Operating expenses	6,252	6,154
Other ordinary expenses	133	279
ORDINARY PROFIT (LOSS)	(3,236)	(3,645)
EXTRAORDINARY LOSSES	0	0
Provision for reserve for price fluctuations	0	0
Income (loss) before income taxes	(3,237)	(3,646)
Corporate income taxes - current	2	2
Total of corporate income taxes	2	2
Net income (loss) for the period	(3,239)	(3,648)

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The Neo First Life Insurance Company, Limited

Notes to the Unaudited Non-Consolidated Balance Sheet

As of June 30, 2020

1. Dividends paid Not applicable.
2. Marked Changes in Shareholders' Equity

On April 27, 2020, the Company received funds from Dai-ichi Life Holdings, Inc. for a capital increase via a private placement. As a result, capital stock and legal capital surplus increased ¥10,000 million and ¥10,000 million, respectively, in the three months ended June 30, 2020 and capital stock and legal capital surplus rose to ¥42,599 million and ¥34,599 million, respectively, at the end of the three months ended June 30, 2020.

3. Amounts are rounded off to the unit stated.

Notes to the Unaudited Non-Consolidated Statements of Earnings

Three months ended June 30, 2020

1. Net loss per share for the three months ended June 30, 2020 was ¥971.04.
2. Amounts are rounded off to the unit stated.

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The Neo First Life Insurance Company, Limited

5. Breakdown of Ordinary Profit (Fundamental Profit)

				(millions of yen)
			Three months ended	Three months ended
			June 30, 2019	June 30, 2020
Fundamental profit (loss)	A	(3,135)	(3,554)
Capital gains		―	―
	Gains on money held in trust		―	―
	Gains on investment in trading securities	―	―
	Gains on sale of securities		―	―
	Derivative transaction gains		―	―
	Foreign exchange gains		―	―
	Others		―	―
Capital losses		―	―
	Losses on money held in trust		―	―
	Losses on investment in trading securities	―	―
	Losses on sale of securities		―	―
	Losses on valuation of securities		―	―
	Derivative transaction losses		―	―
	Foreign exchange losses		―	―
	Others		―	―
Net capital gains (losses)	B	―	―
Fundamental profit plus net capital gains (losses)	(3,135)	(3,554)
		A + B
Other one-time gains		0	―
	Reinsurance income		―	―
	Reversal of contingency reserve		―	―
	Reversal of specific reserve for possible loan	0	―
	losses
	Others		―	―
Other one-time losses		101	91
	Ceding reinsurance commissions		―	―
	Provision for contingency reserve	101	86
	Provision for specific reserve for possible	―	4
	loan losses
	Provision for specific reserve for loans to	―	―
	refinancing countries
	Write-down of loans		―	―
	Others		―	―
Other one-time profits (losses)	C	(101)	(91)
Ordinary profit (loss)	A + B + C	(3,236)	(3,645)

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The Neo First Life Insurance Company, Limited

6. Solvency Margin Ratio

														(millions of yen)
													As of March 31,	As of June 30,
													2020	2020
Total solvency margin				(A)	9,388	42,504
			Common stock, etc.							3,264	19,616
			Reserve for price fluctuations					5	5
			Contingency reserve					1,451	1,538
			General reserve for possible loan losses		―	―
			(Net unrealized gains (losses) on securities (before tax) and deferred	(27)	183
			hedge gains (losses) (before tax)) × 90%
			(Multiplied by 100% if losses)
			Net unrealized gains (losses) on real estate × 85%		―	―
			(Multiplied by 100% if losses)
			Policy reserves in excess of surrender values		22,281	22,177
			Qualifying subordinated debt					―	―
			Excluded portion of policy reserve in excess of surrender values and	(17,587)	(1,016)
			qualifying subordinated debt
			Excluded items								―	―
			Others										―	―
Total Risk										3,013	3,381
			(R + R ) 2	+ (R	2	+ R + R ) 2 + R	4	(B)
1	8		3	7
			Insurance risk							R1	512	523
			3rd sector insurance risk				R8	932	1,006
			Assumed investment yield risk		R2	4	5
			Guaranteed minimum benefit risk		R7	―	―
			Investment risk							R3	2,503	2,861
			Business risk							R4	118	131
Solvency margin ratio
				(A)				x 100					623.1%	2,513.8%
			(1/2) × (B)

(Note) The figures as of March 31, 2020 are calculated based on Articles 86 and 87 of the Enforcement Regulations of the Insurance Business Act, and Announcement No. 50, Ministry of Finance, 1996.

The figures as of June 30, 2020 are calculated by using the method which is deemed appropriate taking the regulations and announcement above into account.

7. Status of Separate Account

Not applicable.

8. Consolidated Financial Summary

Not applicable.

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The Neo First Life Insurance Company, Limited