Dai ichi Life : Presentation(3,234KB

Financial Analyst Conference Call

for the Fiscal Year Ended March 31,2024

May 29, 2024

Dai-ichi Life Holdings, Inc.

Agenda

Time	Topic	Speaker	Title
15:00 ～ 15:10	Key KPIs	Taisuke	Executive Officer
Nishimura	Chief Financial Officer
	Achieving	Tetsuya	President and Representative
15:10 ～ 15:25	Director
the New Mid-Term Management Plan	Kikuta
	Chief Executive Officer
15:25 ～ 16:30	Q&A session

2

Key KPIs

3

CFO Review (FY2023)

Capital Circulation Management

Strategic Management Action

Risk Control		Capital / Cash Generation	Capital / Cash Allocation

	Reduction in FY2023
Market Risk	ca. ¥160bn
Reduction	Total during the MTP:
ca. ¥700bn
(Interest rate and equity risks)	vs MTP target: 125%

FY2023 Remittance Estimate

ca. ￥300bn

Remittance

from Subsidiaries

Shareholder	Total since Mar. 2021
Payouts	ca. ¥880bn

	Mar. 2024
ESR	226%
(Economic Solvency Ratio)

(Dividends)

FY2023 Remittance Ratio

Estimate

ca. 93%

o/w Share buybacks ¥540bn

* FY2024 DPS forecast: ¥122 (+¥9 vs FY2022)

(vs March 2023 Up 14%pt)

Risk Reduction Amount

Exceeded the MTP Target

(vs Group adj. profit, FY2022: 140%)

Remittance Amount is	Achieving Stable
above the FY2022	Shareholder Returns

4

CFO Review (FY2023)

FY Results / Market Evaluation

Market Evaluation(1)

FY Results

Capital Efficiency

Relative TSR	vs Global 14 peers
(Mar. 2022 - Mar. 2024)	5th
	+64% from Mar. 2022
Our Stock β	0.87
(Mar. 2024, vs TOPIX,

3-year β)	(at the start of ex-MTP 1.45)

Kept Superiority in the RTSR

Group	FY2023		FY2023
¥319.3bn	Adj. ROE	8.2%
Adj. Profit	(Accounting)
	(+87% YoY)		(+3.3%pt YoY)
	FY2023		FY2023
Group VNB ✔ ¥54.5bn	ROEV
26.8%
(Economic value)

(Down 30% YoY)

Despite Challenges in VNB,	Capital Efficiency Improved
Profit Increased from FY2022	Compared to FY2022

5

(1) Calculated by the Company based on Bloomberg data

Market Risk Reduction and ESR

• ESR increased compared to the end of FY2022, due to progress in risk reduction and positive market factors such as higher stock prices, rising yen interest rates, and the depreciation of the yen.
• Market sensitivity has changed, showing a decline in ESR with rising yen interest rates due to increased mass surrender risk. DLHD will continue to reduce equity risk as outlined in the medium-term management plan and aim to lower sensitivity by addressing surrender risk.

ESR (Economic Solvency Ratio)

Financial market sensitivities with new ESR

Mar. 2024	226%	Uｐ 14％pt
(vs Mar. 2023)
	(Shareholder Payout)
	Market factors,	(6%pt)	Mar. 2024
	etc.	226%
	+16%pt		(3%pt)
		(inflation rate,
Mar. 2023			increase in unit costs, etc.)

212% Risk reduction

	initiatives
	+7%pt
Capital	¥9.6tn
¥7.8tn
	ca. +¥1.7tn

ESR as of end of Mar 2024

Japanese interest rate 50bps

Rise

Japanese interest rate 50bps

Drop

US interest rate 50bps Rise

US interest rate 50bps Drop

Australian interest rate

50bps Rise

Australian interest rate

50bps Drop

Japanese UFR rate 50bps

Drop

10％ decline in stocks and

real estates

Exchange rate 10% yen

appreciation

226%

(6)%pt

+1%pt

(1)%pt

+1%pt

(0)%pt

+1%pt

(0)%pt

(7)%pt

(2)%pt

Required Capital		¥4.2tn
¥3.6tn
ca. +¥550.0bn

(Reference) Definition of each surrender risk

1. Normal surrender risk: Amount of decrease in net assets when a certain level of stress is applied to the surrender rate over the contract period in the measurement model (J-ICS compliant).
2. Mass surrender risk: Decrease in net assets in the event of sudden stress on the surrender rate (J-ICS compliant)
3. Dynamic surrender risk: Risk of losses incurred due to fluctuations in surrender rates for savings products, such as single-payment whole life insurance, due to switching to other financial products in response to changes in market interest rates, etc.

6

Outlook for Group Risk Profile Transformation

• While interest rate risk has steadily decreased, equity risk has increased compared to the end of the previous fiscal year due to the rise in domestic stock prices, leading to an increase in required capital.
• Surrender risk has increased, driven by a rise in mass surrender risk associated with higher interest rates, exceeding the usual surrender risk.

		Group Integrated Risk Breakdown(1)			Drivers affecting
		(as of end of Mar. 2024, before diversification effect)
				Required Capital (Risk Amount)
Details of Market-related Risk(2)	Interest rate risk		(¥ in trillions)
6％[11%]
(before diversification effect)
[In parentheses: As of the end of Mar. 2023]

Other risks, etc.

6％ [7％]Equity risk

Surrender risk	23％[20%]
12％[9%]

Insurance risk Market risk

（excl. surrender risk etc.）	51％
19％[20%]	[52%]

（－）Diversification effect increased due to increased risk amount of market risk and life insurance risk

(＋) Surrender risk ca. +340.0bn

o/w DL surrender risk: ca. +¥310.0 bn

※Adopt the greater of mass surrender risk and normal surrender risk

FY23	Mass surrender risk ca.¥620.0bn＞ normal surrender risk	ca. ¥220.0bn
FY22	ditto	ca.¥260.0bn ＜	ditto	ca.¥310.0bn

Credit Risk	Exchange rate
12％[12%]	risk

12％[10%]

Other market risk	Spread risk
3％[3%]
1％[1%]
Real estate risk
		6％[6%]

(＋) Equity risk ca. +400.0bn
(＋) Exchange rate risk	ca. +220.0bn
(－) Interest rate risk ca.(310.0)bn
	Market	Insurance	Credit	Operational	Other	diversificati Required
	risk	risk	Risk	risk	risks	on effect	Capital
End of	2.87	1.55	0.88	0.19	0.27	(1.53)	4.25
Mar. 2024
End of	2.50	1.26	0.84	0.16	0.27	(1.35)	3.69
Mar. 2023

7

(1) Breakdown excludes the exchange rate risk against JPY, associated with the group consolidation.

New Business Results (Group Value of New Business)

• Group VNB decreased by 30% YoY, with DFL performing steadily under the new standards, while DL saw declines, excluding the increase in the group annuity business. PLC's VNB for some products turned negative, and at DLVN, sales slumped due to a decline in sales momentum.
• With the recovery in DL's sales and an increase in new contracts in TAL, the forecast for FY2024 is expected to be approximately ¥105bn.

	Group VNB	(YoY)			Annualized Premiums from New Policies (ANP)
FY2023	¥54.5bn
(30%)			¥502.9bn YoY+28%
	Entire group including 3 Asian affiliates: ¥55.4bn

(excl. exchange rate impact: +26%)

New
Business	1.3％	1.5％	0.9％
Margins
DL	(0.2％)	(1.5％)	(0.5％)
			ca. ¥105.0bn

(¥ in billions)	Domestic
+35%
			(DL +25%)
		ipet

Overseas

+10%

(Currency-adjusted +3%)

			77.7
(¥ in billions)			25.0
71.2
			46.7	¥54.5bn
		Overseas		8.7	45.0
46.7
		DFL/NFL
		DL	50.9	51.2
27.0			35.0
		(2.5)		(5.4)

NFL	378.7
DFL	6.7
13.1
DL	280.5

206.7 121.5

14.2301.2

117.9	220.7
74.5	46.2	57.5

DLVN&Other

TAL

PLC

106.3 113.0

29

38.4

13.9 9.9

63.2 64.6

124.2

26.9

13.6

83.6

	(19.8)
FY2022	FY2022	FY2023	FY2024
(Old Standard)	(New Standard)		(Forecast)

FY2021 FY2022 FY 2023

FY2021 FY2022 FY2023

8

Economic Value (Group EV)

• Group EV increased thanks to higher domestic interest rates and an increase of valuation in domestic stocks as stock prices increased, which contributed mainly to DL's EV.
• Sensitivity of Group EV to interest rates continued to decline while DL's sensitivity to equities increased from the end of Mar. 2023, but through domestic stock sales, DL's sensitivity to equities is expected to decline.

Group ROEV

FY2023	26.8%	(Contribution of economic variances)
+17.7%pt
(Group EV)	¥8,892.1bn	(vs Mar. 2023)
+¥1,817.8bn

Breakdown of Group EV

Overseas		DLVN	Domestic
	TAL
21％	2％	79％
8％

PLC

11％

NFL2％ Group EV

DFL Mar 2024

DL	PLC Others Others
(¥ in billions)

9％

¥8.8tn DL

69％

PLC

Others

PLC

Others

DL

DL

Adjustment

(incl. FX

change, etc.)

VNB

Expected

existing business

Economic / non-economic Variances

contribution

and assumption changes

(Non-Economic Assumptions) (Economic Assumptions)

Total +¥567.3bn

Total ¥（27.0）bn

Total +¥1,238.1bn

o/w RFR +¥67.9bn

ROEV

26.8%

Mar.

Mar.

Mar.

2023

2023

2024

(Adjusted)

EV Sensitivity to Financial Market Fluctuations

	Group-wide EV	DL EV
	Mar. 2022	Mar. 2023	Mar. 2024
	(8.9%)	(7.0%)
50bp decrease
in interest rates	(6.4%)
(RFRs)	(4.7%)	(0.7%)
			(0.1%)
			(7.0%)
	(5.9%)	(5.5%)
10% decrease
in stock market	(4.7%)		(4.8%)
	(3.9%)
		9

(Reference) EV sensitivity

Interest Rates

Stocks and Real Estates

Rise / Drop

Decline Values

Mar. 2024

Group EV

+0.8%

+0.7%

+0.3%

Group

¥8.8tn

¥8.8tn

Group

Overall

(0.2％)(0.1%)

(1.1%)

(0.7%)

(0.3%)

(1.9%)

(4.8%)

RFRs	Japanese	US	Australian	10％	10％
50bps	interest rate	interest rate	interest rate	decline	decline
Rise Drop	50bps	50bps	50bps	in	in
	Rise Drop	Rise Drop	Rise Drop	stocks	real estates

Mar. 2024
DL EV				DL
+0.4%	+1.0%	+0.4%	+0.3%	¥6.1tn
¥6.1tn
DL
(0.7%)	(1.4%)	(0.4%)	(0.3%)	(2.8%)
				(7.0%)

10