NISSAY ANNUAL REPORT 2016 A life insurance company that “Stays Closest” to support valued customers —Stay Closest to “Your Thoughts for Beloved Ones”— Top Message Introduction I would like to begin by expressing my deepest sympathies to the victims of the Kumamoto Earthquake. I hope to see a recovery in the damaged areas as soon as possible. In fiscal 2015, the domestic economy exhibited signs of weakness, as slowing growth rates in newly emerging economies caused instability in the foreign exchange and stock markets, but still managed to maintain a gradual recovery trend. Interest rates were low even at the start of the year, but fell even further as the Bank of Japan adopted a negative interest rate policy. This represents a significant challenge, as it could have a major impact on Nippon Life’s management. Despite these harsh economic conditions, demand for life insurance products is rising, as more women enter the workforce and as senior citizens face growing needs for medical and nursing care, and assistance with inheritance issues and asset formation. For Nippon Life, this change and diversification of customer needs represents a good opportunity for further growth. We are taking steps to solidify our position as Japan’s top life insurer, in terms of scale, quality and credibility, thus enhancing corporate value in a multiplicity of dimensions. Looking Back on the First Year of the Three- Year Management Plan Zen Shin When I was appointed president, we set out an objective for all Nippon Life employees: to make Nippon Life a company of excellence in “scale,” “quality,” and “credibil- ity.” Our goal was to make a company capable of constantly earning the trust of customers. Our previous three-year management plan, the “Future Creation Project,” returned Nippon Life to a growth track, and laid the foundation for medium- and long-term expan- sion. The current plan, which commenced in fiscal 2015, aims to build on this base by solidifying our position as Japan’s No.1 life insurer over the next decade. This Three- Year Management Plan has been named Zen Shin. Zen in this case means “everyone” working together with one mind, while Shin means “moving forward” as one towards the achievement of our goals. The growth strategy underlying the Zen Shin plan has several dimensions. We will take steps to “strengthen the domestic life insurance business” while also “reinforcing Group operations,” create a firm operating foundation by “solidifying the customer base,” “improving financial sta- bility” and “developing human resources.” These efforts 8
Transcript
NISSAY ANNUAL REPORT 2016
A life insurance company that
“Stays Closest”
to support valued customers
—Stay Closest to “Your Thoughts for Beloved Ones”—
Top Message
IntroductionI would like to begin by expressing my deepest sympathies to the victims of the Kumamoto Earthquake. I hope to see a recovery in the damaged areas as soon as possible. In fiscal 2015, the domestic economy exhibited signs of weakness, as slowing growth rates in newly emerging economies caused instability in the foreign exchange and stock markets, but still managed to maintain a gradual recovery trend. Interest rates were low even at the start of the year, but fell even further as the Bank of Japan adopted a negative interest rate policy. This represents a significant challenge, as it could have a major impact on Nippon Life’s management. Despite these harsh economic conditions, demand for life insurance products is rising, as more women enter the workforce and as senior citizens face growing needs for medical and nursing care, and assistance with inheritance issues and asset formation. For Nippon Life, this change and diversification of customer needs represents a good opportunity for further growth. We are taking steps to solidify our position as Japan’s top life insurer, in terms of scale, quality and credibility, thus enhancing corporate value in a multiplicity of dimensions.
Looking Back on the First Year of the Three-Year Management Plan Zen Shin
When I was appointed president, we set out an objective for all Nippon Life employees: to make Nippon Life a company of excellence in “scale,” “quality,” and “credibil-ity.” Our goal was to make a company capable of constantly earning the trust of customers. Our previous three-year management plan, the “Future Creation Project,” returned Nippon Life to a growth track, and laid the foundation for medium- and long-term expan-sion. The current plan, which commenced in fiscal 2015, aims to build on this base by solidifying our position as Japan’s No.1 life insurer over the next decade. This Three-Year Management Plan has been named Zen Shin. Zen in this case means “everyone” working together with one mind, while Shin means “moving forward” as one towards the achievement of our goals. The growth strategy underlying the Zen Shin plan has several dimensions. We will take steps to “strengthen the domestic life insurance business” while also “reinforcing Group operations,” create a firm operating foundation by “solidifying the customer base,” “improving financial sta-bility” and “developing human resources.” These efforts
President
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NISSAY ANNUAL REPORT 2016
A life insurance company that
“Stays Closest”
to support valued customers
—Stay Closest to “Your Thoughts for Beloved Ones”—
will help us meet the six following goals: “capture the top share of the domestic market for new policies,” “generate 6% growth in annualized life insurance premiums in force,” “expand the customer base to over 11.7 million,” “increase net income from Group businesses to ¥30 billion,” “cut fixed costs by ¥17 billion” and “boost equity by over ¥1 trillion.” In fiscal 2015, Nippon Life captured the top share of new life insurance policies in Japan, as annualized insur-ance premiums in force rose by 3.2% year on year. The customer base grew by 100,000, to 11.67 million policy-holders. Group operations generated a net income of ¥15.6 billion and equity grew by ¥600 billion. All of these figures represent important strides in the direction of our targets. The entire management team, as well as every employee in the Nippon Life Group, is working as a team to reach the goals set out in our three-year plan.
Growth Strategies
Expansion of the domestic life insurance business(Segment Strategy Progression)We are providing attractive products and services, while expanding and diversifying sales and service channels, to better accommodate customers’ needs.
Providing Attractive Products and ServicesIn April 2015, Nippon Life launched the Mirai no Katachi “Five Stars” Plan with Dread Disease Insurance Coverage with Continuous Support for the three most dreaded dis-eases—cancer, heart attack and stroke. In addition to a lump-sum payment to those affected by the ailments, this insurance product provides annuity payments up to four times, to help customers address the costs of long-term medical treatment. Many customers responded with inter-est to this package, concluding over 400,000 new policies to date. In April 2016, the Company introduced Gran Age, the industry’s first product designed for individuals who live very long lives.
President
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Unlike conventional life insurance products that are mainly designed to support beneficiaries if the policyholder passes away, this new-concept policy pays out a larger annuity to policyholders who live longer. In conjunction with the launch of this product, nippon Life kicked off its “Gran Age Project.” Developed with the idea that in modern society, many people will live for roughly a century, this project aims to support people during their “second life,” with products and services that offer seniors a safe and rewarding lifestyle, information on ways to improve their health, and opportunities to take part in local social activities. the Company has also developed products exclusively for sale via the sales desks of financial institutions. For example, in July 2015 we launched Long Dream GOLD, a single-premium whole-life insurance policy, and in April 2016 we released the variable annuity product Wrap Dream. Both of these products can offer relatively high returns during this time of low interest rates, because they are based on foreign currency-denominated funds. In this way, we are helping customers to address their inheritance and asset-formation needs.
Strengthening and Diversification of Sales/Service Channels
We use a variety of sales channels besides the face-to-face nippon Life sales representatives. these include nissay Life Plazas for servicing walk-in retail customers, financial institutions, and insurance agencies and corporate support teams. In fiscal 2015, nippon Life took capital stakes in Lifesalon and Life Plaza Partners—two chains of inde-pendent life insurance agencies. this will allow choosy customers to compare nippon Life products with a variety of other comparable policies. to further expand contacts with customers, we have forged relationships with compa-nies as diverse as nitori Co., Ltd. and ntt DoCoMo, Inc., seeking ways to jointly develop sales outlets and inde-pendent life insurance agencies.
Strengthening of Group Businessesto establish a firm foundation for longer-term growth, nippon Life is focusing on the overseas insurance business, asset management business and businesses instrumental to the development of the domestic life insurance market. our management targets for the three years from fiscal
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2015 are to increase net income from Group operations to ¥30 billion, and to ¥100 billion over 10 years. thus, we hope to expand the earnings capacity of the nippon Life Group.
Businesses instrumental to the development of the domestic life insurance market
In December 2015, we integrated the management with Mitsui Life Insurance Co., Ltd., and from the current fiscal year, we will begin management integration activities and exchange of personnel under the aegis of an “Integration Department.” this will strengthen our ability to market products through agencies and financial institutions and bolster asset management operations. In the future we hope to develop synergy and expand cooperation in an even broader range of activities.
Overseas Insurance BusinessIn october 2015, nippon Life reached an agreement to acquire a capital stake in national Australia Bank, Ltd., and in its life insurance subsidiary, MLC Ltd. this is the first time we have acquired a majority stake in a major overseas institution. In India, meanwhile, nippon Life increased its stake in Reliance Life Insurance Co., Ltd., and accordingly changed the name of the company to Reliance nippon Life Insurance Co., Ltd. As we broaden
our cooperation with these companies we look forward to both an increase in earnings and a wider opportunity to offer benefits to customers around the world.
Asset Management Businessthe asset management business has always been closely associated with life insurance operations, and nippon Life has several asset management subsidiaries, including nissay Asset Management Corp. and nippon Life Global Investors singapore Ltd., which handles Asian operations and numerous overseas business partners as well. Working as a team, we are steadily expanding income both in Japan and abroad. In March 2016, nippon Life increased its capital stake in Reliance Capital Asset Management Ltd. and changed the subsidiary’s name to Reliance nippon Life Asset Management Ltd.
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Business Principles
Expand the Customer Basenippon Life sales representatives strive to offer better “face-to-face after-sales service,” including Policy Details Confirmation Activities, which is not only house calls, but checks to see if a customer is in the hospital, and explana-tions of the services, content and process of handling their contracts. We also offer convenient contact via phone or online. In this way, we are trying to provide services that respond to an even broader range of policyholders’ needs. In october 2015, we began offering “contract informa-tion services for policyholders’ families,” to the relatives of all policyholders over the age of 70. the service explains the content of a customer’s policy to their family members, and the procedures for implementing a policy claim. In April 2016, we also launched a “nissay bereaved relative support service” for the relatives of policyholders who pass away, assisting them with various procedures. these and other services are allowing nippon Life to deliver even greater reassurance and satisfaction to policyholders and their family members.
Strengthening Financial Soundnessnippon Life does its utmost to maintain a solid financial foundation, to assure customers that we will always be able to meet insurance settlements, annuities, dividends and other payments in full, over the long term. As of the end of March 2016, the Company had an equity of ¥4.8 trillion, which already represents a solid financial base. However, to
implement our strategies for the future, we have set medium- and long-term targets to expand that base even further. our long-term goal is to raise nippon Life’s equity to ¥6.5 trillion, and the target of our current three-year plan is to boost equity by ¥1 trillion. to best utilize the premiums paid in by policyholders, we not only pursue asset management strategies that offer stable long-term returns but also seek to make our invest-ments serve society in a positive way, by investing in envi-ronmentally friendly, socially responsible funds. Under the current three-Year Management Plan, we have adopted investment targets that will increase the focus on infra-structure, environment-related industries and both domes-tic and overseas venture funds that can engender growth and promote new advances or new markets. Looking ahead, we will continue to promote compre-hensive and strategic management and control of the risks facing the Company, seeking to achieve a stable increase in profit over the long term while ensuring financial soundness.
Development of Human ResourcesI oversee the internal Human Value Improvement Project, which we started in fiscal 2015. through the project, we will move ahead with creating workplace environments where employees can work with aspiration and positive outlook, and to “develop human resources with a high sense of ‘responsibility’ and ‘pride’ overflowing with magnetism.” Women make up 90% of the workforce at nippon Life, and we place high priority on leveraging their skills. our personnel structure allows them to adjust to changes at various key stages of their lives, but also to support them in career development efforts. We are expanding the scope of job responsibilities for women and actively promoting women to management-level positions. All employees are encouraged to maintain a healthy bal-ance between their work and private life to ensure that they remain energetic and highly motivated, and we promote health, fitness and “worker health management.” this year, nippon Life introduced a program of “nursing care participation” for all employees. By encouraging our staff to take part in seminars and volunteer work, they can better understand the value of nursing care. In addition, we are seeking ways to better support our own employees who have to balance work with care for a family member. nippon Life provides all section managers with training that helps them be an effective nippon Life version of IkuBosses (“bosses who understand and encourage the diversity of lifestyles, employees and ideas”) as the back-bone of our “Human Value Improvement Project.”
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nippon Life’s desire is “to be the most familiar and approachable life insurance company”, and our corpo-rate message is to “stay closest to your thoughts for beloved ones.” every nippon Life employee, and every member of management strives to put this philosophy into action in their day-to-day activities, whether it be by providing cus-tomers with face-to-face service that makes them feel safe and secure, or through a program like “Action CsR-V: social contributions by 70,000 people.” this program was introduced to guide the social contributions of all company employees and executives, motivating them to contribute to a better society and local community. Another example of our commitment is our support for the 2020 tokyo olympics and Paralympics, as a gold part-ner (life insurance category). We want to encourage and support the athletes, organizers and spectators in the same way that we support our policyholders. our slogan for this effort is: “Play, support… Let’s Begin.” sport plays an important role in cultivating the next generation, whether it be the best athletes on the planet or those with physical disabilities. All employees and executives of nippon Life
will take an active role in helping to make these olympic Games a success.
In Closingthrough our efforts towards sound business management, from our long-term standpoint, we have continued to pay insurance claims even in the face of major disasters and financial crises. In any era, the foundation of a life insur-ance enterprise is to take full responsibility for protecting customers, thus serving as a source of security and safety for them. each and every one of us should reflect upon this mis-sion, and seek to reflect that awareness in our daily work activities, striving to help policyholders and all stakehold-ers achieve progress, and meet their life goals. We ask for your continued support and patronage.
—Stay Closest to “Your Thoughts for Beloved Ones”—
