Domestic Insurance Business Strategy

Hideo TeramotoDirector, Senior Managing Executive Officer

Summary

21

Three brands provide products to cater to the changing needs of our customers

Rebalancing product portfolio in light of the negative interest rate policy

Initiatives to strengthen core channel led to an increase in salesrepresentatives

“InsTech” initiatives, merging insurance business and technology

Three Brands Strategy: Domestic Life Market and Dai-ichiGroup

22

Bancassurance(level premium,

protection)

Walk-in insurance shops etc. Leaflet, direct mails

Direct, Internet

Leaflet, direct mails etc.

Sales representatives

Bancassurance(single premium,

saving)

Prefers comparison, simple products & procedures,

proactively seeking information

Prefers consulting for services with high value added

Agents

Eyeing the opportunity

Optimizing three brands and distribution channels to cater to the changing needs of our customersNegative interest rate policy make a limited impact

Customer characteristics

& products

Distribution channels

Main players

Market(maturity, size)

Immature, Small

Matured,Large

Relatively matured, Medium

Foreign & P/C Foreign & P/C players

Foreign, P/C & other new

players

Internet, foreign

players, mutual associations

Major playersBancassurancespecialists and major players

Foreign and P/C players

Protection / Medical / Saving(single premium / level payment)

Single premium saving(yen / foreign currency) Medical / Protection

Dai-ichi Life Group’s Reaction to the Negative Interest Rates

23

<Dai-ichi Frontier Life>Stopped sales of yen-denominated fixed annuity (Feb-16)Stopped sales of yen-denominated fixed whole life (Mar-16)

<Dai-ichi Life>Individual insurances & annuities

Reducing assumed rate of return on single premium whole life (Jan-16 onwards)Reduced availability of prepayment (Apr-16)Reduced discount rate on prepayment and return rates on claims deposit

Group InsuranceDefined Benefit: Control general account in-force and promote Separate Account Bond Fund and Separate Account Balanced Fund IIDefined Contribution: Promote sale of mutual funds

Shifting focus on protection-type products

Shifting focus on foreign-currency products

Dai-ichi Life: Targeting Young and Female Segments

24

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1QFY Mar-16 1QFY Mar-17

Below 1010’s

20’s

30’s

40’s

50’s

60’s & over

＋15％＋19％

＋7％

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1QFY Mar-16 1QFY Mar-17

below 1010’s

20’s

30’s

40’s

50’s

60’s & over

Total+1％

＋17％＋36％

＋29％

＋30％

＋36％

＋7％

Launched new products targeting young and female segments・Whole life medical for female (Jan 2016), term life with survival benefits (Apr 2016) etc.

Sales to senior segment declined as we controlled sales of single premium products in light of lower interest rates・Reduced assumed rate of return on single premium whole life.

No. of Policies by Age (Male)

Total+16％

No. of Policies by Age (Female)

(13％)(14％)

Dai-ichi Life: Rebalancing Product Portfolio

25

Assuming low interest rates environment will persist⇒Shifting Product Portfolio toward protection and medical

Sales of Single Premium Whole Life

• Customized plan for youth• Mixed media promotion

(television, web, SNS etc.)

• 100% deductible• Top-level account value at age 30s to 50s• Nursing care protection0

50

100

150

200

250

300

0

100

200

300

400

500

600

700

800

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016F

Premium revenue (LHS)

Number (RHS)

(billion yen) (thousand)

Additional incentives to the channel

Intensified training to develop protection market

Head office leading delivery of target customer info

New products launch

Promote sales of comprehensive protection package

Initiatives for young segment

Insurance for business owners

Dai-ichi Life: Strengthen Core Channel (Sales Rep.)

26(Notes) Sales force are as at the end of June. Number of new policies per sales representative is monthly average.

Sales force and productivity on the rise due to a change in training process (FY2015-2016)

43,991

42,447 41,957

43,502

5.66.2 6.3

6.6

2.0

3.0

4.0

5.0

6.0

7.0

8.0

39,000

40,000

41,000

42,000

43,000

44,000

45,000

1Q FY 2013 1Q FY 2014 1Q FY 2015 1Q FY 2016

Sales representatives (LHS) New policy per sales rep. (RHS)

<What has changed?> Training period expanded from two to five yearsCompensation to prioritize customer base expansionChange in training process (literacy in finance, improve sales pitch etc.)

(number) (number)

Dai-ichi Life: Strengthen Core Channel (Sale of DFL Products)

27

0

5,000

10,000

15,000

20,000

25,000

30,000

0

200

400

600

800

1,000

Apr May Jun Jul Sep (Plan) Jan (Plan)

No. of eligible sales rep. (RHS)No. of sales (LHS)

10x

3.5x

Sale of Dai-ichi Frontier products by sales representatives launched in last fiscal yearEligible sales representatives to be increased to 25,000 next January from current 2,600

Eligibility expanded

Eligibility expanded

Eligibility expanded

(number)(number)

Recognizing the Environment and the Direction to Take

28

(Note 1) Reduction in standard rate of return on level payment policies could lead to an increase in premium on savings-type products but make a limited impact on protection-type products.

(Note 2) A revision of life table could lead to a reduction in premium for death protection but an increase for medical insurance.

Accelerate price competition?

Changing business environment and competitive landscape

Pricing differ strategically company

to company

Companies focus on differentiation of

protection products

Customized premium based on analysis of medical big data,Focus on accumulating big data such as medical data and life log

Reduction in standard assumed rate of return※1

Revision of life table※2

Assumption of extended period of low interest rate after Brexit

Existing business model rendered obsolete by an advancement of ICT

Consulting for services and products with high value-added rather than simply competing on pricing,

Streamline business process

Merging Insurance Business and Technology

29

Insurance ×Technology

Guiding personally optimized proposal

(consultation, products, timing etc.）

Quick paperwork, Customer friendly,

Simple questionnaire

Value added leading to QOLProducts and services to

promote healthspan

(Note) QOL (Quality of Life): general well-being of individuals and societies based not only on wealth and built environment, but physical and mental health and social belongings

Initiatives Taken in Each Domain

30(Note) Indices developed by Japan Medical Data Center to measure health condition based on vital and medical receipt data of 1.6 million anonymous case

Healthcare domain

Healthcare domain

Underwriting domain

Underwriting domain

New products & services that promote extension of healthspan

Studying new product based on “Kenko Nenrei(note)” at Neo First Life

Participate in joint research on analysis and application of health data together with Kyoto University and other business partners

Plans use wearable terminals to accumulate health log of employees on company’s health insurance union

New products & services that promote extension of healthspan

Studying new product based on “Kenko Nenrei(note)” at Neo First Life

Participate in joint research on analysis and application of health data together with Kyoto University and other business partners

Plans use wearable terminals to accumulate health log of employees on company’s health insurance union

Analysis of medical big data to optimize underwriting and risk management

Joint research on development of diseases using IBM Watson technology

Gradual application of analysis on combined internal and external medical data to underwriting criteria

Streamline business process by clerical mechanization

Analysis of medical big data to optimize underwriting and risk management

Joint research on development of diseases using IBM Watson technology

Gradual application of analysis on combined internal and external medical data to underwriting criteria

Streamline business process by clerical mechanization

Initiatives Taken in Each Domain - continued

31

Keeping in touch with

technologies

Keeping in touch with

technologies

Marketing domain

Marketing domain

Securing access to the latest technologies (IoT, big data, AI, robotics etc.)

Investment in venture fund founded by Keio Innovation Initiative

Securing access to the latest technologies (IoT, big data, AI, robotics etc.)

Investment in venture fund founded by Keio Innovation Initiative

Guiding optimized consultation through analysis of big data

Provide Total Life Plan Designers sales leads for best product for the customer based on analysis of internal big data

Personalized proposal ideas based on digital marketing

Guiding optimized consultation through analysis of big data

Provide Total Life Plan Designers sales leads for best product for the customer based on analysis of internal big data

Personalized proposal ideas based on digital marketing

Position of Neo First Life

32

Customer initiated; prefer comparison, affordability, simple procedure

Banks Shops

Simple products

Immature, small

Competitive advantage based on coverage and pricing,

Competitive edge in “health”

The third brand after Dai-ichi Life and Dai-ichi Frontier Life to cater to the changing needs of customersHelps the Group expand customer base

Customer characteristics

& products

Distributionchannels

Market(maturity, size)

Starting with banks and shops, eyeing direct

channel

Gain of customers in the growing market

Direct

Neo First Life: Product Strategy of a Late Comer

33

Competitive edge in “health”Timely introduction of new products during the year with distinctive benefitsCompeting with reasonable pricing (economical yet value added)Balanced source of earnings (products other than third sector)

Non-smoker discount

Reduced underwriting standards

Products based on “KenkoNenrei(note)”

Aug-2015 Feb-2016 Planned in FY2016

Income protection insurance（with health discount)

Sep-2016

(Note) Indices developed by Japan Medical Data Center to measure health condition based on vital and medical receipt data of 1.6 million anonymous cases

Neo First Life: New Policies

34

Number of new policies underwritten during the first eight months to March 2016 was in line with the competition but was below our projectionMonthly sales this fiscal year averages 1.7 times that of initial seven months of prior fiscal year

0

2,500

5,000

7,500

10,000

12,500

15,000

0

500

1,000

1,500

2,000

2,500

3,000

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Monthly Accumulative

FY Mar-2016 FY Mar-2017

AccumulatedNo. of monthly sales

Aug-Feb average

Apr-Jun average

FY Mar-2016Accumulated:

8,000

1.7x

Key Takeaway

35

Unique combination of three brands with diverse business lines provides resilience to a change in environment

Building industry leading business model with “InsTech”

Growing sales force together with productivity gain lead to top line growth