Fundamental Strategy | T&D Financial Life Insurance Company | Annual Report 2016 (Integrated Edition)

As a strategic company of the T&D Life Group which specializes in selling insurance products through independent insurance agents, T&D Financial Life is working to expand the presence of the T&D Life Group.

T&D Financial Life is a strategic company in the T&D Life Group focusing on sales through independent insurance agents.

Insurance sales through this independent insurance agent channel are expected to grow, and by expanding its presence in the independent insurance agent market, the company aims to grow as well.

Under the medium-term management plan running from April 2016, the company will “diversify its product lineup,” “expand its sales network of insurance agents,” and “enhance customer service” to become the company of choice for customers and agents in the independent agent market, thereby encouraging the growth of EV and the increase of the new policy amount.

T&D Financial Life's Business Model

Figure: T&D Financial Life's Business Model

T&D Financial Life's Sales Network

Figure: T&D Financial Life's Sales Network

Strategy for Products

Transition of Shogai Premium Series

April 2010	Sales release of Shogai Premium
June 2011	Sales release of Shogai Premium World
August 2011	Sales release of Shogai Premium Japan
July 2013	Sales release of Shogai Premium World 2
August 2013	Sales release of Shogai Premium Japan 2
September 2014	Sales release of Shogai Premium Japan 3 and Shogai Premium World 3
April 2015	Start of handling the regular payment rider

Leveraging its product development capabilities, T&D Financial Life has been supplying products offering differentiated benefits, etc., to the market.

In April 2010, T&D Financial Life developed and introduced Shogai Premium, a cash flow-type single premium whole life insurance product based on the concept of “secure additional fund without the withdrawal from the premium reserve.” Beginning with this product, the company has developed and introduced a lineup of single premium whole life insurance products as the Shogai Premium Series by regularly revising the range of benefits in line with market needs.

At the time of launch, the market for OTC sales at financial institutions was dominated by single premium assumed interest rate-type products without market value adjustments (MVA), which were offered by the major domestic life insurers. However, the competitive environment showed some signs of shifting when other life insurers lowered their assumed interest rates and limited sales of their assumed interest rate-type products. In this environment, T&D Financial Life gradually made progress on expanding its agency network and driving product penetration in the market, achieving steady growth in sales.

At present, cash flow-type single premium whole life insurance products have been capturing a greater share of the overall market. The company is proud to have spearheaded the creation of this entirely new market category.

Also, in April 2015, the company developed the “regular payment rider,” enabling customers to regularly receive additions of a prescribed bonus policy amount in the Shogai Premium Series, as part of the product's improved convenience for customers.

As regards level premium products, in June 2014, a fixed annuities payment was added as one option to the income protection rider for the three major diseases, a characteristic feature of Kakei Ni Yasashii Shunyuhosho. The policy scope was broadened, including by reducing the minimum monthly annuity amount from ¥150,000 to ¥100,000 when the good health discount rider is applied. Furthermore, in August 2015, the company developed and introduced Kazoku Wo Tsunagu Shushinhoken, which is a whole life insurance product that specializes in death protection and addresses a wide range of asset formation and other needs of customers in the medium and long terms, including funding for post-retirement living expenses and children's education.

In addition, in December 2015, the company developed and introduced Hataraku Anata Ni Yasashii Hoken, which provides coverage in the event of prescribed conditions due to specific diseases, including cancer, acute myocardial infarction and stroke.

Going forward, T&D Financial Life will continue to develop and launch products that have something different to offer than other insurers' products, with the aim of increasing its presence in the market for independent insurance agents.

Lineup of Main Products

Single Premium Products

Shogai Premium Series

	Main Features:
Shogai Premium Japan 3 [non-participating whole life insurance (accumulation rate renewing type I)]	Under the concept of “secure additional fund without the withdrawal from the premium reserve,” Shogai Premium Series is a cash flow-type single premium whole life insurance series that features annual additions of a prescribed bonus policy amount to the “accumulated bonus amount” throughout the insured's lifetime.
Shogai Premium World 3 [non-participating foreign exchange rate linked whole life insurance (accumulation rate renewing, multi-currency type III)]	Shogai Premium Japan 3 is a product for customers interested in investing in yen-denominated assets, as the annual bonus policy amount is steadily added to the accumulated bonus policy amount every year using JGB yields as the reference rate. Shogai Premium World 3 is a product for customers interested in overseas interest rates, which are higher than domestic interest rates, and in foreign currencies, as the product is based on the reference rate of its linked foreign currency (Australian dollar or U.S. dollar).

Level Premium Products

	Main Features:
Kakei Ni Yasashii Shunyuhosho [non-participating income protection insurance (no surrender value type I)]	This is an income protection insurance product which provides either a monthly survivor annuity or a disability annuity over a fixed period in the event of the death or the total disability of the insured. One of the main features of this product is that the insurance premiums are more affordable than conventional term life insurance products. Also, by applying the waiver of premium payment rider for the three major diseases and the income protection rider for the three major diseases, the insured is covered against loss of income in the event that he or she suffers from one of the three major diseases (designated cancer, acute myocardial infarction and cerebral stroke) that reach a particular condition.
	Main Features:
Kazoku Wo Tsunagu Shushinhoken [non-participating special whole life insurance (type 1)]	The customer selects whole life insurance from two plans: the “basic plan” that secures death benefits from the beginning of the contract, or the “simple plan” in which death benefits are held to the initial insured amount at the time the contract was made and to which users can subscribe with a simple declaration. A product that secures death benefits and at the same time addresses a wide range of asset formation and other needs of customers in the medium and long terms, including funding for post-retirement living expenses and children's education.
	Main Features:
Hataraku Anata Ni Yasashii Hoken [non-participating specified illness income protection insurance (no surrender value type I)]	Pays an annuity (with a choice of either fixed term annuity or annuity certain) for prescribed conditions resulting from specific diseases (cancer, acute myocardial infarction, and stroke). Because this eliminates a death benefit and specializes in living benefit coverage, it is possible to provide required living expenses tailored to each customer's needs.

Management Targets Fiscal 2016

Policy amount in force: ¥1,850billion
New policy amount: ¥220billion

Fundamental Strategy

Aiming to establish a strong brand in life insurance sales through the independent insurance agent channel^*, the company is working to “diversify its product lineup,” “expand its sales network of insurance agents,” and “enhance customer service.”

* The independent insurance agent channel collectively refers to the OTC sales channel at financial institutions, including banks, securities firms, and the insurance shop agent channel.

Business Model

Market: Independent insurance agent market / Sales channel: Independent insurance agents (financial institutions and insurance shop agents) / Products: Single premium insurance (foreign currency reference type, etc.), loss of income protection insurance, etc.