Fundamental Management Principles of Nippon Life

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2 Fundamental Management Principles of Nippon Life Life insurance business based on the philosophy of co-existence, co-prosperity and mutualism is closely connected with the welfare of the public. Because of the nature of the business, public understanding and support are indispensable for the development of life insurance companies. For this reason, we have established the Fundamental Management Principles of Nippon Life under the precepts of Conviction, Sincerity and Endeavor. 1. We will strive sincerely to fulfill our responsibilities to the people by making every effort to offer policies which are truly needed. 2. We will, in recognition of the public service aspects of the life insurance business, strive to contribute to the elevation of the social welfare level through proper investment activities. 3. We will strive to increase further our productivity in every division of our company, with powerful execution, strong conviction and creative imagination. 4. We will strive to raise the living standard of all our employees through the prosperity of Nippon Life. We will strive also to be good citizens of Japan and the world. 5. As a member of the life insurance industry, we will cooperate with other life insurance companies for the development of this industry, and will also cultivate public understanding and support for life insurance. Chairman Kunie Okamoto President Yoshinobu Tsutsui

3 Contents Top Message 2 TOPICS 6 Response to the Great East Japan Earthquake 7 Three-year Management Plan 8 More Advanced Protection 12 More Advanced IT 14 More Advanced Support 16 Strengthening Equity 18 Using Equity to Fund Strategic Investments in Overseas 20 Major Overseas Business Expansion Initiatives and Global Network Development 22 Stable Payout of Dividends 24 Long-term, Stable Investment 26 Developing Human Resources to Create a Better Future and Fostering an Open Corporate Culture 28 Outline of Nippon Life Insurance Company (As of March 31, 2012) Company Name: Nippon Life Insurance Company Location of Head Office: , Imabashi, Chuo-ku, Osaka , Japan President: Yoshinobu Tsutsui Established: July 4, 1889 Offices: Branches 116 Sales offices 1,572 Overseas representative offices 4 Agencies* 11,234 Related Companies: Insurance and insurance-related businesses 9 Asset management-related businesses 30 General affairs-related operations 9 * Agencies include agencies at banks and financial institutions. CHAPTER 1: Business Performance in the Fiscal Year Ended March 31, 2012 Soundness and Profitability of Nippon Life 30 Fiscal Year Ended March 31, 2012 Business Overview and Performance 34 CHAPTER 2: Management of Nippon Life Mutual Company Framework 42 Corporate Governance System 48 Enhancing the Internal Control System 48 Promoting Compliance 49 Strengthening Risk Management 52 Strengthening the Underwriting, Insurance Claims and Benefits Settlement System and Expanding Explanation 56 Measures to Reflect Customer Feedback in Business 60 Contributions to the Environment, Communities and Society 62 Improving Disclosure 66 CHAPTER 3: Nippon Life s Products and Services Products for Individuals 68 From Application to Conclusion of a Policy 72 Provision of Information During the Term of a Policy 74 Requesting Payment of Insurance Claims and Benefits 76 Developing a Variety of Service Channels 79 Products and Services for Corporate Customers 84 CHAPTER 4: Company Information 87 CHAPTER 5: Financial Data 97 CHAPTER 6: Operational Data 151 Policyholder Protection Systems 217 Worldwide Network 219 Head Office The latest information is available on the Nippon Life website. index.html This is an English translation of a disclosure report that was produced in accordance with Article 111 of the Insurance Business Act. 1Business Performance Management of Nippon LifeNippon Life s Products and Services Company Information Financial Data Operational Data

4 Top Message We are dedicated to fulfilling our social mission as a life insurance company by creating a secure future along with our customers. Accomplishments and highlights of the past fiscal year The events of the year reinforced our awareness of the magnitude of our social mission as a life insurance company. When I was named president in April 2011, I said that I want Nippon Life to be a company capable of constantly earning the trust of customers. To accomplish this goal, I stated that Nippon Life must become a life insurer that excels in terms of scale and quality. It has been one year since I first proclaimed that the goal of everyone in our organization is to make Nippon Life a company of excellence in scale, quality and credibility. Our activities following the Great East Japan Earthquake underscored our commitment to this goal. Our sales representatives stepped up face-to-face services, we checked the safety of policyholders, we made insurance payments with reliability and speed, and we extended support to areas that were damaged. Activities of sales representatives in areas damaged by the earthquake clearly demonstrated that our operations are firmly underpinned by the two facets of our corporate culture in which we all take particular pride: discipline and solidarity. I was appointed chairman of The Life Insurance Association of Japan in July In this role, I was involved with measures, affecting the entire life insurance industry, to check the safety of policyholders, make reliable and speedy payments of benefits, and perform other activities. All these activities made me acutely aware of the immense scale of the social mission of life insurance companies following a disaster. Life insurers must always be a source of security for customers and fulfill their obligation to provide protection. Competition among life insurers in Japan is becoming more heated as the population ages and the number of children declines. Some people are inclined to believe that there is no longer any prospect for growth in Japan s life insurance market, but I do not subscribe to this belief at all. For example, there are a number of growing needs among seniors. To be prepared for a long post-retirement life, these individuals require services associated with medical and nursing care as well as with annuities and other categories of asset management. Women are another example of a market sector with growth potential. Lifestyles of women in Japan are shifting as more women pursue careers and marry at a later age. In recent years, the percentage of young people who take out insurance has decreased significantly. Here again, I think there is growth potential because insurers are not adequately explaining the need for policies to this age group. In Japan, there is much talk about how to resolve budget problems, particularly concerning social security programs and taxes. Japan has reached a point where everyone will need to take action on their own to be prepared for various risks. In other words, people must take responsibility for protecting their own lives. In this respect, the role of life insurers will become increasingly greater as a source of security for customers by supplementing the national social security system. Consequently, the responsibilities of Nippon Life are becoming greater as well. 2

5 The Future Creation Project, our new three-year management plan Goals of this plan are increasing new policy sales and building a stronger base for financial soundness and profitability. At the same time, we will upgrade the development of our human resources, which is vital to achieving our goals. For over 16 years, from 1996 to 2012, Nippon Life worked on increasing equity, which represents the basis for the financial soundness and profitability of a life insurance company. Furthermore, we invested 150 billion during the six-year period starting in 2006 to implement the New Integration Plan. I believe that these two initiatives are precisely how we should fulfill our social mission as a life insurance company. The full-scale implementation of the New Integration Plan started in April By taking this step, we completed a reexamination of all operations involving insurance from the standpoint of our customers. We also fundamentally overhauled our IT system infrastructure. We have a strong commitment to creating a secure future along with our customers by providing new comprehensive insurance services supported by the new integrated system and backed by outstanding financial soundness. We started The Future Creation Project, which is our new three-year management plan, for the purpose of accomplishing this goal. The project is centered on the following three components. (1) More advanced protection The first measure is more advanced protection. We started selling a product called Mirai no Katachi on April 2, 2012 in response to social changes and the diversification of our customers needs. The basic concept is to provide simple forms of protection that customers can easily understand. We used this concept to completely revamp the structure of many of our insurance products. In the past, we sold primary policies and added riders as necessary. Now, we are selling each insurance policy as an individual product. Switching to this method gives customers much more flexibility to assemble policies that have exactly the protection they require. As one step to improve services, we are responding to the need among many of our customers to talk to a consultant about nursing care. Customers can now receive information by using our Care Guidance Service, which we started in April We established an alliance with Nichii Gakkan Company, which operates Japan s largest network for senior care services, to provide this service. Customers can talk to a consultant who (1) Increase new policy sales with emphasis on new comprehensive insurance services (2) Build a stronger base for financial soundness and profitability to fulfill our long-term protection responsibilities as a life insurance company while constantly making progress regarding customer services (3) Develop human resources able to fully utilize the innovative IT infrastructure created by the New Integration Plan and take the lead in expanding overseas operations All of our executives and employees are determined to do what is needed to end the decline in our policies in force by fiscal 2014 and return to growth. Measures to increase new policy sales We will use advances regarding protection, IT and support to provide customers with new comprehensive insurance services. Regarding the New Integration Plan, we will incorporate three advances resulting from this plan into our sales activities, chiefly face-to-face sales. These advances involve offering protection that can meet diversifying needs, using IT to supply highly convenient services, and providing support that precisely matches each customer s requirements. 3

6 Top Message visits them at home free of charge about nursing care. The consulting service is available not only for policyholders and beneficiaries but also for spouses and parents with an interest in nursing care. We believe this service provides an opportunity for every member of a family to learn about nursing care that may be needed in the future. (2) More advanced IT The second measure is more advanced IT. We have started using a new wireless device called REVO that uses state-of-the-art technology. This unit, which will further improve customer services, has two major features. The first is more advanced consulting for insurance protection. REVO allows sales representatives to supply customers with information that matches their particular requirements based on family composition, age and other parameters. The ability to create a proposal that is best suited to each customer is another advantage. The second is more convenient administrative operations and services. Until now, customers completed procedures to take out insurance by filling out paper documents. With REVO, applications can be completed with no paper and no personal seal. (3) More advanced support The third measure is more advanced support. Face-to-face services provided by sales representatives will remain our primary means of providing support. But we will also continue to build a multi-channel service framework by strengthening and integrating Nissay Life Plaza customer service centers, corporate sales, agencies, financial institutions and other channels. The Internet is another means we are using to reinforce our support for customers. For example, to expand lines of contact with customers, we have a Facebook page and we have set up a Mirai Factory section on our website. We plan to promote greater integration of our channels by having our face-to-face sales representative channel play a supporting role in sales to individuals who used the Internet to ask for information about our products or register for our campaigns. Measures to strengthen financial soundness and profitability By adopting a medium- to long-term perspective, we will establish an even more powerful foundation for fulfilling our responsibility to provide customers with long-term protection. The series of financial crises triggered by the collapse of Lehman Brothers has created an uncertain outlook for financial markets. To continue fulfilling our obligation to be a source of security and protection for our customers in this difficult environment, we are taking the following four actions to build an even stronger base for financial soundness and profitability. (1) Increase equity We have been increasing our equity consistently over the past 16 years. We believe that this growth in our equity played a major role in enabling us to meet our obligations even after the financial crises in the past few years and the Great East Japan Earthquake. We aim to continue increasing equity (foundation funds (kikin), reserves and other items) so that we can continue to fulfill our responsibility to provide customers with long-term protection. Our goal is to return equity to the 3 trillion level by the end of fiscal Regarding dividends, our goal as a mutual company is to maximize benefits for customers by paying a stable dividend over the medium and long term. At the same time, we will preserve the proper balance between dividend payments and the need to increase equity and other requirements. (2) Strategic overseas investments Nippon Life is using its powerful equity base to make strategic investments in prominent financial institutions and insurance companies in Europe, North America and Asia. Building these long-term partnerships increases opportunities to earn profits that we can use to support the long-term distribution of earnings to our customers. In fiscal 2011, we established alliances with three companies outside Japan that included investments in these partners: Allianz Group, one of the leading integrated financial services providers in the world; Reliance Group, one of the largest business houses in India; and the AIA Group, the largest life insurer in the Asia-Oceania region, serving 15 countries and regions. We will continue to exchange information and personnel with leading financial institutions and insurance companies in other countries. We want to build mutually beneficial relationships for sharing business know-how, giving employees global business skills and achieving other goals. (3) Long-term, stable investment Nippon Life has always managed assets in a manner that enables us to provide customers with long-term, stable benefits while carefully managing the associated risks. We are establishing a global system for investment with offices in New York, London and Singapore and further support from overseas alliance partners and our subsidiary, Nissay Asset Management. In today s uncertain investment climate, Nippon Life will make investment decisions based on rigorous selection and diversification of our investment portfolio and risk management to earn stable and growing returns from a long-term perspective. 4

7 (4) Increase earnings Securing consistent earnings is vital to accomplishing all of these goals: increasing equity, making strategic investments, paying a stable dividend to policyholders and making continuous enhancements to customer services. Nippon Life will strive to further increase earnings power in several ways, including increasing new policy sales, earning stable and growing returns on invested assets, and implementing the New Integration Plan to use costs more efficiently. Measures to Develop Human Resources We are concentrating on giving our people the skills needed to take full advantage of the highly innovative infrastructure we developed by implementing the New Integration Plan. The New Integration Plan is the central strategy of our Future Creation Project. Successfully completing this plan will require the development of human resources with the skills to fully utilize the innovative infrastructure that we have created. The first step is development of sales representatives. To oversee this training, we established the Employee Development Promotion Department in fiscal By combining our activity innovation measures of the past with infrastructure innovation measures, we are better able to nurture the development of the next generation of core personnel. Second is development of non-sales personnel. We want to transform these people into customer service personnel who can draw on their knowledge of administrative procedures and experience. We will enlarge the scope of their activities to include tasks that support services for customers and the activities of sales representatives. Acquiring these skills will enable these employees to back up our new administrative and service systems. Furthermore, giving our people these skills can only be achieved with a firm commitment to maintaining an open corporate culture that encourages all employees to use creativity and innovation. Our Future Creation Project is a prime example. To promote this project, we formed a project team made up of younger employees and gave the team the authority to make all decisions. The team came up with the core concept of the power to create the future, which became the basis for the launch of this project. I strongly believe that promoting such initiatives will enable Nippon Life to continue and build upon its long tradition of fostering an open corporate culture. Human resources development is the foundation for achieving the goal of everyone at Nippon Life: to become a company of excellence in scale, quality and credibility. Our people are our most valuable asset and we will continue to do everything we can to give them opportunities for education and advancement. July 2012 President 5

8 TOPICS Fiscal Year Ended March 31, 2012 July Invested in Allianz Nippon Life purchased convertible subordinated notes issued by Allianz Financial II B.V., a finance subsidiary wholly owned by Allianz SE, one of the world s leading integrated financial services providers. Looking ahead, Nippon Life will continue to seek opportunities to work together in various areas with Allianz through continuous interaction including exchange of personnel. August Launched Official Facebook Page and Smartphone Website Nippon Life launched an official Facebook page and smartphone website to address diversifying customer needs and market conditions. Nippon Life will regularly provide information from its Facebook page and smartphone website to clearly explain its life insurance services and the necessity for such services, along with its activities and other topics. Since June, Nippon Life has been using Twitter and Facebook to provide information to students preparing for job-hunting activities. September Formed Business Alliance with Reliance Capital Limited Nippon Life signed a Memorandum of Understanding on collaboration with Reliance Capital Limited, a financial services company in the Reliance Group, one of the largest business houses in India. Nippon Life and Reliance Capital Limited agreed to increase strategic partnership from a long-term perspective in a range of fields, including areas other than the life insurance business. January Agreed to Invest in Reliance Capital Asset Management Limited Nippon Life reached an agreement to purchase shares of Reliance Capital Asset Management Limited, an asset management subsidiary of Reliance Capital. In October 2011, Nippon Life invested in Reliance Life Insurance Company Limited, a life insurance subsidiary of Reliance Capital. Nippon Life s investment in Reliance Capital Asset Management Limited is aimed at deepening and expanding the cooperative relationship between Nippon Life and the Reliance Group. February Established Mirai Forest Nippon Life established Mirai Forest, a lounge for visitors, inside the Nissay Life Plaza Marunouchi. Mirai Forest is based on the concept of providing a space for rest in the heart of the city one that evokes a forest. Mirai Forest is open to all visitors, who are welcome to casually drop by and enjoy the facility. It is an open lounge offering information about insurance and Nippon Life. March Formed Business Alliance with AIA Group Limited Nippon Life signed a Memorandum of Understanding on a business alliance with AIA Group Limited, one of the largest life insurers in the Asia-Pacific region. Nippon Life has purchased ordinary shares of AIA Group Limited with the objective of further strengthening its relationship with this company while capturing growth opportunities across Asia-Pacific life insurance markets. Unveiled the 3-Year Management Plan Future Creation Project In April 2012, Nippon Life launched a 3-year management plan called the Future Creation Project. The plan embodies Nippon Life s aspiration to create a future together with customers where people can feel secure, backed by its strong financial position and soundness. Through the New Integration Strategy, Nippon Life has completed the development of products and services combining innovation and flexibility (insurance coverage) and cutting-edge IT infrastructure (IT). Nippon Life now seeks to combine these elements with its sales channel mix based on face-to-face sales activities (support), a core strength of the company. Through this approach, Nippon Life aims to provide a new type of comprehensive insurance service. Launch of Mirai no Katachi Announced Mirai no Katachi is a new product that dramatically improves flexibility for customers both at policy enrollment and thereafter by allowing customers to flexibly combine standalone insurance coverage options according to their needs. Each coverage option has been fully revamped based on the concept of providing customers with clear and simple coverage details. Efforts have also been made to enhance services. For example, Nippon Life has introduced the Care Guidance Service, where specialized staff (care managers, etc.) visit customers at their homes and offer consultations free of charge. Nippon Life Executive Advisor Ikuo Uno Received The Insurance Hall of Fame Award Mr. Ikuo Uno, Executive Advisor to the Board of Nippon Life, received The Insurance Hall of Fame Award at The International Insurance Society, Inc. s (IIS) 48th Annual Seminar held on June 18, 2012 in Rio de Janeiro, Brazil. Established in 1957, The Insurance Hall of Fame Award honors distinguished insurance leaders from all over the world for their innovative and creative contributions to the advancement of the insurance industry on both theoretical and practical fronts over a long time. Winners are selected by a vote of IIS members, comprising a total of 900 corporate and individual members. Members include insurance business managers and researchers from more than 90 countries around the world. This is the first time since 2001 that a recipient of The Insurance Hall of Fame Award has been selected from Japan s life insurance industry. IIS noted that Mr. Uno s induction to the Insurance Hall of Fame recognizes his significant contribution to the life insurance industry as a business manager who is committed to long-term, stable business management with the conviction and determination to fulfill responsibilities to provide security to policyholders over the long term in the context of the activities of Nippon Life and the industry as a whole. 6

9 Response to the Great East Japan Earthquake Nippon Life wishes to extend its deepest sympathies to those who were personally affected by the Great East Japan Earthquake, which struck on March 11, Recognizing that many people are still experiencing hardship and suffering, we hope for the speediest possible restoration and recovery of the affected areas. On the day of the earthquake, Nippon Life set up a Disaster Response Headquarters led by Mr. Kunie Okamoto, its Chairman (President at the time), as an emergency response measure. On March 12, Nippon Life Nippon Life s Initiatives Special Treatment for Policyholders Affected by the Earthquake Full payment of benefits for accidental death due to the disaster Special extension of grace period for payment of premiums Fast and simplified payment of claims, benefits and policy loans Reduction or exemption of interest payable on policy loans and new loans through lower interest rates Special treatment of financing-related matters Special treatment of accidental hospitalization benefits Special treatment of insurance policies invalidated in connection with policy loans Measures to Ensure the Fulfillment of All Payments Customer visits Advertisements and television commercials expressing a message of sympathy Launched a special earthquake response website on the corporate website Special earthquake response counters and other facilities established Poster notifications Extension of call center hours and expansion of service (calling charges waived) Checked customers claim-filing status via safety confirmation s and phone calls Customer notices with enclosed return envelopes mailed to policyholders in the affected regions Customer Status Check Activities (March 31, 2012) Number of customers to be checked Approx. 380,000* Check completion ratio 99.9% * Number of customers to be checked in the three prefectures of Iwate, Miyagi and Fukushima decided to provide full payment of benefits for accidental death due to the disaster. Nippon Life also implemented various measures for policyholders, as detailed below. In addition, on March 17, Nippon Life set up the Earthquake Disaster Recovery Bureau within the Sendai Branch. Through this new organization, Nippon Life has worked to rapidly restore customer services and other operations in the affected regions and assist with the reconstruction effort in various ways. Earthquake Recovery Support Activities and Power Conservation Measures Donation of relief money of 100 million through the Japanese Red Cross Society Nippon Life-owned building (the former Sendai Excel Hotel Tokyu) leased gratis to Ishinomaki City, Miyagi Prefecture Delivery of relief supplies Preparing meals at an evacuation shelter with labor unions Implementation of volunteer activities by Nippon Life employees (removal of rubble, cleaning of photographs and other activities) Invitation of children from earthquake-stricken areas to various events (puppet theater, classical music concert, Nissay Inter League (Central-Pacific) baseball games, baseball and table tennis workshops, and tree-planting activities) Cooperation on sales of local products from earthquake-stricken areas (provision of store space at product exhibitions) Donation of Tanabata Festival decorations with message of support from customers Project to Grow Flowers for a Brighter Future in Earthquake-stricken Areas (delivery of flower seeds with messages to people in the affected areas) Power conservation measures Donations to the Great East Japan Earthquake Relief Fund of the Japanese Red Cross Society by Zutto Motto Service policyholders using Thanks Mile points (Donations totaling 173,951,289 for relief money were received from 316,106 people.) Nippon Life has completed almost all of the customer status checks for the target area as of March 31, Nippon Life will continue trying to check the status of customers with whom it has yet to establish contact through continued visits and via telephone, the Nippon Life website and other means. Status of Payment of Insurance Claims and Benefits to Customers (As of March 31, 2012) Amount paid as of March 31, billion* * Total amount of payment for insurance claims and benefits due to the Great East Japan Earthquake Nippon Life has completed the payment of insurance claims and benefits of 31.5 billion as of March 31, Looking ahead, Nippon Life will continue making proper payments to customers along with implementing continued status check activities. The Life Insurance Association of Japan (then Chairman: Yoshinobu Tsutsui) Receives a State Minister s Commendation for Contributors to Consumer Support Based on a Commendation Program of the Consumer Affairs Agency The Life Insurance Association of Japan (LIAJ) has received a State Minister s Commendation for Contributors to Consumer Support in recognition of its response to the Great East Japan Earthquake. The commendation expressed strong appreciation for LIAJ s concerted efforts to promote the prompt payment of insurance claims and benefits. These efforts included the implementation of special treatment of insurance claim procedures and premium payments; the establishment of the Center for Searching for Life Insurance Contracts in Disaster Areas for people who lost all their important insurance policy documents; information sharing throughout the life insurance industry; and requests to the authorities regarding procedures for assisting with swift insurance payments. 7

10 Three-year Management Plan Launch of the Future Creation Project to Create a Secure Future Along With Our Customers To Become a Life Insurer That Excels in Terms of Scale, Quality and Credibility What is the Future Creation Project? Nippon Life has launched the Future Creation Project, a three-year management plan to ensure that it steadily fulfills its social missions as a life insurer amid rapid upheaval in the economic environment and the structure of society. The project embodies Nippon Life s aspirations to create a secure future along with its customers. Backed by outstanding financial soundness, Nippon Life will provide new comprehensive insurance services in order to stop the downturn in the amount of policies in force and achieve a return to growth. More Advanced Protection Increase New Policy Sales More Advanced Support Excellence in Services Management Goals Excellence in Human Resources Development Excellence in Financial Soundness Social Missions Fulfill long-term coverage responsibilities Encourage people to make selfreliant efforts to prepare for risks Respond to diversifying needs Strengthen Human Resources Development Future Creation ~

11 Core concept embodying the combination of More Advanced Protection, More Advanced IT and More Advanced Support Return to Growth New Comprehensive Insurance Services P10 Number of policyholders (insured persons): 11.5 million Nippon Life aims to restore the number of policyholders to 11.5 million as evidence of its excellence in scale, quality and credibility. No. 1 in Share of New Policies Nippon Life is targeting the No. 1 share in new policy sales across all metrics, specifically the number of new policies, the amount of coverage, and annualized premiums on new policies. More Advanced IT Restore Growth in the Number of Policies in Force Strengthening Equity P18 Bolster Financial and Earnings Foundations Ensure Stable Investment Returns P26 Strategic Investment and Business Development Overseas P20~23 Stable Payment of Dividends P24 Nippon Life aims to restore growth in the number of policies in force, following the upturn in the annualized premiums on policies in force in fiscal Restore Equity to 3,000 billion Nippon Life aims to restore equity to 3,000 billion in order to fulfill its long-term coverage responsibilities to customers. Project

12 Three-year Management Plan Supporting Customers Lives Through New Comprehensive Insurance Services Making Enrollment Easy for All Customers and Adapting to Changes in Their Lives After Enrollment Nippon Life has three social missions: fulfill its long-term coverage responsibilities; encourage people to make self-reliant efforts to prepare for risks; and respond to diversifying needs. To fulfill these missions, Nippon Life will fundamentally overhaul its infrastructure through a reexamination of all operations involving insurance from the standpoint of its customers. This is the main thrust of the New Integration Plan, which started officially in April We aim to create a secure future along with our customers. New comprehensive insurance services are essential to achieving this goal. Products With Innovative Features and Flexibility Along With an Enhanced Range of Additional Services P12 More Advanced Protection For Every Individual s Life New Comprehensive Enhanced Range of Additional Services A Sales Channel Mix Based on the Face-to-Face Approach P16 More Advanced Support 10

13 A New Cutting-edge Wireless Device and a Variety of Highly Convenient Procedures P14 Insurance Services More Advanced IT By combining these three elements, Nippon Life will provide an entirely new type of insurance offering easy enrollment for all customers and adapting to changes in their lives after enrollment. 11

14 Three-year Management Plan More Advanced Protection Nippon Life will provide more advanced protection through Mirai no Katachi. The New Mirai no Katachi Product With the aging of the Japanese society with fewer children, there will be an increasingly stronger need for everyone to make self-reliant efforts to ensure their own security with respect to medical and nursing care, retirement and other forms of coverage, as well as death coverage. In light of this trend, Nippon Life seeks to respond to the diversifying needs of customers throughout their lives, while providing customers with additional peace of mind. To this end, in April 2012, Nippon Life launched the new Mirai no Katachi product. Mirai no Katachi changes how we provide insurance to customers. In the past, we sold primary policies and added riders as necessary. Now, we are selling each insurance policy as an individual product. By having customers flexibly choose and combine the insurance they need, Nippon Life can now address diversifying customer needs in greater detail. In addition, we have completely revamped the structure of each type of insurance based on a concept of providing simple forms of protection that customers can easily understand. Nippon Life has also enhanced the range of additional services by introducing the Care Guidance Service, a new nursing care service, following in the footsteps of the Zutto Motto Service and the Best Doctors Service. In these ways, Nippon Life is providing more advanced protection through Mirai no Katachi by completely revamping its products, providing simple forms of protection that customers can easily understand, and enhancing the range of additional services. Combinations are subject to some restrictions. Improved Flexibility During and After Enrollment Nippon Life can now provide protection that precisely matches the needs of many different customers. This is achieved by flexibly combining the necessary coverage according to customer needs when customers enroll in Mirai no Katachi. Whole life insurance Term life insurance with survival benefit General medical insurance Cancer medical insurance Term life insurance Death coverage Medical coverage Limited injury insurance Dread disease insurance Serious disease and nursing care coverage Asset formation and retirement coverage Physical disability insurance Nursing care insurance Annuities Endowment insurance Choose insurance as needed For heads of households seeking comprehensive coverage: Whole life insurance Term life insurance Dread disease insurance Physical disability insurance General medical insurance After enrollment in Mirai no Katachi, customers can freely revise policy details according to changes in their needs and stages of life. For example, customers can add new insurance, increase coverage amounts, and selectively revise only the parts they need to change. Customers can change their policy details to precisely meet their protection needs at any stage of their lives. [Customers can flexibly revise protection according to changes in their needs and stage of life] Single Married Childbirth Children gain independence Male, 20 years Male, 30 years Male, 35 years Male, 60 years Death Add Increase coverage amount Death Revise Nursing care Dread disease Medical Add Dread disease Medical Dread disease Medical Dread disease Services may not be available if Nippon Life does not handle the relevant system when requests are made. 12

15 Upgrading Benefit Details With Mirai no Katachi, Nippon Life has completely revamped various insurance products based on the concept of providing simple forms of insurance that are easy for customers to understand. This approach is readily apparent in insurance products with survival benefits, such as dread disease, physical disability and nursing care insurance. Here, Nippon Life has greatly increased the appeal of products by introducing new services in addition to enlarging the scope of protection and linking the reasons for payment to public insurance systems. Dread disease insurance Physical disability insurance Nursing care insurance Insurance that covers designated malignant neoplasm (cancer), acute myocardial infarction (heart attack), cerebral stroke and death Protection for carcinoma in situ has been newly added. Surgery has been added to the reasons for payment for acute myocardial infarction and cerebral stroke. u The Best Doctors Service has been made available. Insurance that covers physically disabled conditions and death This insurance has been made easier to understand by linking the reasons for payment to the Act on Welfare of Physically Disabled Persons. (Requirement for payment is the issuance of a level 1-3 physical disability certificate) Insurance that covers specified conditions, which require nursing, and death The scope of protection with respect to the public nursing care insurance system has been expanded from nursing care level 3 and higher to nursing care level 2 and higher. u The Care Guidance Service is available. General medical insurance Cancer insurance Insurance that covers hospitalization and surgery, etc. Protection for bone marrow donors and recipients has been newly added. u The Best Doctors Service is available. Insurance that covers hospitalization, surgery, etc., due to cancer Protection for bone marrow recipients has been newly added. Enhanced Range of Additional Services l Care Guidance Service New service launched Since April 2012, the Care Guidance Service (home-visit nursing care consulting service) has been made available to nursing care insurance policyholders and beneficiaries under Mirai no Katachi. With this service, care managers and other specialist staff of Nichii Gakkan Company, which operates Japan s largest network for senior nursing care services, visit customers at home to consult with them about their future nursing care concerns. The Care Guidance Service is promoted and handled by Life Care Partners Co., Ltd. This is not an insurance policy or service of Nippon Life. l Best Doctors Service From April 2012, Nippon Life has expanded the scope of the Best Doctors Service, a specialist physician referral service, which it has offered since April In case customers have concerns about treatment from their primary physicians or want a second opinion, Best Doctors, Inc. introduces suitable Japanese physicians to contact from the specialists selected by Best Doctors, Inc. for its Best Doctors in Japan list. The Best Doctors Service is provided by Best Doctors, Inc. This is not an insurance policy or service of Nippon Life. Best Doctors and Best Doctors in Japan are trademarks of Best Doctors, Inc. in the United States and other countries. l Zutto Motto Service The Zutto Motto Service is a unique Nippon Life service offered to policyholders. This service reflects Nippon Life s commitment to work even harder and longer ( zutto motto ) at providing each policyholder with better after-sales services. Through this service, policyholders and their families provide us with up to date information about their status. In return, we supply timely information that reflects changes in the lives of policyholders. Staying in touch also makes it possible to perform insurance claim and benefit procedures and many other tasks more efficiently. Policyholders Thanks Miles Menu Happy Present Menu Information about status of policyholders and their families Four-item menu to express our appreciation Premium Chance Menu Heartful Support Menu Nippon Life For further details on the Care Guidance Service, Best Doctors Service and Zutto Motto Service, please see Nippon Life s corporate website or various brochures on services. 13

16 Three-year Management Plan More Advanced IT Better consulting, administrative operations and services with the new wireless device, REVO From April 2012, we introduced a new wireless device for sales representatives to use in the field when visiting customers. The new device, called REVO, has two major features as noted on the right. (1) State-of-the-art consulting functions to support more advanced protection (2) Highly convenient administrative operations and services State-of-the-art Consulting Functions to Support More Advanced Protection l Planning for 13 Separate Segments Using the latest information obtained from customers, REVO enables sales representatives to conduct detailed consultations with customers according to their life stage and situation. Based on the consultation, representatives can then propose a plan that matches each customer s individual needs. In this way, REVO enables us to offer customers the maximum benefit of the innovative features and flexibility of Mirai no Katachi. Children Young and single customers Customers who need coverage most Independent singles Function Planning for 13 Separate Segments Working couples with no children Seniors Homemakers l State-of-the-art Consulting Using Statistical Data and Video REVO brings various statistical data and video media to the actual consultation venue, enabling a more sophisticated and illuminating consultation. Sales representatives can use REVO s advanced functions to propose optimal solutions for the customer s individual needs and life stage, or to present a simulation of changing coverage needs based on the customer s family situation. Highly Convenient Administrative Operations and Services l REVO Speeds Up Procedures Previously, customers had to fill in forms and documents by hand. If there was an omission or an error, sales representatives had to ask the customers for more of their time to make corrections. Now, with the introduction of the new REVO wireless device, customers can be given guidance on how to fill out each part in the process, so that procedures can be completed successfully in a single visit. Before After Not needed! Form Document Problem If a problem arose with documents, sales representatives would need to ask customer for another visit. Communication The new REVO wireless device allows all procedures to be completed in a single visit. 14

17 l Paperless, Cashless Transactions ' Paperless Under the paper-based system, enrolling for a policy involved filling out and applying personal seals to a lot of paper forms. Now, customers are able to simply check and confirm previously entered information and policy details on the screen of the REVO device, and record their signature digitally to complete the procedure. Before After ' Cashless Before the introduction of cashless settlements, customers used cash for paying premiums and other fees when signing up for a policy or performing other procedures. Now, insurance premium payments will start after the customer has completed enrollment. This frees customers from having to prepare cash when enrolling for a policy. And, customers can now use cash cards or other means to pay processing fees or premiums arising from various procedures. Cash Before After On enrollment After enrollment Premium payment via debit from designated account l Cash card l Credit card Payments processed by the sales representative through the REVO device l After-sales Life Insurance Services and Procedures Changed for Customers with Customer IDs and Passwords (4-digit PIN codes) Customers who wanted to use services and perform procedures after enrolling in a policy used to have to fill out procedural forms, provide their life insurance policy documents, and registered seals. Under our new system, customers can access services and perform procedures by using their customer ID and password with a REVO wireless Before Procedural documents After Wireless device carried by sales representative or Customer s PC or mobile phone device carried by a sales representative. They can also access services and perform procedures by themselves using the corporate website. Some services and procedures such as application for payment of insurance claims and benefits or name changes cannot be accessed or performed using the customer ID and password. These require a sales representative to prepare documents including identity certification documents. They can be performed without providing an insurance policy document or registered seal however. [Procedures and Services Available Using Customer ID and Password] Customers can check the latest policy content at any time. Life insurance policy document Life insurance policy document Registered seal Customer ID (11 characters) Password (4 digits) Policy details can be confirmed using either the Policy Content Notice (sent by post) or the website, instead of the life insurance policy document. Procedures will no longer require a life insurance policy document Customers are clearly instructed to keep their passwords confidential from other people. Sales representatives will never ask customers to tell them their password. Policy loans and other financial transactions can be performed from customers PCs and mobile phones. If customers apply for loans before 14:30 on weekdays, the funds can be in their transaction account (transfer account) on the same day. Funds may not be transferred on the same day depending on the day of the transaction and the transaction account. Changes of address and various other procedures can be handled swiftly from customers PCs and mobile phones. Customers who answer surveys on a dedicated website can accumulate Thanks Mile points. TOPICS An Industry First Policy Guidance Service to Support Customers When Enrolling To bring peace of mind to customers when they apply for a policy, a customer service representative can be present with the sales representative, either by videophone or physically. The customer service representative offers confirmation of policy content and guidance for the enrollment procedure. Benefits of the Policy Guidance Service (1) Deeper customer understanding of insurance products and important related matters Life insurance policies are a long-term agreement, lasting until the policy term ends or possibly until a claim is to be paid. To ensure that customers understand the policy content correctly before enrolling, specialist customer service representatives are on hand to clarify points or answer questions. This enables customers to deepen their understanding of insurance products and important related matters. (2) Improved after-sales services for customers thanks to accurate customer information The Policy Guidance Service strives to improve services to customers, such as simplifying and expediting procedures, and ensuring swift and reliable payment of claims by collecting accurate customer information. 15

18 Three-year Management Plan More Advanced Support Strengthening and combining channels to take customer support to the next level Nippon Life has a multi-channel sales structure based on a face-to-face approach using sales representatives, including Nissay Life Plazas, the Nissay Call Center and the Internet. Through these channels we offer customers support to match their lifestyles. Supporting Customers Through a Multi-channel Sales Structure Nissay Total Partners (Sales Representatives) Our nationwide network of around 50,000 Nissay Total Partners (sales representatives) provides individual, face-to-face support to meet the needs of each customer. Various Lines of Contact Nippon Life provides a wide range of lines of contact to cater to a diverse range of customer lifestyles and needs. l Policy Details Confirmation Activities Nissay Total Partners make regular visits to policyholders to check up on changes in customers lifestyles, confirm whether any reasons for payment of benefits have occurred, and see whether there are any other services Nippon Life can provide. The visits help to reaffirm a sense of the peace of mind that comes from enrollment in life insurance policies. Nissay Life Plazas Nissay Call Center Agencies Corporate Sales Internet Services Conventional shops that customers can visit throughout Japan Receive telephone calls from customers Tax accountants, professional insurance sales agencies, financial institutions, etc. Consulting on employee benefit services for corporate customers Enables customers to perform various procedures or lodge applications via their PCs or mobile phones Advances in Support 1 More Advanced IT Reform of Working Methods In the face-to-face channel, REVO has reformed the way that sales representatives do their jobs by bringing state-of-the-art consulting functions into play along with efficiency gains in administrative procedures. We will strive to translate the resulting improvements in quality and quantity of sales activities into even better customer services. Advances in Support 2 Face-to-Face Channel Internet When customers have registered their information or requested materials on Nippon Life s website, sales representatives visit them to offer face-to-face consultations. REVO l Reduced paper-work burden l Detailed planning l Easy-to-understand explanations Customers Better Quality of Sales Activities Greater Quantity of Sales Activities Even better customer services Commercials and Other Media Develop Positive Customer Sentiment for Nippon Life Sales channels Internet (dedicated website) Sales promotions, events, etc. 16