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Lifenet Insurance's Commitment to the Asset Owner Principles

Lifenet Insurance Co., based in Chiyoda, Tokyo, has publicly declared its agreement with the "Asset Owner Principles," as announced by the Cabinet Secretariat on August 28, 2024. Since its inception, Lifenet has consistently operated with a focus on the customer's perspective, following the principles outlined in its "Lifenet Life Insurance Manifesto." With this commitment, the company aims to fulfill its responsibilities as an asset owner, prioritizing the best interests of its clients by adopting the Asset Owner Principles in its asset management strategies.

Overview of the Asset Owner Principles

Lifenet's adherence to these principles is structured around the following five guidelines:

Principle 1: Establishing Clear Objectives

Asset owners must define the purpose and objectives of their investments, considering the best interests of beneficiaries, and regularly review these against changing economic and financial environments. Lifenet focuses on ensuring the reliable payment of future insurance claims by prioritizing safety and stability in its investment strategies. This includes diversified investments primarily in yen-denominated bonds, allowing the company to maintain financial soundness while securing stable, medium to long-term profits. Each year, Lifenet establishes investment goals and asset allocation plans, which are updated according to changes in the financial and economic landscape.

Principle 2: Ensuring Expertise

To pursue beneficiaries’ best interests, asset owners are expected to operate based on professional knowledge. Lifenet employs responsible parties with substantial expertise in asset management and risk management. Through training programs and encouraging professional qualifications, the company aims to enhance its knowledge base. Furthermore, by clarifying authority through internal regulations, Lifenet establishes an effective system of checks and balances. It also entrusts some of its assets to external management firms to improve efficiency and capabilities.

Principle 3: Appropriate Method Selection

When selecting investment methods, asset owners must act with due consideration for the profit of beneficiaries, prioritizing appropriate risk management, including diversification of investments. Lifenet implements a diversified investment strategy centered on yen-denominated bonds, considering the risk-return characteristics of each asset class. The risk management department employs Value at Risk (VaR) calculations and stress testing to maintain financial health. The selection and monitoring of external asset managers are conducted according to internal regulations.

Principle 4: Transparency and Accountability

Asset owners are responsible for providing stakeholders with information about investment conditions—"transparency"—which facilitates dialogue. Lifenet publicly discloses its investment conditions through statutory and timely disclosures, including securities reports and quarterly results. The company actively engages in investor relations (IR) activities to share its investment policies and initiatives with shareholders and investors.

Principle 5: Engaging in Stewardship Activities

To achieve investment objectives, asset owners must implement stewardship activities that benefit beneficiaries and foster sustainable growth in investee companies. Lifenet has established a basic sustainability policy focused on responsible investment. Understanding the significance of sustainability within the life insurance industry, it prioritizes bond investments that adhere to ESG (Environmental, Social, and Governance) criteria. Lifenet recognizes that ESG investments can enhance long-term returns whilst addressing social challenges, aiming to expand these efforts as it scales.

Conclusion

Through its commitment to the Asset Owner Principles, Lifenet Insurance not only solidifies its position as a leader in the digital insurance market but also reinforces its mission to support customers' lives with responsible, transparent, and sustainable insurance practices. By leveraging digital technology and investing responsibly, Lifenet strives toward a society where individuals can nurture future generations with confidence.

For more information about Lifenet Insurance, visit Lifenet Insurance.