INDUSTRY SUMMARY

Life Insurance ($2.5 Billion or more) - Asia-Pacific

Powered by FINLISTICS SOLUTIONS

 Life Insurance ($2.5 Billion or more) - Asia-Pacific
Net Premium Range: $2.5 - $10000 Billion
Region: Asia-Pacific Number of Companies in Aggregate: 28

Industry Description: The Life Insurance industry is comprised of companies primarily involved in underwriting and selling life insurance (term, whole life, etc.)
policies and in addition to annuities. Premiums paid by policyholders which comprises the majority of revenue for life insurance companies. Most premiums paid are re-invested
by the life insurance company so they can earn investment income which provides another significant source of revenue. Many insurers are engaged in both Life and Property &
Casualty in addition to other insurance activities.
TOP COMPANIES BY NET PREMIUM SIZE PREMIUMS EARNED (MIL) RETURN ON ASSETS (ROA)
PING AN INSURANCE 757,599 (CNY) 1.6%
CHINA LIFE INSURANCE 604,666 (CNY) 1.3%
JAPAN POST 6,786,210 (JPY) 0.1%
CHINA PACIFIC INSU 331,639 (CNY) 1.5%
DAI-ICHI LIFE HOLD 4,730,301 (JPY) 0.6%

SUMMARY PERFORMANCE TABLE Industry Trend

Current Year Current Year Curent Year 2020 2019 2018 2017 2016
Key Financial Metrics 1st Quartile Median 4th Quartile Median Median Median Median Median
Premium Earned Growth 9.7% 4.4% -5.5% 5.9% 9.4% 8.6% 16.6% 12.8%
Non Premium Rev. Growth 38.8% 9.6% 1.5% 8.3% 19.5% 2.3% 20.0% 3.1%
% Benefits & Claims 70.1% 81.2% 83.8% 78.1% 78.2% 78.5% 75.8% 77.8%
% Selling, General & Admin. Exp. 7.1% 11.6% 15.4% 12.4% 12.0% 13.0% 10.8% 12.6%
Best Performer Mid-Range Performer Lowest Performer
Median Net Premium Growth Median Non Premium Growth Median % Benefits & Claims Median % SG&A Expenses

INDUSTRY GAP VALUATION WHAT-IF ANALYSIS

The Gap Valuation quantifies the First Year Cash Flow benefits the Median company
in the Life Insurance ($2.5 Billion or more) - Asia-Pacific industry, with 1000
Million in Premiums Earned, would recognize assuming current year results could
improve to the benchmark (1st Quartile) for the following metrics: Premium Earned
Growth, Non Premium Revenue Growth, % Benefits & Claims Expense and %
SG&A Expenses.
Gap Valuation - 1st Yr. Cash Flow Benefits (In Mil)
The What-If Analysis quantifies the impact of improving each of the financial
metrics by 1% to measure potential First Year Cash Flow benefits. This is based
upon the Median company in the Life Insurance ($2.5 Billion or more) -
Asia-Pacific industry with 1000 Million in Premiums Earned.
1st Year Cash Flow Benefit from 1% Improvement (In Mil)

% BENEFITS & CLAIMS PREMIUMS EARNED AND NON PREMIUM REVENUE

% Benefits & Claims Expense provides the greatest potential cash flow
benefits given the Median value of 81.2% compared to the 1st Quartile
(benchmark) value of 70.1%.
Benefit is calculated from 1% increase in Premiums Earned or Non Premium
Revenue and Total Operating Costs as a percentage of Total Revenue.
BENEFITS & CLAIMS EXPENSE
A 1% reduction in Benefits & Claims Expenses contributes the greatest cash
flow benefits since it represents 81.2% of Total Revenue.

Page 1 of 4
 Life Insurance ($2.5 Billion or more) - Asia-Pacific $2.5 - $10000 BILLION - ASIA-PACIFIC

INDUSTRY QUARTILE SUMMARY STATISTICS

1st Quartile 4th Quartile

Median
GROWTH & PROFITABILITY (Top 25%) (Bottom 25%)
Premiums Earned Growth 9.7% 4.4% -5.5%
Non-Premium Revenue Growth 38.8% 9.6% 1.5%
Total Revenue Growth 15.0% 8.6% -1.9%

% Benefits & Claims (1) 70.1% 81.2% 83.8%

% Selling, Gen. & Admin. Exp. (1) 7.1% 11.6% 15.4%
% Other Operating Expenses (1) 0.9% 1.7% 3.9%
% Total Operating Expenses (1) 83.4% 92.1% 95.2%
Pretax Profit Margin 6.8% 4.4% 2.6%
Net Income Margin 6.3% 3.5% 2.1%

OVERALL PERFORMANCE
Yield on Investments 4.99% 3.17% 2.88%
Return on Assets 1.26% 0.71% 0.35%
Return on Equity 14.14% 11.01% 6.07%
Free Cash Flow / Revenue 49.54% 24.29% 15.27%

LIQUIDITY & LEVERAGE

Debt to Equity 0.08 0.20 0.38
Funds from Operations / Revenue 50.43% 24.82% 15.75%

1 Calculated as Percentage of Total Revenue

Life Insurance ($2.5 Billion or more) - Asia-Pacific $2.5 - $10000 BILLION - ASIA-PACIFIC

ANNUAL DETAILED WHAT-IF ANALYSIS

The What-If Analysis quantifies the 1st year cash flow benefits for Life Insurance ($2.5 Billion or more) - Asia-Pacific $2.5 - $10000 BILLION -
ASIA-PACIFIC , given percentage improvements, for each financial metric. This is based upon the Median company in the LIFE INSURANCE ($2.5 BILLION
OR MORE) - ASIA-PACIFIC industry with 1000 Million in Premiums Earned.

POWER OF ONE
Percentage 1st Year Cash Flow
Financial Metric
Change (in Millions)
Premiums Earned 1.0% 0.4
Non-Premiums Earned 1.0% 0.2
Benefits & Claims -1.0% 11.3
Selling, General & Admin. Expense -1.0% 1.6
Total Operating Expense -1.0% 12.8

Page 2 of 4
 Life Insurance ($2.5 Billion or more) - Asia-Pacific $2.5 - $10000 BILLION - ASIA-PACIFIC

ANNUAL INDUSTRY TREND ANALYSIS

The Trend Gap Analysis compares Life Insurance ($2.5 Billion or more) - Asia-Pacific $2.5 - $10000 BILLION - ASIA-PACIFIC's financial metrics for the
current year with those of the five previous years. The and arrows indicate the best and lowest performance for a given metric on a historical basis.

Benchmark Years
Current
2020 2019 2018 2017 2016
GROWTH & PROFITABILITY Year
Premiums Earned Growth 4.4% 5.9% 9.4% 8.6% 16.6% 12.8%
Non-Premium Revenue Growth 9.6% 8.3% 19.5% 2.3% 20.0% 3.1%
Total Revenue Growth 8.6% 6.6% 10.4% 2.2% 16.3% 8.5%

% Benefits & Claims (1) 81.2% 78.1% 78.2% 78.5% 75.8% 77.8%
% Selling, Gen. & Admin. Exp. (1) 11.6% 12.4% 12.0% 13.0% 10.8% 12.6%
% Other Operating Expenses (1) 1.7% 3.5% 2.6% 3.5% 1.7% 3.0%
% Total Operating Expenses (1) 92.1% 92.3% 92.7% 95.8% 91.2% 93.7%
Pretax Profit Margin 4.4% 4.8% 5.0% 5.5% 5.1% 5.4%
Net Income Margin 3.5% 3.5% 3.6% 3.6% 3.8% 3.9%

OVERALL PERFORMANCE
Yield on Investments 3.17% 3.16% 3.48% 3.69% 3.80% 3.83%
Return on Assets 0.71% 0.67% 0.75% 0.69% 1.02% 0.75%
Return on Equity 11.01% 9.02% 10.71% 9.49% 10.41% 9.65%
Free Cash Flow / Revenue 24.29% 34.09% 33.81% 20.24% 24.78% 37.52%

LIQUIDITY & LEVERAGE

Debt to Equity 0.20 0.26 0.18 0.19 0.13 0.14
Funds from Operations / Revenue 24.82% 34.50% 34.29% 20.28% 26.12% 37.77%

1 Calculated as Percentage of Total Revenue

Page 3 of 4
 FINANCIAL METRIC DEFINITIONS
Premiums Earned Premiums Earned Growth simply measures the year over year change in Premiums Earned. Premiums Earned is defined as the portion of a premium
Growth that represents coverage already provided or the portion of premium that belongs to the insurer based on the part of the policy period that has passed.
It is calculated as follows: (Premiums Earned this period - Premiums Earned last period) / Premiums Earned last period
Non-Premium Non-Premium Revenue Growth measures the year over year change in Non-Premium Revenue. Non-Premium Revenue includes revenue items such
Revenue Growth as investment income, gains/losses on sale of securities and other operating income . It is calculated as follows: (Non-Premium Revenue this period
- Non-Premium Revenue last period) / Non-Premium Revenue last period
Total Revenue Total Revenue is the summation of Premiums Earned and Non-Premium Revenue. Total Revenue Growth measures the year-over-year percentage
Growth change in Total Revenue
% Total Operating % Total Operating Expense represents Total Operating Expense as a percentage of Net Premiums Earned. Total Operating Expense includes both
Expenses Benefits & Claims Expense in addition to all Other Operating Expenses.
% Benefits & % Benefits & Claims represents Benefits and Claims Expense as a percentage of Net Premiums Earned. Benefits and Claims includes all expenses
Claims relating to the payment of policy benefits, including adjusters fees, investigating expenses and all other costs associated with settling claims.
% Selling, General % SG&A Expense represents Total SG&A Expense as a percentage of Total Revenue. SG&A Expenses includes all expenses relating to selling and
& Admin. Exp. administration expenses of the company.
% Long Term Long Term Insurance Reserves (Life Insurance specific) represent the expected discounted future payments for long term policies usually determined
Insurance Reserves by regulatory agencies in each country . % LT Insurance Reserves is calculated as follows: LT Insurance Reserves / Total Revenue
Pre-Tax Profit Pretax Profit Margin is a one measure of profitability for an insurance company. Pretax Profit Margin is calculated as follows: Pre-Tax Income /
Margin Total Revenues
Net Income Margin Net Income represents the bottom line after tax income for an insurance company. It is calculated as follow: Net Income / Total Revenue
Yield on Investments Yield on Investment measures the return received on an insurance company's invested assets. It is calculated as follows: Investment Income /
Average Investments
Return on Assets Return on Assets measures the return a company is generating on their assets. It is calculated as follows: Net Income / Average Assets
Return on Equity Return on Equity measures how much profit the shareholder’s investment has generated. The higher the Return on Equity (ROE), the more flexibility
a company has to use internally generated funds to invest in company growth and other initiatives versus using external capital. ROE is calculcated as
follows: Net Income / Average Equity
Free Cash Flow to Free Cash Flow measures the cash generated within the business after accounting for Capital Expenditures. Improvements to Net Income and Working
Revenue Capital items positively impact Free Cash Flow. It is calculated as follows: Funds from Operations (From Cash Flow Statement) - Capital
Expenditures / Total Revenues
Debt to Equity Debt to Equity is an aggregate measure of a company's relative indebtedness. It is calculated as follows: Total Long Term Debt / Total Shareholders
Equity
Funds from Funds from Operations measures the generation of cash before investment back in the company, payment of dividends, repayment of debt, repurchase
Operations / of shares and other activities. It is calculated as follows: Funds from Operations (From Cash Flow Statement) / Total Revenue
Revenue

Page 4 of 4