I'm Akifumi Kai. Thank you for joining us today. Here is my background. I've always worked in the financial industry, including insurance, banking, and securities. I have long experience in business strategy, organizational reform, and M&A. I joined Daiichi Life Holdings in October 2024. At present, I am the Head of Protection Business in Japan. Together with the President and the management of the group companies, and the CXOs of the holding company, I am responsible for developing and implementing business strategies and realizing synergies across the group. My main role is to objectively view the business and steadily implement strategies. Also, as we often say at our company, I try to create a healthy conflict. Now, let me begin the presentation. First, let us look at the domestic insurance market and how we position ourselves in the market.
In the past few years, the domestic life insurance market has remained flat. However, with the size of almost JPY 30 trillion, it remains one of the most important markets for us. In terms of new business, savings-type products have nearly doubled compared to fiscal year 2019, while the protection-type products dropped to 90%. While savings-type products have surpassed protection-type products, the ANP from protection-type products continues to exceed JPY 1 trillion annually, even though we see little room for significant growth in the future. At Daiichi Life Group, the contribution from overseas and non-insurance business is increasing, but we continue to position domestic protection business as our core business, which contribute to stable cash generation. We believe the integrated value proposition of protection and asset formation succession is becoming increasingly important for the domestic insurance business.
We are experiencing a transition to a world with interest rates, a decline in birthrate and aging society, longer healthy life expectancy, and the increase in dual income households. Structural changes are progressing, affecting lifestyles and asset formation. Against this backdrop, sales of savings-type products have increased significantly, and the demand for asset formation and succession is expected to grow further. Within this context, we believe protection and asset formation succession are closely linked and inseparable. That is to say, people need to build assets towards their financial goal while ensuring protection as a safeguard against rainy days. We have the strength to enable both in meeting the diverse needs of customers with our products and services. To ensure cash generation capacity, we will continue to diversify our revenue base by maximizing revenues from both asset management and insurance.
This slide shows the profile of each domestic company and recent highlights. I will also touch upon their performance in the first half of fiscal year 2025. Daiichi Life is a domestic core company. Through its sales reps, it provides comprehensive lineup of insurance products to the core generation in need of protection. Adjusted profit is JPY 158.6 billion, increased steadily from the previous year. As we have already disclosed, we plan to revise the full-year forecast upward. Value of new business was JPY 53.1 billion. It also increased from the previous year, thanks to growth in contracts with SMEs, even though the effect of new products faded. We would like to push up the value of new business even further. Daiichi Frontier Life offers single premium products to savings and succession-oriented customers, mainly through bancassurance channel.
Both asset under management and the number of policies in force were the highest since the company's founding. Mr. Iida will explain the business later, so I will not go into the detail here. Neo First Life offers medical and health-promoting products to comparison-oriented customers through walk-in shops and digital channels. The value of new business was JPY 3.1 billion, and the number of customers was 1.04 million. Both of them increased from the same period the previous year. The number of policies in force exceeded 1 million in the previous fiscal year. ipet Insurance offers pet insurance through pet shops, website, and sales rep channels. The new business ANP was JPY 3.7 billion. The number of customers was 0.73 million. Both of them increased from the same period the previous year.
By the end of August, the number of policies in force exceeded 1 million, keeping the second largest share in the industry. We are accelerating the sale through Daiichi Life sales reps, and the sales more than doubled from the previous year.
Now I will explain the positioning of the Daiichi Life sales rep channel in our group. We have a large sales team of approximately 35,100 sales reps based in 69 branches and 1,031 sales offices across Japan. They comprise a core channel supporting the group's domestic insurance business, supporting customers by staying by their side for life. The sales rep channel sells Daiichi Life products and other group company products as well. For example, in new premiums from Daiichi Frontier Life single premium products, the sales rep channel contributed 20% in FY 2024, playing an important role in supporting Daiichi Frontier Life's business. In addition, in selling Benefit Station, which is an employee benefit service, the sales rep channel contributed to getting 40% of approximately 1,000 companies out of 2,400 companies who have joined the membership between May 2025 to December 2025.
The sales rep channel has enabled access to small and medium-sized companies that Benefit One had not been able to fully approach in the past. In this way, the sales reps form a core part of the group's domestic insurance business, staying by the customer, catering to their various needs, and providing a wide range of values. I will now cover Daiichi Life initiatives for sustainable growth from four perspectives: customer, product, channel, and sales infrastructure. First of all, from a customer perspective, in addition to the existing individual insurance customer base, we are targeting owners and employees of SMEs and their families. The contribution of executive insurance to total new business was 29% as of the first half of this fiscal year, an increase of six points, and showing steady growth.
We will continue to deliver solutions as a group, including Benefit One, in order to cater to corporate customers' needs. Next, from a product perspective. Last December, we launched wide type and basic type waiver of premium riders, which was well-received by many customers. Going forward, we will continue to deliver new products strategically from both protection and retirement savings and asset management. We will also strengthen product governance and develop products based on deeper insight into customer needs. Thirdly, from a channel perspective. We are starting to see results from changes made, such as new standards and quarterly hiring system and efforts to strengthen development of employees. In terms of hiring, in the most recent results, we have been able to hire 1,200 people in the past three quarters, and we believe our pace of hiring has gone up one level.
In terms of enhancing the development and retention of employees, the second-year retention rate of new hires is 86%, and in the third year, 71%, which is a significant improvement. In addition, based on the Total Life Plan design, we are continuing to enhance their consulting capabilities and corporate skills. Based on these factors, we believe we are starting to see signs of getting out of the turnover issue and moving towards steady regrowth in our organization. Lastly, on the sales infrastructure. Leveraging digital and AI, we have worked on improving the sales reps' productivity and transforming the business process. Specifically, we are using new platforms such as integrated CRM, digital buddies, and AI customer analysis. We are working on preparations for full operations from FY 2026 onwards. We want the four pillars to work together for sustainable growth.
Now I'd like to turn to Daiichi Life's initiatives to improve operational efficiency and productivity. As people have been saying for some time now, the domestic insurance market overall is a mature industry, which we recognize will shrink in the long term. Also, with recent dramatic advancements in technology, using generative AI has become the norm, and we view this as an opportunity. Based on these environmental changes and potential increase in operating expenses or business costs in the future with inflation, we are working to reduce operating expenses and improve productivity, leveraging AI and digital technology, making our business leaner, a move that we see as a natural course. The right-hand side of the material shows part of our initiative.
First, in reducing business costs, Daiichi Life has worked on reorganization of headquarters and branch offices in order to reduce fixed operating expenses in FY 2026 by approximately JPY 35 billion compared to FY 2020, and we expect to generally achieve this plan. In addition, towards FY 2030, we will further reduce our operating expenses and improve productivity by revisiting our business processes centering around our back office and administrative functions. This will be made possible through our investment into AI and digital technology. We are assuming a review of existing business processes, referencing global case studies, and are working on fundamental transformation of our operations. Lastly, on the organization. The headquarters organization is becoming more complex, and we are going to make it simple, fat, and lean. This will enable speedier decision-making.
On the other hand, we will be strengthening our front-office sales capabilities that contribute to top line.
The expected investment into AI and digital, and our targets for decreasing operating expenses will be disclosed together with the progress of our planning going forwards. Lastly, I would like to talk about the concept of our business strategy, leveraging the group's strengths. This is something that we are going to work on as a group-wide initiative. First of all, the Daiichi Life Group has abundant resources available. By leveraging them, combining them, we believe we will be able to evolve our business into a more differentiated one. In addition to our existing B2C strengths, we will be brushing up our value creation capabilities in 2B, so that we can create a B2B2C model that is unique to our group. Specifically, we are going to look at developing more corporate customers through Benefit One, provide more value to their employees of members.
Provide protection as well as asset formation and business succession. We will work in an integrated manner in the group. We will be leveraging the strengths of the face-to-face interactions that our 35,000 sales reps have, so that we will be able to enhance value of our domestic insurance business even in a market that is shrinking. We will be creating that kind of model. That concludes my presentation. Thank you.
I am Takashi Iida. I am the Business Head of Retirement Savings and Asset Management Business. My background is written here. Unlike Akifumi Kai, I joined Daiichi from the beginning, and I used to be in claims, and then I started to work on investment, and then annuities, and now I am a Managing Executive Officer. First, I would like to give you an overview of retirement savings and asset management business. The desirable state of the business is written on the upper part of the slide. It says that the asset management capability is the foundation of the business, and we will develop investment products as well as savings-type insurance and annuity products. The business will be global through overseas group companies. In the middle, we show the structure of the business by entity.
The first domain is the asset formation and succession business, which consists of Daiichi Life, savings investment trust, and group annuities businesses, and Daiichi Frontier Life. The second one is asset management business in and outside Japan. That is another pillar. That includes Asset Management One, Vertex, and overseas companies we have invested in. The last one is real estate asset management. The largest one is the Daiichi Life Marubeni Real Estate, which is a joint venture that started operation last year. Each asset management company has its own profit target. However, at the same time, by providing asset management functions to Daiichi Life, Daiichi Frontier Life, and Daiichi Life Reinsurance Bermuda, the group's reinsurance company, they contribute to the development of savings-type products by group life insurance companies. That is a characteristic of this business.
In the future, they will be able to provide asset management functions to overseas group life insurance companies and help enhance competitiveness, especially in growing retirement markets in advanced economies. This shows profit target. It shows where we stand in the profit target. The group's adjusted profit target for 2030 is JPY 700 billion. You can see in the pie chart on the right, domestic insurance accounts for 40%, overseas insurance 50%, and non-insurance business 10%. Daiichi Life Savings Investment Trust and The Daiichi Frontier Life businesses are called spread business because the source of profit is the difference between investment yield and cost of debt or assumed interest rate. We believe that spread business will become a major pillar in the domestic business. In the overseas market, because of the aging population in advanced economies, retirement business is expected to grow.
Asset management business, which is included in the non-insurance businesses, will play a central role in non-insurance businesses. The asset management companies aim to increase their profits. They will provide asset management functions to group life insurance companies, creating synergy within the group and contributing to group's profit target. Before explaining future strategies for each business, I would like to look at the current state of personal assets in the developed countries. From left to right, the U.S., Japan, the U.K., and Australia. The vertical scales are roughly aligned except for the U.S.. U.S. is outstandingly large. This chart shows the growth and the share of each asset over the five years period from 2019- 2024. One thing in common is that the gray non-financial assets are driving the growth in personal assets.
In the U.K., stocks and investment trust declined, but in the other countries, equities, investment trusts, and other assets are also driving total asset growth. The growth rate is 9.6%, 9.2%, 0.5%, and 7.6% respectively. With the exception of the U.K., you can also see a solid growth for insurance annuities at the light blue part. The Australian superannuation, in particular, shows a high growth of 5.0%. This hidden part is showing a very high growth. Japan has an outstanding high level of cash and deposits shown in dark blue. We assume that Japan's personal financial asset could reach JPY 4,000 trillion by 2040 as the government's policy to promote Japan as a leading asset management center accelerates the shift from savings to investment. We are getting ready for that. This shows the distribution of wealth.
The inverted pyramid on the left shows the world's adult population divided into three tiers by the amount of assets held. The pyramid in the middle, on the other hand, shows the number of households in Japan divided into three tiers by the amount of net financial assets held. The sources are listed below. You can see that the world's wealth concentrates among the so-called wealthy people. That's an inverted pyramid. For example, the adult population holding more than $1 million is limited to 60 million, yet the value of their holdings is $226.5 trillion. The global mass population with assets less than $100,000 is 3.12 billion. The value of their holdings is $59.5 trillion. We can see that it's not evenly distributed. Let's look at Japan. There are 1.65 million wealthy households with a net financial asset of JPY 469 trillion.
That is JPY 284 million per household. While there are 44.25 million mass households with a net financial asset of JPY 711 trillion, that is JPY 16 million per household. I believe that if the government's policy will succeed, then the pyramid will be like the global one, close to the global one. But the mass accounts for a large part in Japan. Particularly in Japan, Daiichi Life has provided protection-type insurance to the mass segment, and DFL has provided savings-type insurance in yen and foreign currencies to the senior affluent segments. It will also provide asset management products and services in Japan and abroad using the investment capabilities acquired through its asset management strategy. That is the integrated value proposition. I would like to talk about the synergies between the insurance pension business and the asset management business. On the left-hand side, there is a spread business.
The spread business on left-hand side, in particular, requires insurance and pension products backed by strong investment management capabilities. Conversely, if you have an asset management company of choice for insurance company, the group can keep the investment management fees within the group. We do not have to entrust the fund from our clients to outside company. We can keep that investment management fees within the group. Combination with the asset management business, it will help us have the synergy. Suppose, for example, the group entrusted JPY 10 trillion of investment funds to an external manager. Even if fee is 20 basis point or 0.2%, this would mean that the JPY 20 billion of fees would flow out of the company every year. The target profit for the non-insurance business is 10% of the total. That is JPY 70 billion in 2030.
The more you invest, the value of the strong asset management companies will increase. Global insurance groups already have strong asset management companies within their group. We believe that the group needs to build such an asset management platform as soon as possible. Please go to next page. This is about DFL. We have two slides for DFL. By enhancing investment capabilities and utilizing reinsurance, DFL has steadily increased assets under management. Our aim is to increase the AUM to JPY 18 trillion by 2030. In the near future, we expect it will become a major pillar of the domestic business. However, the issue of seconded employees made news and caused significant trouble for the agencies. We need to rebuild the foundation of our business and reform our governance from scratch, starting with corporate culture. We have another slide for Frontier Life.
I would like to explain the investment portfolio of DFL, which is the source of its competitiveness. The slide compares the investment portfolio in 2021 and 2025. By shifting from corporate bonds to so-called alternative credit investments such as CLOs, credit-linked bonds, and direct lending, we are strengthening our products. You can see that in these graphs. The life insurance industry is set to transition to economic value-based capital regulations from the end of this fiscal year. Toward the end of the fiscal year, we plan to reduce or reverse the accumulated capital and various reserves, and distribute them as dividends to the holding company. That is our plan. Daiichi Frontier Life will improve capital efficiency even further by releasing the capital and to contribute to the group's capital circulation management.
Next slide, please. We have not talked much about Daiichi Life Group Pension business to the external community in the past, but here I want to give an introduction of this business because it contributes stable and significant profit to the group since general accounts products' guaranteed interest rates have been lower, which is a topic that I will touch upon later. The Daiichi Life Group Pension business provides services for private pension schemes like DB or defined benefits and DC, defined contributions, that are set up by corporations. In addition to providing support for setting up and administrating the corporate pension scheme, we are also entrusted with managing assets for corporate pensions. For DB, we offer general accounts or GA products and special accounts or SA products. GA is a spread business.
During the time when interest rates were low, we decided to lower guaranteed rates, which were higher than market interest rates. Since then, interest rates have started rising. Instead of returning to GA with a high capital burden, we have developed and launched a new guaranteed interest rate product called DB-GIC. Recently, we have been securing good margins so that we are able to provide interest rates that are more attractive compared to other industry peers, asset managers and trust banks. This has been very well received by our customers. For the SA, we have been leveraging the investment capabilities of asset managers inside and outside the group, and the AUM is number one in the life insurance industry. DC is a fee business, and it is growing significantly in both the corporate and individual lines of business. We are enhancing our corporate DC administration services, of course.
For individual DC, iDeCo, we are educating the Daiichi Life sales reps so that they can make proposals to individual customers. Through these efforts, we will be promoting integrated proposals combining protection and asset formation, which is also something that is required from a fiduciary duty perspective. Last but not least, in the corporate lump sum retirement payment and corporate surplus asset management, which we believe is one big market, we will maximize the use of our group asset management capabilities in order to monetize market growth. Next slide, please. This is about our profit expansion in the asset management business. In our capital market management business,
Our contribution to group profit at the end of year ending March 2024 was small, at JPY 3.5 billion. After establishing Vertex, we have acquired alternative investment capabilities inside and outside of Japan, and through our real estate business joint venture with Marubeni Corporation. Profits have grown so that we can expect JPY 18.5 billion on contributing to profit growth. Going forward, in addition to organic growth from our existing group asset managers, we will execute new M&A deals to build profit to around JPY 70 billion by the end of FY 2030, the year ending March 2031. Now I will introduce two case studies of synergies with group asset managers. The first is our collaboration with Canyon Partners, which is an alternative credit company in the United States.
At the moment, the Daiichi Life Group holds a 19.9% stake in Canyon, but has the right to acquire a majority interest from FY 2027 onwards. At the time of the first investment, the group made a $1.3 billion investment commitment, and Canyon used that to set up a new fund. Net funds raised outside of assets entrusted by our company also strongly turned positive. They are also in the alternative credit area. They are significantly increasing hiring of new talent into Canyon. Recently, the AUM has reached a record high, even excluding the entrustment that we have been making. The other case study is the Vertex case study, and it is about the development of Daiichi Life savings type of product development with Vertex. As Kai-san mentioned earlier, there is a Step Jump savings product, and I would like to talk about how that was developed.
The Daiichi Life Group now has around 60 - 70 financial engineering talent, mainly in the investment-related divisions in the group. When Vertex was established, some of them have been transferred to Vertex so that they can work on product development and investment. I want to introduce a part of what they do. AUM of Vertex, as you can see in the bar chart, is currently JPY 2.7 trillion. Currently, Daiichi Life investment divisions and QIS service, quant-based investment solutions, as well as the Daiichi Frontier Life and Daiichi Life Reinsurance Bermuda asset and entrustments are contributing to the AUM of JPY 2.7 trillion currently. Also, we have the Step Jump indexed annuities product developed mainly in collaboration with Vertex. Step Jump is a product that has taken a product that is popular in the U.S. single premium annuity market. We call this an FIA type of product.
You have a rider product where you can be quite flexible. Combining quants with insurance, they are developing a lot of products like that. Vertex has taken reference from those types of products and converting the popular product in the U.S. market into a regular premium product to launch here in Japan. In that one year after launch, we have sold 500,000 policies, and it is quite well received. Let me also touch upon the investment divisions of group insurance companies. The Daiichi Life Group, as of last October, consolidated a portion of the Daiichi Life and Daiichi Frontier Life investment functions to Daiichi Life Holdings. This is aimed to efficiently leverage group investment functions, reallocating talent and resources to growth areas such as private investment in order to improve investment returns and improve the competitiveness of our products.
Going forwards, we will partner and integrate with other life insurance investment divisions and collaborate with asset managers in the group in order to develop this into an asset management platform. Lastly, on our domestic real estate asset management business. As you can see on the map, inside of Japan, the market continues to grow, meaning the market for real estate asset management. When we look at the portfolio and look at the pension funds asset structure in Japan and the United States, we expect real estate allocations as a share of total assets to continue growing in Japan going forwards. We believe that this is one of the growth areas that help us transform our business portfolio. This is an asset management business, so it is a capital-light fee business.
In order to expand this, we plan to secure high-quality properties on a continuous and stable basis to meet institutional investor needs and increase our AUM. This is the last slide I have to present. In order to expand the domestic real estate business this fiscal year, we have worked on strategic initiatives such as integrating our real estate business with Marubeni Corporation and making strategic investments into &Do Holdings Co., Ltd. and also Wealth Management, Inc.. By investing into Wealth Management, Inc., which has extensive expertise and capabilities in hotel development and operations, including overseas luxury hotels, we hope to be capturing the continued growth opportunities in the hotel market, driven by increasing inbound tourist demand, and thereby accelerating the growth of the domestic real estate asset management business.
Through the business growth of our group companies, we aim to expand real estate AUM to around JPY 3 trillion, reaching a top-tier level in the domestic real estate industry. That is one reason for our investing in the company. The last slide is a summary of what I have said so far, and I would be welcoming any comments and questions. Thank you.