Advance Create Co.,Ltd.

Business Details

Operates life and non-life insurance agency business and related operations. Uses "Hoken Ichiba" as a unified brand, conducting insurance solicitation through diverse channels including direct mail, face-to-face sales, fully online completion, and joint solicitation with other agencies. Revenue sources consist of three pillars: Insurance Agency Commission Income, bonus income, and MC income. Adopts a unique revenue recognition method in which the present value (PV) of future commissions to be received is recorded as sales at the time a contract is concluded. Major customers include MetLife Insurance and Nanairo Life Insurance.

Recent Overview

Q1 sales up 57.8% and operating profit of ¥27 million, a turnaround from a substantial loss in the prior-year period

In Q1 FY2026 (ending March 2026) (October to December 2025), the main factors behind the sales increase were productivity improvements at directly operated branches, steady sales performance, and an increase in PV sales amount associated with improved insurance contract retention rates resulting from maintenance activities. External customer sales were ¥1,282 million (up 55.1% year on year), and operating profit improved significantly to ¥27 million (compared to a loss of ¥679 million in the prior-year period). However, an impairment loss of ¥60 million was recorded as an extraordinary loss within the Insurance Agency Business segment. The company continues to be in breach of financial covenants, and material uncertainty regarding the going concern assumption remains.

Key Products

Growth Drivers

• Improved productivity per sales employee at directly operated branches (utilizing Dynamic OMO and avatars)
• Increase in PV sales amount (present value of future commissions) associated with improved insurance contract retention rates
• Growth in the number of customers securing appointments through improved marketing methods
• Improved appointment acquisition efficiency through database utilization
• Faster onboarding of new graduate employees through use of the Avatar AI Role-Play Support Service "Avatore"
• Expansion of demand for private insurance amid the declining birthrate, aging population, and shift from savings to investment

Risks

• Material uncertainty regarding the going concern assumption (breach of financial covenants, operating losses and negative operating cash flow for three consecutive periods)
• Risk of breach of financial covenants related to receivables securitization contracts (right of repurchase claim by financial institutions; waiver of the repurchase claim right was obtained in December 2025, but countermeasures are still being implemented)
• Risk of impairment loss on fixed assets in the Insurance Agency Business (¥60 million recorded in Q1 FY2026, ending March 2026)
• Risk regarding the estimation accuracy of PV calculations (present value calculation of future commissions) (concern over recurrence of prior-period corrections)
• Impact on new consultation numbers and collaborative results due to sluggish growth in the number of appointments obtained
• Risk of fixed cost control across the group, including increased outsourcing costs in the Media Rep Business