2 mark saunders

Joint Regional Seminar -- 2012 MOVING MINDS: Who will grasp the opportunity in the Asian insurance industry of the future?

Mark Saunders Managing Director, Towers Watson Hong Kong & Managing Director Asia Pacific Region, Insurance Sector and Risk Consulting & Software Practice Leader

Š 2011 2012 Towers Towers Watson.

Watson.All Allrights rights reserved. reserved.

It’s hot and there’s a lot going on …

© 2012 Towers Watson. All rights reserved.

Purpose

Take some time out of the weeds…

Share views, thoughts, insights and experiences Provoke/confrontational?

Challenge the conventional Stimulate creative thinking Consider fresh perspectives Inspire … or, at least, one valuable takeaway!

Food for Thought © 2012 Towers Watson. All rights reserved.

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Lots of

Some food for Thought

ACHANGE PP ETI SER OPPORTUNITY !

EVOLUTION or REVOLUTION

© 2012 Towers Watson. All rights reserved.

3

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1989: Ten “opportunity for growth” thoughts of a naïve young actuary new to Asia 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Segmentation/targetting High Net Worth Bancassurance IFAs OTP and Direct Disclosure and Fee-based UL UWP Annuities Preferred lives More evolution than revolution…

© 2012 Towers Watson. All rights reserved.

Customer Distribution Servicing

Products x

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But that was 23 years ago … what about “now”?

Trends…..the “common” influencing factors…

GFC

Divestitures/ Withdrawals

S2

Catastrophes

Euro

Demographics

Risk Management

Distribution

IFRS/IAS & Disclosures

Efficiency

Asian Growth

Product

© 2012 Towers Watson. All rights reserved.

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3 Themes

Awareness + Appreciation

Pride

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Customerfocused

Respons ib

ility?

y Opportunit

Ageing

Obligation?

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Our Objectives?

1. Do well by doing good

2. Live long and live well 3. We can make a difference; so let’s move minds

Provide for people’s needs … …through PULL rather than PUSH … ?!?

© 2012 Towers Watson. All rights reserved.

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A New World?

K A K W

E O R N B N C I G T L J P Q B I E R A F V X B D Z P E S T E R X

K M O Q

A E Y E

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O O O K

L D L A

F O N S H N H N Y T N J D E O B B N B I

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Catastrophes Power Shift Risk

Terror

GFC

Growth

Economics Low IRs

Austerity Eurozone

Liquidity

Arbitrage

Risk free?!

Jasmine SNS

Guarantees

Shareholder Spring

Technology Interconnectedness

Operation “Twist” Retirement Health & Wellness Pace Work-Life balance BRiC

Information

“Occupy”

Environment

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Credit

PIIGS

RBC/EC

Regulation

Wealth

Demographics Ageing Population

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Six Broad Directions for insurers….

Game Changers

Incrementalists

Nichies

NOW

Survivors Dinosaurs… © 2012 Towers Watson. All rights reserved.

Fast followers ……….OR?

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Power Shift Market Capitalization by Insurer >US$4bn

Red bars indicate AP headquarters Source: Bloomberg May 18, 2012

Š 2012 Towers Watson. All rights reserved.

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Ten Areas of Opportunity‌ Protection Retirement Health Micro insurance Takaful HNW/WM Group/ Eee Bens Analytics GI sophistication Business Performance Improvement Š 2012 Towers Watson. All rights reserved.

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Demographics

10%

5%

1950

2000

AGEING

65%?

45% CHALLENGE OPPORTUNITY 2050 Š 2012 Towers Watson. All rights reserved.

2100 Not to scale: for illustrative purposes only

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The question is ‌.

How to grasp the opportunity?

Š 2012 Towers Watson. All rights reserved.

reminder

A reminder … Our Objectives?

1. Do well by doing good

2. Live long and live well 3. We can make a difference; so let’s move minds

Provide for people’s needs … …through PULL rather than PUSH … ?!?

© 2012 Towers Watson. All rights reserved.

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Appreciation & Customer Focus

Promote the “GOOD” Be Proud

Customer Experience

Wow!?......decent?

VFM Fair & Reasonable

TRUST

DIFFERENTIATOR © 2012 Towers Watson. All rights reserved.

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“Greed and Fear”

Maintain Lifestyle But….Outliving Savings?

Synchronise exhausting assets but how much to leave to dependents?

© 2012 Towers Watson. All rights reserved.

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!

Challenges • Cost of Rtmt Provision • HealthCARE Services

Massive Need & Want

• LIRs • Longevity • Guarantees

Challenges Risk Management Specialists

• Poor Perception

Achieve Appreciation Positive Customer Experience Move Minds

Private

Public Partnership

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Too difficult ?!?

SIMPLISTIC ORIGINS

$$$

$$$ Rules

VS Dying Too Soon

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Living Too Long

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Vision of the World – Steve Jobs – Game Changer …

© 2012 Towers Watson. All rights reserved.

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The Game Changer Solution for Ageing “problem”

+

Customer Focus

+

Awareness and Appreciation

Will it be YOU?

? © 2012 Towers Watson. All rights reserved.

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Move Minds

Awareness + Appreciation

Pride

Respons ib

ility?

y Opportunit

Private

Public Partnership Š 2012 Towers Watson. All rights reserved.

Ageing

Customerfocused

Obligation?

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Which direction you take is up to you!

There is (or should be): NEED WANT SUPPORT

It’s a TIC S A T FAN ity! n u t r o Opp

1. Do well by doing good 2. Live long and Live well 3. We can make a difference; so let’s move minds

Push or Pull ?!? © 2012 Towers Watson. All rights reserved.

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And finally…

……IN THE NEW WORLD……

Mark Saunders, FIA, FIAI, FSA, FSAS, FSAT Managing Director, Hong Kong & Asia Pacific Insurance Sector and Risk Consulting Practice Leader Towers Watson

Telephone: Fax: E-mail:

+852 2593 4535 +852 2525 9706 mark.saunders@towerswatson.com

www.towerswatson.com © 2012 Towers Watson. All rights reserved.

Disclaimer This presentation has been prepared by Towers Watson for general information purposes only and does not constitute professional advice. It is incomplete without the accompanying oral explanations. The information, opinions and illustrations contained are derived from various sources and have not all necessarily been independently verified by Towers Watson. The presentation is not intended to guide or determine any specific individual situation and persons should consult qualified professionals for appropriate professional advice before taking any specific actions. Neither the presenter, nor the presenter’s employer, shall have any responsibility or liability to any person or entity with respect to damages alleged to have been caused directly or indirectly by the content of this presentation. If you require professional advice or require any further information, please contact Mark Saunders or your usual Towers Watson representative.

All rights reserved. You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial or other public purposes without the prior written permission of Towers Watson

Š 2012 Towers Watson. All rights reserved.