Introducing Towers Watson

Joint Regional Seminar -- 2012MOVING MINDS: Who will grasp the opportunity in the Asian insurance industry of the future?Mark SaundersManaging Director, Towers Watson Hong Kong &Managing Director Asia Pacific Region, Insurance Sector and Risk Consulting & Software Practice Leader

2011 Towers Watson. All rights reserved.

2012 Towers Watson. All rights reserved. 2012 Towers Watson. All rights reserved.Its hot and theres a lot going on

2012 Towers Watson. All rights reserved.PurposeTake some time out of the weedsShare views, thoughts, insights and experiencesProvoke/confrontational?Challenge the conventionalStimulate creative thinkingConsider fresh perspectivesInspire or, at least, one valuable takeaway!Food for Thought 2012 Towers Watson. All rights reserved.3Some food for ThoughtEVOLUTIONorMoving MindsREVOLUTION

APPETISER!

1 of 21Lots of CHANGE OPPORTUNITY 2012 Towers Watson. All rights reserved.1989: Ten opportunity for growth thoughts of a nave young actuary new to AsiaSegmentation/targettingHigh Net WorthBancassuranceIFAsOTP and DirectDisclosure and Fee-basedULUWPAnnuitiesPreferred livesCustomerDistributionProducts

Servicing

x

More evolution than revolution2 of 21 2012 Towers Watson. All rights reserved.But that was 23 years ago what about now?Trends..the common influencing factorsDivestitures/ WithdrawalsCatastrophesDemographicsDistributionEfficiencyProductGFCS2EuroRisk ManagementIFRS/IAS & DisclosuresAsian Growth3 of 21 2012 Towers Watson. All rights reserved.3 ThemesAwareness +AppreciationAgeingCustomer-focusedACAPride

Responsibility?

Opportunity

Obligation?

4 of 21 2012 Towers Watson. All rights reserved.

Our Objectives?1. Do well by doing good2. Live long and live well3. We can make a difference; so lets move mindsProvide for peoples needs 5 of 21through PULL rather than PUSH ?!? 2012 Towers Watson. All rights reserved. 2012 Towers Watson. All rights reserved.A New World?KEORNBNCIAGTLJPQBIKERAFVXBDWZPESTERXKAOLFONSHMEODNHNYTOYOLNJDEOQEKABBNBI6 of 21 2012 Towers Watson. All rights reserved.InterconnectednessOccupy Jasmine Pace Health & WellnessEnvironment Guarantees TerrorCatastrophes Power Shift Risk free?! SNSRegulation Risk Technology Information DemographicsRetirement Ageing WealthArbitrage Work-Life balancePopulationLiquidityCreditGFCEurozoneGrowthAusterityRBC/ECEconomicsLow IRsYes! Its a New World!Shareholder Spring PIIGS BRiC 7 of 21Operation Twist 2012 Towers Watson. All rights reserved.

Six Broad Directions for insurers.Game ChangersNichiesIncrementalistsFast followersSurvivorsDinosaursNOW

.OR?8 of 21 2012 Towers Watson. All rights reserved.Power Shift

Source: Bloomberg May 18, 2012Market Capitalization by Insurer >US$4bn Red bars indicate AP headquarters

9 of 21 2012 Towers Watson. All rights reserved.Ten Areas of OpportunityProtectionRetirementHealthMicro insuranceTakafulHNW/WMGroup/ Eee BensAnalyticsGI sophisticationBusiness Performance Improvement10 of 21 2012 Towers Watson. All rights reserved.DemographicsAGEING19502000205021005%10%45%65%?Not to scale: for illustrative purposes only11 of 21CHALLENGEOPPORTUNITY 2012 Towers Watson. All rights reserved.The question is .How to grasp the opportunity? Evolution or Revolution? 12 of 21 2012 Towers Watson. All rights reserved.

A reminder Our Objectives?1. Do well by doing good2. Live long and live well3. We can make a difference; so lets move mindsProvide for peoples needs reminderthrough PULL rather than PUSH ?!? 2012 Towers Watson. All rights reserved. 2012 Towers Watson. All rights reserved.Appreciation & Customer FocusPromote the GOODBe ProudCustomer ExperienceWow!?......decent?VFMFair & ReasonableTRUSTDIFFERENTIATOR13 of 21 2012 Towers Watson. All rights reserved.Greed and FearMaintain LifestyleBut.Outliving Savings?AccumulationDe-cumulationSynchronise exhausting assets but how much to leave to dependents?

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2012 Towers Watson. All rights reserved.

!Cost of Rtmt ProvisionHealthCARE ServicesLIRsLongevityGuaranteesPoor PerceptionChallengesMassiveNeed & WantChallengesRisk Management SpecialistsAchieve AppreciationPositive Customer ExperienceMove Minds

PublicPrivatePartnership15 of 21 2012 Towers Watson. All rights reserved.Too difficult ?!?Dying Too SoonVSLiving Too LongSIMPLISTIC ORIGINS$$$$$$

Rules16 of 21 2012 Towers Watson. All rights reserved.Vision of the World Steve Jobs Game Changer

17 of 21 2012 Towers Watson. All rights reserved.20The Game ChangerWill itbe YOU?

Solution for Ageing problemCustomer Focus

Awareness andAppreciation++

?18 of 21 2012 Towers Watson. All rights reserved.21Move MindsAwareness +AppreciationAgeingCustomer-focusedACAPride

Responsibility?

Opportunity

Obligation?

PublicPrivatePartnership19 of 21 2012 Towers Watson. All rights reserved.Which direction you take is up to you!1. Do well by doing good2. Live long and Live well3. We can make a difference; so lets move minds

There is (or should be):NEEDWANTSUPPORTIts a FANTASTIC Opportunity! Push or Pull ?!? 20 of 21 2012 Towers Watson. All rights reserved. 2012 Towers Watson. All rights reserved.And finally IN THE NEW WORLDSuccess and FortuneMark Saunders, FIA, FIAI, FSA, FSAS, FSAT Managing Director, Hong Kong& Asia Pacific Insurance Sector and Risk Consulting Practice LeaderTowers Watson

Telephone:+852 2593 4535Fax:+852 2525 9706E-mail: mark.saunders@towerswatson.com

www.towerswatson.com21 of 21 2012 Towers Watson. All rights reserved.24Disclaimer 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 presenters 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 2012 Towers Watson. All rights reserved.25Chart175891.341954665.44543473.182240089.286332083.91831167.554328079.87427482.224426830.633724190.460922341.05521759.199220113.043919483.066419112.580117944.970317273.613516263.221316092.058614198.102195653113508.863812187.442612050.985110721.095910375.331710078.466510063.821210011.98038849.54138709.28088540.50567894.0437663.52057506.11147276.59517044.26816639.9736233.91895868.1255522.94384693.51224668.56614264.9577

Market Caps (US$ billion)

Sheet1China LifePing AnAllianzAIAMet LifeZurich FinancialAXAChina PacificPrudential (UK)TravelersINGPrudential Financial (US)Great West LifeManulifeChubb CorpTokio MarineGeneraliSamsung LifeAllstate CorpNew China LifePICCAvivaSun Life FinancialOld MutualDai-Ichi LifeL&GCathay FinancialMS&ADFubon FinancialSamsung Fire & MarineFairfax FinancialAegonNKSJStandard LifeMapfrePrincipal FinancialT&DSony FinancialLincoln NationalRoyal Sun AllianceKorea LifeGreat EasternAgeas75891.341954665.44543473.182240089.286332083.91831167.554328079.87427482.224426830.633724190.460922341.05521759.199220113.043919483.066419112.580117944.970317273.613516263.221316092.058614198.102195653113508.863812187.442612050.985110721.095910375.331710078.466510063.821210011.98038849.54138709.28088540.50567894.0437663.52057506.11147276.59517044.26816639.9736233.91895868.1255522.94384693.51224668.56614264.9577