Timothy C. Pfeifer, FSA, MAAA Pfeifer Advisory LLC

 Interest Rates  Mortality (esp. improvement, older ages)  Reinsurer Participation 2  Principle-based approaches  Demographic trends  Sales compensation  Technology

3 Risk Free Rates Steer Return Potential Investment Earnings Rates on Assets Funding Costs for Capital Solutions Competitiveness of Alternative Products Steadily Increasing Interest Rates will Provide Some Pricing Relief

 General view is that term life will benefit from PBR 4 PBR  MCEV  Rating Agency expectations  year term bigger beneficiaries  Need for high ART period? Related Issues  Competing products may be disadvantaged

5 Improvement Common today in pricing, but tempered in future, particularly at very young, very old ages Stabilization of risk class numbers allows for more robust, consistent data Dichotomy in views surrounding slope of older age mortality Mortality jump may be tempered by lower premium spike Refinement Older Ages End of LPP

6 Emerging “sweet spot” not traditional term zone Longer working lives extends need for life coverage Less time than money? Reaching ethnic, female, unemployed, rich

 Less likely to be source for capital relief (coinsurance)  More likely to be partner providing underwriting and mortality guidance and earnings smoothness  May provide avenues to keep ROP in the game, riders  Trend of increasing retention limits will slow/stop  Profits beyond the level premium period, survivorship term 7          

 Levelizing compensation less likely to impact prices much on base term  Compensation on policy fees, favorable experience, post LPP re-underwritten  Greater compensation for term conversions in preferred windows  Agent-owned reinsurance rebirth 8

Speed-medical records Drug databases Lifestyle databases Smart algorithms 9 Underwriting Up-Selling Policy Issuance Conversion Programs Internet-Friendliness

A.Prices will drop slightly at ages 40-60; same or higher elsewhere B.30-year Comeback C.Process/Technology Improvements broaden market D.Structures to retain customers after LPP E.Pivotal product as long as economic climate viewed as harsh 10