July 2008 Leadership in life insurance

2 Agenda Indian life insurance opportunity Organisational overview Integrated framework

3 Agenda Indian life insurance opportunity Organisational overview Integrated framework

4 One of the fastest growing economies India: FY 2008, Others: calendar 2007 Source: International Monetary Fund and the Central Statistical Organisation GDP growth rates (2007)

5 Services sector growth Industrial sector momentum Favourable demographics Knowledge capitalRural potential Globalisation CAGR during 1990s: 5.2% Indian economy: Key drivers of growth

Increasing proportion of working population To further fuel India’s growth and rising disposable income levels Shift towards nuclear families Increased savings and protection needs (Age group) (percentage of population) Source: Census of India 69 63

7 Source: IRDA, Swiss Re Penetration (as a % of GDP) Insurance premium per capita ($) Number of players 1.2% ~ FY 2000 NB premium ($ bn) 1.49 Total premium ($ bn) 6.27 CAGR of 40% CAGR of 28% Evolution of industry since liberalisation 4.4% 18 FY ~

8 Agenda Indian life insurance opportunity Organisational overview Integrated solution

9 Business context … our growth story Employees New business (in $ bn) Branches March 2006 March ,70416, March ,956 29, # of policies (in mn) Fitch rating of ‘AAA (Ind)’ Awarded most respected private life insurer Sustained private market leadership for 7 years

10 Key strategic elements Distribution Rapid expansion of agency Multi-channel platform Brand Creation of a superbrand Product Comprehensive portfolio Innovative & flexible products People Talent from diverse industries Career programs Scale Pan India presence Drive growth profitably

11 Agenda Indian life insurance opportunity Organisational overview Integrated framework

12 External challenge External: Supply demand mismatch 3.7 mn jobs expected to be created in services sector alone (next 2 years) Scarce insurance sector specific skills Younger workforce Wage inflation Job inflation Attrition Wage increases highest in the world Incumbents working 1-2 levels below their intended levels High attrition esp. at frontline

13 Internal challenge Hypergrowth Sustained growth of ~40% Scale Increasing presence in tier II & tier III towns and cities across India Competency requirements: New lines of business (health etc.) Readiness risk Assimilation risk Fitment risk Risk of underdeveloped incumbents Risk of slow learning in new roles Wrong person for the job

14 The framework Organisation design Knowledge management Organization DNA Talent management Performance Effectiveness Attrition “agnostic” strategies

15 Organisation design Align people to overall goals of the organization through balanced scorecard Ensure clarity through metrics (KPIs) Track it through automation Aggregate roles under functional “centres of excellence” Shared services model Centralization of roles Drive automation in people processes to manage scale

16 Knowledge management Ensure “skill ready” supply base – instead of focusing on hire & train, change it to train & hire Insurance specific courses Adopt enabling automation De skill the jobs without affecting productivities Aid in decision making through dashboards Invest in “job ready” training & certification

17 Talent management Differentiate performance Through rewards Clear career paths…to enable growth internally Phase out poor performers Identify “talent pool “ based on potential– leadership competencies Cast a wider net Cultivate a “talent scout” mindset among managers Poor performers Solid contributors High performers 15% 20%30%25% 10% Leaning Toward Disengagement Neutral Leaning Toward Engagement

18 Talent management Interventions for the “talent pool” Design roles around people’s strengths Diagnose development and have candid conversations with people Keep people challenged through roles on an ongoing basis Talent as an organization resource – enterprise wide visibility Inculcate a strong proposition of learning & growth

19 Thank you