LIFE UNDERWRITING CHALLENGES AND POLICY HOLDER BEHAVIOUR BY JUSTUS M MUTIGA ICEA LION LIFE ASSURANCE CO.LTD Email: Justus.mutiga@icealion.com

Policyholders Behavior TOPICS COVERED The mobile revolution Death of underwriter Behavior Engineering Claims Experience Policyholders Behavior

Mobile technology and traditional insurance distribution model. THE MOBILE REVOLUTION Mobile technology and traditional insurance distribution model. The internet and mobile devices are impacting distribution, but overall share of e-commerce sales is still low. New technology is changing how consumers and firms interact with insurers.

THE MOBILE REVOLUTION New technology will eventually enable customers to arrange most of their insurance through remote digital channels. Internet and mobile devices have their share of market share in terms of premium. Traditional distribution channels continue to dominate but the future is technology.

Development markets have utilised technology more THE MOBILE REVOLUTION Development markets have utilised technology more Uptake of mobiles is growing at very high rates in Africa surpassing the development countries. Micro insurance is being sold through mobiles in Tanzania, Ghana and Kenya This trend (innovation) will continue

Mobile Micro insurance has spread to Asia and Latin America. The products sold are the less complex life covers This allows insuring of the bottom of the pyramid of wealth population.

DEATH OF AN UNDERWRITER In life insurance physical examinations are common and purchasing insurance takes weeks or months. Underwriting evidence protects the insurance against adverse selection but it is deterrent to reaching under insured younger and middle income markets.

DEATH OF AN UNDERWRITER New technologies, smart phone apps and data driven predictive modelling solutions offer opportunities to bridge information gap. This reduces the length of insuring and underwriting process.

DEATH OF AN UNDERWRITER The big data and analytics is simplifying the process. Shrinking market for underwritten products Compliance and privacy issues Product complexity and relevant of the underwriting requirements.

CURRENT COMPETITIVE ENVIRONMENT FOR THE LIFE INSURANCE INDUSTRY Underwriting – A competitive Advantage? Lack of value and innovation, consumer’s make their insurance purchase decisions solely on price Value creating mechanisms – underwriting is expensive. Partnership with health clubs and laboratories

CURRENT COMPETITIVE ENVIRONMENT FOR THE LIFE INSURANCE INDUSTRY People behaviours – driving, lifestyle etc. Treatment history.

SOCIETAL AND DEMOGRAPHICS Continued mortality improvement HIV Mortality Customer Expectations Increased focus on Health Habits Exercises Healthy eating

BEHAVIOUR ENGINEERING Can Insurers induce favourable behaviour pattern from insured population. Products with return of premium features Discounts to Healthy Lifestyle Individuals Separation of long term and short term behavioural elements.

POLICYHOLDER BEHAVIOUR Lapsing of policies is a policyholder behaviour Anti-lapse strategies Commission structure Training Understanding policyholders Surrender Risk Non disclosure

POLICYHOLDER BEHAVIOUR More and more products are sold with policy holder optionally. Policy loan Partial withdrawal Design of products

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