1. Swiss Re | Inclusive Business Forum | Manila, February 2016 Thomas Kessler, Head South East & East Asia, Swiss Re Global Partnerships

2. Swiss Re | Inclusive Business Forum | Manila, February 2016 What is Reinsurance 2 Swiss Re’s VISION: We make the world more resilient. Swiss Re’s MISSION: Together, we apply fresh perspectives, knowledge and capital to anticipate and manage risk. That’s how we create smarter solutions for our clients, helping the world rebuild, renew, and move forward. We offer risk transfer solutions -> high frequency portfolios -> high severity losses We offer innovation (re)insurance solutions with the public sector to close the PROTECTION GAP

3. Swiss Re | Inclusive Business Forum | Manila, February 2016 The growing burden of uninsured losses 3 Source: Swiss Re Economic Research & Consulting and Cat Perils.

4. Swiss Re | Inclusive Business Forum | Manila, February 2016 How to close the protection gap 4 gap 4 Which risk? Governments Who carries the risk? Pooling Insurance schemes and pools to increase insurance penetration Macro Risk transfer solutions for (sub)sovereigns to cover their direct or indirect costs Micro Simplified products distributed via aggregators such as MFIs, NGOs, and corporates Risk transfer solution Businesses, homeowners, farmers Public physical assets Emergency response costs Foregone revenue Uninsured private assets Livelihood assistance Protection gap Individuals

5. Swiss Re | Inclusive Business Forum | Manila, February 2016 The Microinsurance Target Market: 4 Billion People Sources: World Bank, Swiss Re Sigma Report 2010, Allianz Group 2012, KPMG 2013 5 SR working definition of microinsurance : "Microinsurance is the protection of low-income people who do not yet have equal access to insurance solutions" An estimated 4 billion people are living under USD4/day who can potentially benefit from microinsurance and/or public private partnership. Microinsurance market (commercially viable) Microinsurance through aid/government support Conventional insurance market

6. Swiss Re | Inclusive Business Forum | Manila, February 2016 Agriculture/Index and Livestock Range Of Microinsurance Solutions Natural Catastrophes ?? Life 6 Increasing emphasis from emerging countries, and from entities serving most vulnerable populations Initiatives : The platform MiCRO – industry-first to combine basis risk and parametric protections was launched in Haiti in 2011. Swiss Re also supported the first flood insurance for river basin residents in Bangladesh in 2013. Index covers help overcome the challenges of traditional agriculture insurance Initiatives : Innovative products and pilot programs in India, Kenya, Mexico, Malawi; use of technology to reduce fraudulent claims in livestock microinsurance Most popular and successful microinsurance product. Strong push from MFIs and product simplicity have been the main growth drivers Initiatives : Innovative distribution such as mobile technology through tie-ups with retailers or telecom 6 Shariah-compliant insurance targeted at the low-income Islamic population Initiatives : Though the market is still in the early stages of development, there are health, life, disability, livestock programmes across certain markets (i.e. Indonesia, Malaysia) Health Offers the highest value to low-income individuals. Governments can channel subsidies to meet social goals Initiatives : Cashless government program (RSBY) to improve access to healthcare for the poorest in India Microtakaful

7. Swiss Re | Inclusive Business Forum | Manila, February 2016 7 Microinsurance Differs From Conventional Insurance In Many Ways… MicroinsuranceConventional Insurance  Low-income individuals  Extremely limited insurance awareness/knowledge  High and medium income individuals  Market is largely aware of insurance benefits  Simple product design with easy-to-understand features  Community of group pricing: limited actuarial data  Multiple coverage and features  Risk-based pricing driven by multiple parameters; good data quality  Innovative distribution with multiple tie-ups  Usually sold as combined product through microfinance institutions  Employs conventional channels including agents, banks, internet  Insurance sold by licensed intermediaries  Simple underwriting practices (often no screening); small sum assured  Simple policy language with minimal or no exclusions  Comprehensive underwriting; large sum assured  Complex language with multiple exclusions and terms and conditions  Irregular premium payments; by cash or bundled with other products Regular payments paid by cheque, direct bank debit, credit card  Simple and quick claims turnaround process; limited documentation  Comprehensive process; detailed documentation  As per regulatory norms or investment rules of the risk carrier Target Market Claims Handling Administration Asset Management Marketing and Distribution Underwriting Product Design 7

8. Swiss Re | Inclusive Business Forum | Manila, February 2016 8 Core Characteristics Of Microinsurance A. Microinsurance is based on insurance principles B. It extends the reach of insurance to the remotest sections of society C. Premiums, coverage, distribution and claims adjustments are kept at a low level to make products affordable D. Products require customisation to meet the demand of low-income clients and/or administrative innovations such as product registration and payments via virtual or mobile platforms E. Microinsurance is structured simply to make products easy to understand 8

9. Swiss Re | Inclusive Business Forum | Manila, February 2016 Addressable market and target customers  Sub-Saharan Africa is the largest mobile microinsurance market with 25 million mobile insurance customers using basic mobile devices and never having had insurance before with less than USD 10 income per day Distribution models and business Models  direct distribution by insurer-owned technology platforms  retail point-of-sale  intermediation through technology service providers (TSPs) Functions of mobile insurance  Reducing costs of customer education and monitoring agent quality  collecting premium  Collecting data to enable underwriting 9 Mobile Insurance distribution in emerging markets: African innovation spreading globally 9 Source: Swiss Re Economic Research & Consulting.

10. Swiss Re | Inclusive Business Forum | Manila, February 2016 10 Case Study Kenya: Kilimo Salama ("Safe Agriculture") Solution features Kilimo Salama is an Agricultural Index Insurance Initiative of UAP Insurance and Syngenta Foundation with Swiss Re providing reinsurance and technical support. The insurance is designed for Kenyan farmers to cover inputs, such as seeds, fertilizer and chemicals. The insured perils are extreme drought and excessive rainfall by relying on independent data from automatic weather stations. The farmer buys the insurance together with inputs from various stockists. Policy registration as well as premium and benefit payments are paperless transactions through the mobile platform "M-PESA". Involved parties Kilimo Salama is a multi-stakeholder approach that is mainly driven by Syngenta Foundation together with the local insurance partner UAP. The IFC Global Index Insurance Facility is supporting the initiative. Swiss Re joined from the very beginning to provide risk capacity, underwriting expertise, structuring as well as claims support. 10

11. Swiss Re | Inclusive Business Forum | Manila, February 2016 Insurers: Include public and private insurers Reinsurers: Provide reinsurance capacity, technical expertise, insurance of risk peaks, and disaster protection Distributors/Dealers: Channels include microfinance institutions, government, Development Banks, NGOs, cooperatives, mutuals, community organizations, retailers, utility companies, post offices, commercial banks, brokers and mobile network operator Governments: Drive the necessary regulation and sponsor microinsurance programs Enablers: Service providers (e.g. claims management, IT, market research), international development organizations, donors and investors 11 Public Private Partnership And Microinsurance Requires A Multi-stakeholder Approach 11

12. Swiss Re | Inclusive Business Forum | Manila, February 2016 Thank You! 12

13. Swiss Re | Inclusive Business Forum | Manila, February 2016 13

14. Swiss Re | Inclusive Business Forum | Manila, February 2016 Legal notice 14 ©2015 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.