1. Federal Advisory Committee on Insurance Robert A. Kerzner President and CEO LIMRA, LOMA, LL Global June 12, 2013

2. © LL Global, Inc. SM Americans Households Owning Individual Life Insurance 2 Source: LIMRA Household Trends in U.S. Life Insurance Ownership, 2010

3. © LL Global, Inc. SM 3 Among households with children under 18, 4 in 10 say they would immediately have trouble meeting everyday living expenses if a primary wage earner died today. Another 3 in 10 would have trouble keeping up with expenses after several months. That’s 70% of households that would be in jeopardy within a few months. Source: LIMRA Household Trends in U.S. Life Insurance Ownership, 2010

4. © LL Global, Inc. SM American Households That Say They Need More Life Insurance Source: LIMRA Household Trends in U.S. Life Insurance Ownership, 2010

5. © LL Global, Inc. SM 5 # of U.S. households that believe they need more life insurance Source: LIMRA Household Trends in U.S. Life Insurance Ownership, 2010

6. © LL Global, Inc. SM C HANGING D EMOGRAPHICS IN THE U NITED S TATES 6

7. © LL Global, Inc. SM History: US Growth in Numbers 2000-2010 (all numbers in millions) Source: U.S. Census Bureau

8. © LL Global, Inc. SM 8 Projected Growth Over the Next 20 years … Source: U.S. Census Bureau *non-Hispanic

9. © LL Global, Inc. SM 9 Percent of Americans Who Are Hispanic and/or Non-white Younger Generations Are Increasingly Diverse…

10. © LL Global, Inc. SM 10 Individual life insurance ownership by ethnicity Household income of $25,000 or greater

11. © LL Global, Inc. SM 11 One Parent Households Have More than Doubled Since 1970

12. © LL Global, Inc. SM 12 6 in 10 insured single mothers need more life insurance “I need more life insurance.” 59% “I am likely to buy more life insurance.” 27% Source: 2010 U.S. Life Ownership study – Single Mothers

13. © LL Global, Inc. SM Fewer Americans are getting married… 41% decline Source: Pew Research, 2011

14. © LL Global, Inc. SM Fewer US Households Have Children Percent of U. S. Households with Children Under 18 Source: US Census Bureau

15. © LL Global, Inc. SM 15 Wives earning more than husbands Source: Pew Research Center 625% increase

16. © LL Global, Inc. SM 16 Household financial decisions When Husband Earns More When Wife Earns More Source: Pew Research Center

17. © LL Global, Inc. SM Retirees Are Here to Stay… Source: U.S. Census Bureau, 2012 Total: 72 Million Boomers Total: 81 Million Gen Next

18. © LL Global, Inc. SM Retirement income opportunity will double to nearly $22 trillion by 2020 18 Source: LIMRA, Based on 2001, 2007 and 2010 Survey of Consumer Finances, Federal Reserve Board and U.S. Census Bureau’s Current Population Survey, March 2011 Supplement. All estimates and calculations reflect consumer segments of age 25 or more, and households with assets between $50K and $4.9M. Household HH by age group growth has been estimated by using Census projections by age and assuming that the proportion of HHs that have between $50,000 and <$5 million is constant within age group over time and the proportion in equities remains constant within each age group over time Asset Gathering Retirement Assets 2010 2020 $0.4 trillion 0.6 trillion Early Career Age 25 -34 Investable Assets $1.7 trillion $2.5 trillion Mid Career with Kids Age 35 -44 Investable Assets $4.3 trillion $5.6 trillion Kids in College Age 45-54 Investable Assets $6.1 trillion $10.2 trillion Pre-retiree Age 55-64 Investable Assets $5.9 trillion $11.4 trillion Retired Age 65+ Investable Assets The Retirement Income Opportunity 65% of assets 56% of assets

19. © LL Global, Inc. SM American’s Top Financial Concerns 19 Source: 2013 Insurance Barometer Study, LIFE and LIMRA

20. © LL Global, Inc. SM Gen X and Y Americans’ Top Concern: 75% Having Enough Money For A Comfortable Retirement

21. © LL Global, Inc. SM Top 5 Important Reasons for Saving Gen XGen Y But What Do They Really Save For? 21 Source: LIMRA Retirement Study—Consumer Phase, 2012. Note: Based on 854 consumers aged 32 to 47 (Gen X) and 698 consumers aged 20 to 31 (Gen Y) currently working for pay. Top 10 based on the percent of consumers that ranked each reason as one of their household’s three most important reasons for saving (besides emergencies and unemployment).

22. © LL Global, Inc. SM Longevity Two Issues Undermining Retirement Security Insufficient Funds

23. © LL Global, Inc. SM Viewing Priorities Differently Retireesvs.Advisors Health Care Inflation Volatility Longevity Volatility Health Care Inflation 1 2 3 4 Source: LIMRA, The Retirement Income Reference Book, 2009

24. © LL Global, Inc. SM Couples Need to Plan Source: LIMRA’s 2012 Retirement Income Reference Book

25. © LL Global, Inc. SM Pre-retirees who have less than $100,000 in financial assets Source: LIMRA analysis of 2010 Survey of Consumer Finances, Federal Reserve Board, Pre-Retirees (55-70, non-retired) Are Not Prepared…

26. © LL Global, Inc. SM Less than half of pre- retirees are confident that they will be able to live their desired retirement lifestyle Source: The Pre-Retiree Market: Surveying the Landscape, LIMRA (2012)

27. © LL Global, Inc. SM workers who think they need to save more to be on track for retirement

28. © LL Global, Inc. SM Half of Americans Not Saving for Retirement 28 not contributing to a retirement plan or individual IRA. Source: eNation survey, April, 2012, LIMRA 49%

29. © LL Global, Inc. SM It’s worse with younger Americans… 29 56% of younger Americans, (ages 18-34) are not contributing to a retirement plan. Source: eNation survey, April, 2012, LIMRA This is particularly troubling because younger people are less likely to have a defined benefit plan.

30. © LL Global, Inc. SM Younger Generations Unlikely to Have Pensions Fewer than one in five Gen X and Y Americans will have a pension. Source: LIMRA Analysis of Survey of Consumer Finances, 2010

31. © LL Global, Inc. SM People Won’t Act Without Help In fact, the presence of an employer match nearly triples the odds of employees contributing to their DC plan. Employer-matching is the single most significant factor in determining whether employees contribute to a 401K plan or not. Source: The Plan Participation Puzzle: Comparison of Not-for-Profit Employees and For-Profit Employees, LIMRA (2010)

32. © LL Global, Inc. SM W HY D ON ’ T P EOPLE B UY 32

33. © LL Global, Inc. SM Americans’ Disposable Income Has Been Dropping for 30 Years

34. © LL Global, Inc. SM 34 Every day expenses limit achieving financial goals 61% energy costs (oil, gas, electric) 58% every day living expenses (food, clothing, transportation) 50% debt payment (credit card balances, loans, equity lines of credit) 46% housing costs 43% taxes (income, sales, property) Source: 2008 Middle Market Study What limits your ability to save for goals or for discretionary items.

35. © LL Global, Inc. SM Families Have Other Priorities

36. © LL Global, Inc. SM Preference for Buying in the Future 36 Preference for Buying Future Life Insurance Policy Understanding the Web Link: Gen X, Gen Y, and Life Insurance, LIMRA, 2010.

37. © LL Global, Inc. SM

38. Advisors Make a Difference Contribute to a Retirement Plan With Advisor Without Advisor Source: Use of and Impact of Advisors, LIMRA, 2012

39. © LL Global, Inc. SM Behavioral Economics Helping us understand the seemingly irrational decisions of consumers about investments, savings and insurance.

40. © LL Global, Inc. SM Which Would You Choose?70% Consumers who chose chocolate Source: Presentation by Dr. Barbara Fasolo, Senior Lecturer in Behavioral Sciences, London School of Economics

41. © LL Global, Inc. SM

42. A DDENDUM 42

43. © LL Global, Inc. SM Japan’s Japan’s Population Skews Older Japan - 2050

44. © LL Global, Inc. SM While Indonesia Has a Relatively Young Population 44

45. © LL Global, Inc. SM Latin America’s Population is Younger Latin America - 2050

46. © LL Global, Inc. SM Population by Age Groups in Latin America 57 mil83 mil 255 mil 296 mil 104 mil 105 mil 160 mil 149 mil 60+ 25-59 15-24 0-14 2010 2020 Source: Americas Market Intelligence

47. © LL Global, Inc. SM Life Insurance Growth in China

48. © LL Global, Inc. SM Two-thirds of Middle-Income U.S. Households Save Less than 5% of their Income for Retirement Nothing Less than 3% 3% to less than 5% 5% to less than 10% 10% or more Source: LIMRA, Consumers’ Retirement Perspectives, Fourth Quarter 2012

49. © LL Global, Inc. SM U.S. Households Have Few Investable Assets* 35% 24% 10% <$10,000 $50,000 to $99,999 $250,000 to $499,999 9% $500,000 + 11% $100,000 to $249,999 *Investable assets include retirement savings plans, and exclude homes and businesses. 11% $10,000 to $49,999 All U.S. Households Source: 2010 U.S. Life Ownership Study, LIMRA 70% of households have less than $100K in investible assets

50. © LL Global, Inc. SM The Lure of Now – Present Bias 50 244 mortgaged U.S homeowners 120 underwater 124 with positive equity Source: Presentation by Dr. Barbara Fasolo, Senior Lecturer in Behavioral Sciences, London School of Economics

51. © LL Global, Inc. SM Consumers with Present Bias Are in Trouble More 51 Source: Presentation by Dr. Barbara Fasolo, Senior Lecturer in Behavioral Sciences, London School of Economics