1. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. Insurance 2020 & Beyond IIS Global Insurance Forum www.pwc.com/insurance June, 2015

2. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. Introduction & Welcome Stephen O’Hearn PwC Global Insurance Leader PwC

3. 88% 66% 71% 61% 64% 61% 69% 50% 61% 47% Changes in industry regulation Changes in customer behaviors Increase in number of significant competitors traditional and new Changes in distribution channels Changes in core technologies of production or service provision Q: How disruptive do you think the following trends will be for your industry over the next five years? Respondents stating very or somewhat disruptive Insurance All Industries The insurance industry is undergoing more upheaval than any other industry Source: PwC18th Annual Global CEO Survey

4. PwC of insurance CEOs believe there are more growth opportunities than there were three years ago 59% of insurance CEOs see more threats than they did in 2012 61% Sources: PwC 18th Annual Global CEO Survey Insurance executives are preparing to navigate a market filled with nearly an equal amount of opportunities and threats 4 Source: PwC 18th Annual Global CEO Survey

5. Industry Trends & Disruptors PwC Jamie Yoder PwC Global Insurance Advisory Leader

6. PwC In 2011 when we put forward our perspective on the future of insurance, we considered scenarios for 32 distinct drivers of change 6 Social Customer Behaviors – Social Networking – Customer Expectations – Risk Awareness – Health Talent Drain Stakeholder Trust Corporate Social Responsibility Demographic Shifts – Dynamics of the Middle Class – New Family Structure – Dependency Ratio – Aging Economic Urbanization New Growth Opportunities Fiscal Pressure Inflation/Deflation Risk Sharing & Transfer Social Security & Benefits Distributor Shift Partnerships Technology Information & Analytics Devices & Sensors Software & Applications Medical Advances Environmental Climate Change & Catastrophes Sustainability Pollution Political Regulatory Reform Geo-political Risk Rise of State-Directed Capitalism Terrorism Tax Treatment Sharia Compliance (Takaful)

7. PwC The implications of these trends are altering the way insurers compete 7 Social The balance of power is shifting towards customers Technological Advances in software & hardware are transforming ‘big data’ into actionable insights Environmental Increasing severity and frequency of catastrophic events are giving rise to more sophisticated risk models & risk transfer Economic The rise of economic and political power in emerging markets Political There is harmonization, standardization and globalization of the insurance market

8. PwC 8 4% 10% 39% Distribution disruption where integrated multi- channel interaction is the norm RegressiveProgressive Source: PwC Analysis; IIS Conference, Toronto, 2011 21% 24% In 2011, when we asked how far the balance of power would shift to the customers…

9. PwC 9 Today… of insurance CEOs recognize the power of digital and are using it to enhance customer experience 81% Source: PwC 18th Annual Global CEO Survey of consumers shopped for auto insurance online in 2014 46% of consumers shopping in 2014 obtained a quote online 71% Sources: PwC 18th Annual Global CEO Survey; comScore 2o14 U.S. Online Auto Insurance Shopping Report

10. PwC 10 Social Disruption New entrants gaining stronghold of large consumer groups “ (…) the key to insurance is having lots of data about people’s backgrounds and habits, which is perhaps the company’s [Google] greatest strength.” New York Times, Jan 18, 2015 Source: https://www.google.com/compare/autoinsurance/form?p=home

11. PwC 11 Social Disruption The eCommerce player Alibaba is transforming the Chinese market and innovating in financial services and insurance Three companies joined together to launch… Ping An Tencent Alibaba...Zhong An - the first online insurance company in China Source: https://www.zhongan.com/index.html

12. PwC 12 Social Disruption New entrants in the robo-advisor space are developing new models of assisted and automated omni-channel education and advice Sources: http://www.bloomberg.com/news/videos/2015-03-26/northwestern-mutual-acquires-learnvest; https://intelligent.schwab.com/

13. PwC 13 In 2011, when we asked about technological advances that could transform ‘big data’ into actionable insights 10% 25% Sophisticated information analytics and new sources of information becomes key to competitive differentiation RegressiveProgressive 49% 14% 2% Source: PwC Analysis; IIS Conference, Toronto, 2011

14. PwC 14 Today… Source: PwC 18th Annual Global CEO Survey; Industry Forecasts Compilation, 2020 forecast from IDC; PwC Analysis 70% more than all but one other industry, see the speed of technological change as a threat to their growth prospect 2014 2020 $3.5T $8.9T The Internet of Things is Exploding IoT Global Revenue

15. PwC 15 Pricing Risk New data sources (IoT, mobile, etc) Better data Ongoing Relationship Empowering to make smart lifestyle decisions Services to support easier lifestyle Crowdsourcing Cheaper option to pool capital Help diversify assets Andreesen Horowitz shares the 16 tech trends it’s most excited about Source: http://a16z.com/2015/01/22/16-things/ Virtual Reality Sensorifi- cation of the Enterprise Machine Learning + Big Data The Full-Stack Start-up Digital Health Online Marketplaces Security Cloud-Client Computing Crowd Funding Internet of Things ‘Failure’DevOps Insurance Containers Bitcoin (and Blockchain) Online Video

16. PwC 16 Technological Disruption The Climate Corporation revolutionized yield management and crop insurance using machine learning techniques Source: http://www.climate.com/; FastCompany, October 7, 2013

17. PwC 17 Technological Disruption Discovery has established a new business model using technology, information and analytics to deliver personalized underwriting and change customer behavior Source: http://www.thevitalitygroup.com/; http://www.thevitalitygroup.com/john-hancock-enters-exclusive-partnership-with-vitality/

18. PwC 18 Source: PwC Analysis; IIS Conference, Toronto, 2011 7% 12% 11% Emerging markets do not harmonize their regulations with the developed markets, but they change the regulations to make it easier for new entrants RegressiveProgressive 39% 30% In 2011, when we asked about the opposing forces of harmonization and regionalization/nationalization of regulations, products, and practices globally…

19. PwC 19 of insurance CEOs see over regulation as a threat to their growth prospects, more than any other sector 91% Today… The challenge for insurers is how to maintain attention to other strategic challenges and minimize upheaval by building the new requirements Sources: PwC 18th Annual Global CEO Survey

20. PwC 20 Manifestation of Mega Trends Disruption in Insurance Digitization Intelligence & Automation Innovative Business Model Customer Revolution Two-Speed Growth Regulation What risks and opportunities do these trends and potential disruptors mean to you?

21. Introducing the Panel PwC

22. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. Stephen O’Hearn PwC Global Insurance Leader Jamie Yoder PwC Global Insurance Advisory Leader Thomas Sullivan Associate Director Federal Reserve Board Sean Gilday VP of Strategic Partnerships RGA Panelist Moderator 22 Panelists

23. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. Q&A PwC

24. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. In summary, there are 5 things to remember… 24 1)No one knows what the winning bets are so learn fast 2) Fail quickly, fail cheaply 3) ‘Test and refine’ is more important than ‘plan and design’ 4) Do something different – you’ve not got long! 5) Focus on the customer…

25. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. Thank you PwC

26. © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2015 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.HB8763