1. APEC FINANCE MINISTERS MEETING (AFMM) and Finance Sector Roundtable and Dialogue Introduction to the Cebu Action Plans An overview of the APFF Work Related to Insurance and Retirement Income Makoto Okubo ( 大久保 亮）, Nippon Life Insurance Company Sherpa, APFF Insurance and Retirement Income Work Stream Cebu, Philippines, 10-11 September 2015 1

2. Infrastructure Projects CONSUMERS Capital Market INSURERS AND PENSION FUNDS Roadmap for the Sustainable Development 2 Disaster Risk Financing GOVERNMENT Reduce Fiscal Liabilities Promote Sustainable Economic Development & Resilient Infrastructure Enhance Disaster Risk Financing Addressing the Aging Tsunami Enhance Sovereign Rating Regulation Accounting Liabilities Assets ALM Long Term Returns Long Term Investments Capital Market and Long Term Investments Retirement Income & Longevity Solutions Enhance Financial Inclusion

3. A holistic framework to support the long-term roles of insurance and pension industry in the Asia-Pacific APFF Insurance and Retirement Income Work Stream Regulation and Accounting Capital Market and Long-term Investment Retirement Income and Longevity Solutions 3 Insurance industry Insurance and Pension Industry Financial Stability Macro Economy Sustainable Development Financial Inclusion Social Security Insurance Protection Microinsurance and Disaster Risk Financing

4. Ensure Adequate Lifetime Retirement Income Facilitate Retirement Savings Demand Facilitate Retirement Income Product Supply Mandatory Provisions How can society catch up with drastic change in demographics? Ensure Adequate Retirement Savings Capital Market Long-term Investments Accounting Capital Market & Infrastructure Development Long-term Liabilities Long-term Assets Retirement Income and Longevity Solutions Responding to the needs of aging, while promoting capital market and infrastructure development 4 Regulation Product Design Tax Measures Consumer Education Risk Management Distribution Channels

5. Regulatory issues Bank-centric regulations  Insurers play an important role as long-term investors and in the social security system Short-term oriented economic regime  Economic-based regime should have a long-term vision  Otherwise, unintended consequence may occur on long-term products/investments “One-size-fits-all” models  Different business models by economies Accounting issues Volatility in the balance sheet and P/L  Assets-liabilities interaction Other issues for traditional long-duration contracts (i.e. complexity, consistency, transition, presentation) 5 Regulatory and Accounting Issues

6. Market issues Underdeveloped long-term capital market Small number of bankable projects available Lack of infrastructure financial instruments Lack of market instruments (i.e. derivative, hedging tools) to manage portfolio risk Constraints on long-term insurance business (both demand side and supply side) Operational issues Weakness in credit rating Lack of experience Uncertainty in legal framework (i.e. creditors rights, resolution) Market and operational Issues 6 Collaboration with Capital market/FMI/PPP work is the key

7. ＣＡ Ｐ Proposed new structure 7 Disaster Risk Financing [called upon request] Capital Market and Long-Term Investments in collaboration with APFF Capital Market WS Regulation and Accounting Retirement Savings and Lifetime Retirement Income Retirement and Long-Term Investments Working Group Disaster risk financing and Insurance Working Group Micro-Insurance in collaboration with Financial Inclusion Group 4E Long – Term Investment in Infrastructure 3B Disaster Risk Financing and Insurance SS WG CG Coordination Group

8. For more details on the APFF, visit mackglobe.com or email Makoto Okubo (m-okubo@nipponlifeglobal.com)m-okubo@nipponlifeglobal.com Asia Pacific Financial Forum (APFF) Insurance and Retirement Income Work Stream Asia Pacific Financial Forum (APFF) Insurance and Retirement Income Work Stream 8