1. Insurance Ireland Consumer 360 Conference Conduct Developments – Lessons from Europe Hugh Hessing – Aviva Ireland CEO 7 th December 2015

2. There’s been a tsunami of regulatory change across Europe…. 2007 20092011 2010 Consumer Credit Directive 2012 2013 2014 2015 2016 GDPR …but what has been the real impact? Have consumers benefited, do they understand?

3. Has all this reform achieved its intended outcome? 3 Achievements: Consistent implementation across markets General acceptance by consumers No significant drop in customer numbers Good collaboration on implementation between all stakeholders Unforeseen consequences: x Short term consequences – far larger and more sustained spike in annuity sales prior to implementation than predicted x Unexpected opportunities for companies to gain a competitive advantage Objectives Equal treatment for men and women in access and supply of goods and services Insurance in scope Dec 2012 (8yrs post enactment) following ECJ judgement Remove gender as a rating factor Gender Directive

4. Has all this reform achieved its intended outcome? 4 Achievements: Better advice – not influenced by commission Advisers better qualified Allows comparison of the cost of using Advisors Unforeseen consequences: x Increase in execution only investment x Reduction in IFA numbers leading to Advice Gap - those most needing advice not receiving it x No significant reduction in fees x Plethora of confusing fee structures Objectives Clarity for consumers Address broker remuneration distorting consumer outcomes Increase professional standards Retail Distribution Review (UK)

5. Has all this reform achieved its intended outcome? 5 Achievements: Increased focus on compliance Significant fines & prosecutions Greater awareness Unforeseen consequences: x Onerous, confusing and time consuming obligations x Loyal, long-standing customers made to feel like criminals x High cost of administration increases cost for the consumer x Inconsistency of application across Europe Objectives Combat money laundering Effective counter terrorist financing laws Support public interest in reducing access by terrorists/criminals to financial instruments Anti Money Laundering

6. Despite all the new regulation, consumers still don’t feel they understand Insurance Products 6 “I don’t really understand about pensions, savings policies and things like that* % who agree with statement *IPSOS Aviva Consumer Attitudes Survey Qtr2 2015

7. And consumer trust in Insurance Companies is lower than it was during the recession* % who trust insurance companies *IPSOS Aviva Consumer Attitudes Survey Qtr2 2015

8. So what are the underlying system conditions driving the wrong outcomes?  Competing concurrent regulation  Designing around the “1%”  Regulatory design is not agile  The industry of evidence and CUSTOMER NOT AT THE HEART??

9. What is our vision in Insurance? Improve returns for policyholders and deliver value for shareholders To become the preferred company for all our stakeholders To help our customers achieve financial prosperity & peace of mind Help our customers understand and protect themselves from risk We free people from fear of uncertainty

10. 10 To create a better everyday life for the many people To put joy in kids’ hearts and a smile on parents’ faces To be earth’s most customer centric company What does “customer at the heart” look like?

11. What is needed to drive the change we need? Industry Culture Outcomes & Experience vs Arms Length Review Innovation Around Evidencing Oversight Reinforcing Continuous Improvement Continued & Improved Collaboration is Key