HDFC Standard Life Insurance Company Limited

Transcription

1 HDFC Standard Life Insurance Company Limited Quarter ending June 2015 This is the sole and exclusive property of HDFC Life

2 Agenda A HDFC Life s Strategy and Performance Snapshot Financial Overview Awards and Accolades

3 Risk mitigation & management 3 Core strategic elements ready for the next cycle 1 Long term orientation Way ahead Customer experience Owning customer segments Fortify and diversify distribution Achieve cost leadership Agile multidistribution platform Economies of Scale Strategy Innovation in product selling and grow niches Digital Leadership Technology enablement 5 Unique customer 3 experience Skill development & retention Key enablers Delivering Value

4 4 Revenue trends 1 Orientation 12M Performance Q1 Performance ` Bn % 13% 20% % 10% 30% % 93% 47% % 152% 23% % 43% 73% 9% % % % % % % % % 4.8 7% FY13 FY14 FY15 Q1 FY15 Q1 FY16 Total Premium Single Premium (Individual) Group Premium Renewal Premium (Individual) First Year Regular Premium (Individual) Healthy trajectory across all premium categories vs last year Group premium continues to grow robustly with enhanced focus on protection portfolio

5 Market ranking 1 Orientation 12M Performance Q1 Performance New Business Received Premium 15.8% New Business Received Premium 15.3% Rank 14.4% % % 1 2 FY13 FY14 FY15 Q1 FY15 Q1 FY16 Individual WRP Individual WRP 17.5% 13.8% 14.8% 15.6% 14.8% Rank FY13 FY14 FY15 Q1 FY15 Q1 FY16 Group Received Premium Group Received Premium Rank 14.4% 10.9% % % % 3 FY13 FY14 FY15 Q1 FY15 Q1 FY16 Consistently ranked amongst the top 3 private players Source: Life Insurance Council 5

6 Conservation ratio 1 1 Orientation 12M Performance Q1 Performance 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 40% 79% 79% 90% 50% 40% 79% 97% 83% 30% 30% 20% 20% 10% 10% 0% FY13 FY14 FY15 0% Q1 FY14 Q1 FY15 Q1 FY16 Industry leading conservation ratio 2 through a raft of customer retention initiatives Collection efforts complemented by effective technology usage 86% of service transactions through online mode 54% of renewal payments received through online and direct debit modes Initiatives launched in FY14 for revival of lapsed and paidup customers, led to a spike in FY15 conservation ratio current sustainable levels reflect the strong renewal base Notes: 1. Conservation ratio are for individual business 2. Based on FY15 numbers 6

7 Persistency ratio 1 Orientation 100% 90% 80% 70% 60% 50% 40% 30% 70% 74% 88% 89% 91% 82% 89% 94% 64% 67% 20% 10% 0% 13th month 25th month 37th month 49th month 61st month Jun14 Jun15 Basis Original premium 70% 74% 69% 65% 66% 65% 55% 66% 23% 37% Improving persistency trends seen across cohorts Quality measures introduced at customer onboarding phase in FY15 starting to yield benefits in 13 th month persistency Note: Persistency ratios are calculated with a 1 month lag for the period of JunMay for respective years based on individual business 7

8 Premium less benefit payouts 1 1 Orientation 12M Performance Q1 Performance ` Bn (20.0) 20.0 (40.0) 15.0 (60.0) (80.0) (10.0) (100.0) Q1 FY13 FY13 FY14 Q1 FY14 FY15 Q1 Q1 FY15 Q1 FY16 1 Total Premium Surrenders & Withdrawals Claims by Death, Maturity & Others Premium less policyholder payouts Total Premium Surrenders & Withdrawals (5.0) (5.0) (10.0) (15.0) (20.0) (25.0) Claims by Death, Maturity & Others Net Cash flow Highest Premium less Benefit Payouts amongst the private players 2 Claims saw a rising trend in line with the expectations, primarily due to increased number of polices attaining maturity Notes: 1. Gross of reinsurance 2. Based on FY15 results 8

9 9 Product portfolio Offering for every customer need Recognised by experts 2 Segments Consistently awarded Best Product of the Year over last five years Children Thank You Protection Retirement & pension Golden Peacock Innovative Product/Service Award 2015 Indian Insurance Awards 2014 Best Product Innovation Product of the Year 2013 under Life Insurance category Click 2 Invest Super Income Plan Smart Woman Plan Employment benefit solutions Winners of the Indian Insurance award for Best Product Innovation 2012 Sampoorn Samriddhi Women Savings & investment Awarded at Indian Insurance Award 2012 Sampoorn Samriddhi Health Winner at Indian Insurance Awards 2011 Crest Comprehensive product suite catering across lifecycle

10 Product mix 12M Performance Q1 Performance 2 Segments 2% 37% 2% 15% 37% 17% 36% 21% 15% 17% 22% 21% 36% 30% 17% 17% 61% 49% 61% 62% 49% 62% 48% 66% FY13 FY14 FY13 FY15 FY14 Q1 FY15 FY15 Unit Linked ParticipatingUnit Linked Non Participating Participating Non Participating Unit Linked Q1 FY16 Participating Continue to refine the product strategy to balance customer needs and channel profitability Cancer Care, a unique health product enabling customers to fight against cancer launched in the quarter witnessed great response with 29,668 policies sold since May 2015 Continue to market niche and innovative products such as Click2 series, including Click2Protect Plus and Click2Invest Note: The percentages are with reference to APE for individual business 10

11 New business sum assured 12M Performance Q1 Performance ` Bn 2 Segments , , , , FY13 FY14 FY13 FY15 FY14 Q1 FY15 FY15 Q1 FY16 Pure Protection Others Pure Protection OthersPure Protection Others New business sum assured continues to grow with increased focus on protection segment Increased mix of pension products resulted in reduction of new business sum assured for Others Note: The above numbers are based on Individual and Group business 11

12 Segment wise average term and age 2 Segments Overall Average Policy Term (Yrs) Average Customer Age (Yrs) 15.9 (Q1 FY15: 14.7) 38.1 (Q1 FY15: 37.7) UL Pension 12 UL Pension 53 UL Life 13 UL Life 39 Par Savings 14 Par Savings 38 Par Pension 14 Par Pension 49 Nonpar savings 16 Nonpar savings 31 Nonpar protection 32 Nonpar protection 34 Nonpar Pension 11 Nonpar Pension 52 Orientation towards long term insurance solutions reflected in higher policy term Protection and Saving contracts have a younger customer profile and offer long term opportunities to crosssell and upsell across customer lifecycle Note: The segment wise average term and age of the individual new business policies sold in Q1 FY16 12

13 Distribution mix 1 12M Performance Q1 Performance 3 Distribution 5% 7% 8% 5% 7% 8% 8% 10% 72% 70% 72% 70% 73% 73% 70% 72% 7% 7% 7% 7% 5% 5% 16% 16% 14% 16% 16% 14% 6% 4% 16% 14% FY13 FY14 FY15 FY13 FY14 FY15 Q1 FY15 Q1 FY16 Agency Broker Bancassurance Direct Agency Broker Agency Bancassurance BrokerDirect Bancassurance Direct All India presence through 414 HDFC Life offices and 8,300+ partner branches Continue to nurture relationships across various banks, NBFCs 2 and MFIs 2 Maintained leadership in Online segment, with 4% contribution to new business (Q1 FY15: 2%) Distinctive program in association with Manipal Global Education, to train and create a professional entry level specialised sales force Notes: 1. The percentages are with reference to APE for individual business 2. NBFC NonBanking Financial Corporation, MFI Microfinance Institutions 13

14 Cost trends 12M Performance Q1 Performance ` Bn 30.0% % 4 Cost % 10.7% 10.2% 20.0% % 11.6% 20.0% 10.0% 10.0% % % % % % 30.0% % 30.0% % % FY13 FY14 FY % Q1 FY15 Q1 FY % Operating Expenses Operating Expense/Total premium Ratio Commission ratio % 4.3% 4.2% 4.2% 3.4% % 10.8% 10.7% % Maintained healthy 14.0 Opex / Total Premium Ratio, despite increased investments in distribution channels, training, 12.0 technology and product innovation % Commission ratio movement reflecting change in product mix (Higher UL products sold in Q1 FY16) % 20.0% 0.0% 20.0% 30.0% 2.0 Note: Commission ratio is calculated as a factor of Total Commission paid and Total premium 40.0% 50.0% 14

15 15 Customer touch points HDFC Life branch network 414 own branches and over 8,300 partner branches Service call centre New business Call Centre 5 Customer Dedicated agents to handle customer calls Preconversion calling at new business stage interaction Dedicated agents to handle requests Customer touch points Mobility SMS on the move with policy details, branch details, etc. Customer portal (My account) Online portal providing fund value, renewal premium receipt, etc. 96% death claims settled within 10 working days (excluding investigative cases) Tied up with Common Service Centres to utilise their network to expand reach to rural areas Use of technology to improve service efficiency and enhance overall customer experience 1 st private life insurer to have a responsive website, launched a comprehensive online app. Large bouquet of products available online Leading presence across social media and digital platforms 81% of new business applications initiated using Point of Sale (POS) platform

16 Agenda HDFC Life s Strategy and Performance Snapshot B Financial Overview Awards and Accolades

17 Assets under management M Performance 25% 25% 25% 25% 33% 33% 40% % 20% % 0% 0% 20% % 25% 37% Q1 Performance 20% 33% 40% 20% 0% % 40% % 60% 60% % 80% % 100% % 40% 60% 80% 100% st 31st Mar Mar st 31st Mar Mar st 31st Mar Mar % % % 31st Mar th Jun st Mar th Jun st Mar 2015 AUM AUM in in Rs Rs bn bn Growth in AUM vs vs LY LY AUM in Rs bn Growth in AUM vs LY AUM in Rs bn 45% 46% 48% 45% 46% 48% 45% 46% 48% 49% 46% 55% 54% 52% 55% 54% 52% 55% 54% 52% 51% 54% 31st 31st Mar Mar st Mar Mar st 31st Mar Mar Debt Equity 31st Mar st Mar st Mar th Jun th Jun 2015 Debt Equity Debt Equity Continue to rank amongst top 3 private players Note: Ranking based on Assets under Management as on March 31,

18 Capital position 12M Performance Q1 Performance ` Bn % 192% 194% 196% % 230% 210% 190% % 210% 192% 190% 208% 230% 210% % % % % 130% 110% 90% 70% June 30th 2014 June 30th % 31st Mar st Mar st Mar % % 90% 70% % % June 30th 2014 June 30th % 150% 130% 110% 90% 70% 50% Incremental Incremental Surplus Capital Solvency margin Surplus Capital Solvency margin Stable solvency ratio, despite consistent growth in underlying business 208% vs regulatory requirement of 150% as on 30 th June 2015 No fresh capital infusion since FY12 Available Solvency Margin (ASM) Incremental Surplus Capital Note: RSM represents Required solvency margin 18

19 Profitability trends M Performance (0.5) Q1 Performance FY13 FY14 FY13 FY15 FY14 FY15 Q1 FY15 Q1 FY16 Underwriting profits Shareholders' income Underwriting profits Shareholders' income Underwriting profits RoE % 44.7% 35.1% 59.2% 36.7% ` Bn RoIC % 33.6% 36.4% 52.0% 42.2% Continue to deliver long term stable ROE along with increasing RoIC Accumulated profits of ` 6.1 Bn as on 30 th June 2015 Notes: 1. Return on equity calculated as a factor of profit after tax and average net worth (Net worth comprises of Share capital, Share premium and Accumulated profits/(losses)) is annualised for the quarter 2. Return on invested capital calculated as a factor of profit after tax and share capital including share premium is annualised for the quarter 3. The shareholders income for FY14 includes surplus of ` 0.8 Bn due to one time tax adjustment 19

20 20 Underwriting profits breakup 12M Performance Q1 6.2Performance ` Bn FY13 FY14FY13 FY15 FY14 Q1 FY15 FY15 Q1 FY16 New Business Strain Existing Business Surplus UL FFA New Business Strain New Business Strain Existing Business Surplus UL FFA Existing Business Surplus Lower profits in Q1 FY16 due to increase in new business strain in line with growth and shift in product mix

21 Individual new business margins 12M Performance 10.0 Q1 Performance ` Bn 30.0% % 13.2% % % % 13.2% % 17.5% % 26.2% 15.0% 16.1% 5.0% 5.0% 15.0% % 22.5% 17.5% % 15.0% 5.0% 5.0% 15.0% 22.9% % 20.0% 15.0% 10.0% 5.0% 0.0% 5.0% 25.0% FY13 FY14 FY15 Q1 FY % FY13 FY14 FY15 New business APE New business APE NBM (pre overrun) NBM (post overrun) New business APE NBM (pre overrun) NBM (post overrun) Q1 FY % NBM (pre overrun) Improvement in individual pre overrun margin aided by higher share of protection business Entity level (Individual + Group) preoverrun margins at 24.3% for Q1 FY16 Note: New business profits are computed on MCEV basis 21

22 Distribution Segments Orientation Customer Performance summary Q1 FY15 Q1 FY16 Q1 FY15 Q1 FY16 Total premium (` Bn) NB policies via POS 81% 81% Market share / Rank % / % / 2 Renewal premium by Online / Direct debit 43% 54% Conservation ratio 2 97% 83% Sales related complaints (Per 10,000 NOP) Premium less Benefit Payouts (` Bn) Other complaints (Per 10,000 NOP) # of branches Linked : Traditional mix 4 48:52 66:34 # of agents ( 000) Protection mix 4 6% 8% # of employees 13,982 14,537 Avg. policy term (years) Online business (%) 2% 4% Avg. sum assured (Million) AUM (` Bn) Individual NBAP on loaded expenses (` Bn) Profit after tax (` Bn) Individual NBM on loaded expenses 22.1% 22.9% RoIC % 42.2% MCEV (` Bn) Notes: 1. Based on Individual Weighted Received Premium amongst private sector 2. For individual business 3. On individual new business 4. Basis APE 5. Calculated as annualised profit after tax and share capital including share premium 6. As on 31 st March 2014 and 31st March

23 Building blocks of future Agile multidistribution platform Grow, fortify and diversify distribution mix Be a platform of choice for distribution partners across categories Performance Update Grew by 12% and 73% in individual and group segments respectively 1 Tied up with over 15 partners in last 18 months four new arrangements during the quarter Digital leadership Build a selfsustainable ecommerce platform with holistic sales and service capabilities Grow the digital insurance category and establish leadership Online segment grew by 177% 2 Launch of consumer mobile app for various services including to locate nearest branches, track NAVs and claims login Innovation in product selling and grow niches Sales process improvisation to drive needbased selling Grow niches while ensuring a well diversified product portfolio Products Launched Cancer Care, Uday and Sampoorn Nivesh Cancer care sales enabled via Mobile POS Economies of Scale Achieve economies of scale Increase operational efficiency Profitability and cost leaderships Continued thrust on lowering expense ratios & improving margins New business workflow 'LifeLine' successfully implemented; driving straight through processing Notes: 1. Based on total new business premium in respective categories 2. Based on APE 23

24 Agenda HDFC Life s Strategy and Performance Snapshot Financial Overview C Awards and Accolades

25 Awards and accolades 38 th in Top 100 Best Places to Work for Ranked No. 1 in the Insurance industry sector HDFC Life won in 5 categories at the Indian Insurance Awards 2015 Life Insurance Company of the Year, Agency Efficiency (LI), Marketing Initiative (LI), Ebusiness Leader (LI) and Innovative Social Media Campaign (LI) HDFC Life won the CIO 100 Award 2015 for the sales enabler software application MyMix HDFC Life won the prestigious Golden Peacock Award 2015 for the most Innovative Product for Click2Invest HDFC Life won the silver Indian Digital Media Awards (IDMA) 2015 award for the "Best PPC campaign Performance Marketing.

26 Actuarial Update, Appendix & Glossary

27 Value of new business (VNB) walkthrough FY15 ` Bn NBM 3.4% 0.1% 18.5% 15.2% FY14 VNB Impact of Higher EPI Change in Product Mix Change in Assumptions FY15 VNB VNB increased due to growth in new business and higher nonparticipating business Note: The above numbers are based on Overall (individual + Group) business 27

28 Market consistent embedded value (MCEV) FY15 VIF ` Bn PVFP TVFOG FC CNHR VIF Networth EV TVFOG includes cost of guarantees for conventional non participating and participating products Notes: 1. The above is based on unaudited figures 2. PVFP pertains to Overall (Individual + Group) business 3. PVFP Present Value of Future Profits; TVFOG Time Value of Financial Options and Guarantees; FC Frictional Cost; CNHR Cost of Non Hedgeable Risk; VIF Value of InForce business 4. Detailed explanation of components provided in the Appendix to the corporate presentation 28

29 Analysis of change in MCEV FY15 EV profit 18.2 ` Bn Methodology and assumption changes 7.4 New business profits (before expense 1 overrun)* 1.5 Acquisition expense overrun 6.1 Expected return on inforce Operating Variances Investment variances and change in economic assumptions Dividend payout Embedded value operating profit (EVOP) 22% of Opening MCEV (FY14: 19%) 27.9 Value of inforce business Shareholder s Adjusted Networth MCEV at 31st Mar 14 MCEV at 31st Mar 15 26% growth in MCEV over last year Investment variance reflects buoyant performance of equity markets in FY15 Note: 1. New business profits pertain to Overall (Individual + Group) business 2. The above is based on unaudited figures 29

30 1 Sensitivity analysis FY15 Scenario VNB % Change % Change in VNB in NBM EV Change in Base % 88.1 Interest rate % Change in EV Increase by 1% 6.4 8% 1.5% 87.5 (0.6%) Decrease by 1% (0.8%) (0.2%) % ` Bn Equity values Persistency Maintenance expenses Mortality Increase by 10% 5.9 negligible negligible % Decrease by 10% 5.9 negligible negligible % Increase by 10% 6.4 8% 1.5% % Decrease by 10% 5.4 (8%) (1.4%) 86.1 (2.2%) Increase by 10% 5.6 (5%) (0.9%) 87.2 (1.0%) Decrease by 10% 6.2 5% 0.9% % Increase by 10% 5.6 (5%) (0.9%) 87.1 (1.1%) Decrease by 10% 6.2 5% 0.9% % Additional Info Impact of no TVFOG for nonparticipating savings products VNB % Change in VNB % Change in NBM EV % Change in EV % 2.6% % Impact of zero tax on Par fund 6.0 2% 0.3% % Note: 1. Based on unaudited figures 2. Post overrun total VNB for Individual and Group business 3. The NBM impact in interest rate fall scenario is low as the TVFOG charged is sufficient to absorb the impact of such decrease in interest rate 30

31 Shareholders EV IRR FY15 ` Bn % 16.2% 15.9% 16.7% 17.2% 18.3% % 18% 16% % 13.0% % 12% % % % 4% 2% 10 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 MCEV Share capital Shareholders'IRR 0% The shareholder IRR measured on EV generated is showing a steady growth on back of growth in business Note: The IRR has been calculated based on MCEV and not on appraisal value 31

32 32 Appendix 1 : MCEV methodology and approach MCEV methodology The calculations of embedded value and new business profits have been performed using a market consistent embedded value ( MCEV ) approach. This approach differs from a traditional EV approach primarily in respect of the way in which allowance for risk is made. Within the traditional EV approach allowance is made for risk through an increase in the risk discount rate used to value future shareholder cash flows, whilst within the MCEV calculation explicit separate allowances are made for risk. Components of MCEV There are two components to the MCEV: 1. Adjusted net worth It represents the market value of assets attributable to shareholders. This amount is derived from the Indian GAAP balance sheet and adjusted to allow for assets on a market value basis. 2. Value of inforce It is derived as Present value of future profits ( PVFP ) less Time Value of Financial Options and Guarantees ("TVFOG") less Frictional Costs of Required Capital ( FCRC ) less Cost of non hedgeable risk ( CNHR )

33 33 Appendix 2 : Components of value of in force ( VIF ) Present value of future profits ( PVFP ) This component is the present value of the projected future after tax shareholder profits expected to arise on the business existing at the valuation date. The projection is carried out on a deterministic basis using marketconsistent economic assumptions and best estimate noneconomic assumptions (such as persistency, mortality, morbidity, expenses, inflation). The economic assumptions (future investment returns and risk discount rate) are based on the risk free (government bond) yield curve at the valuation date. Time Value of Financial Options and Guarantees ("TVFOG") This component represents the cost that may arise due to embedded financial options and guarantees. Different economic scenarios are derived on the basis of a stochastic simulation process using suitable statistical distributions for interest rates and equity returns calibrated to Indian market conditions. The cost of the options and guarantees is calculated using these economic scenarios with methodology and noneconomic assumptions consistent with the underlying PVFP. Frictional Costs of Required Capital ( FCRC ) This represents the frictional costs of holding required capital ( FCRC ). Required capital is set equal to the amount of shareholder attributable assets required to back local regulatory solvency requirements. The frictional costs represent the investment costs and taxes associated with holding the required capital. Cost of non hedgeable risk ( CNHR ) This represents the deduction to allow for non hedgeable risks. The CNHR has been derived using a cost of capital approach and is calculated as the discounted value of the annual charge applied to projected risk bearing capital. The initial risk capital has been calculated based on stress events for non economic assumptions. These events are based on the Solvency II, QIS5 framework. Appropriate risk drivers are used in projecting the risk capital at future time points. The annual charge applied to the projected risk capital is 4% p.a.

34 34 Appendix 3 : Key assumptions underlying MCEV and NBP Economic assumptions The closing MCEV is calculated by basing the projected earned and risk discount rates on the risk free (government bond) yield curve at the closing balance sheet date. The new business profitability is calculated with similar assumptions, except that the yield curve at the start of the quarter in which the new business has been written is taken. For detailed assumptions, refer Appendix 5 Non economic assumptions Expenses Maintenance expenses have been based on the latest expense analysis carried out in March 2015 with appropriate allowance for future inflation. These assumptions do not incorporate any allowance for future productivity improvements. Based on an analysis carried out by the Company, the projected longterm acquisition expense assumptions have been revised and these are higher than those used earlier and have been incorporated into the calculation of preoverrun margins for FY15. Mortality and morbidity Mortality and morbidity assumptions are set for different products based on past experience. Persistency Persistency assumptions are set for different product lines, payment mode and duration inforce, based on past experience and expectations of future experience. Separate decrements are modeled for lapses, surrenders, paidups and partial withdrawals. Tax Tax assumptions are based on our interpretation of existing tax legislation, where appropriate supported by legal opinion. Profits attributable to shareholders are assumed to be taxed at 14.42% for Life business and 0% for Pensions business. Allowance is made within the tax computation for dividend offsets permitted under Section 2A of the Income Tax Act.

35 35 Appendix 4 : Key components underlying MCEV movements Analysis of change in MCEV Opening modeling, assumptions and methodology changes: The models, assumptions and methodology are continuously refined and improved and the impact of these refinements is reflected in the opening changes. Operating Variances: The Operating Variances capture the impact of the difference between the actual expenses, mortality and persistency experience from those expected in the opening MCEV calculation. Expected return on inforce: It reflects expected investment income on shareholder assets during the period and unwind of the discount rate on the opening PVFP. Investment variances and change in economic assumptions: This reflects the impact due to the actual investment return being different from expected and the impact due to the change in economic assumptions (represented by change in yield curve during the period).

36 36 Appendix 5 : Economic assumptions Years Forward rates Spot rates FY14 FY15 FY14 FY % 7.91% 8.38% 7.61% % 7.91% 8.38% 7.61% % 7.96% 8.47% 7.63% % 7.97% 8.58% 7.64% % 7.98% 8.67% 7.65% % 7.98% 8.90% 7.66% % 7.98% 8.99% 7.66% % 7.98% 9.03% 7.66% % 7.98% 9.05% 7.66% % 7.98% 9.07% 7.66% The forward rates derived from the spotrates of riskfree government bonds are used in projecting future investment returns and discounting of future profits in VNB and MCEV calculation

37 37 Glossary APE (Annualized Premium Equivalent) The sum of annualized first year regular premiums and 10% weighted single premiums and single premium topups. Conservation ratio Ratio of current year renewal premiums to previous year s renewal premium and first year premium. First year premiums Regular premiums received during the year for all modes of payments chosen by the customer which are still in the first year. For example, for a monthly mode policy sold in March 2015, the first installment would fall into first year premiums for and the remaining 11 installments in the first year would be first year premiums in New business received premium The sum of first year premium and single premium. Operating expense All expenses of management excluding service tax. It does not include commission. Operating expense ratio Ratio of operating expenses (excluding service tax) to total premiums. Renewal premiums Regular recurring premiums received after the first year. Solvency ratio Ratio of available solvency margin to required solvency margins. Total premiums Total received premiums during the year including first year, single and renewal premiums for individual and group business. Weighted received premium (WRP) The sum of first year premium and 10% weighted single premiums and single premium topups. 13th month persistency Percentage of contracts, measured by premium, still in force 13 months after they have been issued.

38 38 Disclaimer This release is a compilation of published financial results, other information and is not a statutory release. This may also contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ from our expectations and assumptions. We do not undertake any responsibility to update any forward looking statements nor should this be constituted as a guidance of future performance. This release is a privilege copy intended for reference of selected group. These disclosures are subject to the prevailing regulatory and policy framework as on June 30, 2015 and do not reflect any subsequent changes.

39 39 Thank You In partnership with Standard Life