Right now! 26th Annual Insurance Conference Tuesday, November 28, kpmg.ca/insuranceconference2017

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1 Right now! 26th Annual Insurance Conference Tuesday, November 28, 2017 kpmg.ca/insuranceconference2017

2 State of the Canadian Insurance Industry Canadian Economy is on a hot streak Weather events are increasing The population demographic is ageing Interest rates were hiked marginally Emerging technologies are changing scale and need reserved. ( KPMG International ), The KPMG name a Swiss and entity. logo are All registered rights reserved. trademarks The KPMG or trademarks name and of logo KPMG are International. registered trademarks or trademarks of KPMG International.

3 State of the Canadian Insurance Industry

4 Canadian Economy is on a hot streak 3.1% Real GDP growth prediction for 2017? What would the impact of NAFTA be?

5 State of the Canadian Insurance Industry

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7 The population demographic is changing XX% Number of seniors will likely be double by year 2036 Changing product mix Fewer workers/ more retirees Stronger shift from savings products to protection products Increased importance of disability products Source: Statistics Canada

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9 State of the Canadian Insurance Industry

10 Emerging technologies are changing scale and need Technology in the insurance industry Drones to survey damages Improve efficiency On demand insurance Data driven underwriting Internet of things Reduce costs Gain competitive advantage Contrary to common belief, more insurers are embracing technology and innovation

11 State of the Canadian Insurance Industry

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13 Interest rates were hiked marginally 0.5% Hiked by 0.5%. More to come? 168% Household credit market debt as a proportion of household disposable income With low yields from traditional investments, it is time to look at alternative investment sources?

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15 State of the Canadian Insurance Industry

16 It Burns, It Rains! Actuaries Climate Index TM Reference Period Standard Deviations There has been a sustained increase in frequency and severity of weather events in Canada and worldwide. Source:

17 State of the Canadian Insurance Industry Canadian Economy is in a hot streak Weather events are increasing The population demographic is changing Interest rates were hiked marginally Emerging technologies are changing scale and need

18 85% expect short-term growth, but 52% are cautious about the next 3 years KPMG CEO Outlook 2017 Strategic priorities are shifting. 59% are investing to transform their business 73% are confident in creating customer value, and 68% take personal responsibility 61% see disruption through technology as an opportunity, but underinvestment undermines ambition Emerging technologies and talent are top risks

19 Thank you!

20 Contact us Johannes Pastor Global Financial Services Audit Leader and Insurance Sector Lead KPMG in Canada T: E: Jeremy Anderson Chairman, Global Financial Services KPMG T: E: Dana Chaput Accounting Change Leader T: E: Nazir Valani Partner and National Leader, Actuarial Practice KPMG in Canada T: E: Gavin Lubbe Partner, Advisory and National Service Line Leader, Operations KPMG in Canada T: E:

21 kpmg.ca 2017 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.