Survival of the Fittest!

Transcription

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2 Survival of the Fittest! Yan Sun 21 May 2018 AXA France Vie This presentation has been prepared for the Actuaries Institute 2018 Financial Services Forum. The Institute Council wishes it to be understood that opinions put forward herein are not necessarily those of the Institute and the Council or of the presenter s past or current employer, is not responsible for those opinions.

3 Section 1 GROUP BUSINESS

4 Australia Group Business Asia Common: Profitability is generally challenging Industry Funds dominate Death, TPD and GSC Deep history and data Coverage is permanent employees focused Generally stable with insurer Less waiting periods, preexisting exclusions etc. Corporates still on top Death, TPD, GSC, Trauma, GPA and Medical Data: lucky to have 3 years (winning the lottery at 5 years) Variety of working population Stronger churn Waiting periods are more common

5 Group Business Regional Corporate Program (umbrella policy issued via SG office) Coverage: Death, TI, TPD, Group CI (37), GSC and High End Medical 3 x Salary = Lump Sum, 70% of Salary = Income Active At Work employees up to age 69 ( u/w) Extras: extended benefit, AD&D, survivor benefit etc. GSC: 2 year BP + TPD at month 24 AALs (SGD): 2m Death/TI/TPD, 1m CI, 30K per month GTL Bangko k Ho Chi Minh City Jakart a Kuala Lumpur Manila Singapore Net Margin:? Data provided:? Waiting Period:? GCI Bangko k Ho Chi Minh City Jakart a Kuala Lumpur Manila Singapore GDI Bangko k Ho Chi Minh City Jakart a Kuala Lumpur Manila Singapore Taiwan India

6 Group Business Online internet EB sales in China: Indifferent to occupation / industry Average free cover as high as 700K RMB (140K AUD) Currency: RMB Year Group PA 建工意外 Construction PA 疾病身故 ( 包括疾病身故与全残 ) Death & Sickness (incl. Total Disability) 个人意外险 Individual PA TOTAL % 3% 29% 10% 35,000, % 3% 9% 42% 170,000, % % 4% 10% 45% 200,000,000 18%

7 Section 2 MEDICAL BUSINESS

8 Australia Medical Business Asia Common: Profitability is generally challenging Selected group PHIAC Typical product sets inpatient only or with specialists + expat Pooling of risk shared Maturity in claims & processes Isolated benefit Services: public vs. private Life & non-life insurers More variety - group, individual, micro-health, top-up XL, expat Variety of risk transfer styles More prevalent to fraud Is also a common Rider + CI, Hospital Cash etc. More service options for product differentiation

9 Medical Business Government (State) Micro Health: fixed package rates (network hospitals only), inflation risk min. Normally 1million+ families (including parents) Usually 3-4 year rate guarantee Reporting within 30 days (with TPA agreed, SLA in place) Inpatient only (like CI) Outpatient linked to inpatient Prem~2000 INR (30 USD) per family Aggregate Limit p.a. ~6K USD Market ~ 1bn USD + Operational, what s key: Identity cards Investigators on the ground Gov. buy-in via profit share

10 Medical Business High End Medical => all about services, convenience & access

11 Medical Business Best Doctors / Good Doctors / We Doctors => InsureTech Fever

12 Section 3 INVESTMENT STYLE

13 Australia Investment Style Asia Common: Low Yield Environment Challenges Largely not guaranteed, in super system Retail products that don t generally contain insurable risk Not bundled with protection Trust banks (?) National savings ratio low (?) Developing market Banks prefer selling investment linked products Guarantees are highly valued and still available (e.g. 3% p.a. is still achievable) Preference for multi-currency: USD, EURO and AUD are popular

14 Variable Annuity Investment

15 Investment Variable Annuity (GMAB and GMDB) + Multi-Currency Features

16 Section 4 CRITICAL ILLNESS & CO.

17 Critical Illness & Co. Australia Lacks innovation Trauma only Volume is significant but stable Profitability challenged but recovering Mostly YRT Asia Innovation & variety CI/Trauma, Single CI, Hospital Cash, Disability Income, Surgery etc. Huge growth and volume Profitability can be poor (population data vs. insured experience) Mostly not YRT

18 Korea Market Critical Illness & Co. Market Size ~ 9 billion policies (2009), now it s a lot bigger Standardised pricing, definitions & underwriting Before the 2000 s: The CI / Cancer market (started around 90 s) had challenges due to level premium term, with guarantees to 80 or WOL and very wide coverage scopes (e.g. full 100% benefit paid for Thyroid) Early detection (medical advancement in the 90 s) Market had losses as a result After the 2000 s: Benefits are now limited/reduced (i.e. severity based payment for cancer) Premium rate guarantee reduced (5 yr. 10 yr. rate guarantees) Data is deeper and has longer history Source: Swiss Re Korea, HS Lim, FIAA

19 Korea Market Simplified Issue: Critical Illness & Co. Target members who wants ease of policy issuance grey underwritten outcomes 3 CI Coverage Diagnosis, Hospital Cash and Surgery: Min age 40, Max age 80, Max policy duration (if entry age <60) = 20yrs Maximum SI ~ 50K USD Rate review period: every 5 years, prevailing KIDI table Diagnosis benefit CI 1: Cancer, CI 2: MI (100%), CI 3: Cerebral Hemorrhage (100%) Surgery Limit applies per surgery (max. ~1000 USD) Hospital Cash Limit applies per stay (min. 4 days and max. 120 days, ~ 50 USD per day)

20 Simplified Issue (SI) question Regulator FSS standardised Standard UW question Product Summary 1 Have you received any of the following medical treatments within the last 3 months through a medical examination? 1) Diagnosis 2) Treatment 3) Hospitalization 4) Surgery 5) Re-examination SI UW question Have you been offered to receive any of the following medical treatments within the last 3 months through a medical examination? 1) Hospitalization 2) Surgery 3) Re-examination 2 Have you taken medicine within the last 3 months? Deleted 3 Have you taken re-examination by a doctor within the last 1 year? Deleted Have you received any of the following medical treatments due to sickness or accident within the last 5 years? Have you received any of the following medical treatments due to sickness or accident within the last 2 years? 4 1) Hospitalization 1) Hospitalization 2) Surgery (including caesarean operation) 2) Surgery (including caesarean operation) 3) over 7 days of treatment 4) over 30 days of medication 5 Have you received any of the following medical treatments due to 10 major diseases within the last 5 years? 1) Diagnosis 1) Diagnosis 2) Treatment 2) Hospitalization 3) Hospitalization 3) Surgery 4) Surgery 5) Medication * 10 major diseases include Cancer, Leukemia, High blood pressure, Angina, Cardiac infarction, Valvular heart disease, Liver cirrhosis, Cerebral stroke (cerebral hemorrhage, brain infarct), Diabetes and AIDS or HIV carrier. Have you received any of the following medical treatments due to cancer within the last 5 years?

21 Critical Illness & Co. Taiwan Disability Product 2017 Volume was 100m+ USD p.a. (combination or level /regular premium) Fixed income (declared) WOL annuity, claim based on disability accident table (severity 1-11), unrelated to working Min. benefit payout Targeted / Single CI product 2018 Cancer Liver Cholesterol Diabetes

22 Section 5 RETIREMENT

23 Australia Retirement Asia Common: Government has a key role to play Largely funded by savings (super) and then government Is not income protection focused Small (but growing) private sector insurance product Not linked to services (e.g. no LTC linked products) Small equity release market Generally, government and private DB sector (where exists) Raising awareness More variety in private sector product Interest rate too low Equity release market not popular

24 Retirement LTC (ElderShield) Level Premium, WOL coverage Limited benefit period 5 years, depending on generation Entry age 40, paid up by 65 3/6 ADL Government licensed provider (1 in 3 lottery ) Government dictate design,benefit, premiums etc. Top-up product sold by the market LTC (China) Not ADL or definitions test Service providers, licensed by state

25 Retirement Singapore CPF Life: mandated annuitisation in 2013

26 Retirement Japanese J-Pension: Need to enroll 16K / 144 USD per month contribution Min. contribution years 25 (recently dropped to 10 years) 779K / 7K USD p.a. (40 yrs. contribution) Draw down from age 65 Additional: Survivor benefit Disability benefit Many believe it s minimum Most buy additional coverage via Private sector (e.g. WOL Annuity) Good Deal?

27 Crowded Work hard Play hard Dynamic Winning Life in Asia?

28 THANK YOU QUESTIONS PLEASE?