Mirae Asset Life Insurance Investor Relations FY2015
BUILDING ON PRINCIPLES Total Assets 26.79 tn KRW Shareholder s Equity 1.85 tn KRW Employees 1,358 Headquarter 507 Teheran-ro, Gangnam-gu, Seoul, Korea 1988 Mar Establishment 2005 Jun Acquired by Mirae Asset Group Nov Dec First to open financial consulting center in Korea First to be authorized as retirement pension provider in Korea First to establish Retirement Research Institute in Korea 2006 Jul First to sell mutual funds through insurance FCs in Korea 2007 Sep First to provide trust services in Korea 2009 Feb Recognized as a superior retirement plan provider 2010 Jun First to establish smart mobile insurance system in Korea 2011 Oct First to be authorized by ISO for Education System for Retirement Pension Plan Experts 2012 Apr Recognized as the Top Call Center by KSQI 2013 Apr Top New Products Award by FSS for Sincere Difference 2014 Apr First to provide variable insurance products through online channel in Korea 2015 Jul Listed on Korea Stock Exchange (KOSPI) Market,... Not an offer for sale, or solicitation of any offer to buy any securities. Any investment decision must be made solely based on the information contained in the prospectus. The forward-looking statements, based on our current expectations or estimates, involve substantial risks and uncertainties and speak only as of the date of this presentation. Mirae Asset Life Insurance Co., Ltd. -01-201603-184
Shareholder Structure Company Outlook (End of 2015) Etc. 46.2% 1.2% Treasury Stock 6.5% ESOP 7.2% Life Insurance Total Assets (tn KRW) 5.6 6.5 8.4 9.6 12.2 14.1 16.5 Mirae Asset Securities 19.9% 19.0% Mirae Asset Capital Other Related Parties & Group Affiliates 19.4 20.9 24.1 26.8 Shareholders Shares % Stake Mirae Asset Securities 28,843,450 19.9% Mirae Asset Capital 27,601,633 19.0% Mirae Asset Global Investment 8,958,493 6.2% Mirae Asset Fund Service 771,568 0.5% Mirae Asset Consulting 155,910 0.1% Other Related Parties 617,852 0.4% Major Shareholders & Related Parties 66,948,906 46.1 ESOP 9,504,546 6.5% Treasury Stock 1,700,000 1.2% Etc. 67,026,548 46.2% Total Floating Shares (KRX KOSPI) 145,180,000 100.0% * CPS : 21,126,760 shares (Portfolio C) * RCPS : 7,042,253 shares (MAI Invest I, II) * Listed Stock on KSE Market on Jul. 2015 : 45,399,976 shares 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 * Total Assets : Unconsolidated Basis MIRAE ASSET LIFE INSURANCE CO., LTD. 3
Innovation in Motion Customers Insurers Business Strategy 4 Distinctive Strategies in Long Term Basis Getting Older Lowered Interest Social Networks Preferences for annuities & healthcare insurance Increasing expectation for tax adv. & +α yields Info. sharing, price comparison by mobile Price Deregulation Regulatory Change Mobile Technologies Expansion in interest band and safety margin Reinforced financial stability (IFRS4-II) Online, mobile based insurance services Business Asset Mgmt. Clients Regulation 2-Track Strategy Global Portfolios Customer Satisfaction Financial Stability Protection Fee-Biz Stability Profitability MIRAE ASSET LIFE INSURANCE CO., LTD. 4
2-Track Strategy 2-Track Strategy Improving ROI Improving Spread Margin High Profitability Protection Insurance Reserves Improvement Long Term Stability Variables / Pension Fee-Based Business Base for Commission Income Reinforcing Financial Stability Pursuing 2 Core Strategies Simultaneously PROTECTION APE (bn KRW) FEE-BIZ AUM (tn KRW) 130 170 203 CUSTOMERS (Thousands) Total Fee-Biz 2,001 2,100 2,184 Total Excluding Variables 12.4 11.3 10.1 4.5 5.6 6.5 2013 2014 2015 2013 2014 2015 419 549 654 RESERVE PROPORTION FOR HIGH FIXED RATE 3% & Up 6% & Up 42.8% 40.1% 38.2% 22.8% 20.3% 18.4% 2013 2014 2015 2013 2014 2015 Cross Sales Between 2-Tracks Insurance Customers Fee-Biz Customers FEE-BIZ COMMISSIONS (bn KRW) Total Excluding Variables 38 41 29 13 17 18 2013 2014 2015 MIRAE ASSET LIFE INSURANCE CO., LTD. 5
Promoting Protections 2-Track Strategy Focusing on Sales of Protection Type Insurance for Profitability EXCLUSIVE CHANNEL (FC+TFC) Quarterly Protection APE (bn KRW) NON-EXCLUSIVE CHANNEL (AM+Bancassurance) Quarterly Protection APE (bn KRW) 38 32 37 41 44 35 48 46 4.5 4.7 5.4 6.7 7.5 6.9 7.4 7.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Proactive Loss Ratio Improvement Total Excluding IBNR 91.6% 93.7% 92.5% 84.3% 90.8% 93.1% 88.2% 82.5% Increased risk premiums through focusing on sales of protections Reinforcing pricing policy for proactive risk management Expiration of past policies that have high fixed rates 2012 2013 2014 2015 * IBNR : Incurred But Not Reported claims MIRAE ASSET LIFE INSURANCE CO., LTD. 6
Fee-Biz : Retirement Pension Reserves 2-Track Strategy The Core Growth Industry in the Aging Society RETIREMENT PENSION MARKET (tn KRW) RESERVES FOR PENSION (bn KRW) ANNUAL COMMISSIONS (bn KRW) 288 10.7 7.8 124 107 84 67 50 29 3 7 14 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020E * Source : Mirae Asset Retirement Research Institute 2,922 2,445 1,723 1,239 2012 2013 2014 2015 * Based on asset management contracts 2014 2015 Fee-Biz NAV continues to grow while maintaining industry s topnotch yield rate The whole retirement pension market will reach 288 tn KRW in 2020 with growing market size in the private pension sector. Increasing pension beneficiaries will be a favorable factor to Mirae Asset Life which is famous for superb competitiveness in pension planning market. Mirae Asset Life s long-term global portfolio management will be a strong point for the upcoming aging and deflating society. MIRAE ASSET LIFE INSURANCE CO., LTD. 7
Fee-Biz : Variable Insurance 2-Track Strategy The Most Anticipated Player in the Variable Insurance Market RESERVES FOR VARIABLE INSURANCE (bn KRW) ANNUAL COMMISSIONS (bn KRW) 21.4 23.0 5,598 5,765 5,901 5,353 Miraeasset Variable Portfolio Sincere Difference 2012 2013 2014 2015 2014 2015 MVP, our representative variable insurance program featuring global based flexible account exceeded 400 bn KRW in NAV. The Sincere Difference also achieved on-going sales growth. Tax exemption for capital gain and commission-free portfolio adjustment service maximize yield rate. Pursuing investment stability and +α returns from global portfolio distribution. Achieved No. 1 yield performance for recent 3 consecutive years. (Hankyung Business Meg. Dec. 2015) Global Trend of Variable Insurance Industry Increasing IOVAs : Investment Oriented Variable Annuities Increase in flexible account for investment portfolio adjustment MIRAE ASSET LIFE INSURANCE CO., LTD. 8
Asset Portfolio Global Portfolio Mgmt. Diversifying Local and Global Asset Portfolios based on Risk Mgmt. Total Assets 27 tn KRW Domestic Invested Assets Cash & Deposits US Treasury Overseas+Domestic Non-operating Assets Real Estate US IG Overseas Seperate Account 2.1% Stocks KP 0.6% 0.7% 12.0% Loans Overseas Securities 12.3% Global Bonds Equity 40.1% SEPERATE ACCOUNT 61.2% INVESTED ASSETS 20.5% Beneficiary Cert. Bonds INVESTED ASSETS 40.9% Real Estate Etc. 37.3% Var. NAV 6 tn 3.6% AUM 16 tn 15.8% Overseas 5 tn 5.1% 16.8% 48.2% 3.5% 22.6% 35.2% 10.5% 10.9% * Var. NAV : Net Asset Value of Variable Insurance MIRAE ASSET LIFE INSURANCE CO., LTD. 9
Overseas Asset Portfolio Global Portfolio Mgmt. Long-Term Based Overseas Portfolio Management WORLDWIDE DISTRIBUTION (FY2015) US 68.1% KP (Korean Paper) 8.2% Korea government s deregulation in progress with regard to weight limitation for overseas investment (currently 30% of AUM) Emerging 1.7% Brazil 1.6% Real Estate 11% Equity 3% Others 11% US Treasuries 12% OVERSEAS AUM BREAKDOWN US IG 41% Australia 2.1% Global Bond 17% KP 5% MIRAE ASSET LIFE INSURANCE CO., LTD. 10
Global Alternative Investment Global Portfolio Mgmt. Global Alternative Investments of Mirae Asset Life 2006 2011 2011 2012 2013 Mirae Asset Tower (Pudong, Shanghai) Acushnet (Acquisition) Canada Horizons ETFs, Australia BetaShares (Acquisition) Rochavera Towers (Sao Paulo) Faria Lima Tower (Sao Paulo) 225 West Wacker (Chicago) 2013 2013 2014 2014 2015 Four Seasons Hotel (Sydney) Coffee Bean (US) 2550M St. Bldg. (Washington DC) 1801K St. Bldg. (Washington DC) Fairmont Orchid (Hawaii) Fairmont (San Francisco) Dividends and rents from AI are the main revenue sources of global mutual funds Industry Leading Managing Capability for Overseas AI Mirae Asset Life s Investments MIRAE ASSET LIFE INSURANCE CO., LTD. 11
Clients First Customer Satisfaction Achieving the Core Value of Clients First Spirit Industry-unique marketing channel providing one-stop financial service Customer s Happiness Center / Plazas Sincere Difference The Best Brand of the Chosen by Consumer Award (2011-2015) Consulting Supporting Financing Insurance, Retirement Pension, Tax, Inheritance FC Marketing Education for Consultants Reinforcing outbound marketing Receipt & Payment Mutual Funds & Trust Sales, Personal Loans Insurer of the Year Korean Awards (2014-2015) Better Loyalty Than Ever Customer Oriented Product #1 Public Satisfaction Rank PERSISTENCY OF POLICYHOLDERS (%) 81.3 82.4 82.7 84.3 62.8 13th Month 25th Month 1 65.6 69.2 70.6 INNOVATIVE VARIABLE INSURANCE SINCERE DIFFERENCE NAV & APE (bn KRW) 240 5.8 256 270 288 5.0 4.4 5.2 321 7.5 373 377 402 11.0 9.9 9.0 Accum. NAV APE CUSTOMER SUPPORT QUALITY (BY FSS) 4th 3rd 2nd 1st 2012 2013 2014 2015 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 2011 2012 2013 2014 * FSS : Financial Supervisory Service * Sincere Difference : Brand name of a variable insurance product exclusively provided by Mirae Asset Life MIRAE ASSET LIFE INSURANCE CO., LTD. 12
IFRS4 Phase II Financial Stability REGULATORY CHANGES IN ACCOUNTING PRINCIPLE As Is To Be Liability Test Rev. Recognition Cost Method Initial Market Value Periodic Capital Test RBC Solvency II Level ADVANTAGE IN RESERVE STRUCTURE The adoption of IFRS4-II will bring negative impact on insurance liabilities and risk based capital mainly due to past high fixed rate contracts. Fee-Biz like variable insurance and retirement pension business can reduce negative impact on the capital and liabilities. STRONG RBC RATIO TOTAL RESERVES AUM BREAKDOWN GUARANTEED MINIMUM RBC RATIO 60% AUM 18% 20% Fixed Rate 6% & Up Fixed Rate Under 6% 13% Floating Rate Over 3% 217% 285% 261% Market Standard 200% 40% Separate Account 62% Floating Rate 87% Floating Rate 3% & Down Regulatory Requirement 100% Lesser exposure to market valuation Lower high fixed rate reserves Lower guaranteed minimum for floating rate 2013 2014 2015 MIRAE ASSET LIFE INSURANCE CO., LTD. 13
Summary of EV EV The VoNB of FY2015 increased by 35.6% YoY, resulting in 43.7bn KRW (This amount excludes VoNB from Retirement Pension business, of which volume is 4.2bn KRW). The total EV as of Dec. 2015 is 1,957 bn KRW. VoNB (bn KRW) Embedded Value (bn KRW) ANW VIF 47.9 4.2 VoNB (Retirement Pension) 1,681 1,957 143 56 43.7 43.7 VoNB (Insurance Policies) 32.2 1,538 1,901 FY2014 FY2015 FY2014 FY2015 MIRAE ASSET LIFE INSURANCE CO., LTD. 14
Value of New Business EV VoNB increased by 1.6%p due to expansion in protection type business and improvement of efficiency in the insurance business sector. VoNB Movement (bn KRW) New Business Margin Movement +11.5 (35.6%) +1.6%p 11.5 43.7 1.8% 6.8% 32.2 1.2 0.5-1.8 5.2% 0.1% -0.3% FY2014 Change in New Business Volume Change in Product P/F & Mix Changes in Actuarial Assumptions Changes in Economic Assumptions FY2015 FY2014 Change in Product P/F & Mix Changes in Actuarial Assumptions Changes in Economic Assumptions FY2015 * VoNB Margin : Excluding VoNB from retirement pension MIRAE ASSET LIFE INSURANCE CO., LTD. 15
Embedded Value EV Key Assumptions Discount Rate 9.0% (9.5% in FY2014) NIER (Net Investment Earnings Rate) 3.5% (3.8% in FY2014) Required Capital RBC ratio at 150% under the Korean RBC regulation Loss Rate Lapse & Surrender Rate Others 5 recent years experience data (by experience life table and product line-ups) 5 recent years experience data (by products, channels and payment methods) Maintenance expenses assumed to rise at the inflation rate of 2% / year (3.0% in FY2014) Operating expenses : Experience data from last year Corporate tax rate : 24.2% * Source : Milliman Embedded Value Report MIRAE ASSET LIFE INSURANCE CO., LTD. 16
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