Transcript Life Underwriting Trends and Opportunities

OESAI : LIFE INSURANCE TECHNICAL TRAINING
12-13 OCT 2016 – TRAVEL LODGE, GABORONE BOTSWANA
Presented by Ezekiel Macharia, Chief Actuary (KAFS)
Life Underwriting
Trends & Opportunities
OESAI COMPREHENSIVE LIFE INSURANCE
TECHNICAL TRAINING
Ezekiel Macharia
Chief Actuary – Kenbright Actuarial & Financial Services
Day 2, Thursday 13th October, 2016
Why Life Insurance?
Long Term Investment
AGENDA
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Africa & the World
Opportunities
Trends
Conclusion
Insurance in Africa
$2,200
$13,000
Real GDP per Capita
$61
$640
Premium per capita
Africa
2.7%
Willingness to Pay
4.9%
World
Life vs Non-Life
Insurance vs GDP
Risk Based Supervision:
Transition in 2015
Botswana
Kenya
Mauritius
Morocco
Mozambique
Nigeria
Sierra Leone
Tanzania
Zambia
Zimbabwe
Products in Scope
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Term Assurance
Endowment & Whole Life
Group & Credit Life
Annuity (fixed & variable)
Unit Linked
Disability (Temporary & Permanent)
Major Diseases (Critical Illness)
Product Attraction by Age
• Unit Linked
• Whole Life
• Term
Assurance
• Endowment • Long Term Care
• Investment Focused
• Group Life
• Disability
• Protection Focused
• Annuity
• Savings Focused
Opportunities: Average Age
Income by Age
People below 25 yrs earn significantly less
even in the USA – Median Age in SSA is 17
GDP Per capita
USA: $53,000
Africa: $2,200
Botswana: $7,500
Opportunities: Average Age
Changing Age Profile
Source: United Nations, Department of Economic and Social Affairs
Botswana: 1950
Botswana: Today Botswana: 2050
The population profile is expected to grow older, be
wealthier (rising middle class) and seek protection
through insurance
Key Trends
Sales
Automation
Online sales
Predictive Underwriting
Rating
Cross-Selling
Product Bundling
Price Optimization
Different prices for different channels
New Products
Long term care
Others
Fraud
Fraud detection tools
Micro-life
Linked with Telecos
Mobile Money
Quick claims settlement
Key Considerations
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Longevity Risk – people living longer than expected
Reinvestment risk – negative interest rates in future
Contagion – Global financial crisis
Risk Based Supervision
Passing risk to consumer
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Unit linked products
Variable annuity products
6. Competition from banks – embedded bancassurance that sell savings & protection
Key Considerations
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Use of Technology in Distribution & Claims
New Distribution Channels
Use of mobile money in Africa for claim settlement
Increased Reinsurance support
Using Big Data
New Generation – New Solutions
Conclusion
• There is scope for growth in life insurance
• Life Insurance can improve the economy through
long term investments
• The African population is young and can take up
insurance given the right incentives
• Trends in automation are prevalent
• Key considerations include longevity risk,
reinvestment risk and risk based supervision
QUESTIONS
[email protected]
+254 722 540 045
Actuarial & Financial Services
Kenbright – established in 1993