Passion for life: a look at the life insurance industry
•Download as PPTX, PDF•
0 likes•9,348 views
Momentum Retail CEO Mark van der Watt talks about risk, trust and gap cover in the life insurance industry.
Recommended
More Related Content
What's hot
Similar to Passion for life: a look at the life insurance industry
Similar to Passion for life: a look at the life insurance industry (20)
More from Matthew Le Cordeur
More from Matthew Le Cordeur (20)
Recently uploaded
Recently uploaded (20)
Passion for life: a look at the life insurance industry
- 1. Risk Summit 2015 Unlocking the opportunities in risk Mark van Der Watt
- 2. • MMI’s client strategy • Some distribution trends • What the UNISA study tells us • Gaps in the market • Opportunities for advisers Agenda
- 3. Factors leading to new strategy Technology advances Fairness Regulations Lack of trust Google Clients are more… • Demanding • Diverse • Indifferent • Selfish • Sophisticated
- 4. The new MMI strategy OUR PURPOSE OUR STRATEGIC FOCUS AREAS Why we exist To enhance the lifetime financial wellness of people their communities and businesses. Growth Client- centricity Excellence The way we will compete OUR VISION Where we are headed To be the preferred lifetime financial wellness partner, with a reputation for innovation and trustworthiness OUR VALUES A culture that is grounded in the values of accountability, excellence, integrity, diversity, innovation and teamwork What we stand for
- 5. Momentum’s purpose “To enhance the lifetime Financial Wellness of people, their families, communities and businesses”
- 6. • Momentum’s success in the past – Service excellence – Distribution excellence – Product innovation Role of advice
- 7. • Now – client centricity • Role of advice – Critical – TCF outcome 4 – “suitable advice taking account of client circumstances” Role of advice
- 9. TRENDS
- 10. NMG study Class of adviser Change in market share (2012 to 2013) Independent financial advisers -13% Aligned advisers +6% Tied agents +16% Bank brokerages -11%
- 11. Swiss Re survey 0 1,500 3,000 4,500 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 Brokers Tied agents/own sales-force Banks Direct marketing Rm Distribution channel Excluding new participants and corrections New participants and corrections
- 12. WHAT THE UNISA STUDY TELLS US
- 14. Movement per 1 000 households DU Drifting Unwell AU Anchored Unwell 11 12 122 From DU To DU 2012to20132011to2012 11 to AU 1 to DU 2 from AU 14 to DW 2012to20132011to2012 AW Anchored Well DW Drifting Well 9 8 46 60 To DW To DW 2012to20132011to2012 11 from AU 1 to DU 14 from DU 46 to AW 2012to20132011to2012
- 15. Agenda GAPS IN THE MARKET GAPS IN THE MARKET
- 16. True South (2013) Death Disability Number of earners 13.0m 13.0m Death/ disability events expected per year 130 050 43 065 Death /disability events expected per day 356 118 Source: True South
- 17. • Insurance gap increased from R18,4 trillion in 2010 to R24,0 trillion in 2013 • R9,3 trillion death • R14,7 trillion disability True South Source: True South
- 18. True South survey 2013 Gap (R'trillion) Death Disability Insurance need 15,1 24,4 Actual cover -5,9 -7,3 Disability grant -2,4 Insurance gap 9,2 14,7 Gap as % of need 61% 60% Source: True South
- 19. True South (income groups) Number of earners (million) Average age Average gross income p.a. (R'000) 20% poorest 2.6 37 9 2nd Quintile 2.6 36 26 3rd Quintile 2.6 37 52 4th Quintile 2.6 38 111 20% richest 2.6 42 401 All 13 38 120 Source: True South
- 20. True South (gap per income group) Death cover Average gap per earner (R'm) Total gap (R'bn) Proportion of income 20% poorest 0.1 131 11 2nd Quintile 0.3 663 12 3rd Quintile 0.5 1 299 10 4th Quintile 0.9 2 287 8 20% richest 1.9 4 899 5 All 0.7 9 279 Source: True South
- 21. True South (gap per income group) Disability cover Average gap per earner (R'm) Total gap (R'bn) Proportion of income 20% poorest -0.2 -425 -22 2nd Quintile 0.2 409 8 3rd Quintile 0.6 1 497 12 4th Quintile 1.3 3 459 12 20% richest 3.8 9 801 9 All 1.1 14 741 Source: True South
- 22. True South (gap by age) -200% -150% -100% -50% 0% 50% 100% <30 30 - 40 40 - 50 50 - 55 55+ Death Disability Source: True South
- 23. True South (gap by education level) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% PS or lower Some HS Matric Diploma Degree Gap as % of cover needed Death Disability Source: True South
- 24. • Basket – Temporary disability (income until permanent disability pays) – Lump sum disability (once-off expenses) – Permanent disability (income until retirement) True South survey (disability)
- 25. • Disability gap greater • 38% of permanent disability need covered • 7% to 25% of temporary disability need covered True South survey (disability)
- 26. Benefit mix 2007 2008 2009 2010 2011 Life Cover 60% 58% 59% 60% 61% Disability Cover 31% 33% 31% 31% 30% Critical illness Cover 9% 9% 10% 9% 9%
- 27. True South (disability sales) 0% 20% 40% 60% 80% 100% 2007 2008 2009 2010 2011 Income beneift Lump sum benefits Source: True South
- 28. True South (income disability) 2007 2008 2009 2010 2011 Permanent cover 99.4% 99.7% 99.5% 99.3% 99.2% Tempory cover 0.6% 0.3% 0.5% 0.7% 0.8% Source: True South
- 29. True South (disability sales) 0% 20% 40% 60% 80% 100% 2007 2008 2009 2010 2011 Accelerated cover Standalone cover Source: True South
- 30. • Sales skewed to death benefits – Expect 43% more disability than life cover • Disability sales skewed to lump sum • Lump sum disability risky for individuals – Market risk (need 32% to 41% more) – Consumer understanding – Behavioural (sudden access to lump sum) True South survey (trends) Source: True South
- 31. • Accelerated disability cover – Ratio up life cover – E.g. expose the estate • Income protection sales skewed to permanent True South survey (trends) Source: True South
- 32. Remedies Death Disability Purchase additional insurance Insurance (% of earnings) 2,90% 1,80% Increase in cover 1,6% 1,5% Reduce household expenditure Required reduction 33% 37%
- 34. Benefit mix 29% 21% 26% 7% 2% 7% 1% 1% 1% 5% Death only Death & Disability Death; Disability & Critical IIlness Death; Disability Critical Illness; Income Protection Income Protection Only Death & Critical Illness Death & Iincome Protection Critical Illness only Disability only Other
- 35. Myriad (disability) 0% 10% 20% 30% 40% 50% 60% 70% 80% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Standalone Accelerated
- 36. Myriad (disability) 0% 20% 40% 60% 80% 100% 120% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Lump sum Income
- 37. Myriad (disability) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Income Protector Temporary Income Protector
- 38. FOR ADVISERS
- 39. RISK VS SAVINGS
- 40. R39 BILLION IN ANNUAL PREMIUMS
- 41. DISABILITY COVER
- 45. YOUNGER AGES
- 46. BUSINESS ASSURANCE TWO OUT OF THREE BUSINESSES ARE NOT COVERED
- 47. WHAT WE PROVIDE
- 53. Risk Summit 2015 Unlocking the opportunities in risk Mark van Der Watt
Editor's Notes
- Out of the current 62 million UK residents, 1 in 6 will live to become 100 years old. (The Department of Work and Pensions) The local insured population would not look bad relative to the average UK population, so are you prepared to see 1 in 6 of your clients live to become 100 years old?
- 8% has Longevity, thus 92% does not have Longevity protection