LIFE ASSURANCE PROTECTION MYIBA BLITZ December2016 7 December 2016 - - PowerPoint PPT Presentation

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LIFE ASSURANCE PROTECTION

MYIBA BLITZ

December2016

LIFE ASSURANCE

December 2016 Royal London – MyIBA Blitz 2016 2

PROTECTION

Daragh Feely Head of Sales

ROYAL LONDON

• Market Overview
• Irish economy
• Protection market
• Trends

1) Technology advancements 2) Product innovation 3) Market intelligence

• New Market Opportunities

3

AGENDA

December 2016 Royal London – MyIBA Blitz 2016

MARKET

• European Commission’s Economic Forecast for Ireland
• 2016 – 4.9% GDP growth
• 2017 – 3.7% GDP growth
• Overall EU GDP growth of 1.8% forecast for 2016
• Central Bank cut it’s projected economic growth by 0.2% to 4.9% for this year and by

0.6% to 3.6% for next year due to Brexit – despite this they still believe the economy will continue to grow steadily

• Ireland’s macro position is being best represented by:
• Economic recovery
• Ageing population
• Improving wealth in Ireland
• 2012 – €444 billion
• 2015 - €626 billion

4

OVERVIEW

Irish economy

December 2016

MARKET

5

OVERVIEW

Irish Protection Market 2005 - 2015

80 100 120 140 160 180

Total Protection Market APE €M

December 2016

MARKET

• New and different competitors
• VHI Life
• Laya Healthcare
• Irish Life Health

Brokers very well positioned to take advantage of this

• Ireland life assurance competitive

landscape is fierce and this will continue

• Life Assurance
• SSI – will it/can it continue in the same

vein as providers add more and more illnesses

• Whole of Life cover – one to watch

6

OVERVIEW

December 2016 Royal London – MyIBA Blitz 2016

TECHNOLOGY

• a. Ongoing website improvements
• Improved data
• Access to online resources
• Comparative portals
• Total customer view
• Consumer facing websites to back up

recommendations

• b. Digital Signatures – huge increase in return

rates

• Adoption means no need for printers
• Use for acceptance terms
• Questionnaires
• c. Lifestyle Analysis – similar to that in the

general insurance market, for example tracking devices in the car insurance market

• Vitality

7

ADVANCEMENTS

1) Technological Developments

December 2016

TECHNOLOGY

2) Reflexive Underwriting

8

ADVANCEMENTS

a) Information gathering has improved b) Acceptance rate at point of sale - 72% of SSI applications get a decision at point of sale c) Risk assessment d) Data capture with integrated questionnaires e) Diabetes – maintenance programme – trialling in the UK f) Non-disclosure rate? a) Ireland - 85% OR rate b) UK – 75% OR rate

December 2016

TECHNOLOGY

3) Brokers are utilising online resources more than they ever have

• Digital natives – 24/7 access
• More demands on providers online

platforms

• Must be user-friendly
• Intuitive
• Consistently improved
• Eircode
• Digital Signatures
• ‘No to all’ option

9

ADVANCEMENTS

December 2016 Royal London – MyIBA Blitz 2016

PRODUCT

1) Sales Opportunities

• Triggers for sales
• ne month free; discounts
• extra cover for a period
• two months premium refund
• commission, free will
• Discount model moved towards a choice model
• Higher commission for not taking the discount
• commission choice flexibility
• pick and choose to suit each case
• faster payment
• weekly payment options

2) More extra benefit options to choose from

• Helping Hand
• Best Doctors
• Life Care

10

INNOVATION

December 2016

PRODUCT

3) Third party information providers – bringing greater transparency, such as

• Clear Choice
• Best Advice
• Money Advice
• Voyant… etc.

4) Broadening of cover

• Improved definitions – SSI
• Expansion and enhancements

11

INNOVATION

December 2016 Royal London – MyIBA Blitz 2016

PRODUCT

5) Use of research Broker and consumer research

• Life Changes option
• Moving expiry date out to age 70 – IP
• Introduction of 2 deferred periods
• Indexation
• Broadening of free cover
• Integration of questionnaires into data capture

form

• Early commission payment
• Payment of commission more frequently

12

INNOVATION

Autumn 2016 Royal London – MyIBA Blitz 2016

HOW LONG

13

WILL COVER LAST?

How long life cover payout may last based on monthly income requirements:

Assumptions: Net Investment Growth 4.0%/ Inflation 2.0% first monthly income is taken after 1 month

Life Assurance Payout Example

€200,000 €400,000 €600,000 €800,000 €1,000,000 Monthly Income Needed €2,000 9yr 1mth 20yr 1mth 34yr 3mth Over 50yrs Over 50yrs €4,000 4yr 4mth 9yr 1mth 14yr 3mth 20yr 1mth 26yr 8mth €6,000 2yr 10mth 5yr 10mth 9yr 1mth 12yr 6mth 16yr 2mth €8,000 2yr 1mth 4yr 4mth 6yr 8mth 9yr 1mth 11yr 7mth €10,000 1yr 8mth 3yr 5mth 5yr 3mth 7yr 1mth 9yr 1mth

December 2016

MARKET

14

INTELLIGENCE

Irish Protection Market 2005 - 2015

80 100 120 140 160 180

Total Protection Market APE €M

December 2016 Royal London – MyIBA Blitz 2016

MARKET

15

INTELLIGENCE

December 2016 *Milliman

50 70 90 110 2012 (€1,071) 2013 (€1,060) 2014 (€1,028) 2015 (€1,024)

Thousands

Number of policies

Irish Protection Market – Policy Numbers* (Average premium)

MARKET

16

INTELLIGENCE

Life, including WOL (60%) SSI (33%) IP (7%) Estimated Total Protection Market – Product Breakdown

December 2016 Royal London – MyIBA Blitz 2016

MARKET

17

INTELLIGENCE

Brokers (60%) Banks (25%) Direct Sales (15%) Total Protection Market – Sales Channel Breakdown

December 2016 Royal London – MyIBA Blitz 2016

MARKET

18

INTELLIGENCE

Term Assurance Serious Illness Mortgage Protection Income Protection Whole

• f Life

2016 €745.36 €892.93 €493.27 €1,139.61 €1,983.04

Average premium per product

December 2016 Royal London – MyIBA Blitz 2016

MARKET

19

INTELLIGENCE

Mortgage Protection Term Assurance 2011 €646.68 €1141.76 2012 €606.70 €928.72 2013 €592.97 €855.65 2014 €521.23 €761.28 2015 €515.14 €793.18 2016 €493.27 €745.36

Annual comparison of average premiums

December 2016 Royal London – MyIBA Blitz 2016

MARKET

Change in Premiums Example What’s the difference between the premiums paid for a level term policy now and 5 years ago? A 40 year old male, non-smoker, taking out a level term policy with initial cover of €250,000 for 20 years.

• In 2011 monthly premium €28.63
• In 2016 monthly premium €25.47

11% reduction in premium over the period

20

INTELLIGENCE

December 2016 * Figures based on price-matched position

NEW MARKET

Tax saving 40% tax relief on Pension Term Assurance

• Pension Term Assurance - undervalued market
• It does not have to be linked to a pension
• Size of market –
• 2.01 million in the Irish labour force*
• Of those 600,000 working in the private sector do not have a

pension*

• About 1,500 cases written in 2015 - massive opportunity
• For example someone willing to spend €100 a month on a

PTA policy, will get tax relief of €40 (at the higher rate of tax). So the premium actually only costs €60. Should they increase the net cost back to €100 in return for more cover?

21

OPPORTUNITIES

December 2016 *CSO

Irish labour force 2016

Working with Pension Working without Pension

NEW MARKET

Demographics – The Business Owner 2015 was a record breaking year for new company formations , up to 19,472*

• First half of 2016 – 10,606 new companies formed
• 22% increase on the same period last year
• An average of 58 per day!
• Over 194,000 companies trading everyday in Ireland
• Pensions and business assurance opportunity

22

OPPORTUNITIES

December 2016 *Vision-net

NEW MARKET

Demographics – The Cohabiting Couple

• Cohabiting couples have been increasing – accounting for 12% of the

population in 2011.

• Inheritance Tax Liability
• Growing market – requiring Financial Broker Advice
• Importance of how the policy is set up – Life of Another basis

23

OPPORTUNITIES

December 2016 * iReach survey commissioned by Royal London

NEW MARKET

Demographics – The Grey Pound

• Ageing population
• Grey pound becoming more important – savings, investments and bank deposits
• Different needs
• Legacy protection
• Whole of Life
• Increasing costs of funeral expenses
• Long term care

24

OPPORTUNITIES

December 2016

NEW MARKET

Demographics – The New Irish

• In 2011 Irish residents who were born outside of Ireland made up 17% of the

population*

• Fastest growing groups:
• Romanians (up 110%)
• Indians (up 91%)
• Polish (up 83%)
• Lithuanian (up 40%)
• Latvians (up 43%)
• Niche markets
• Teachers
• Foreign national Doctors
• Garda
• Funeral cover
• Brokers catering to the specific needs i.e. application translation

25

OPPORTUNITIES

December 2016 * CSO

NEW MARKET

Rolling Conversion

26

OPPORTUNITIES

December 2016 Notes: Example assumes no lapses or claims and 100% conversion rate.

100 200 300 400 500 600 700 1 3 5 7 9 11 13 15 17 19 Broker Income Levels €000's Year Broker Income Streams 10 Year Rolling Conversion 20 year term model

ROYAL LONDON GROUP

• Thanks to your support, now bigger and better than ever and 100% committed

to the Irish market and continuing to grow our presence here

• Royal London is the largest mutual Life, pensions and investment company in

the UK and Ireland

• Group businesses hold around 9.1 million policies and employ 3,179 people
• Group funds under management of over €114 billion*
• New life and pensions business 2016 (on a PVNBP basis^) up by 30%

*Figures quoted are as at 30/09/2016. Exchange rate as at 04/11/2016 ^Present value of new business premiums (PVNBP) is the total of new single premium sales received in the year plus the discounted value, at the point of sale, of the regular premiums the Group expects to receive

• ver the term of the new contracts sold in the year.

27

STRONG AND SECURE

December 2016

THANK

YOU

Royal London would like to thank you for your continued business and support.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority in the United Kingdom and is regulated by the Central Bank of Ireland for conduct of business rules. The Royal London Mutual Insurance Society Limited is registered in England and Wales, number 99064, at 55 Gracechurch Street, London EC3V 0RL and in Ireland, number 908341, at 47-49 St. Stephen’s Green, Dublin 2. 1196.2