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Creating Opportunities in a Challenging Environment Julio G
Creating Opportunities in a Challenging Environment Julio G. Villalon Head of Middle East Region MetLife
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Objectives Overview of today’s environment
What we can expect in the future Some Challenges .. but also great Opportunities How is MetLife dealing with these challenges
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The World Economy is Changing…
GDP DEVELOPED COUNTRIES GDP EMERGING COUNTRIES Source: International Monetary Fund, World Economic Outlook Database, September 2011
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Our Environment: Post – Financial Crisis
Customers Loss of trust in financial sector More sensitive to price Higher risk aversion Governments and Regulators Sovereign debt crisis New Regulation (Solvency II, Customer protection rules) Insurance Industry Consolidation Shortage of capital - Some deleveraging geographically - Others deleveraging lines of business Low Interest Rates
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Lowest Interest Rates in Last 25 Years
Source: WSJ LIBOR: Historical Data
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Our Environment: Future
Customers Value more capital strength and solvency Products with guarantees Products more transparent Governments and Regulators More regulation and supervision Insurance Industry: 2 Winning Strategies Large companies that can leverage their size Specialists who focus in specific risks or niche markets
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What are the opportunities?
Life Industry Myths Based on Research Life insurance is sold, not bought Customers want to make better-informed decisions when purchasing, rather than relying on the industry to know what’s right for them Personal interaction is essential Customers expect to do far more research in the future using online sources, even though they may continue to use an advisor to complete the purchase It’s hard to cross-sell to existing customers Customers want to be rewarded for loyalty and repeat sales Providers can’t materially influence retention Providers could influence retention if they were better at meeting customers‘ changing needs and were prepared to offer better deals to stay Responding to the New Customer Needs Source: Ernst & Young global insurance customer survey, 2012; 24,000 customers in 23 countries covering Americas, EMEA and Asia
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Where are the opportunities?
Additional Trends Emerging Markets will represent most of the growth More than 60% of Life Premium growth will come from Emerging markets Corporations are becoming more Global 65% of Global 1000 have Employees outside the U.S. Source: McKinsey Global Insurance Pool Dun & Bradstreet Research
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MetLife - A leader in the International Life Market
Total Revenues1 $ M $68,150 Market capitalization2 $53.31B # of countries present4 Over 45 Leading market positions5 Over 20 Markets Total customers (M)4 90 Assets Total3 $M 836,781 MetLife has a strong foundation Will need to adapt to this changing and challenging environment 1 Total Revenues are from MetLife’s audited Consolidated Financial Statements for the years Ended December 31, This financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and related notes included in the Metlife’s 2012 Annual report. . 2 Market capitalization as of Oct 28th , Data from Yahoo Finance 3 Assets Total: Consolidated Balance Sheet as of December 31st, 2012. 4 From MetLife Corporate profile. Customer and country information represent combined numbers for both life and non-life businesses. 5 AXCO Insurance Information Services, March 7, 2013
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MetLife Positioning in Middle East
Turkey Since 1988 Egypt Since 1997 Lebanon Since 1953 Jordan & PNA Since 1958 Saudi Arabia Since 1954 Kuwait Qatar Since 1962 UAE Oman Since 1971 Bahrain Since 1960 Over 1350 Employees Operating Since 1953 Leading Position in Region
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One MetLife Strategy Build Global Employee Benefits Business
Refocus the U.S. Business Build Global Employee Benefits Business Global * World-Class * Scale One Grow Emerging Markets Drive Toward Customer Centricity and a Global Brand
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MetLife Strategy Grow Emerging Markets Build Global Employee Benefits
GDP Growth driving Insurance penetration Growing middle class needs for Life Insurance Build Global Employee Benefits Corporations increasing Global presence Employee Benefits as a lever to retain talents Customer Centricity & Global Brand Listen to Customers to derive better experiences Global Brand to differentiate ourselves We believe that we will grow Emerging Markets Operations more rapidly since GDP Growth will grow insurance penetration and growth of middle class will also push need for insurance We will also grow our Employee Benefits Business serving better our Customers on a Global basis. We already have relationships with 60% of Global 1000 companies Finally we will do an effort to listen more and better to our customers to improve their experience with us. An we will use our MetLife Global Brand as a differentiator
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MetLife Strategy Key Enablers
Talent/Collaboration/Communication Scale & Efficiency Regulatory Engagement: - Creating long term relationship - Share Global expertise - Support strong regulation appropriate to marketplace
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Challenging Environment Significant Opportunities
In Summary Challenging Environment Significant Opportunities Strategic Response Economic and Financial crisis - Clients’ loss of trust - Higher Risk Aversion Changing Regulatory environment Persistent low interest rates Diverse Competition Clients want to do business in different ways. Insurance penetration is increasing in emerging markets Corporations are becoming more Global Leverage size and scale vs. specialist approach Responding to the “new consumer” Need for global partnerships (Clients, Distributors, Partners, Brokers)
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