1.  Defining the Market Space Niche Markets: Surviving in Spite of Threats November 2007

2. PricewaterhouseCoopers November 2007 Slide 2 Niche Markets: Surviving in Spite of Threats Defining a Niche Market “..focussed, targeted portion or subset of a market sector…” Evolves from a product or service that is not met by mainstream providers, may involve potential demand that is not met by any supply Profitable, due to: Disinterest Lack of awareness Self-protection mechanism

3. PricewaterhouseCoopers November 2007 Slide 3 Niche Markets: Surviving in Spite of Threats The future of Financial Services From crystal ball gazing to analysis of current and future events and their potential impact of changes in the environment in which we operate…. Five drivers will shape the future of financial services Politics Demographics The economic cycle Regulation and reporting Technology

4. PricewaterhouseCoopers November 2007 Slide 4 Niche Markets: Surviving in Spite of Threats Changing Demographics At present 15% of population is elderly (over 65), but.. Ratio will increase to 25% by 2030 By 2050, 30% Elderly getting older

5. PricewaterhouseCoopers November 2007 Slide 5 Niche Markets: Surviving in Spite of Threats Impact of Changing Population Profiles Greying populations creating major challenges Government required to spend more on pensions, healthcare and long-term residential care Benefits traditionally funded through taxes on working age adults Ratio of working age adults (less than 65) to those over 65 declining Pension reforms required Shift to private and personal provisioning Move to defined contribution schemes

6. PricewaterhouseCoopers November 2007 Slide 6 Niche Markets: Surviving in Spite of Threats Impact of Changing Population Profiles Key assumptions re retirement financing being challenged Savings accumulated during working life will fund retirement Ability to retire earlier Early retirement is useful Retirement at most senior position, highest income Accumulate then spend model No change in residence during retirement Level of government provided pensions

7. PricewaterhouseCoopers November 2007 Slide 7 Niche Markets: Surviving in Spite of Threats Opportunities Behind every dark cloud… Emerging issue in Caribbean, focus on stretching public funded schemes Models not tested, seem impractical Personal pensions not properly structured to meet possible deficits in funding

8. PricewaterhouseCoopers November 2007 Slide 8 Niche Markets: Surviving in Spite of Threats Opportunities New products and services to meet life cycle savings and investment Working age Close to retirement Post retirement Expansion in asset management services Pension scheme administration Fee income potential from off balance sheet activities Stability of income streams

9. PricewaterhouseCoopers November 2007 Slide 9 Niche Markets: Surviving in Spite of Threats Serving the Diaspora Significant untapped potential Remittances Other foreign currency inflows Investment opportunities

10. © 2007 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP (US).  Quo Vadis?