1. OESAI : LIFE INSURANCE TECHNICAL TRAINING
12-13 OCT 2016 – TRAVEL LODGE, GABORONE BOTSWANA
Presented by Ezekiel Macharia, Chief Actuary (KAFS)

2. Life Underwriting Trends & Opportunities
OESAI COMPREHENSIVE LIFE INSURANCE TECHNICAL TRAINING
Ezekiel Macharia
Chief Actuary – Kenbright Actuarial & Financial Services
Day 2, Thursday 13th October, 2016

3. Why Life Insurance? Long Term Investment
6.5 times lower on GDP per capita
Why Life Insurance?
Long Term Investment

4. AGENDA
Africa & the World
Opportunities
Trends
Conclusion

5. Insurance in Africa $2,200 $13,000 $640 $61 4.9% 2.7% Africa World
Real GDP per Capita
$2,200
$13,000
Premium per capita
$61
$640
Africa
World
Willingness to Pay
2.7%
4.9%

6. Life vs Non-Life

7. Insurance vs GDP

8. Risk Based Supervision: Transition in 2015
Botswana
Kenya
Mauritius
Morocco
Mozambique
Nigeria
Sierra Leone
Tanzania
Zambia
Zimbabwe

9. Products in Scope Term Assurance Endowment & Whole Life
Group & Credit Life
Annuity (fixed & variable)
Unit Linked
Disability (Temporary & Permanent)
Major Diseases (Critical Illness)

10. Product Attraction by Age
Unit Linked
Term Assurance
Investment Focused
Whole Life
Endowment
Group Life
Disability
Protection Focused
Annuity
Long Term Care
Savings Focused

11. Opportunities: Average Age

12. Income by Age GDP Per capita USA: $53,000 Africa: $2,200
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

13. Opportunities: Average Age

14. Changing Age Profile Botswana: 1950 Botswana: Today Botswana: 2050
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

15. Key Trends Sales Others Fraud Automation Micro-life
Fraud detection tools
Automation
Online sales
Micro-life
Linked with Telecos
Predictive Underwriting
Rating
Cross-Selling
Product Bundling
Mobile Money
Quick claims settlement
Price Optimization
Different prices for different channels
New Products
Long term care

16. Key Considerations 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
Unit linked products
Variable annuity products
Competition from banks – embedded banc-assurance that sell savings & protection

17. Key Considerations 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

18. 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

19. ?
QUESTIONS

20. Actuarial & Financial Services
Kenbright – established in 1993