1. Ageing population Fabrice Lorillon’s presentation March 15, 2012 - Brussels

2. Life expectancy continues to increase 2 A continuing increase or a stabilization or a declining trend are debated among demographers. Life expectancy continues to rise by three months every year in almost all the world’s countries.

3. The continuing increase in life expectancy is now driven by a decrease of mortality of the senior population  In 2010, c. 500m people are older than 65 in the world. United Nations forecast that it will triple by 2015 to represent one person out of six.  Emerging markets age 4 times faster than mature markets: 115 years for France to move from 7% to 14% of 65+ years old It will take 26 years to China. Age-specific contributions to the increase of Life Expectancy of women from 1850 to 2007 3

4. Ageing increases all over the world 4  65 year and older share increases all over the world: In 2010 : 500 million people (8% of the population) In 2050: 1,5 billion people (one out of six). An increasing share of the populationA different evolution amongst regions  2005, in Europe, 65 years old and older outreach 15 years young and younger. In Asia same threshold only in 2050.  Ageing is 4 times higher in China than in France.

5. Gender life expectancy gap 5 At eighty gap increases in all OCDE countries except Anglo-Saxon countries. Life expectancy gap between women and men varies according to age. Gap is significant in all OCDE countries. Convergence is slower than expected. It continues to increase in some countries like Japan.

6. The link between wealth and longevity is positive Rising longevity is often associated with negative side effects:  Heavier fiscal burden  Slower growth  Higher risk aversion But the link between wealth and longevity is positive and strongly non-linear. Relation between wealth and healthy life expectancy at birth Source: UN, WHO, AXA IM Research (sample: 165 countries), 2007 data 6

7. Saving Higher as age increase 7 In Japan savings are 2,7 million yen per capita under age 30, and 8,5 times larger at 23,1 million age 60 or older. Liabilities peak as age increases up to 40/49 and decrease after. Elderly people are attractive consumer segment for insurance companies. As people get older portion of invested assets with risk increase.

8. Japanese and French demographics 8  Decreasing population and rapid growing of elderly people: Japanese population decreasing since 2005. Aged 65 and older exceed 20% of total population. Japan was in the lower rankings in the 80s, in the middle in the 90s, and is already the highest in the early 21st century.  Fertility rate has dropped from 4,54 in 1947 to 1,91 in 1975, and to 1,26 in 2005.  Baby boomers reach retirement age.  Japanese Life expectancy is the longest in the world (Men 79,6, Women 86,4).  At the age of 65 life expectancy for men is a further 18,9 years and for women 23,9 years. Japan is third after Denmark and France. Japanese demographics French demographics  Half of babies born after 2007 will reach 100 hundred years or Baby boomers reach retirement age.  French Life expectancy is the second highest in the world after Japan (Men 77, Women 84,5).  In spite of the highest fertility rate in Europe population is ageing. Like in Japan baby boomers reach retirement age.

9. Impact of longevity on the economy 9 Consequences  In the Euro Zone the ratio retired people/ working people will double in 2050: One retired people out of two working people.  Unsustainable burden for public finances: Increased burden on social protection schemes in particular PAYG; Without structural reform in the 50 years to come welfare state expenses could represent 95% of GDP.  Unsustainable burden for people: Old age dependency Long Term care expenses are dramatically growing: in France more than 3000 € per month for a heavily dependent.  In France, women are more exposed to old age (75% of dependent people). Without structural reform old age dependency Long Term care expenses will be unsustainable for public finances.

10. Impact of longevity on the economy – Capturing the economic opportunity A study conducted in early 2011 by the Economist Intelligence Unit and sponsored by AXA shows that:  Business is largely optimistic about longevity’s business impact  Growth opportunities are expected for healthcare and pharmaceuticals, leisure and tourism, and financial services industries  Small and mid-size businesses seem more responsive than larger ones. In Japan and South Korea, ageing is a driver of innovation and economic growth  A fund of 1bn€ dedicated to innovations for “senior people, health, well-being and prevention” was set up in Japan  Japanese companies have developed their strategy towards senior people through: Technological innovation Universal design to create simple and easy to use products  In South Korea, public policies have been implemented to inform and incentive companies to take into account demographic ageing in their strategy and in their product development. 10

11. Impact of longevity within companies – Facing the workforce challenge  Ageing creates workforce tensions in hotel & restaurant businesses, building, personal services. At sector level  Societies and companies will have to maintain opportunities for employment of 65+ years old, implying: Continuous training through the work life to improve senior people’s productivity and employability Adapted incentives and work organization to retain the most senior employees (transfer of knowledge and know-how while acknowledging potentially reduced productivity) Investments of companies to favor prevention and maintain the autonomy of their employees. At company level  Public policies will have to be implemented to incentive companies to invest into the training of senior people and to encourage innovations related to population ageing. At public policy level Challenges :  Insure the sustainability of social security systems  Delay cognitive decline to reduce expenditures on long-term care 11

12. Impact of longevity on insurance companies – Key players to contribute to economic growth  Insurance companies have the expertise to manage long term risks and offer long term care products, which leverage two main drivers of protection techniques: Mutualization Time factor.  The development of long term care coverage would have several benefits for the economy: Reduce public expenditures in an environment of high public deficits Enable populations to face the cost of long term care Accelerate the expansion of personal services, stimulating employment Provide a new source to finance the economy through long term care reserves.  As regards to retirement activities, the role of insurance companies will depend in Europe on the final regulatory prudential framework Solvency II and on the on-going review of the European Directive on Institutions for Occupational and Retirement Pensions (IORP II). The increase in longevity creates a potentially unprecedented opportunity if companies succeed in adapting their offers and their management of the senior workforce and if structural reforms can be conducted to adapt the public policies to the new population age structure. 12

13. Longevity and ageing opportunity for growth  Ageing as a source of innovation;  Health, personal services;  Housing (domotic), Gérontechnologies, leisure… 13 Opportunity which impacts the whole Society  Impact on intergenerational solidarities;  One more healthy year life expectancy increases global revenue. Virtuous impact on working force  Jobs creation in the service industry: In France 1 million jobs;  Increase of training and prevention needs;  Seniors’ employment;  Mix of solutions based upon partial retirement/employment (Nordic countries). Positive impact on the whole Economy