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2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver

Canadian Institute of Actuaries. L’Institut canadien des actuaires. 2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver. 2007 Annual Meeting Assemblée annuelle 2007. Life Pricing Hot Topics. Pardon the Interruption Disclaimer:

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2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver

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  1. Canadian Institute of Actuaries L’Institut canadien des actuaires 2007 Annual Meeting ●Assemblée annuelle 2007 Vancouver

  2. 2007 Annual Meeting Assemblée annuelle 2007 Life Pricing Hot Topics • Pardon the Interruption • Disclaimer: The views you are about to hear do not necessarily reflect the views of any company, and may just be put forth for the sake of generating discussion

  3. 2007 Annual Meeting Assemblée annuelle 2007 The Panel Mark Edwards, FSA, FCIA AVP and Pricing Actuary Individual Insurance – Life and Living Benefits Manulife Financial Robert Bhatia, FSA, FCIA AVP Life Pricing Transmerica Life Canada Steve Bocking, FSA, FCIA Associate Manager, Individual Life Great West Life

  4. 2007 Annual Meeting Assemblée annuelle 2007 LCOI Profitability • Opinion about own Company’s profitability! Source: 2006 Munich Re Pricing Survey

  5. 2007 Annual Meeting Assemblée annuelle 2007 Interest Rates • Coincidence? Source: 2006 Munich Re Pricing Survey

  6. 2007 Annual Meeting Assemblée annuelle 2007 Lapse Rates • 2007 LCOI Composite Rates Source: 2007 CIA Lapse Study

  7. 2007 Annual Meeting Assemblée annuelle 2007 Lapse Rates • 2003 vs. 2007 LCOI Lapses Source: 2007 CIA Lapse Study

  8. 2007 Annual Meeting Assemblée annuelle 2007 Limited Pay UL • How big is the market? • Will it just replace existing sales? • Is it profitable? • Do we have accurate experience?

  9. 2007 Annual Meeting Assemblée annuelle 2007 Term Prices MNS Age 40, $300,000, Term 10 Source: Transamerica Life Canada

  10. 2007 Annual Meeting Assemblée annuelle 2007 Term Prices R= ratio of renewal premium to initial premium S= ratio of renewal premium to newly underwritten attained age initial premium Source: Transamerica Life Canada

  11. 2007 Annual Meeting Assemblée annuelle 2007 T10 Lapses • What’s the real answer? Source: 2006 Munich Re Pricing Survey

  12. 2007 Annual Meeting Assemblée annuelle 2007 Is Term 20 Better? MNS Age 40, $300,000 Source: Transamerica Life Canada

  13. 2007 Annual Meeting Assemblée annuelle 2007 Quick Pay

  14. 2007 Annual Meeting Assemblée annuelle 2007 Conversions • Significant portion of 2006 new business sales: • Over 20% of UL Level COI sales • Nearly 15% overall UL sales • Are we encouraging through compensation?

  15. 2007 Annual Meeting Assemblée annuelle 2007 Reinsurance Ceded Where are we going next? Source: Various

  16. 2007 Annual Meeting Assemblée annuelle 2007 Consolidation

  17. 2007 Annual Meeting Assemblée annuelle 2007 Large Case Pricing • A lot money out there • What capacity is available, and is it enough? • Should prices move up or down? • Market conduct

  18. 2007 Annual Meeting Assemblée annuelle 2007 Conserving Business • YRT to Level COI Switches • Single to JLTD • JFTD to JLTD • T10 to T20 • Anything for my top advisors

  19. 2007 Annual Meeting Assemblée annuelle 2007 Odds Makers

  20. 2007 Annual Meeting Assemblée annuelle 2007 Banks in Insurance • Odds that banks will have no restrictions in selling insurance within 5 years? Within 10 years?

  21. 2007 Annual Meeting Assemblée annuelle 2007 Time to Place • Odds that the industry average time to place will be less than 20 days by 2010? 2015? Source: 2006 Munich Re Pricing Survey

  22. 2007 Annual Meeting Assemblée annuelle 2007 New Business Growth • Odds that in 2007: • Term grows by 6% • UL grows by 15% • Other Products grow by 3% • Overall grows by 10%

  23. 2007 Annual Meeting Assemblée annuelle 2007 Advisors • Odds that we may see a movement to levelized commissions in the next 5 years? 10 years?

  24. 2007 Annual Meeting Assemblée annuelle 2007 Exam System • Odds that the SOA will change the exam system within the next five years (AGAIN!)

  25. 2007 Annual Meeting Assemblée annuelle 2007 Acquisition • Odds of a major acquisition in the Canadian market within 5 years

  26. 2007 Annual Meeting Assemblée annuelle 2007 Toss Up!

  27. 2007 Annual Meeting Assemblée annuelle 2007 Preferred Products No Changes New Designs on their way OR Preferred?

  28. 2007 Annual Meeting Assemblée annuelle 2007 Foreign Travel Risky Proposition Much Ado About Nothing OR

  29. 2007 Annual Meeting Assemblée annuelle 2007 Combo Products Industry’s next product innovation All talk no action OR

  30. 2007 Annual Meeting Assemblée annuelle 2007 Audience Toss Up? Will they participate? Won’t they? OR

  31. 2007 Annual Meeting Assemblée annuelle 2007 Admin Systems Gateway to Information for Pricing Barrier to Information for Pricing OR

  32. 2007 Annual Meeting Assemblée annuelle 2007 Final Thoughts???

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