Robert A. Kerzner

President & CEO

LIMRA, LOMA & LL Global

August 17, 2017

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77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

▬ Premium

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates

Total U.S. Individual Life Sales

Policies (millions)

▬ Policies

Premium ($billions)

30yr T-Bill 14%

UL replacing

WL

Weak economy

Market conduct issues

S&P ↑ 20% per yr

Growth of LTG UL

Great recession

1st quarter 2017: +5% 1st Quarter 2017: -2%

Annualized premium CAGR: +1.62%

U.S. Individual Life Product Market Share

1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

VariableProducts

UniversalLife

Term

Whole Life

Annualized New Premium ($Billions)

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates

$3.0 $2.9 $3.1 $3.2 $3.2 $3.6

$3.9 $4.2

$4.4 $4.6 $5.1 $5.3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Whole life sales (Annualized Premium)

U.S. Whole Life sales have increased more than

80 percent since 2006

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates

Cash Accumulation Products

Increasing Market Share

24% 23% 17% 13% 15% 16% 20% 25% 22%

29% 34% 41% 46%

37% 28% 36% 40% 38% 36% 27%

29% 39% 34%

35%

36% 34%

38% 49% 47% 47% 47% 48% 53%

45% 39% 37%

29% 23% 20%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cash Accumulation Current Assumption/Other Lifetime Guarantee

UL Sales by Product Type

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates

Middle market owns the majority of permanent

life insurance policies

14.7%

28.3% 57%

Lower

Upper

Middle

Market share permanent life insurance policies by household income

Source: 2016 Facts of Life and Annuities, LIMRA

Fixed annuity sales surpass variable annuity sales in 2016

Source: LIMRA Secure Retirement Institute, U.S. Individual Annuities survey.

Do

llars

in

Bill

ion

s

Total U.S. Annuity Sales

$73 $109 $111

$82 $81 $72 $84 $96 $104 $117

$184

$156 $128

$141 $158 $147

$145 $140 $133 $105

$257 $265

$239 $222

$238 $220

$230 $236 $237 $222

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Variable Fixed

The last time fixed annuity sales surpassed VA sales was in 1992

Variable annuity sales have declined

42 percent since 2006

$111 $117 $129 $133 $137

$160

$184

$156

$128 $141

$158 $147 $145 $140 $133

$105 $93

$78

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *2017 *2018

Source: LIMRA Secure Retirement Institute, U.S. Individual Annuities survey.

Do

llars

in

Bill

ion

s

Annual Variable Annuity Sales

Variable annuity sales decline to lowest levels since 1998

Sales Projections for 2017 and 2018

Source: LIMRA Secure Retirement Institute Analysis

Overall annuity sales will drop 10-15%

in 2017 and 2018

Source: 2016 Life Insurance Ownership in Focus - Households

The US life insurance ownership remains at its

lowest level

46%

54%

53%

52% 52% 49%

46%

[VALUE]+

[VALUE]+

62%

55%

50% 50%

44% 44%

83% 83% 81%

78% 76%

78%

70% 70%

30%

40%

50%

60%

70%

80%

90%

100%

1960 1976 1984 1992 1998 2004 2010 2016

Perc

ent

Ow

nin

g L

ife Insura

nce

*Includes Individual, Group, SGLI & VGLI + Individual Life Sold Face-to-Face through an Agent

Owns Group Life Owns Individual Life Owns Any Life*

60 million U.S. households need more

life insurance…

Source: 2016 Life Insurance Ownership in Focus - Households

*Based on LIMRA Life Insurance Needs Model analysis

If it was easier – would they buy?

6 in 10 US households would experience a negative

financial impact quickly if the primary-wager-earner died

15%

23%

13%

8%

4%

12%

25%

Oneweek

Onemonth

Sixmonths

One year Twoyears

Five ormore

Don'tknow

How quickly consumers would feel the financial impact from the loss of the primary wage earner.

59%

Source: 2016 Insurance Barometer Study, LIMRA and Life Happens

13

Individual life insurance

ownership by ethnicity

36%

47%

63%

52%

44%

Hispanic ChineseAmerican

AsianIndian

AfricanAmerican

U.S.Population

(Percent of households)

Household income of $25,000 or greater

Source: 2016 Life Insurance Ownership in Focus - Households

Consumers understand the value of life insurance

Millennials

(18-35)

Gen X

(36-51)

Boomer

(52-64)

Senior

(65+)

Most people need life insurance 88% 88% 83% 82%

I personally need life insurance 78% 77% 63% 50%

I own life insurance 51% 62% 67% 65%

I own group life insurance obtained

through an employer or labor

union.

68% 64% 53% 31%

I own individual life insurance that

was individually purchased, and

was not received as a benefit of

employment.

55% 65% 76% 84%

Source: 2016 U.S. Life Insurance Ownership Study, LIMRA

What people say and do are entirely different things…

U.S. households that say they need more life insurance

U.S. households that say they will purchase life insurance

with the next 12 months

U.S. households that actually buy life insurance

50%

25%

10%

Source: U.S. Life Insurance Ownership Studies, LIMRA

U.S. households that say they need more life insurance

U.S. households that say they will purchase life insurance

with the next 12 months

U.S. households that actually buy life insurance

41%

45%

10%

2010 2016

18,700,000 New LIMRA/Maddock Douglas study finds

PEOPLE ARE “STUCK SHOPPERS”

56% 49% 42%

Millennials

Married With Kids

Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014

4 in 10 Millennials still want to buy face-to-face

Most Preferred Way to Purchase Life Insurance by Age

Age Group

Total Millennials Gen X Boomers Seniors

In person (outside of the workplace)

through a financial advisor or agent 51% 42% 47% 55% 73%

Complete an online form 21 22 24 22 11

Through my workplace 11 15 14 7 3

Complete application (offline) and email it

to an insurance company/professional 6 10 6 5 3

Complete an application and mail it to an

insurance company/professional 6 4 5 8 8

Over the phone 5 7 4 3 2

Source: 2016 Insurance Barometer Study

Almost half of millennials say that they don’t buy life insurance

because they haven’t been approached by a life insurance agent.

Source: U.S. Life Insurance Ownership Study (2016), LIMRA

256,735

144,600

1973 1975 1981 1983 1986 1989 1991 1993 1996 1998 2001 2004 2007 2010 2013

Sources: NOT constant groups of companies, Census of U.S. Sales Personnel, LIMRA [1973-2010]

U.S. Insurance Sales Professions, LIMRA [2013 Agency-building and home service combined]

The number of affiliated agents has declined more than 40 percent

34

30 29

28 26

34

37 39

41

44

0

5

10

15

20

25

30

35

40

45

50

0

100

200

300

400

2000 2010 2015 2020 2030

U.S. population (millions) Recruits (000) actual and projected Recruits (000) needed to keep up with population growth

The Recruiting Gap

• U.S. Census Bureau and LIMRA’s U.S Recruiting Trends

Betterment now

offering human advice

with its robo

84% 82% 77% 71%

16% 18% 23% 29%

1998 2004 2010 2016

Buyers are adapting to direct-to-consumer life insurance initiatives

Face-to-Face Direct Channels

Source: 2016 U.S. Life Insurance Ownership Study, LIMRA

More consumers buying directly from insurers

Majority of Americans want to use technology in addition to a human advisor for financial guidance

54%

33%

11%

2%

A human relationship coupled withtechnology is ideal

Requires a human relationship

Can be fully automated (e.g. basedon client demographics, lifestage,

etc.)

Other

Source: Northwestern Mutual's 2016 Planning & Progress Study

25

Emerging wealthy and high-net-worth investors

prefer “hybrid” investment advice (a combination of traditional advisory services and low-cost digital tools)

More satisfied More likely to seek help

Source: Insight: New Face of Wealth Management, Accenture

Schwab combines robo with humans to

create hybrid advice model

With a $25,000 minimum, Schwab Intelligent Advisory will provide

clients a customized financial plan and ongoing live advice from

certified financial planners.

Source: Investment News, Dec. 13, 2016

Raymond James to put

“Connected Advisor” robo

in advisers' hands

Connected Advisor is focused on three key areas: • Greater automation to help advisors more efficiently manage their businesses

and their clients’ basic investment management requirements so they can spend more time on building relationships and more fully understanding client needs.

• Increased collaboration through tools that support online communication and information sharing between advisors and their clients.

• Enhanced sophistication of proactive financial solutions through the use of big

data to provide advisors with insights into their practices and their clients’ needs.

Source: Raymond James Press Release, Jan. 30, 2017

and

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“Consumers without significant

wealth currently find it more

difficult to access advice or

support to meet their needs.”

- excerpt from final report

The middle market was left behind

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Regrets?

Tracey McDermott

Acting Chief Executive

Financial Conduct Authority

“The Financial Conduct Authority is

examining the possibility that commission

payments be allowed once again for

certain investment or pension products.”

Source: “Financial Conduct Authority considering return of commission payments,”

Financial Times, January 9, 2016

Historical Interest Rate Trend

1.00%

3.00%

5.00%

7.00%

9.00%

11.00%

13.00%

15.00%

17.00%

1790 1805 1820 1835 1850 1865 1880 1895 1910 1925 1940 1955 1970 1985 2000 2015

Interest rates represent 10-year Treasury rates beginning in 1962 and a proxy for prior years.

Sources: Federal Reserve Bank of St. Louis, Bloomberg and Arbor Research

1791

Fed gov't

assumes

states’ debt

1842

8 of 26 states

default on debt

Civil

War

1918

End

of WWI

Depression

1945 End of WWII

1971

U.S.

abandons

gold

standard

1981

Volcker

rate hikes

2008

Great

Recession

begins

2016

1919

Spanish flu

epidemic

Sept. 11,

2001

Rise of the Consumer Improving customer experience

across the enterprise

Uber

AirBnB

Upwork

Task Rabbit

threadUP

Peerby

Millennials Drive the Sharing Economy

Rather than buy, Millennials share

Carpooling? Need a designated driver? Borrowing a friend’s car?

Get insurance

only for the time

you need it!

86% CEOs who believe technology will completely

reshape competition in the industry or have a

significant impact over the next five years.

Source: PwC's 20th CEO Survey

Insurance companies using Amazon’s Echo to

connect consumers with agents

Builds engagement

Identifies cross-selling

opportunities

Generates referrals from

friends and family

Transamerica launches

voice ID for their help lines

“Implementing Voice Pass allows our

customers to communicate with us more

easily, and with added security…to

enrich the overall customer experience.”

Agents engaging with their clients via social media

Top reason

consumers shop for

life insurance

41%

cite life event

Source: LIMRA 2011 Buyer Nonbuyer Study

“$1 million in coverage approved within 15 minutes…”

In partnership with Generation Life (a 50-year-old insurance company

that was recently acquired by Swiss Re), Quilt is targeting under-insured

population of millennials can have the coverage they need.

Ladder sold $100 million in coverage in first 100 days*.

*only available in California

“We’ve found that the faster

we get a quote in front of

someone, the more likely

they are to buy.” - Jamie Hale, Ladder CEO

Source: Nearly 40% of adults don’t have life insurance — these startups are trying to change that,

MarketWatch, July 3, 2017

60% of its applications occur outside normal

business hours

Fabric – a new online platform offering

accidental life insurance

Policyholders can ‘upgrade’ to a 20-year Term

Life policy, issued by Vantis Life

Companies selling on the app include: American General, Assurity Life, Banner

Life, Mutual of Omaha, Principal Financial, Prudential Financial, Protective Life,

Sagicor Financial and SBLI

Tomorrow Ideas App offers

wills, trusts, and life

insurance in all 50 states.

“We've created an easy-to-use

phone app that lets people do

[insurance and estate planning]

together.”

- Dave Hanley, Tomorrow Ideas president/co-founder

Lapetus introduces facial recognition into underwriting

7 in 10 consumers say they would buy a simplified life insurance product

10%

18%

51%

21%

Very unlikely

Somewhat unlikely

Somewhat likely

Very likely

Likely to buy life insurance priced without a physical exam

Source: 2017 Barometer Study, LIMRA and Life Happens

72%

Why consumers are interested in buying a product with simplified underwriting

45%

64%

64%

66%

67%

71%

It avoids the need for a face-to-faceconversation

It avoids the need to see a doctor

It avoids the need for a medical exam

It is unbiased and objective

It provides transparent explanations of riskclassification and product pricing

It is fast and easy

Benefits of simplified underwriting: Appeal to consumers

Consumers who felt the benefit was extremely or very appealing

Source: 2017 Barometer Study, LIMRA and Life Happens

Launched in 2015 ─ $5 million in sales

Projected $30 million in 2016

Expanded to 33 states in 2016

Up to $1 million term life insurance coverage through

online application with competitive pricing and no medical

exam for a majority of people under 40.

“Most people overestimate the change that will

occur in two years and underestimate the change

that will occur in 10 years.”

Source: The Road Ahead, 1996

- Bill Gates, 1996