insurance conference june 2012

building a sustainable

financial services industry

Problem statement: Financial services facing a crisis of confidence

are we losing the battle of public opinion?

the regulatory response

an over-reaction?

the industry response

are we fuelling the fire?

How should we as an industry, respond?

Financial Services – A crisis of confidence

The financial crisis started 4 years ago

Have we learnt any lessons?How does the world perceive us?

Have we learnt any lessons?

building a sustainable

financial services industry

How does the world perceive us?

CEOs rolling in money and

stock options

there is

no place to hide

“Consumers are the only important group in the economy who are not effectively organised, whose views are often not heard.”

JFK, 1962

the regulatory response?

to name but a few…

the regulatory response?

to name but a few…

binder regulations

FSLGAB

SAM

TCFCPA

microinsurance FAIS regulations

re exams

FAIS regulations conflict of interest

we need to consider the intent:

eliminate conflicts of interestcreate greater transparencyensure enforceability provide financial securityensure professionalism

how many consumers understand who they are buying protection from

and who is getting paid for doing what?

regulatory response

an over-reaction?

regulatory response

an over-reaction?

•2011 economic losses to date are approaching USD400 billion while the average from 2004 to 2010 was USD89 billion.

•Global catastrophe losses in 2011 = $ 100bn.

•Lloyds net losses in 2011 = $ 20.5bn.

There will be no material impact on the Central Fund

RichardWard:CEOofLloyds

the industry response

how much of this promotes our

industry?

annual advertising spend

for short-term insurance is R1,5bn

the industry response

fuelling the fire?

Occupationalgroup

Currentemployment

Retirement Mortality Leaving theSector

Total ReplacementDemand

Newemployment

Total Positionsto fill

Managers 14 789 591 295 443 1 329 295 1 624

Professionals 26 672 800 533 3 200 4 533 2 133 6 666

Technicians andTrade Workers 1 872 56 37 224 317 74 391

Community andPersonal ServiceWorkers

342 0 6 10 16 13 29

Clerical andAdministrativeWorkers

45 249 904 904 2 262 4 070 2 262 6 332

Sales Workers 13 931 278 278 696 1 252 696 1 948

MachineryOperators and Drivers

267 5 5 13 23 10 33

ElementaryWorkers 1 024 20 20 51 91 40

131

Total 103 744 2 654 2 078 6 899 11 631 5 523 17 154

the industry response

War on talent

Not surprising the top two issues dominating CEOs’ time – regulation and talent!

the industry response

war on talent

"Mark and his signature hoodie: He's actually showing investors he doesn't care that much; he's going to be him," Michael Pachter, an analyst for Wedbush Securities, said in an interview on Bloomberg TV. "I think that's a mark of immaturity. I think that he has to realize he's bringing investors in as a new constituency right now, and I think he's got to show them the respect that they deserve because he's asking them for their money."

How do we, as an industry, respond?

Ours is a noble purpose

But do we do enough to protect our industry?

Our problem isnot unique

There are examples of

leadership

[Changepicturetosomethingmorerelevant]

We need to work with

all stakeholders

including the regulator

wrapping things up

conclusion

Ours is an industry in a state of transition

facing a crisis of confidencethe need to project a positive imagea collective responsibility requiring individual leadershipunited behind our noble purpose

so let’s be……..

proudly insurance