prudential uganda - profile
TRANSCRIPT
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Prudential Africa : Introduction
September 2015
2
Executive summary
• US$750bn assets under management
• US$64bn market capitalisation
• US$54bn of gross written premiums in 2014
Continuity in
Business
Financial
Strength
Long Term
commitment
to Africa
• We have acquired three businesses in Africa:
− Express Life in December 2013, now Prudential Life Insurance Ghana
− Shield Assurance of Kenya in September 2014, now Prudential Life Assurance Kenya
− Goldstar Life of Uganda in June 2015, now Prudential Assurance Uganda
• We have invested heavily for decades to build the most successful life franchise in Asia and we are doing the same in Africa
We intend to continue to expand our footprint across the region
• 166 continuous years of financial service
• About 24 million insurance customers across the world
• Employs over 27,600 people
3
Agenda
Introduction to Prudential
Prudential in Africa
Uganda – Macroeconomics
Prudential Uganda – Offerings
Supporting our Communities
4
Growth
Capital
Overview166 year history of honouring claims
Prudential was
founded on 30 May
1848 in Hatton Garden,
London
1848 1998
Prudential
celebrates
150 years
of financial
service
1912
Prudential honoured claims for
over 300 lives lost in the tragedy
2013-151914–1945
Wartime
During World War I, Prudential paid
230,000 war claims. By the outbreak
World War II, Prudential had more
than 28 million policyholders
In total, Prudential paid over £10
million in claims during the two wars
Prudential
Corporation Asia
was formed to
develop existing
and new
businesses in Asia
1994
Prudential marks
its entry into
Africa with
acquisitions in
Ghana, Kenya
and Uganda
The ‘Man from the
Pru’, was launched
as an advertising
image to re-establish
the identity of the
agent in the post-war
world
1949
Paid out claims
worth c.$2m post
acquisition of
Shield Assurance
in Kenya
5
OverviewGeographic footprint
63%
37%
Prudential footprint % of GDP growth1, 2014-2019
Global growth $13.9 trillionPrudential 24m life customers
1 IMF World Economic Outlook – October 2014
Rest of World
Prudential footprint
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1. Amongst foreign insurers
2. Measured by FUM. Source: Investment Management Association, data as at end of December 2013
3. Data as of 31 December 2013
4. based on 9M 2013 sales (APE)
Exchange Rate used: 1£ = $1.6490 (as of 31 December 2013)
Leading global life insurance franchise Businesses across Asia, US, UK and Africa
Key Products• Regular premium
• Unit linked / A&H
• Single premium
• Variable Annuities
(VA)
• Single premium
• Participating /
Annuities
• Unit Trusts• Endowment
• Funeral plan
Distribution• 458,000 Agents
• Bancassurance• Broker Dealers
• Independent
Financial Advisors
(IFAs)
• Independent
Financial
Advisors (IFAs)
• ~800 Agents
• Brokers
• Mobile phones
Market
• Present in 13
countries
• 12.5m customers
• No. 1 insurer in 7
markets
• 4m customers
• No. 1 provider of
VA in the US
• 7m customers
• No. 1 Annuity
provider4
• No. 1 With-Profits
onshore bonds4
• 350,000 customers
• Second largest
retail fund manager
in the UK2
• Present in Ghana,
Kenya and Uganda
• Over 1m
customers
Life Reserves US$53bn US$177bn US$242bn • US$9m
External FUM3 US$30bn US$208bn
Asia US UK Africa
Prudential Africa
Holdings Limited
7
975
1,663
973
636
4,247
3,4253,264
1,0361,484 1,283
2,393 2,778
4,054
2006 2007 2008 2009 2010 2011 2012 2013 2014
Asia US UKIO M&G
Key financials Strategy to deliver “Growth and Cash”
1,278
804
1,877
2,376
5,246
4,150
3,321
4,864
1,749 1,9232,048
2,3783,002
2006 2007 2008 2009 2010 2011 2012 2013 2014
Asia US UKIO M&G
1,913
1,143
445
3,501
2,360
1,8821,4161,263
1,118
3,428
2,5292,949
2006 2007 2008 2009 2010 2011 2012 2013 2014
Asia US UK
New business profit1, US$m IFRS operating profit2, US$m
+15%+15%
CAGR CAGR
Underlying free surplus generation3, US$m
+19%
CAGR
29.6 31.1 32.7
41.5
48.1
55.360.8
28.2
39.3
2006 2007 2008 2009 2010 2011 2012 2013 2014
Dividend, cents/share
+10%
CAGR
1 Excluding Japan and Taiwan agency
2 In 2010, the Group amended the presentation of IFRS operating profit for its US insurance operations to remove the net equity hedge accounting effect (incorporating related amortisation of deferred acquisition costs) and include it in short-term fluctuations. The prior period comparatives for 2009 and
2008 have been amended accordingly. Excluding Taiwan agency
2008 – 2011 Comparatives adjusted for accounting policy improvements for deferred acquisition costs. The total IFRS operating profit before tax includes unallocated sum of $(936m)
3 Life and asset management businesses, net of new business strain. Excluding Taiwan business; 2006 figure not available.
UKIO stands for UK Insurance Operations
Exchange Rate used: US$1 = £0.6073 (2014 Avg)
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280%
258% 252% 248%
226% 222% 221%212%
183% 182% 182%174%
141%
Pru
den
tial
ZIG
ING
Man
ulif
eC
hin
a Li
fe
L&G
AXA
Aeg
onS
tand
ard
Life
Allianz
Avi
vaP
ing
An
Gen
eral
i
Financial strengthOne of the highest solvency ratios in the sector
1. Rating and financial strength as at 1st April 2014
2. Pertains to LT Senior debt
Source : Prudential Website; Company Q4 and Q3 Reports
S&P Moody’s Fitch
Credit Rating1
Prudential plc2 A+ A2 A
Financial Strength1
Prudential Assurance (UK)
AA Aa2 AA
Jackson National Life (US)
AA A1 AA
Solvency Ratio FY 2013
9
Market outperformance on shareholder returns
100
185198 199
290
434
100117 126
109
147
201
2009 2010 2011 2012 2013 2014
Prudential – value of £100 invested on 1 January 2009
International Insurers* – value of £100 invested on 1 January 2009
Total Shareholder’s Return (£)
Note: * International insurers (currently 18) are peers which are similar to Prudential in size, geographic footprint and products. The shareholder
returns are as on Jan 1 of the respective year
Source: Prudential Annual Report
10
Expertise in emerging marketsCreated an industry leading franchise in Asia
685
925
1,340
1,719
1,933 1,907
2,178
2,445
2,812
3,204
3,684
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
199
308 313 324
466
766
995
1,291
1,521 1,602
1,877
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Prudential Asia New Business Sales1,2,
US$m
Asia IFRS operating profit2,3, US$m
1. A measure of new business activity that is calculated as the sum of annualised regular premiums from new business plus 10 percent of single premiums on new business written during the period
2. Life and Eastspring Investments. Net of development costs. 2006 onwards, excludes Taiwan agency and Japan; Pre-2006, as reported
3. 2012 operating profit includes a one-off gain of US$84m arising on sale of Group’s interest in China Life Insurance Company of Taiwan
Exchange Rate used: US$1 = £0.6073 (2014 Avg)
+18%
CAGR
+25%
CAGR
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Note: APE based on 9M 2014. Market share data based on latest available information
1. Amongst foreign/JV players; 2. Amongst private players
Source: Based on formal (Competitors’ results release, local regulators & insurance associations) and informal (industry exchange) market share data
Market leading platform in AsiaLeader in Asia with wide footprint
India
China
Hong Kong
Thailand
Indonesia
Malaysia
Singapore
Korea
Vietnam Philippines
Taiwan
China: 5% of APE
Market Share: 12%1
Rank: 21
Vietnam: 3% of APE
Market Share: 25%
Rank: 1
India: 5% of APE
Market Share: 19%2
Rank: 12
Korea: 5% of APE
Market Share: 1%
Rank: 18
Thailand: 4% of APE
Market Share: 4%
Rank: 8
Indonesia: 17% of APE
Market Share: 27%
Rank: 1
Malaysia: 9% of APE
Market Share: 21%
Rank: 1
Singapore: 17% of APE
Market Share: 24%
Rank: 1
Philippines: 2% of APE
Market Share: 14%
Rank: 2
Hong Kong: 27% of APE
Market Share: 13%
Rank: 3
Cambodia: 0.1% of APE
Market Share: 68%
Rank: 1
Cambodia
Taiwan: 6% of APE
Market Share: 1%
Rank: 13
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Agenda
Introduction to Prudential
Prudential in Africa
Uganda – Macroeconomics
Prudential Uganda – Offerings
Supporting our Communities
13
Building the African business using the same long-term approach that worked in Asia
• Africa represents a significant long-term opportunity for developing life business– By 2100 over half the world’s population will be in Africa
– Middle class to grow by factor of 3 over next 20 years
– Working-age population set to double over next 30 years
• In December 2013 Prudential acquired a life business in Ghana – Small business, with strong local management team; Prudential Ghana already a top-10 business
• In September 2014 Prudential entered the Kenyan life insurance market
• In June 2015 Prudential entered the Ugandan Life market
with a 10 year agreement with a leading local bank
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Uganda becomes most recent Prudential Africa market June 2015
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Agenda
Introduction to Prudential
Prudential in Africa
Uganda – Macroeconomics
Prudential Uganda – Offerings
Supporting our Communities
16
Uganda well positioned for rapid growth of life industry
1 Source: IMF
* Rest of East Africa comprises of Burundi, Ethiopia, Eritrea, Rwanda, Tanzania and Kenya
• Uganda’s economic and demographic
environment well facilitate rapid growth
of life insurance
– Life insurance penetration level of about
0.1% presents a huge opportunity
– Growth prospects further fuelled by :
o Strong GDP growth forecasts (8.0%
CAGR for 2013-2018)1
o Young population, 59% are under the
age of 20
o Growing middle class and urban
population 0 2,000,000 4,000,000 6,000,000 8,000,000
0-4
05-09
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90+
Ag
e g
rou
p
Demographics, 2015
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Uganda among the least penetrated life markets…providing significant opportunities of growth
12.7%
5.4%
4.0%
2.1%
1.2%
0.5% 0.5% 0.3% 0.2% 0.1% 0.1% 0.1%
SouthAfrica
Namibia Mauritius Botswana Kenya Malawi Ghana Zambia Nigeria Tanzania Uganda Ethiopia
Global average 3.5%
Life insurance penetration in Africa, 2013
* Rest of East Africa comprises of Burundi, Ethiopia, Eritrea, Rwanda, Tanzania and Kenya
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Agenda
Introduction to Prudential
Prudential in Africa
Uganda – Macroeconomics
Prudential Uganda – Offerings
Supporting our Communities
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Prudential aims to serve the long-term financial needs of Ugandan people
• We provide protection and savings opportunities to our customers
• We are dedicated to developing innovative and affordable products that meet your
changing needs – whether that is saving for your children’s education or protecting your
loved ones against the financial effects of illness or bereavement
• With Prudential, you can be sure we will be there when you need us. We have been
honouring claims for over 166 years.
• Pru LifeSaver
• Pru LifePlus
o Endowment Assurance Plan
o Education Plan
• Pru CashBuilder
• Whole Life
• Prudential Uganda Group Plans
o Group Life (Disability, Critical Illness,
Funeral Expenses)
o Group Credit Life
o Group Life Extension to Group Personal
Accident
Group LifeIndividual Life
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Group LifeEmployer benefit scheme
• Features
– An employee benefit scheme wholly funded by the employer
– The plan provides payment in the event of death of an employee from both accidental and natural
causes whilst in service
• Benefits
– The benefit is expressed as a multiple of the annual salary, for example 3 times the employee’s
annual salary
• Add-on Benefits
– The following benefits can be added to the Group Life policy:
o Group Disability – compensates the staff member in the event of total and permanent disability
o Critical Illness – pays out benefit to the staff member in the event of contracting any of these critical illnesses for
the first time:
− Heart attack, cancer, stroke, kidney transplant (recipient)
o Funeral Expenses – provides funeral expenses on untimely death of the employee
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Group Life Extension to Group Personal Accident/Workers Comp.
• Features
– A Group Life plan offered to existing members of a Group Personal Accident
scheme to extend cover to include death from natural causes since Group
Personal Accident only covers either death or injury resulting from accidents.
– Just like Group Life, the plan is wholly funded by the employer
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Group Credit Life
• Features
– Product provides both death and total permanent disability cover to a borrower
– Policy is taken out by either a Bank or Microfinance Institution as collateral security
• Benefits
– We pay off the outstanding loan balance in the event of the borrower’s death or total permanent
disability
• Add-on Benefits
– Cover may be extended to cover defaults subject to agreed limits and premium rates
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Agenda
Introduction to Prudential
Prudential in Africa
Uganda – Macroeconomics
Prudential Uganda – Offerings
Supporting our Communities
24
CSR in AfricaCase Study: Prudential Scholarship Programme, Ghana
Objective
• Support low-income, but academically able students with an award enabling them to complete senior high school
Reach
• 500 Senior High School students over 5 years will be awarded scholarships. At least 300 of these will be awarded to girls
Execution
• Local NGO Plan Ghana will ensure adherence to agreed criteria
• Input sought from relevant local education administrators (Ghana Education Service) and industry bodies (Ghana’s National Association of Teachers)
• Prudential Ghana’s employees will be involved in mentoring the students to support their academic achievement
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CSR in AfricaCase Study: Prudential Actuarial Support System
Kwame Nkrumah University of Science and Technology, Ghana
University of Cape Coast, Ghana
Prudential Actuarial Support System (PASS)
Objective
• To promote development of actuarial capacity by rewarding excellence in actuarial science in Ghana
Reach
• The scheme will support the top 10 graduating students in Actuarial Science – 5 students at the Kwame Nkrumah University of Science and Technology and 5 students at Cape Coast University
Execution
• The scheme will commence in 2014, run for three years and then undergo a review process
• Each student will be awarded the Cedi equivalent of US$500 and the reimbursement of exam fees and study notes for two years after graduation
• Top students will also be offered apprenticeships at Prudential
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CSR in AfricaCase Study: Prudential Education Support System, Kenya
Objective
• Support 228 students over a five year period enabling them to complete their secondary school education
Reach
• Provide scholarships to 100 students in partnership with Kenya Education Fund
• Partner with Plan Kenya to also support 128 students with a scholarship programme
Execution
• Kenya Education Fund
– The scholarship will be for four years and will be split equally between girls/boys and Nomadic/non-Nomadic students
– Prudential Kenya’s employees will also be involved in mentoring the students to support their academic achievement
• Plan Kenya
– The scholarship split will be 60% girls and 40% boys, which mirrors our programme with Plan Ghana
Prudential’s Partners in Education Support
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Questions?