This document summarizes EY's activities and solutions for insurers focusing on emerging consumers. It provides an overview of the insurance market in emerging economies, noting high growth rates but low penetration compared to developed markets. It also outlines common challenges for insuring low-income customers like inconsistent cash flows and a lack of understanding of insurance concepts. The document discusses solutions insurers are adopting around product design, distribution, affordability, and awareness. It emphasizes the importance of factors like operating models, governance, culture and skills for effectively serving emerging consumers. Finally, it provides examples of EY's customized solutions and credentials working with insurers in these markets.

1. EY activities and solutions
for insurers focusing on the
emerging consumers
February 2014

2. Page 2
Section one
Market overview
EY activities and solutions for insurers focusing on the emerging consumers

3. Page 3
4%
-0.50% -11.10% -5.60% -3.80%
10.70%
-8.20%
6.30% 7.30%
10.40%
18.60%
10.60%
17.90%
25.10%
8.18%
11.27%
8.92%
6.74%
9.57%
2.96% 3.96%
1.77%
4.80%
1.98% 1.40% 1.42% 0.68%
3.05%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Growth in GWP, penetration and density
Growth Penetration Density
Overview: insurance sector in emerging
markets
Density (USD)
GWP growth and
penetration (%)
► The growth in total premiums is dominated by emerging markets, such as China, India, Indonesia, Malaysia, UAE, Philippines,
Vietnam, Nigeria, Kenya when compared to developed markets in the West – most of which have shown negative growth
► However, if we compare the insurance penetration or density it is extremely low compared to the developed markets
► This highlights the potential of focusing on under-penetrated customer segments in these high-growth economies for global
insurers
Source: “World insurance in 2012," Swiss Re Sigma
(1) GWP growth – change in total insurance premium change in 2012 vs. 2011 – nominal; penetration – total premiums as % of GDP in 2012; density – total
premiums per capita in USD in 2012
Sample of emerging markets
(1) India has been an exception and shown a de-growth in FY12 on the back of regulatory changes and other macroeconomic factors
EY activities and solutions for insurers focusing on the emerging consumers

4. Page 4
Conventional insurance vs. insurance for
low-income segment
Upper middle
class and above
Global middle class
Emerging consumer
(low-income sector)
Below poverty line (BPL) segment
USD 2 – USD 9 per
day
Less than
USD 2
per day
USD 10 – USD 100
per day
Income-based customer segment pyramid
Source: EY Analysis
Conventional
insurance target
segment
Low-income
insurance
Social/Government
sponsored insurance
Conventional insurance Insurance for low income segment
Target customer segment ► Urban/Educated/Mid to high income ► Rural, semi-urban, low income
Products ► Apart from conventional pure-risk products,
unit-linked products, pension products
► Motor/health insurance – non-life
► Typically higher ticket-size products
► Credit life/term insurance/critical
illness/personal accident
► Cattle/weather insurance – non-life
► Low ticket size products
Distribution ► Agents, banks, brokers, online sales ► Usually works on third-party partnerships
(e.g., MFIs) or direct sale (e.g., mobile
sales)
► Typically the same insurance company
focuses on the various customer segments
► Conventional insurance – Usually targeted
at the mid to high income customers,
educated and living in urban centers
► Microinsurance – Targeted at the emerging
consumers or low-income consumers living in
rural/semi-urban areas
► Social/Government sponsored insurance
– Government subsidized insurance for the
below poverty line (BPL) segment
USD 100 and
above per day
EY activities and solutions for insurers focusing on the emerging consumers

5. Page 5
Insurance services for low-income customers
need to overcome multiple common challenges
Common challenges faced by the emerging consumer
Inconsistent cash
flows
Dependence on
single source of
income
Mobile segment
Unaware of
concept of
insurance
Lack of trust
Lack of consistent monthly cash
flows; require flexibility in premium
payment options
Customers are mobile for
employment and need servicing/
claim payments across the country
Customers may not completely
understand the concept of risk
pooling and the advantages it offers.
Lack of trust in private institutions for
buying an intangible product like
insurance
Dependence on the single bread-
earner; may not be able to afford
large premium payments
Improving awareness
about insurance
Make insurance
accessible
Guiding pillars for success in this market:
► Educate customers
► Drive awareness about
insurance
► Explain/showcase benefits
Make insurance
affordable
► Appropriately priced
► Simple products with clear value
► Flexibility in payment options
► Trustworthy distribution channels
► Portability in purchase/servicing
EY activities and solutions for insurers focusing on the emerging consumers
Dependence
on single
source of
income
Mobile
segment
Unaware of
insurance
concept
Lack of
trust
Inconsistent
cash flows
Common
challenges

6. Page 6
Insurers are increasingly focusing on drivers
across the three guiding pillars
Making insurance accessible
Use of mobile as a distribution channel
► Significant increase in the use of the
mobile phone to sell simple, retail life
and health benefit policies to low-
income customers in Africa.
► Embedded insurance – insurance
offered as a “value-add” along with
telecom subscriptions as a loyalty
program.
Alternate distribution channels
► Retailers, churches and other
distribution channels considered
trustworthy by customers are being
leveraged by insurers
Convenience of paying premium
► Ease of payments by tying up with utility
companies to pay insurance premium
through existing bill payments.
Low cost outsourced servicing models
► Outsourcing new business processing/
customer servicing/claims management
to third-party intermediaries.
Making insurance affordable
Working with local partners for
distribution and back-office
processing
► Globally, insurers have started to
partner with third-party
intermediaries to reduce their overall
operating model expenses.
► This has cut down on overall
operating expenses and has helped
in reducing the premium.
Technology backed models
► Technology-backed distribution
models have helped in reducing the
cost of distribution and processing,
thus allowing for affordable
products.
► Technology has helped in improving
quality of data for analysis, which
has helped in reducing reinsurance
premiums and led to more
affordable products
Improving awareness
Educative multimedia materials
► Regulators in various countries have
developed social marketing/educative
materials, such as movies,
information leaflets, radio messages
which are disseminated via various
partner organizations.
Use of technology in transmission of
information
► Continuous transmission of
information related to product (e.g.,
life insurance cover) to the customer
via SMS
► Products sold via the mobile phone
offer USSD short-codes to receive
and convey information related to the
policy, for example, update on cover,
making a claim, etc.
Dedicated microinsurance awareness
programs by the regulators
► Regulators in Ghana and the
Philippines have started dedicated
microinsurance-focused programs.
EY activities and solutions for insurers focusing on the emerging consumers

7. Page 7
Insurers need to focus on various aspects to effectively
serve the low-income customer segment
“External” drivers
Product
Distribution
Customer
servicing
Marketing/
Promotion
“Internal” drivers
Standardized
processes
Focused risk
management
Robust
governance
“Core” drivers
Operating
model and
organizational
strategy
Performance
management
and leadership
focus
Skills
Mindset and
culture
The emerging
consumer/
low-income
consumer
► Insurers need to focus on various drivers in order to effectively serve low-income customer segment.
► External drivers – Relating to product aspects, distribution, marketing/promotion, awareness generation (essentially all aspects
related to direct customer interactions)
► Internal drivers – Ensuring standardization of processes, focused risk management, supported by a robust governance structure
► Core drivers – This includes core corporate drivers, such as leadership and management which is supported by the operating
model and performance management structure. The main driver of innovation and change is the culture and mindset.
Insurance company
EY activities and solutions for insurers focusing on the emerging consumers

8. Page 8
Key challenges and focus areas for
supporting activities
Focus areas
Missing growth
opportunity
Risk
management and
internal controls
Process
standardization
Steer business by
performance
management
Corporate
culture/mindset
Identify investment
opportunities in
rapid-growth
markets
► Organization structure does not support the governance requirements
► Internal governance does not support local requirements and business needs
► Lack of standardization in processes and integrated IT solutions
► Presence of core process design and process differentiation in channels
and segments
► Identification of value drivers and elimination of “not value adding” activities
► Identification of issues and problem solving at an early stage
► Living a performance management cascade supported by a defined structure and
operational KPIs
► Resistance to change in cultural mindset required for operating in a nimble and
ever-changing environment
► Leadership and role modeling
Developing a strong
governance and
risk management
framework
Transforming
existing
businesses to
create sustainable
growth
► Limitations and low experience to evaluate opportunities and risks in rapid-growth
markets
► Lack of local knowledge to operationalize investments and market potential in
rapid-growth markets
A
B
C
Skill development
► Secure quality and customer focus in the defined business segment
► Skill building and knowledge sharing not in place
► Lack of flexibility in workforce management
Governance
structure
► Risk management is underdeveloped or does not focus on the key risks
► Critical internal controls are absent leading to fraud increasing cost of operations
EY activities and solutions for insurers focusing on the emerging consumers

9. Page 9
Section two
EY services and solutions

10. Page 10
Waves of change: the shifting insurance
landscape in rapid-growth markets
EY activities and solutions for insurers focusing on the emerging consumers
► This publication focuses on the risks and opportunities across 21
rapid-growth markets, highlighting the global rebalancing taking place
across the world, as once flourishing BRIC economies expand at a
slower pace than many RGMs. It weighs the opportunities against the
risks of doing business in individual economies, and the analysis
reflects a variety of indicators and forecasts
► Key elements of the report:
► A matrix that ranks opportunities and risks in 21 RGMs on the
basis of market opportunities, risk and volatility
► An analysis of the key opportunities arising across RGMs
► The regulatory trend affecting insurance in RGMs
► An evaluation of key risks that can affect insurance markets
across these markets
► As a result, we believe that insurance executives must regularly
evaluate and refresh their strategies to identify which international
markets are most likely to offer the best prospects for focus and
investment.

11. Page 11
The market maturity for insurance business in emerging
markets is developing, and investors are seeking for new
growth potential
Composite index: 33.3% weighted regulatory risk rating+33.3% weighted ease of doing business rank +33.3% corruption
perceptions index; countries with GDP per capita $500-$10.000; color-coded
Composite index: 50% weighted GDP per capita and 50% weighted
insurance penetration rate; color-coded
Which future market entries
are you are considering?
Heatmap insurance penetration – EM
Heatmap business environment – EM
EY activities and solutions for insurers focusing on the emerging consumers

12. Page 12
Operational excellence for insurers focusing on emerging
consumers: one of the potential solutions for insurers in this
market segment
EY activities and solutions for insurers focusing on the emerging consumers
► As initial marketing activity an EY publication has been developed
in close cooperation with LeapFrog Investments, a leading private
equity investor in this market segment globally
► Key highlights of the report:
► Today’s low-income customer (earning USD 2 – USD 10 per
day) is tomorrow’s middle class.
► This global middle class will fuel growth over the coming years.
► Insurance is a critical enabling tool for this segment.
► However, global insurers need to target this segment differently.
► Operational focus can provide robust returns for investors.
► A differentiated operational strategy backed by a dedicated
organization, skilled manpower and robust performance
management systems is critical for success; hence the
importance of “operational excellence”.

13. Page 13
EY has developed customized solutions for clients active in
the market segment of insurance for emerging consumers
Market entry/transaction
Business
transformation/performance
improvement
Risk management and
governance
A B C
► Many insurers/investors are
evaluating investment
opportunities in new markets
► e.g., Prudential (UK) has
recently bought LeapFrog’s
stake in Express Life in Ghana
► Sanlam and Old Mutual
looking to expand in Africa
► Business transformation/performance
improvement for existing players
► e.g., insurers in Africa are
identifying new distribution
channels, such as mobile
► Insurers focusing on new
distribution partnerships, leveraging
IT in processes and revamping
organizational strategies
► Risk management and governance
are critical topics for
insurers/investors in this market
► e.g., focusing on building a
robust governance structure
► Regular process audits to
evaluate risks and performance
► Build a strong internal controls
framework
Currentmarketactivities
andneeds
► Commercial analysis with focus on
customer and market, regulatory
environment and infrastructure
► Due diligence support with
additional focus on operational, IT
and risk issues
► Integration and setup support with
focus on local implementation of
global policies and regulatory
requirements
CustomizedEYsolutions
► Operational excellence approach
to support business transformation
activities
► Bancassurance as integrated
financial inclusion approach (in
development)
► Customer conversion and
segmentation (in development)
► Integrated controls framework for
small business insurers
► Performance management
structure to steer business and
support internal and external
governance
EY activities and solutions for insurers focusing on the emerging consumers

14. Page 14
Section three
EY: your advisor in the emerging markets

15. Page 15
EY globally has the leading insurance consulting practice
with global reach and strong emerging market focus
Access to a global EY
network of 175,000
employees across 700+
offices in more than 150
countries
Experiences of 9,700
seasoned insurance
professionals globally in one
of EY´s largest sectors
Global availability and deep
knowledge regarding
insurance-related regulatory
requirements and changes
EY has established an
Emerging Markets Center that
connects clients quickly and
effectively to the world’s fastest-
growing economies
EY structure that supports cross-
border approaches, by our
leading and highly integrated
global organization.
EY activities and solutions for insurers focusing on the emerging consumers
Your value add
Kennedy Consulting Research & Advisory has
recently named EY as the leading provider of
insurance consulting services globally

16. Page 16
Our experience shows that it is critical to be
global, yet local ...
Local experts
Global special
matter experts
Emerging market
insurance experts
► Specialist in insurance
business in emerging markets
► Best practice sharing
regarding solutions in other
markets
► Expert in specific topics, such
as transformation, risk
management
► Using knowledge, information
and experiences from the
global EY network
► Cultural fit with language
skills
► Understanding of the local
specifics:
► Market
► Culture
► Infrastructure
► Regulation
► Direct access to local
information
► Usage of existing network of
local EY practice
Cross-disciplinary and cross-border staffing will strengthen the
knowledge and leverage the best benefit for our clients
EY activities and solutions for insurers focusing on the emerging consumers

17. Page 17
Overview of selected credentials
LeapFrog Investments’ stake
acquisition in Mahindra brokers
(India)
► Provided support in identifying
the investment, due diligence
and closing the transaction
Operational restructuring
support of Express Life
(Ghana)/Leap Frog
► Operational restructuring
based on operational
excellence approach to
support sustainable growth
Market analysis and full due
diligence for top 5 global
insurance player (Columbia)
► Provided advice in market
entry strategy and full DD
(CDD, ODD,IT DD, FDD)
Implementation of the
Rashtriya Swasthya Bima
Yojana in India
► Provided technical assistance
to GIZ in developing the
world’s largest micro-health
insurance program in India
Financial due diligence for Old
Mutual (South Africa)
► Provided financial due
diligence services to Old
Mutual on a Nigerian target in
a similar industry
Restructuing of National Credit
Fund for women in India
► Development of new operating
strategy to increase scale
Strong relationships with
the local, regional and global
regulators
Trusted advisor on M&A,
transaction support, complex
restructuring programmes and risk
management
Cross disciplinary staffing with
global experts and local support
Significant experience and
capability across all continents
(LatAm, EMEIA, Asia-Pac)
EY methodology and tools can
provide an accelerated project
success
1
3
2
4
5
Investment strategy/
transaction support
Business transformation
Roll out of the internal control
approach for HDFC ERGO
(India)
► Supported in development and
implementation of the
approach covering all value
chain components, entity level
controls (ELC) and IT general
controls (ITGC)
Implementation of internal
control approach for First
Takaful Insurance (Kuwait)
► Implementation of internal
control approach, including
ELC and ITGC. Update of
processes documents based
on revised controls
Implementation of internal
control approach for Gulf
Takaful Insurance (Kuwait)
► Implementation of internal
control approach, including
ELC and ITGC. Update of
processes documents based
on revised controls
Internal control
small business
EY activities and solutions for insurers focusing on the emerging consumers

18. Page 18
Contact our Special Matter professionals
Dr. Andreas Freiling
EMEIA Insurance Leader
Tel: +49 6196 996 12587
Email: andreas.freiling@de.ey.com
Jan-Erik Behrens
EMEIA FSO – Transaction Advisory Services
Mobile: +49 160 939 29804
Email: jan-erik.behrens@de.ey.com
Focus areas:
► Operational Transaction Services
► Business Transformation/Operational Excellence
► Transaction Strategy
Rohan Sachdev
Insurance – Performance Improvement (India)
Mobile: +91 99207 76259
Email: rohan.sachdev@in.ey.com
Focus areas:
► Insurance performance improvement
► Insurance for emerging consumers
Martin Gehringer
Insurance – Assurance (Germany)
Tel: +49 6196 996 12427
Email: martin.gehringer@de.ey.com
Focus areas:
► Internal controls with focus on emerging markets
in Eastern Europe and India
► Audit of insurance companies
► Insurance regulation
Prajeesh Mukundan
Insurance – Risk Advisory (India)
Mobile: +91 8879 070509
Email: prajeesh.mukundan@in.ey.com
Focus areas:
► Internal control advisory with special focus on medium and
small insurance companies
► Internal audit of insurance companies
► Risk management for insurance companies
EY activities and solutions for insurers focusing on the emerging consumers

19. EY | Assurance | Tax | Transactions | Advisory
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About EY’s Advisory Services
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© 2014 EYGM Limited.
All rights reserved.
EYG no. EG0175
1402-1203412 NY
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This material has been prepared for general informational purposes only and is not
intended to be relied upon as accounting, tax, or other professional advice. Please refer
to your advisors for specific advice.