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Insurance Financial Planning Retirement Investments Wealth

Investor Analyst

Presentation

Margaret Dawes

2nd October 2014

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

Our geographic footprint

countries we are in

indirect presence via

associate companies

SEM’s Direct Africa Interests

Company Group % Holding

Botswana BIHL 60%

Namibia SNH 54%

Nigeria FBNI 35%

Ghana EL 49%

ET 40%

Kenya PAIHL 56%

Uganda SLU 100%

Niko General 49%

Tanzania Aflife TZ 64%

Niko TZ 33%

Zambia Aflife Z 70%

Nico Z 49%

Malawi Nico Holdings 25%

Nico Life 49%

Nico General 49%

Rwanda Soras Group 63%

Product and geographic diversification

2007

2014 Country

Life

Assurance

Short-term

Insurance

Asset

Management Credit/Banking Other*

Botswana ● ● ● ● ●

Burundi ● ●

Ghana ● ●

Kenya ● ●

Malawi ● ● ● ●

Mozambique ●

Namibia ● ● ● ● ●

Nigeria ● ●

Rwanda ● ● ●

Tanzania ● ●

The Gambia ●

Uganda ● ● ●

Zambia ● ● ● ●

Country Life

Assurance

Short-term

Insurance

Asset

Management Other*

Botswana ● ● ●

Zambia ● ● ●

Kenya ● ●

Ghana ●

Tanzania ●

India ●

● Indirect presence via associate company

Other*= consists of medical, funeral services, employee, benefits etc.

Africa’s share of SEM’s contributions (June 2014)

30%

22% 10%

34%

4%

OPBTM

Botswana

Namibia

Rest of Africa

India

Malaysia

41%

23%

35%

1% 0%

VNB

Botswana

Namibia

Rest of Africa

India

Malaysia

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

⧁ Embrace local partnerships (management, board and shareholders)

⧁ Follow a holistic country approach

⧁ Flexible approach to shareholding and branding

⧁ Value-adding centre

⧁ Subscribes to strong governance, values and ethics

⧁ Client-centric

⧁ Passionate people who believe in what they do

⧁ Keep it simple and focus on implementation

⧁ Support skills development of local teams

Our business philosophy

Product offering - Life

Risk Savings

PRODUCT/

Death

Fu

nera

l

Dis

ab

ilit

y

Dre

ad

Dis

ease

WO

P D

eath

WO

P D

isab

ilit

y

Accid

en

t

Ho

sp

ital

PH

I

Retr

en

ch

men

t

Med

ical

Reti

rem

en

t

Ed

ucati

on

An

nu

ity

Cre

dit

Lif

e

Gro

up

COUNTRY

Botswana X X X X X X X X X X X X X X

Ghana X X X X X X X X X X X X X

Kenya X X X X X X X X X X X X X X

Malawi X X X X X X X X X X

Namibia X X X X X X X X X X X X X X X

Nigeria X X X X X X X X X

Rwanda X X X X X X X X X X X X

Tanzania X X X X X X X X X X X X

Uganda X X X X X X X X X X

Zambia X X X X X X X X X X X X X X

Ghana Nigeria Kenya Uganda Tanzania Zambia Malawi Botswana Namibia

Agents

Brokers

Banks

Funeral

Homes

SACCOS/ Affinity Groups

Telcos

Distribution channels

Country Agents

Ghana 930

Kenya 940

Tanzania 60

Zambia 680

Rwanda 60

Agency force - Life

Country Agents

Uganda 280

Malawi 160

Nigeria 1,200

Namibia 500

Botswana 580

Banking partners

Telco partners

Mateete

Rukiga

Heart

FM Nyakyera

Kashongi

Mshika

mano

Arusha

Teachers

Uwabi

Singida

Town

Council

Songea

Town

Mbinga

Kurugenzi

Mwauwasa Moro

Kisacos Mlandege

Mshikamano

Jumuiya

Kinole

Hai Rural

Teachers IUCO

Mugumu

Latcu

MUSSCO

Microloan

Foundation

Sukari

Meru

North

Chunna

Nahiho

SACCOS in

East Africa

Product offering - General

General Insurance

PRODUCT/

Mo

tor

Fir

e

Leg

al

Av

iato

in

COUNTRY Lia

bilit

y

Pers

on

al

Accid

en

t

Mari

ne

Pro

pert

y

Botswana X X X X X X X X

Ghana X X X X X X X X

Malawi X X X X X X X X

Namibia X X X X X X X X

Nigeria X X X X X X X X

Rwanda X X X X X X X X

Tanzania X X X X X X X X

Uganda X X X X X X X X

Zambia X X X X X X X X

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

Market position and market share

COUNTRY Company Market Position/

Rank Market Share %

Botswana BLIL 1 82%

Ghana Enterprise Life 2 23%

Kenya Pan Africa Life 1* 13%

Malawi NICO Life 1 48%

Namibia Sanlam Life 2 17%

Nigeria FBN Insurance 6 1.7%

Rwanda Soras Vie 1 35%

Tanzania African Life 1 48%

Uganda Sanlam Life 4 13%

Zambia African Life 1 33%

Life Insurance

* In pure life

Market position and market share

COUNTRY Company Market Position/ Rank Market Share %

Malawi NICO General 1 38%

Namibia Santam 1 28%

Rwanda Soras AG 1 37%

Tanzania NIKO 13 3.5%

Uganda NIKO 13 2.3%

Zambia NICO 4 12%

Nigeria Oasis 21 0.4%

General Insurance

East Africa

⧁ ICEA

⧁ UAP

⧁ Jubilee

⧁ Britam

⧁ Alliance

⧁ State Insurance Companies

⧁ Prime Life

⧁ Ceral Life

⧁ Sonarwa Life

⧁ (Prudential)

⧁ CFC (Liberty)

⧁ Barclays

⧁ OM

⧁ Metropolitan

Competitors - Life

Southern Africa

⧁ Vanguard

⧁ Smile

⧁ ZISC

⧁ Madison

⧁ Professional

⧁ Bramer Life

⧁ Old Mutual

⧁ Hollard Life

⧁ Liberty Life

⧁ MMI

⧁ ABSA/Barclays

⧁ Regent

⧁ FBN

⧁ (Prudential)

West Africa

⧁ State Insurance Company

⧁ Star Life

⧁ Glico

⧁ Leadway

⧁ AIICO

⧁ Mansard

⧁ Zenith

⧁ MMI

⧁ Provident (Old Mutual)

⧁ Oceanic (Old Mutual)

⧁ Metropolitan

⧁ (Prudential)

Competitors - Life

Zambia

⧁ PIC Zambia

⧁ Madison

⧁ ZSIC

Uganda

⧁ UGI

⧁ General Alliance

⧁ Real

Nigeria

⧁ Leadway

⧁ AIICO

⧁ Mansard

⧁ Zenith

Namibia

⧁ Old Mutual

⧁ Hollard

⧁ Outsurance

Tanzania

⧁ Jubilee

⧁ Heritage

⧁ Alliance

⧁ Real Reliance

Malawi

⧁ UGI

⧁ General Alliance

⧁ Real

Botswana

⧁ BIC

⧁ Zurich

⧁ Regent

⧁ Old Mutual

⧁ Hollard

Rwanda

⧁ Sonarwa

⧁ Cogear

⧁ Corar

⧁ Phoenix

⧁ UAP

⧁ Radiant

⧁ Britam

Competitors - General

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

Current Status

⧁ Evolving (risk based assessments)

⧁ Inspections

⧁ More attention to capital

⧁ COP (not always)

⧁ Product approval

⧁ Annual returns

⧁ Pension liberalisation

⧁ New Micro Insurance legislation Zambia and Nigeria

Regulatory environment

Challenges

⧁ Lack of enforcement

⧁ Adoption of inappropriate norms

⧁ Requirements to increase capital

⧁ Lack of distinction between LT and ST business

⧁ Regulations not in line with legislation

⧁ Regulators have discretion to change rules

⧁ Statistics not up-to-date

⧁ Local cession requirements

⧁ Local shareholding requirements

⧁ Legislation out of date

⧁ No insurance practitioners in regulator

⧁ East Africa common oversight

Regulatory environment

SEM structure and capacity to support growth

Malaysia

(Robert)

East & West Africa

(Margaret)

HR/Act

Markets

India

(Mossie)

Southern Africa

(Botswana – Gaffar)

(Other – Tertius)

Finance + Actuarial + Risk Mgt + Compliance Mgt (Gerrit)

Marketing + Corporate Services (Thabied) / Ops + IT (Cornie) / HR (Niel)

SEM

SPF SIM Santam COE

Product Management Distribution Profit optimisation

Country CEs

Support

Specialist

role

General Insurance (Lourens) / Asset Management (Andre) /

Life Insurance + EB (Mossie) / Credit (Gerrit)

SCM SEB Group

Office

expats

India Africa

(excl. South Africa) South East Asia

SEM

Countries

Mergers and Acquisitions (Robert)

expats expats

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

Insurance penetration

COUNTRY Life (%) Non-Life (%) PA & Health (%) Total (%)

Botswana 1.95 0.91 0.01 2.87

Ghana 0.46 0.58 0.03 1.06

Kenya 1.06 1.58 0.37 3.01

Malawi 0.34 1.06 0.06 2.06

Namibia 5.47 1.97 2.33 9.77

Nigeria 0.81 0.51 NA 0.68

Tanzania 0.09 0.63 0.14 0.86

Uganda 0.09 0.61 0.06 0.79

Zambia 0.40 0.89 0.11 1.38

Population pyramid, Kenya

Kenya 2015, Population 46.8m Kenya 2030, Population 66.3m

Population growth from 47m to 66m

Increased proportion in ages 25 – 50

GDP growth

Country Population 'm Population

(projected 2025) GDP (USD) 'm GDP (USD) 'm 2025 GDP per capita GDP Growth 2014

Botswana 2 2 14,600 25,499 7,192 5%

Ghana 26 33 40,008 68,427 1,565 5%

Kenya 42 59 35,149 60,117 845 5%

Malawi 15 23 4,689 8,994 305 6%

Namibia 2 3 12,807 20,351 5,667 4%

Nigeria 162 240 243,529 497,004 1,499 7%

Rwanda 11 16 6,440 14,123 589 7%

Tanzania 46 67 25,600 55,003 554 7%

Uganda 36 55 19,597 41,248 550 7%

Zambia 14 21 20,161 42,874 1,482 7%

Total 356 519 422,580 833,639 1,188 6%

⧁ Footprint and interests

⧁ Background to our businesses

⧁ Products and partners

⧁ Market share and competitors

⧁ Regulation and central support

⧁ The future and its potential

⧁ Insurance penetration and growth

⧁ Products and new markets

Agenda

⧁ Middle and upper market products

⧁ Multinational products (for high income individuals who

regularly move countries)

⧁ Pension opportunities following pension fund liberalisation

⧁ Immediate annuities on the back of pension liberalisation

⧁ SME market for life and general

⧁ Construction, liability & guarantees around infrastructure

development

⧁ General insurance for small business markets

⧁ Specialist lines

Product opportunities

Growth opportunity (GDP growth /

life insurance penetration)

insurance penetration

GDP

growth

HIGH

LOW HIGH

Zimbabwe

Morocco

Angola

Mozambique Ethiopia

Senegal

Cameroon

Egypt

Ivory Coast

Growth opportunity (GDP growth /

general insurance penetration)

insurance penetration LOW HIGH

GDP

growth

HIGH

Zimbabwe

Morocco

Mozambique Angola

Ethiopia

Senegal

Cameroon

Ivory Coast

Egypt

Historical growth

-5

0

5

10

15

20

25

30

35

Ghana Life OP, GHC'm

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

2005 06 07 08 09 10 11 12 13

Tanzania Life OP, Tsh'bn

Strong, market leading businesses in rapidly

growing markets

Covering a large geographical footprint across countries with

350m people

Embracing diverse partnerships

Supported by an experienced central team with a strong

track record

Summary

New markets Untapped market

segments

quietly confident…

our purpose is clear…

questions