Life Insurance Introduction of life insurance in HK

Life Insurance

Introduction of life insurance in HK Ø Life insurance • 1. Whole life • 2. Endowment • 3. Term

Number of Policies in 2004

Number of Policies in whole life

Number of policies in endowment

Introduction of Prudential Always Listening , Always Understanding

History • 1848 – Prudential was founded on 30 May in Hatton Garden, London. Named as “Prudential Mutual Assurance, Investment and Loan Association” , offer life assurance and loans to the middle classes.

• 1919 – Prudential moved to the field of General Insurance for the first time. Providing Fire, Marine and accident insurance etc. • 1923 – agencies were set up world wide in China, Malaya, the Philippines, India and Japan etc. • 1960 – Prudential Hong Kong was set up first as a general and then as a life insurance business

• 1994 – Prudential Corporation Asia was formed to develop and existing business in Asia.

Structure of Operating Division of Prudential plc(UK) Prudential plc (UK) Prudential’s UK & Europe Insurance Operation Jackson National Life M&G Prudential Corporation Asia Egg plc

Introduction of AXA Be Life Confident!

HISTORY • 1986 - Nation Mutual acquired Sentry Assurance International LTD. • 1990 - Operation extended to Macau. • 1992 - National Mutual Asia was listed on the Hong Kong Stock Exchange. • 1999 - Renamed as AXA China Region Limited. • 2005 - 20 thanniversary of the AXA brand.

In Hong Kong • AXA China Region, was formed after the acquisition of Sentry Assurance International Ltd. by National Mutual in 1986, has been a leading insurer in Hong Kong and Macau for over 18 years. • AXA China Region is a wholly-owned subsidiary, and is one of the largest life insurers in Hong Kong, ranking in the top 6 for new business and top 3 for inforce business. • As of 31 December 2004, the business has A$7. 6 billion funds under management, total premium income of A$1. 5 billion, over 2, 100 agents, 300 advisers and 500 employees

Structure of Operating Division of AXA

The Insurance Market Share of both companies in Hong Kong

Individual Life Insurers’ statistics Name of Insurer Financial Year Ended Prudential (UK) 31 -12 -04 Market Total No. of Policies 370, 356 5, 406, 046 Sums Assured 204, 980, 751 2, 007, 051, 344 Premiums (Annual) Premiums (Single) Net Liabilities 3, 211, 398 403, 698 14, 062, 379 47, 111, 885 10, 010, 324 cited from Office of the Commissioner of Insurance • For detail, the number of policies for life insurance that Prudential made last year is nearly 15% of the market. 161, 949, 335

Comparison between other insurer in accident & health insurance Insurer Financial Year End Accident & Health insurance Gross Net ING General 31/12/2004 72, 086 70, 692 AXA China (HK) 31/12/2004 285, 219 258, 795 Prudential 31/12/2004 176, 710 142, 738 AIA (HK) 30/11/2004 99, 486 96, 602

The strategy of the investment • Match the net investment results and the estimated maturity of its investment with expected payments on insurance contracts. • Because financial market performance may affect the level of surrenders and withdrawals on life insurance policies, as well as projected immediate and longterm cash needs. • Adjusts investment portfolios to reflect such considerations.

Compare Prudential & AXA Life Insurance Product

How to make the price? • Age • Gender • Smoking or Non- smoking

Compare • • Price Protection Coverage Premium Payment Term

Life Insurance Compare Gender : Female(Non Smoking) Age (ANB) : 22 Prudential AXA Premium Payment $730(per year) $1037. 4(per year) Premium Payment Stable Premium Payment Term Up to age 78 Up to age 100 Life Protection Coverage Age 100 Investment Different Funds Nail Saving Declared annually. Client can choose to withdraw them or leave them with the company to earn interest Surrender of Policy Special Investment Bonus Do not affected by Stock Market Death Level Death Benefit The basic sum insured The accumulated dividends(if any) Special Investment Bonus(if any)

Medical Insurance Compare • • Gender : Female (Non Smoking) Age(ANB) : 22 Prudential AXA Premium Payment $2493. 504(per year) $2330. 64(per year) Premium Payment Up to age 75 Premium Payment Term 53 60 Life Protection Coverage Up to age 75 Hospitalization definition At less 8 hours At less 6 hours

Medical Insurance Compare Protection Hospitalization (per confinement) Long Term Illness (per policy) Prudential AXA Daily Room & Board Up to 90 days Claim whole payment (Regular room) Up to 120 days $600 per day Intensive care Up to 90 days Claim whole payment (Regular room) Up to 15 days $2000 per days Doctors' Visits Up to 90 days $585 Up to 120 days $600 days Anesthetist's Fees Maximum 35% of the relevant Surgeon’s Fee Maximum 30% of the relevant Surgeon’s Fee Operating Theatre Maximum 35% of the relevant Surgeon’s Fee Maximum 30% of the relevant Surgeon’s Fee Radiotherapy & Nil Chemotherapy for Cancer $50, 000 Kidney Dialysis $150, 000 Nil

Medical Insurance Compare Death Benefits Compassionate Death Benefit $78, 000 Nil Accidental Death Benefit $78, 000 Nil Medical Accident and Incident Extension Benefit $85, 800 $60, 000 Death Nil $10, 000 Benefit Schedule Up to 1000 days (whole policy) $390 per day Up to 1000 days (whole policy) $750 PRUmed surgical cash plan Amount is payable according to the severity rating of the surgery Nil Total Disability Waiver of Premium Benefit The policy will be waived until the policy expires or such total disability stops Nil

The function of Insurance • Protection • Saving & Investment • Protection > Saving & Investment

Unfortunate event of DEATH • No matter Long Term or Short Term Gain a large amount of money to beneficiary

Short Term ( Year 4 ) • The total amount of premiums paid: US$2, 564 (HK$19, 871) • • Total guaranteed cash endowments: Nil Basic sum insured: US$15, 000 (HK$116, 250) • Total amount received in the unfortunate event of death (annual return ratio 9%) : US$15, 526 (HK$120, 326. 5) • Total amount received in the unfortunate event of death (annual return ratio 5%) : US$15, 502 (HK$120, 140. 5)

Long term ( Year 43 ) • The total amount of premiums paid: US$27, 565 (HK$213, 628. 75) • • Total guaranteed cash endowments: US$12, 000 (HK$93, 000) Basic sum insured: US$15, 000 (HK$116, 250) • Total amount received in the unfortunate event of death (annual return ratio 9%): US$220, 460 (HK$1, 708, 565) • Total amount received in the unfortunate event of death (annual return ratio 5%) : US$98, 774

Refund • Short term not showing a protection of suddenly requirement and the advantage and benefits of saving and investment Need money within short period

Short Term ( Year 4) • The total amount of premiums paid: US$2, 564 (HK$19, 871) • Total guaranteed cash endowments: Nil • Guaranteed cash value: US$810 (HK$6, 277. 5) • Total cash value (annual return ratio 9%): US$1, 336 (HK$10, 354) • Total cash value (annual return ratio 5%): US$1, 312 (HK$10, 168)

• Long term provide Protection, Saving and Investment functions. Need money after retired

Long Term ( Year 43 ) • The total amount of premiums paid: US$27, 565 (HK$213, 628. 75) • Total guaranteed cash endowments: US$12, 000 (HK$93, 000) • Guaranteed cash value: US$7, 650(HK$59, 287. 5) • Total cash value (annual return ratio 9%): US$213, 065 (HK$1, 651, 253. 75) • Total cash value (annual return ratio 5%):

NEW TREND Insurance become more important Reasons: • Birth rate decrease • Hospitalization cost increase • Rapidly ageing population • SARS

Population statistic 年份 人口 年齡中位 數 65歲以上 人口 所佔 的百 分比 1991 5 674 114 31 8. 7% 1996 6 412 937 34 10. 1% 2001 6 708 389 37 11. 1% 2011 7 530 000 41 12% 2021 8 230 000 44 17% 2031 8 720 000 46 24%

Q&A

Question • A) B) C) D) E) 1) which are the following insurance companies we have just introduced? Manulife AXA Prudential AXA and Prudential All of the above

• 2) When will be the premium payment term of the AXA’s life insurance policies terminated? A) Up to age 65 B) Up to age 75 C) Up to age 78 D) Up to age 100

• 3) Which of the following reason is Not relate to people increase buying insurance A) SARS B) Birth rate decline C) Hospitalization cost decrease D) Rapidly ageing population

• You can go to OFFICE OF THE COMMISSIONER OF INSURANCE to get more information about insurance http: //www. info. gov. hk/oci/text/chi/about/co ntent 14. htm

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