Quarterly:
Europe
December 2012
Welcome
W
elcome to the fourth quarter edition of RGA Quarterly: Europe. As another year
draws to a close and we look ahead to 2013, the articles in this issue also look into
the future. We examine the changing distribution channel landscape and highlight
the innovations that are driving these changes. We also explore innovative ways to
reach consumers, and breakthroughs in the field of genetics that may cause us to
reconsider our ideas about the human lifespan. Finally, we provide a summary of a few RGA events.
As we have witnessed over the past few years, the digital world is having greater influence on how
consumers buy insurance. Price comparison sites have become one of the largest insurance distribution
channels, and now that Google is entering the market, the future of insurance distribution is poised to
change yet again. The first article covers the implications of Google’s entry into world of price comparison
sites for European insurance markets and life distribution in particular.
Similarly, innovative mobile-based technologies are making it easier for insurers in developing countries to
overcome the challenges they face. Our “Around the World with RGA” feature describes the solutions that
insurance companies and banks in Tanzania have devised to take advantage of mobile-phone usage.
The third article describes how electronic underwriting is changing the annuity market landscape. RGA’s
AURASM solution can be a key component for insurers wanting to offer an enhanced annuity product and
reach this growing market segment.
As members of the life insurance industry, we deal with mortality risk issues every day. But what if advances
in genetics could dramatically change human lifespan and longevity? Our fourth piece examines the
implications of these advances.
Finally, we wrap up the issue with a report on the topics covered at RGA events in the region. We believe
that events are one way to focus on our clients’ needs. With
presentations from RGA subject matter experts as well as other
In This Issue
thought leaders from within our industry – and the dialogue with
clients and partners – these events are forums to share and discuss
ideas that can advance the industry and our clients’ success.
I would like to wish you a happy and healthy holiday season and
best wishes for a prosperous new year.
Google’s New Venture and Its Effect
on Insurance Distribution
2
Around the World with RGA
5
Advances in the Annuities Market
7
Will We Live Forever?
9
RGA Events: Learn, Share
and Succeed
12
Olav Cuiper
Upcoming Events
15
Head of EMEA and Emerging Markets
RGA International Reinsurance Company Limited
2012 Third Quarter Results
16
Contacts17
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02
December 2012
Google’s New Venture and Its Effect
on Insurance Distribution
By Hein Kuiper
Director, Heinsight
International Ltd,
United Kingdom
In December Google finally entered the British insurance price comparison
market with its own proposition. The move had been long anticipated following
Google’s acquisition of BeatThatQuote.com (BTQ) for £37 million in March
2011. Launching with car insurance, the Google price comparison service
will offer quotes from 120 different providers. In a company statement, BTQ
E U R O P E
want to help users find the best car insurance in the fairest and most honest
Q U A R T E R LY :
visibility. By occupying a space near the top of the search results but below the
R G A
founder John Paleomylites, now a product director at Google, said, “We
Why did Google make this decision and what are the
consequences?
way possible while also respecting their privacy.” As could be expected from
Google, the user experience has certainly been improved since the BTQ
takeover, but what really makes the new Google venture stand out is its
pay-per-click (PPC) AdWords Google has guaranteed itself prime web retail
space. According to the independent digital marketing agency Greenlight,
Google’s proposition went from 0% to 75% visibility for the key search term
“car insurance” almost overnight.
Following the spectacular growth of insurance aggregators between 2006
and 2010, over 60% of all new car insurance policies in the British market are
now bought via a price comparison site. Moneysupermarket.com, Gocompare.
com, Confused.com (owned by insurer, Admiral) and Comparethemarket.com
(BGL Group Limited) account for well over 90% of the comparison market.
They have grown on the back of massive advertising campaigns to educate the
British public and to create brand awareness. In fact, since 2009, these four
price comparison sites have outspent the whole of the rest of the British car
insurance industry put together. Yet, despite this extravagance, the economics
make sense. All the big-four aggregators deliver profit margins of at least 20%.
With combined revenues approaching £400 million, insurance price comparison
has become an attractive business, and it has turned the British car insurance
market on its head.
The already price-focused British consumer has found on-line insurance
price comparison an irresistible proposition to the extent that the majority of
switchers actually use multiple sites to compare insurance premiums. But
while consumers have benefited from convenience, lower premiums and more
choice, the insurers and brokers have suffered from reduced margins, higher
switching propensity and increased fraud rates, all coupled with reduced
customer contact. Despite this, the low acquisition costs and massive volume
potential through aggregators has meant that most insurers have decided
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December 2012
following Google’s launch. Moneysupermarket.com
media budgets accordingly. They were hooked. The
earns over half of its income from car insurance, and
aggregators now effectively control distribution.
it is not expected to be the worst affected of the
Google had a problem. It does not stand to earn much
if users go straight to a branded site. So, once price
comparison sites started spending massive amounts
on advertising to encourage consumers to come
straight to their sites, Google saw its search revenue
opportunities drop. Once insurance providers also
low-cost aggregator policies the writing was on the
wall. Google needed to act.
larger proportion of their income and profits from car
insurance. Confused.com seems most likely to suffer
as it has already seen its margins slide in recent years.
With the arrival of a substantial additional competitor
margins in the core market can only deteriorate. The
race is on to bind customers and to diversify into new
income streams.
with the hope that it will see limited cannibalisation
The extreme market upheaval caused by price
of its PPC income. There is some justification for the
comparison has been largely restricted to the UK to
company to be optimistic about this. In consumer
date. British consumers are still twice as likely to shop
research carried out by the UK research firm Consumer
in this way as the rest of Europe, and the rate of growth
Intelligence prior to the Google launch in the UK, only
outside the UK has been more pedestrian so far. This
11% of respondents said that they would replace an
could all be about to change, however.
existing price comparison site, with over 80% saying
that they would simply add Google to the mix. Time will
tell if this research data proves predictive.
The British market did not really heat up until after
2006 with the arrival of two challenger brands,
Gocompare.com and Comparethemarket.com. The
While putting a brave face on it, the existing British
resulting advertising frenzy substantially changed
price comparison sites will not have welcomed
consumer behaviour, resulting in a major market shift.
Google’s arrival. The market leader and only
Similar trends are emerging elsewhere. According to
publicly quoted aggregator, MoneySupermarket.
consumer research by Ernst &Young/Ipsos conducted
com, immediately saw its share price dip by 10%
last year, Germany is already the second-most active
price comparison market in Europe. Following a
takeover of the number two site in the market, now
named Transpero.de, Germany’s biggest aggregator,
Check24.de, has a serious challenger. Check24.de
recently announced plans to increase its advertising
budget by 50% (reportedly to 30 million euros). The
German market looks set to heat up.
Yet, it is the big-four British price comparison sites
that may now become the catalysts to development
in mainland Europe. Together they represent four out
of the five biggest players in Europe, and they are
actively looking overseas for future opportunities by
leveraging their experience and stockpiles of cash.
Already they have dabbled with operations in Germany, 
E U R O P E
incremental income from its price comparison service
What are the implications in other
European markets?
Q U A R T E R LY :
So, since December, Google has gambled on gaining
com and Comparethemarket.com all derive an even
R G A
started reducing their own media budgets in favour of
big-four British players. GoCompare.com, Confused.
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to play the aggregator game and cut their traditional
03
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04
December 2012
France, Spain, Italy and the Netherlands. The arrival of
Certainly the price comparison sites have not
Google on their home turf serves only to heighten the
encouraged large groups of consumers to proactively
urgency towards overseas expansion. If the resulting
start shopping for life products in the way they do
competition creates a similar consumer reaction in
for general insurance. Even in the advanced British
other European countries, then we may well see more
market the number of on-line comparisons for
extreme market changes like those experienced in the
protection is still tiny.
UK. According to Admiral’s own data, its offspring
sites Le Lynx (in France) and Rastreator (in Spain) are
showing similar paths to growth that Confused.com
R G A
Q U A R T E R LY :
E U R O P E
experienced in the UK during its early growth phase.
Similarly, BGL, having taken over Courtanet.com in
France in 2010, has just rebranded it to Lesfurets.com
and said it would spend 30 million euros on the new
brand in its first year.
That said, increased levels of competition in markets
like the UK have caused the existing aggregators
not only to look outside their borders, but also to
different revenue streams. And they are well equipped.
Aggregators now hold a huge amount of data on their
customers, and the number of customer contacts
is vast. The British aggregators alone generated a
staggering 300 million visitors last year – and they
In another example, the Dutch market has been long
are collecting data on every visit. Most aggregators
dominated by a single aggregator, Independer.nl, with
leverage this data using sophisticated e-CRM systems
little competitive pressure. However, following the
to introduce new products like Protection, and they
recent development that the second-largest Dutch
are prepared to use off-line techniques, too. Confused.
price comparison site (Verzekeringssite.nl) has been
com created a specific Life outbound centre only last
taken over by Comparethemarket.com’s owner, BGL,
year. An abundance of rich customer data with multiple
the market now has a credible challenger brand. With
contact opportunities gives Europe’s price comparison
Independer.nl itself also more cash-rich as a result of
sites the potential to become Europe’s new financial
new ownership, competition is likely to increase.
services powerbrokers.
What of Google? Insurance is Google’s biggest revenue
There is more. The apparent independence of the
line worldwide and hence of strategic importance. It
price comparison sites coupled with large advertising
keeps a very close eye on opportunities and threats,
budgets and a positive customer experience create
and, logically, it will focus on the largest markets with
powerful brands. They have earned high levels of
consumers who are the most ready to compare. To
customer trust that few other financial services labels
this end Google is reportedly seeking French- and
can match. According to YouGov research published in
German-speaking insurance specialists to join its BTQ
2011, UK consumers now see price comparison sites
team in London. (No prizes for guessing its intentions.)
as the destination for advice on even the more complex
With Google’s penetration of the search market still well
financial decisions, well ahead of independent financial
over 90% in most European countries, it is certainly
advisers. Unsurprising, then, that Moneysupermarket.
well-placed to replicate its UK initiative elsewhere.
com made a further strategic move in the direction of
on-line advice by buying the biggest consumer financial
What are the implications for life distribution?
advice site, Moneysavingexpert.com, for £87 million
To date the growth of price comparison in the UK and
this year.
the rest of Europe has been largely restricted to non-
So, it seems the price comparison sites are well
life products, especially mandatory distress purchases
positioned to move from “pull” into “push” products.
that have become commoditised. So the life industry
Google’s arrival will only serve to accelerate their
with its “push” products can rest easy, right?
diversification.
•
December 2012
05
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Around the World with RGA
R G A
Q U A R T E R LY :
Tanzania: Creating a market in the mobile world
Product Development
Actuary
RGA UK Services
Limited
Each month we will look at the protection market of a different country or region,
E U R O P E
By Greg Becker
examining interesting product developments, new distribution ideas, regulatory responses,
industry initiatives and so on. Protection products are purchased by those who understand
their protection needs. Customers then purchase the product solutions which have
fulfillment options that are quick and easy to complete in terms of both time and money.
For many in the third world, micro-insurance is where their protection purchasing history
will start, and maybe this is where many should start in the developed world too?
We take many things for granted in the first world. In the developing world, things are more challenging, and innovative
solutions are developing in response. In the UK, we would not think twice about asking people to read the policy
documentation, to provide their phone number and to give us their banking details. In Tanzania, adult literacy is
72.9%1, there is one landline phone for every 250 people, and 11% of people have a bank account2. This has proven
to be fertile ground for innovation, and disruptive solutions that work around these perceived barriers abound. Mobile
telephony (m-telephony) has flourished to the extent that there are now more than 20 million mobile phones — or one
for every two people.
Mobiles are used differently, although there are surprising levels of consistency among countries3. The unmet need
has been the necessary impetus for m-banking, and many of the leaders in m-banking are from the developing
world. In TNS’s survey of 58 countries4, Uganda had the highest level of mobile-wallet usage (36%). Tanzania was
surpassed only by Uganda and some advanced countries in Asia (Hong Kong, Japan, Singapore and South Korea)
that have higher levels of current mobile-wallet usage. Currently, 23% of Tanzanians use mobile-wallets, and a further
34% are interested in doing so5, which is markedly higher than usage in the UK, which currently has a penetration rate
of 16%, with far fewer being interested (28%).
1
UNDP International Human Development Indicators http://hdrstats.undp.org/en/countries/profiles/TZA.html
2
http://www.finscope.co.za/tanzania.html
3
Select two countries for comparison, say Tanzania and the UK at: http://discovermobilelife.com/
4
http://www.tnsglobal.com/mobile-life/map/global/feature/lbs/both
5
http://www.tnsglobal.com/mobile-life/country/feature/tz/ar
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December 2012
This level of interest in m-telephony and m-banking has
free cover being a function of past airtime purchases13,
been followed by m-insurance. A variety of companies
and with cover increasing as a person spends more.
with different strengths have combined their efforts to
The sum assured varies between £80 and £400 – or a
form a successful partnership, Tigo-Bima, which has led
million Tanzanian shillings. The phone subscriber must
to more than 220,000 subscribers signing up for a free
sign-up to the programme, with this benefit acting as
joint-life policy, covering more than 300,000 lives within
a loyalty programme. There is strong evidence that
the first year of operation. The partners include:
average revenue per user (ARPU) increases, as well as
Tigo6: The first mobile phone network in Tanzania,
which has 30 million customers in 13 African and
Latin American countries. It provided the customer
E U R O P E
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06
base to target.
Milvik/Bima7: A micro-insurance service provider
Q U A R T E R LY :
gap, helping its partners with product development,
R G A
that is helping mobile operators solve the protection
Opportunity International, MicroEnsure was
distribution, marketing and administration, and
which has covered more than one million people.
customer loyalty. More than 100 claims have been paid
so far, and some may be astounded to note that claims
are paid within three working days of the appropriate
documentation being provided14.
Informed customers who have had a positive insurance
buying experience are perfect for on-sell and up-sell
opportunities, and further initiatives are on the cards
to provide more insurance products to this newly
established customer base.
It provided the sales, distribution and technical
In Tanzania, the barriers to insurance sales are being
support.
overcome. Illiteracy, poverty and limited infrastructure
MicroEnsure8: A subsidiary of the nonprofit
founded in 2005, and its mission is to “empower
the materially poor to transform their lives by
insuring them against financial risk and its
consequences”9, using micro-insurance to give
customers a positive insurance purchasing
experience as a first step. It currently covers
five million people globally, and 850,000 in
Tanzania10. It provided the training and insurance
administration.
Golden Crescent11: A Tanzanian insurance
company that has underwritten the initiative.
have held back traditional insurance sales but have
conversely spurred on innovative alternatives. We do not
have the same constraints in the UK, but we still have
challenges. Carol Sergeant’s recent report on Simple
Products15 noted barriers to widespread take-up of
financial products include a lack of awareness, a lack
of self-confidence in dealing with financial matters,
mistrust of the financial industry and a feeling among
consumers that they are overwhelmed and confused
by the offerings available, which is compounded by
entrenched distribution models, regulation and the
complex processes it has led to. Some see challenges
as hurdles, while others see them as opportunities to
do something different. Tigo describes its strategy as
The insurance is simple and free for those who spend at
being “Triple A”, covering “affordability, accessibility and
least 5000 TZS or £2 per month12, with the amount of
availability”. Is that the way to overcome barriers?16
6
http://www.tigo.co.tz/about.php
7
http://www.bimamobile.com/
8
http://www.microensure.com/
9
http://www.microensure.com/resources-aboutus-vision.asp
10
http://www.microensure.com/news.asp?id=165
11
http://www.gca.co.tz/index.htm
12
http://www.dailynews.co.tz/business/?n=22655
•
http://www.telecompaper.com/news/tigo-tanzania-pays-firstinsurance-claims
13 http://thecitizen.co.tz/business/13-local-business/16661-insuranceclaim
14
http://www.hm-treasury.gov.uk/d/sergeant_review_simple_financial_
products_interim_report.pdf
15
16
http://www.tigo.co.tz/about.php
December 2012
07
New underwriting standards: better consumer understanding
The underwritten annuity market has grown significantly in the UK in recent years,
from £0.6 billion in 2006 to £2 billion for the first half of 2012, an increase of over
25% per annum. As the market has grown and become more price-competitive,
technology has been used increasingly to improve customer service, and the speed
and accuracy of quotations, and to collect valuable management information to refine
and improve the process.
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Advances in the Annuities Market
By Zoe Belcher
Executive Director,
AURA Business
Development, Europe
and South Africa
RGA UK Services
Limited
R G A
The latest development is the introduction of the Origo 3.7 messaging standard,
which will allow more detailed questioning, and hence, better-quality and faster
Q U A R T E R LY :
decisions. To understand where we have come from and where we are going, it
may help to consider the rapid evolution of the auto insurance industry, with its
introduction of aggregator sites and integrated quotation engines. Are annuities
the next big space for a revolution? With intense competition in the UK market, the
advance of technology and the consumer need to “buy now,” competitive insurance
companies will need to evolve and invest in processes to stay ahead.
E U R O P E
What is an enhanced annuity?
Enhanced or underwritten annuities are annuities that take into account any
health-related risk that an applicant may have that may reduce his or her lifespan.
Many conditions are considered, and they range from evidence of terminal illness to
occupational and lifestyle factors that are known to affect survival (e.g., smoking and
obesity). A wide variety of medical conditions can be taken into account, with the
more common medical conditions being cancer, diabetes, heart attack, high blood
pressure, kidney failure and stroke.
Competition and complexity may necessitate higher
levels of service
The impaired and enhanced annuities market is becoming more populated. The
number of complex medical conditions and lifestyle factors being underwritten is
increasing. With the advent of Origo 3.7, options are likely to expand even further,
allowing customers to search for, compare and obtain the best competitive solutions
for their retirement years in a matter of seconds.
Origo is the e-commerce and standards body for the UK financial services industry.
It defines the language, standards and structure of the data exchanged among
organizations, making it easier for portals, platforms, providers and advisers to do
business with each other. With the development of the new annuity messaging
structure, individuals are now able to disclose much more detailed information
about their ill-health and suboptimal lifestyle. The Origo standards also make
underwriting annuities electronically much easier, enabling insurance companies
to receive, assess and deliver a broader range of enhanced payments in real time.

R G A
Q U A R T E R LY :
E U R O P E
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December 2012
For the consumer, in most cases, this means greater
accessibility to options that may provide a higher
retirement pension.
Electronic underwriting (with agents or clients
completing medical and lifestyle questionnaires online)
has been available in the auto and home insurance
sectors for many years, and is widely available in the
life insurance industry. It is becoming more and more
expected in the annuity market to obtain the best
and broadest range of enhanced annuity options for
customers. The questions asked depend upon the
information provided, which is also known as reflexive
questioning. The decisions, or uplift, to the annuity
payments are provided within seconds.
post-retirement incomes? Careful consideration of
this fact and ongoing analysis of disclosure should
certainly be key factors.
Market statistics from the Association of British Insurers
Electronic underwriting is changing
the annuity market landscape by allowing
even those companies without medical
underwriting teams to underwrite annuities.
(ABI) show that sales of impaired annuities are rising.
This revolution in the annuity market will dramatically
Considering these ABI figures, and acknowledging
affect agents. With real-time underwriting, they will
that point-of-sale annuity offerings are readily available
be able to take advantage of real-time decisions
and customers are understanding annuities better than
and discussions with their customers. Turnaround
ever, one wonders if annuity providers can afford to
times for quotations will be markedly reduced from
offer only standard annuities much longer.
current paper processes, with decisions rendered
If your organization is considering making an enhanced
in seconds instead of days or weeks. Prospects will
annuities offering, it may be worthwhile for you to
have access to these services with greater ease than
consult with a reinsurer with deep annuity experience.
before through the use of agent portals such as Avelo/
RGA is well-versed and experienced in the impaired
exchange and aggregator websites.
annuity market and is able to provide product
This will become increasingly relevant in a post-Retail
development ideas, pricing advice as well as support
Distribution Review (RDR) world; however, it is worth
in sharing in the risk. In addition, RGA has developed
pausing to consider the inevitable consequence of
an easy-to-use, comprehensive e-solution based on
this shift.
its AURA rules engine, allowing providers to have an
More than 50% of the money that moves from a
pension to an annuity provider is moving into enhanced
annuities, compared with roughly 20% in 2008.
electronic presence.
Future considerations
Standard annuity rates may decrease. Low interest
rates and improved longevity have made standard
annuity rates the lowest in years, and rates may
deteriorate further for males after the Gender Directive.
Will that mean that customers may begin to more
aggressively seek to qualify for impaired annuities by
overplaying their medical histories to improve their
•
AURASM is RGA’s premier automated underwriting rules
engine. AURASM is flexible enough to fit into any underwriting
process. It is available as a cloud-based solution (software
as a service), or it can be installed. RGA has developed a
number of AURA-driven client solutions to meet customer
and market needs. Hosted underwritten annuities is one of
these solutions.
December 2012
09
Most of us do not give much thought to this question for we all accept that we have a
finite lifespan even if we put the thought of our ultimate death out of our minds until we
grow old.
There are those though who, through the course of the centuries, have always
subscribed to the cult of immortality. Some like Ko Hung (Ge Hong), a Chinese
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Will We Live Forever?
By Garth Lane
Capital and Financial
Risk Actuary
RGA UK Services
Limited
alchemist who died in 343 AD at age 60, believed in consuming substances like pearl
and gold. Others like Roger Bacon, the 13th century philosopher, who died in 1292
R G A
AD at age 78, believed in a lifestyle based on extreme self-denial.
The cult of immortality has not disappeared –
Q U A R T E R LY :
some more modern members practice the art of
calorie restriction in the hope that they will extend
their lives. Aubrey de Grey, the controversial
theorist in the field of gerontology, believe that a
structured engineering approach will be enable
most people to grow older without any of the
E U R O P E
physical decline associated with aging. This is
to say that he believes that science and medical
technology will be able to eliminate or reverse
Aubrey de Grey
ageing and by so doing enable us to live for an
arbitrarily long time. Arguably his most infamous
quote is, “I think the first person to live to 1,000 might be 60 already.”
I think it is far more likely that the average human lifespan and limit to life will comform,
for the foreseeable future, with writings from ancient prophets who recorded an
understanding of an average lifespan and limit to life that we are only now achieving
once more. Jeanne Calment, who lived to 122 years and 164 days, is the exception
that proves the rule. Also it is only in modern times that we are starting to see the
expectation of life moving out to 80 years.
Recent improvements to longevity are fueling speculation that there is no limit to life.
Mortality improvements running at over 3% per annum for some age groups have led
to severe problems with pension funding and indeed are straining the ability of some
western societies to support their rapidly growing older-age populations. The natural
tendency is then for actuaries who have got their predictions so wrong over the course
of the last few decades to compensate and to extrapolate from current high rates of
improvement out into the future. We are now using ever more sophisticated tools to
project improvements using statistical methods.
It is my view that we should pause and ask ourselves the fundamental question: What
is driving these improvements? Is it medical advances that are helping us to live longer
(or at least die at a higher average age), or is it in fact mean reversion to some innate

R G A
Q U A R T E R LY :
E U R O P E
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December 2012
life capacity that had been repressed by squalid living
mortality was first formulated in 1852. The force of
conditions in the Middle Ages?
mortality, ignoring mortality deceleration at extreme
I believe that it is helpful to have a theory that makes
ages, then can be stated as µ(x) = A + Reαx. This leads
falsifiable predictions rather than believing that the future
will be similar to the past. In this regard the application
to the question as to how the parameters of this law of
mortality have altered with time.
of reliability theory by Gavrilov and Gavrilova to mortality
Gavrilov et al. have studied the progression of the
provides some intriguing insights. The theory simply
two parameters over time in the Swedish population.
requires that the living organism under consideration
The graph below examines the progression of the
consist of multiple subsystems connected in parallel with
parameters for a 40-year-old male.
binomially distributed initial defects in each subsystem.
Each subsystem contains redundancies, and it turns
out that the process of ageing can be mathematically
described as an exhaustion of redundancy. The
assumption of initial defects leads to an exponential
increase in failure rates as the organism ages.
The theory predicts that organisms that satisfy some
simple assumptions obey a Gompertz-Makeham law
of mortality. This is a nice result because this law of

December 2012
The engineering solutions that he suggests require
all of the mortality improvement has come from the
futuristic technology and even tinkering with the human
Factor A (labelled 2), which relates to accidental death,
genome – for example, moving mitochondrial DNA into
including infectious disease. The Factor alpha (labelled
the cell nucleus to give it the greater protection afforded
3) which relates to age-dependent mortality has hardly
by the nucleus against mutations.
altered at all.
These approaches ignore the morality and ethics of
in the sense that most mortality improvement has
biology. They also ignore the effects of natural selection.
come from public health initiatives ensuring healthier
Although nature is not perfect, it is often the case that
living conditions, and of course from the discovery of
certain mechanisms such as cell senescence protect
antibiotics, immunization and medical treatments that
us from other diseases such as cancer, because if cells
make the survival of infectious disease and traumatic
are allowed to survive forever they accumulate errors of
accidents more likely. It seems that medical advances
duplication and mutations that sometime allow them to
made little or no impact on our ability to live longer
reproduce rapidly in an uncontrolled fashion.
except in the sense that if you eliminate accidental death
more individuals will survive to encounter senescence.
This brings us full circle back to Aubrey de Grey. If we
E U R O P E
are to hold back or eliminate ageing, we would have
to do much more than just eat healthily and exercise. It
would seem that in an ideal environment that our store
of redundancy in our cellular subsystems would be
exhausted more slowly, but in the end we would still not
live beyond the capacity for life that we started out with
at birth.
Aubrey de Grey says, rather hubristically in my view,
referring to changes to the human body as we age:
“So, what are these changes? They (the ones that we
have any reason to think are deleterious, anyway) are
hearteningly few in number:
• Cell loss (without replacement)
• Oncogenic nuclear mutations and epimutations
• Cell senescence
• Mitochondrial mutations
• Lysosomal aggregates
• Extracellular aggregates
• Random extracellular protein cross-linking
• Immune system decline
• Endocrine changes.”
Q U A R T E R LY :
trying to extend human life by manipulating our cell
R G A
This finding puts medical advances in perspective
w w w . r g a r e . c o m
As can be seen, over the course of almost a century,
11
I think that we should instead focus on nurturing
the health of mothers and young children, thereby
maximising the store of redundancy that we are
endowed with rather than attempting to fix things at the
end of life.
So, I do not think that we will live forever and I think that
we should be very wary of well-meaning attempts to fix
something that may not be broken.
•
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12
December 2012
RGA Events: Learn, Share and Succeed
In every issue of RGA Quarterly: Europe, we provide
Medical Consultant for the RGA Italy office. The event
a list of upcoming RGA events. These events are
drew 25 participants (underwriters and doctors) from
opportunities for RGA to share our knowledge,
nine client companies.
experience, and expertise with clients and other
members of the life insurance industry, as well as to
foster communication, connection and fellowship among
E U R O P E
a list, however, does not really capture the nature of
Q U A R T E R LY :
about, this article provides a recap of a few RGA
R G A
our colleagues. Seeing the names of these events on
directors and subject matter experts also speak at
the lively discussions or the value and relevance of the
Overall feedback was unanimously excellent regarding
both the content and quality of the presentation as
well as the format of the event. The inclusion of case
studies and the voting system were especially popular
with underwriters.
topics that the speakers cover.
To give readers a taste of what these events are
underwriting events that took place this Fall. Dr. John
Lefebre, Chief Regional Medical Director for Europe,
South Africa, India, Middle East and Central America,
RGA International Corporation, was the presenter
at a number of these events, and other RGA medical
client events around the globe.
Italy
Following the success of our underwriting events in
Rome and Milan earlier this year, on 26 September
RGA International Reinsurance Company Branch
Office for Italy organised an underwriting breakfast
in Milan. Dr. Lefebre, gave the presentation, “The
Interpretation of Laboratory Tests,” which covered some
of the most significant tests and relative anomalies
that underwriters encounter in their day-to-day
work, including haematology, renal function and liver
function tests. The talk was given in English, with
slides translated into Italian and a simultaneous Italian
translation provided by Chief Underwriter Gabrielle
(Gaby) Wood. As well as giving comprehensive
descriptions of the tests themselves, the presentation
included a series of case studies for each section.
Participants were able to respond using the voting
pads; this encouraged active participation and
subsequent discussion facilitated by Dr. Emma Riva,
Middle East
RGA Reinsurance Company Middle East Limited held
its Second Annual Underwriting Seminar for Middle
East Clients on 22 October in Dubai. Underwriters
from some 15 companies with experience levels
ranging from five to more than 10 years in medical

December 2012
organised an underwriting seminar in Amsterdam,
welcomed the attendees and presented as well.
with the theme, “Underwriting Update 2012!” The
It was an interactive seminar, with presentations
covering topics such as “Evidence-Based Underwriting”
and “Underwriting Cholesterol the RGA Way.” The
seminar participants expressed great enthusiasm in
learning about cholesterol X HDL interaction contours
and the importance of the TC/HDL ratio. Another
w w w . r g a r e . c o m
underwriting attended the seminar. Dr. Lefebre
13
objective of the seminar was to provide an opportunity
for underwriters in the Netherlands to update their
medical knowledge with the latest insights on several
impairments. Seminar presentations also addressed
aspects of financial underwriting that are influenced by
local laws and regulations.
Experts from the Netherlands and the EMEA region
offered the Middle Eastern underwriters in attendance a
presented at the seminar. Dr. Robert Kneepkens,
new perspective on their underwriting approach.
Medical Officer for Achmea, presented on the insurability
R G A
presentation, “Cholesterol – the Good, Bad & Ugly,”
of applicants with HIV. Dr. Kneepkens is a prominent
Q U A R T E R LY :
figure in this area and, together with his working group,
has established many countries’ guidelines for insuring
HIV. Because he is also an adviser for the Dutch
Association of Insurers, Dr. Kneepkens gave another
talk on upcoming changes in laws, regulations and local
practices that may affect insurers and influence the role
E U R O P E
of the underwriter.
Dr. Lefebre gave a dynamic presentation on mental
illnesses, complete with audiovisual techniques that
optimised interactivity with the audience; moreover,
the presentation encouraged the exchange of much
useful information and suggestions as well as practical
examples.
One of the presentations, “Evidence-Based
More than 30 underwriters of intermediate to advanced
Underwriting,” emphasized integrating individual clinical
experience levels attended the seminar, which was
expertise with the best external clinical evidence from
very well-rated by the attendees, making this event a
systematic research. An illustration comparing young
successful one.
cancer survivors of different gender was a thrilling
learning experience for the participants. Dr. Lefebre’s
case studies on choroidal naevus and associated
risk factors offered insight on morbid obesity and
bariatric surgery. In addition to case studies there was
a question-and-answer session. The seminar was then
followed by a cocktail party, which everyone enjoyed.
Netherlands
On 10 September, RGA International Reinsurance
Company Limited, Branch Office for the Netherlands

14
December 2012
R G A
Q U A R T E R LY :
E U R O P E
w w w . r g a r e . c o m
Poland
There were two big underwriting events in Warsaw this
autumn that were either organised or sponsored by
the RGA International Reinsurance Company Limited
Poland Branch Office: the Central and Eastern Europe
(CEE) Regional Annual Underwriting Conference and the
Conference of the Polish Association of Underwriters.
The CEE Regional Annual Underwriting Conference
took place on 25 September. There were more than
60 attendees, including underwriters and those
involved in product development. The program covered
underwriting topics including “Interpretation of EECG,”
is a senior underwriter with RGA Poland, and an actuary,
Marcin Zawistowski, also with RGA Poland. Step by
step they went through the process of creating a fictional
new product – female cancer – focusing on those
elements of the underwriter’s input that influence pricing
(scope of the cover, definitions, exclusions, content
of health questionnaire). Using examples of quotes,
Marcin showed the importance of the proper wording of
exclusions and questions in HQ. After the presentation, a
spontaneous discussion among the attendees revealed
how cooperation between underwriters and actuaries is
missing in some companies.
presented by local medical consultant Piotr Kostrzewski,
and ‘”Diving as the Risk Factor,” which was presented
by diving instructor Michał Kosut. Calvin Cole, Head
of Underwriting, UK and Europe, RGA UK Services
Limited, explained the impact of gender neutral
regulation on updates to RGA’s Global Underwriting
Manual (GUM), while Nic Lempriere-Hogg, Senior
Vice President, Divisional Chief Underwriter with RGA
International Corporation, proved that underwriting can
be key to competitive differentiation. Adriano de Matteis,
Assistant Vice President, Marketing Development with
RGA Italy, focused on how to survive in the post-gender
directive legal environment. He also served as a
moderator of a panel discussion on simplified issue
products in bancassurance, with representatives from
local insurers and the Polish Chamber of Insurers.
Then Helmut Ziegerer, Chief Underwriter and Head of
Claims with RGA International Reinsurance Company
Limited German Branch Office, shared his knowledge
on improving the underwriting process, using his recent
experience with a German client as an example.
The feedback after the conference was very positive.
The Conference of the Polish Association of
Underwriters, which was sponsored by RGA, featured
our presentation on cooperation between underwriters
and actuaries. This presentation was in the form of a
dialogue between an underwriter, Katarzyna Kania, who
The event was described in Dziennik Ubezpieczeniowy,
an online insurance newspaper that reaches the majority
of operators in the Polish insurance market.
•
December 2012
United Kingdom
Actuarial Breakfast
Date: February 2013
Location: Milan
Contact: Silvia Calenic
scalenic@rgare.com
Underwriting Lunch & Learn
Date: March 2013
Location: Warsaw
Contact: Joanna Galecka
jgalecka@rgare.com
Actuarial Breakfast
Date: March/April 2013
Location: Milan
Contact: Silvia Calenic
scalenic@rgare.com
Death Claims Discussion
Workshop
Date: February 2013
Location: London
Contact: Pollyanna Young
pyoung@rgare.com
Actuarial Seminar
Date: March 2013
Location: Warsaw
Contact: Joanna Galecka
jgalecka@rgare.com
Italy Protection Forum
Date: March 2013
Location: Milan
Contact: Silvia Calenic
scalenic@rgare.com
Annual Client Event
Date: 3 April
Location: Noordwijk aan Zee
Contact: Nel Ros
nros@rgare.com
Middle East
Middle East and Africa Summit
Date: 14-15 January 2013
Location: Dubai
Contact: Osama Alkhatib
oalkhatib@rgare.com
Underwriting Breakfast
Date: March 2013
Location: Milan
Contact: Silvia Calenic
scalenic@rgare.com
Academy Workshop
Date: 28 February 2013
Location: Barcelona
Contact: Maria José Ortiz
mortiz@rgare.com
Academy Workshop
Date: March 2013
Location: Madrid
Contact: Maria José Ortiz
mortiz@rgare.com
E U R O P E
The Netherlands
Spain
Q U A R T E R LY :
Italy
Actuarial Breakfast
Date: March 2013
Location: Warsaw
Contact: Joanna Galecka
jgalecka@rgare.com
R G A
CEE
w w w . r g a r e . c o m
Upcoming Events
15
R G A
Q U A R T E R LY :
E U R O P E
w w w . r g a r e . c o m
16
December 2012
2012 Third Quarter Results
On 17 October 2012, Reinsurance Group of America,
“Consolidated premium growth was solid, rising eight
Incorporated (NYSE: RGA) reported financial results for
percent on a reported basis and over nine percent in
the third quarter of 2012.
original currencies. Consolidated operating income
A. Greig Woodring, president and chief executive officer,
commented, “Our operating earnings were depressed
this quarter, primarily as a result of high claims in the U.S.
and Australia, including a large claim liability increase for
our Australian group business. The combined after-tax
adverse effect of these items, relative to expectations,
was about $0.66 per diluted share. Aside from these
businesses, our other operations generally performed as
expected or better during the third quarter.
“In Australia, adverse individual mortality and disability
claims contributed to a poor quarter. We continue to
monitor that business closely. Additionally, we have
performed a detailed review of our Australian group
reinsurance business and, as a result of the emerging
experience, strengthened Australia’s group business
claim liabilities by $27.9 million. Those group contracts
typically have a duration of three years.
“In the U.S., both the individual mortality and group
reinsurance businesses were adversely affected this
quarter by higher-than-expected claims. A thorough
analysis of the individual mortality experience revealed
claims frequency was more prominent than severity this
quarter. We expect the volatility in recent quarters to level
totaled $99.9 million, or $1.35 per diluted share. Our
operating effective tax rate was lower than anticipated
this quarter, primarily due to tax-related adjustments
for claims experience on certain treaties and other
refinements of tax accruals. Book value per share
increased to $91.18, including AOCI, and totaled
$62.05, excluding AOCI. Our net unrealized capital gains
are now $1.9 billion, up 20 percent since June 30, 2012.
A relatively stronger equity market helped our assetintensive operations this quarter as well.
“Annualized operating return on equity was nine percent
for the quarter and 10 percent year-to-date. Both of
those return levels are lower than our expected rate of
return. Historically, our returns have been fairly stable,
and we face some degree of headwinds from the current
investment environment. Our balance sheet remains
strong as does our level of deployable capital. We
continue to evaluate a significant number of block and
other reinsurance opportunities across the globe.”
2012 Third Quarter Financial Results:
• Premiums of $1.9 billion
• Total assets of $39.9 billion at 30 September 2012
out over longer horizons. Our U.S. group reinsurance
business also experienced higher-than-expected
claims in its disability, medical / managed care and
life coverages. That business has mostly performed in
line with expectations on a year-to-date basis with the
exception of the medical / managed care line, which is
prone to large claim volatility.
© 2012 Reinsurance Group of America, Incorporated. All rights reserved. No part of this publication may be
reproduced in any form without the prior permission of the publisher.
For requests to reproduce in part or entirely, please contact: publications@rgare.com
RGA has made all reasonable efforts to ensure that the information provided in this publication is accurate at the time
of inclusion and accepts no liability for any inaccuracies or omissions.
December 2012
Spain and Portugal
Arkadiusz (Ark) Bandosz
Managing Director
RGA International
Reinsurance Company Limited
Branch Office for Italy
Piazza San Marco, 3
20121 Milan
Italy
abandosz@rgare.com
T +39.02.88.21.0526
France and Belgium
Netherlands and
Nordic Countries
Rosa Alegria
Managing Director
RGA International
Reinsurance Company Limited
Sucursal en España
Paseo de Recoletos
33. Planta 1
28004 Madrid
Spain
ralegria@rgare.com
T +34.91.640.4340
Germany, Austria,
Switzerland and
Luxembourg
Klaus Mattar
Managing Director
Germany and CEE
RGA International
Reinsurance Company Limited
German Branch Office
Kaiser-Wilhelm-Ring 15
50672 Cologne
Germany
kmattar@rgare.com
T +49.221.964.998.21
Johan Tuijp
General Manager
RGA International
Reinsurance Company Limited
Branch Office for the
Netherlands
Gustav Mahlerlaan 50 B
1082 ME Amsterdam Netherlands
jtuijp@rgare.com
T +31.20.333.9003
Poland and Central
and Eastern Europe
Klaus Mattar
Managing Director
Germany and CEE
RGA International
Reinsurance Company Limited
Poland Branch Office
Deloitte House
Al. Jana Pawła II 19
00-854 Warsaw
Poland
kmattar@rgare.com
T +48.22.370.12.22
United Kingdom
and Ireland
Simon Wainwright
Managing Director
RGA International
Reinsurance Company Limited,
UK Branch Office
16th Floor
5 Aldermanbury Square
London EC2V 7HR
United Kingdom
swainwright@rgare.com
T +44.20.7710.6700
E U R O P E
Lionel Périnel
Managing Director
RGA International
Reinsurance Company Limited
Branch Office for France
31-33 rue de la Baume, 6th Floor
75008 Paris
France
lperinel@rgare.com
T +33.1.55.07.97.81
Q U A R T E R LY :
Italy
Olav Cuiper
Head of EMEA and
Emerging Markets
RGA International Reinsurance
Company Limited
Gustav Mahlerlaan 50 B
1082 ME Amsterdam Netherlands
ocuiper@rgare.com
T +31.20.333.9000
T +44.20.7710.6704
R G A
Europe
w w w . r g a r e . c o m
Contacts
17