FOR ADVISERS
Introducing PruProtect
Protection that goes further
PRUPM11013 UBD XX Sept 2013
Sections
1. Who is PruProtect
2. Trends impacting protection
3. Facts, stats and quotes
4. Personal products
5. Business products
6. Vitality and Vitality Plus
7. Growing your business
2
Who is PruProtect
Who is PruProtect
Make people healthier
and enhance and protect
their lives
4
About PruProtect
•
PruProtect is a joint venture between Prudential and leading South African insurer,
Discovery
•
By combining Prudential’s trusted reputation and Discovery’s history of creative insurance
solutions, we’ve developed a new type of Serious Illness Cover
•
PruProtect builds on the success of PruHealth in the PMI market
5
Combined strengths
Largest protection
provider in SA
Financial strength
AA
Innovative products
Highly respected
brand
Service excellence
Approx 7 million
customers in the UK
Protection and wellness is our core business
Prudential Assurance Company has a Standard & Poor's rating of AA, March 2013
6
PruProtect Claims experience - 2012
•
97.4% of Life Cover Claims paid out
•
92.9% of Serious Illness benefits paid out
•
94.1% of Income Protection benefit paid out
•
Income Protection was the highest claims paid ratio across other providers with similar
products
Source: PruProtect analysis of Claims experience from
January 2012 to December 2012
7
Discovery Life’s 2012 claims experience
99% claims paid vs declined claims
•
More than £19m were paid out in Serious Illness benefits
•
Over £60m Life Cover benefits were paid out
•
More than £104m has been paid out to claimants or their estates
•
The Global Education Protector currently covers the education costs
of 3,378 children under Group Risk
Source: Discovery Life Claims experience
from January 2012 to December 2012
8
Discovery Life’s 2012 claims experience
Why 1% of received claims were invalid
60%
Non-disclosure
24%
Policy terms or conditions not met
10%
99% paid
Misrepresentation
6%
Suicide within two years
See our claims sales aid
for more details
Source: Discovery Life Claims experience
from January 2012 to December 2012
9
Discovery growth: scale and relevance
Discovery Group membership growth
Members
2012
Over 6
million
members
worldwid
e
+ 3.75
million
+ 2.5
million
+1.6
million
+ 600,000
+ 100,000
June 93
Discover Health
Launch
1997 Vitality
Discovery
2001
Discovery Life
2004
PruHealth
2010
Discovery Invest
PruProtect
The Vitality Group
2010
Standard Life
acquisition
2013
Source: Discovery (2013)
10
Continued Growth in the In-force Portfolio –
No. of Policies
PruProtect Growth in In-force number of policies
160,000
Dec-12
136 164
140,000
Number of Policies
120,000
Jun-12
109 947
100,000
Jun-11
68 965
80,000
60,000
Jun-10
35 921
40,000
10.3% IFA
Market share
20,000
-
Number of Policies
11
Continued Growth in the In-force Portfolio –
Annual Premium Equivalent
PruProtect Growth in APE
100,000,000
88,304,073.00
90,000,000
80,000,000
69,987,983.00
70,000,000
APE (£)
60,000,000
50,000,000
42,568,056.00
40,000,000
30,000,000
20,000,000
23,166,522.00
10.3% IFA
Market share
10,000,000
-
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PruProtect’s model –
continuing to push the boundaries
Premium efficiencies
Dynamic pricing
Wellness underpin
Current market
Upfront efficiency
Broad definitions,
multiple claims
Narrow once-off
Value of benefits
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Our product evolution
Vitality with lite
rewards
Nov 2008
PruProtect
Sept 2007
1st Franchise
Family Income Cover
Education Cover
Business Protection
Relevant Life Policy
Accelerator
Whole of Life
Vitality Plus
Premium Saver &
Premium Discounts
Nov 2011
IP & SIC
enhancements
Apr 2009
Essentials Plan
Nov 2009
TAM’s
Launch
SIC & servicing
enhancements
Health Cover
June 2010
Oct 2010
Vitality
enhancements
SIC Booster
Jan 2012
Vitality
Optimiser
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An integrated approach across the
protection spectrum
Intermediary
benefits
Customer
benefits
Our philosophy
•
•
•
•
High advice sales
Needs based solutions
Rich customer benefit
Lower lapses
•
•
•
•
•
Severity-based benefits
Whole body coverage
Multiple claims capability
Improved consumer outcomes
Health partners and rewards
•
•
•
•
Comprehensive cover
Continuous protection
Simple and fair
Wellness underpin
Continual and relevant innovation
15
Pricing
We offer a range of premium options to suit your clients’ financial situation
•
Have a look at our more affordable Essentials Plan
•
Vitality Optimiser – combining all the rewards of Vitality with an upfront discount on our
award winning cover
•
Your clients can even earn reductions on their premiums by engaging in our
Vitality programme
16
Our financial strength and stability
Group history
•
The Prudential Health Holdings Limited group of companies was set up as a joint venture
between Prudential Assurance Company and Discovery (a South African insurer).
•
The joint venture comprises two businesses (1) a health business PruHealth, and (2) a
protection business, PruProtect.
•
Originally this was a 50% / 50% joint venture.
•
In August 2010, Discovery purchased Standard Life Healthcare for £138m and placed this
into the joint venture. At the same time the shareholding changed to Discovery 75% and
Prudential 25%.
18
Legal entity structure
Discovery
(SA)
Prudential
100%
•
The PHHL Group has two health companies,
PHIL, which underwrites the ex-Standard Life
Healthcare entity, and PHL, which underwrites
the original JV PruHealth business.
•
PruProtect business is underwritten by PAC.
•
PHSL is the services company that employs
all staff and holds all contractual arrangements
and provides the distribution and administration
services for both PruHealth and PruProtect.
100%
PAC
DOHL
75%
25%
PHHL
100%
PHIL
100%
PHSL
100%
PHL
Key
Note: All entities in the structure, other than Discovery, are UK registered.
Discovery
Prudential
DOHL
PAC
PHHL
PHIL
PHL
PHSL
Discovery Holdings Limited
Prudential Plc
Discovery Offshore Holdings Limited
Prudential Assurance Company Limited
Prudential Health Holdings Limited
Prudential Health Insurance Limited (formerly Standard Life Healthcare Ltd)
Prudential Health Limited
Prudential Health Services Limited
19
Group and shareholder performance
Prudential and Discovery display both scale and success in their markets overtime.
Prudential Assurance Company (year to 31 December 2012)
• Net Assets:
£4,740m
• Turnover:
£14,116m
• Profit/(Loss):
£376m
Discovery Group (year
• Net Assets:
• Turnover:
• Profit/ (Loss):
to 30 June 2013)
£914m (15.22 Rand/GBP closing rate)
£1,778m (13.98 Rand/GBP average rate)
£152m (13.98 Rand/GBP average rate)
Prudential Health Holdings Group (12 months to 30 June 2013)
• Net Assets:
£207m
• Turnover:
£339m
• Loss before tax: £(11.0m) (stated after one off expense)
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Financial strength ratings*
•
PruProtect business is written through Prudential Assurance Company Limited (PAC) in the
Prudential Group. As a result, it benefits from the scale, diversity and solvency of PAC.
•
The major rating agencies have given the following ratings to PAC:
Correct as of May 2013
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Reinsurance
•
PruProtect’s Life and Serious Illness Cover products are reinsured by Hannover Life Re UK.
They have an AA- (very Strong) financial strength rating from S&P and an A+ (Superior)
from A.M. Best.
•
Gen Re reinsures PruProtect’s Income Protect products. Gen Re is a subsidiary of the
Berkshire Hathaway Group and has been rated as AA+ by S&P.
•
Swiss Re reinsures the PruProtect over 50s products. Swiss Re is rated AA- by S&P.
•
All three of our reinsurance providers are in the world’s top five largest reinsurance groups.
•
From outset and on a continuing basis, our providers have participated in our business on
financing and quota share bases.
•
This approach allows PruProtect to enhance its in-house risk expertise with continuing
insight from some of the world’s leading risk professionals.
•
Our arrangements also demonstrate the confidence that these market-leading insurance
organisations continue to hold in PruProtect’s products and pricing structures.
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Further financial assurance
In addition to the financial strength illustrated by PruProtect, there are two further ways in which
customers interests are safeguarded.
The Financial Conduct Authority (FCA)
• The FCA requires insurance companies to complete an Individual Capital Assessment (ICA)
every year. The ICA is a worst case scenario test of extreme events which produces a
capital reserve figure. PruProtect is required to hold assets/reserves that amount to this
figure i.e. to provide an additional margin of protection against significant adverse events
The Financial Service Compensation Scheme (FSCS)
• The FSCS is the compensation fund of last resort for customers of authorised financial
services firms. In the event that an insurer becomes insolvent or ceases trading FSCS can
pay compensation to the customers of the insolvent insurer.
•
Insurance companies are required to pay into the FSCS for purposes of compensating
customers in extreme circumstances, who have suffered financial loss following a company
going insolvent. All insurance companies pay into this scheme and it would cover up to
90% of a customer's claim amount.
23
Awards and recognition
Peter Chadborn, principle at IFA CBK, said:
PruProtect has continued to innovate and
challenge old thinking in the market. The
industry needs such companies who are
not afraid of breaking the mould in order
to introduce new ideas.
2009 - 2013
2007-2013
2008 - 2013
Vivien Hearn of Barfield Financial
Advisers, said
The PruProtect Policy is the
best thing that has come to the
market in the last 20 years.
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Thank you
If you’d like to know more, please speak to your Business
Consultant or take a look at pruprotect.co.uk/adviser