VitalityLife Overview June 2019 Herschel Mayers CEO VitalityLife and VitalityInvest
Our Core Purpose To mak ake people ple Members Improved health, better value through improved price and benefits healthi lthier, er, and and enh nhance ance and and protect tect th their ir lives ves Society Insurer Healthier society Lower claims Improved productivity Higher margins Reduced healthcare Positive selection burden and lower lapses
Evolution of Vitality UK Org rgani anic growth Integrat ation Brand and devel velopment ent, rapid innovat vation n & migrat ation n to single e platfo form HEALTHY 2014 2014 2016 2016 2007 2007 MIND 2015 2015 2010 2010 TODAY 2004 2004 10 years 4 4 years
Characteristics of the UK protection market Large term and critical illness cover Increasingly price competitive Lack of innovation has led to a market commoditized market Typic ical l Life Insuran urance ce Polic licy: : 3% 9% Cha hange nge in Term rm Assura suranc nce Pric ices s (Indexed to 2002 2 in real l terms) s) Term Level life cover 2% assurance no added benefits 100 8% 95 Age, smoker status, 90 Guaranteed, level lifestyle and medical 50% premiums 85 questions 80 75 70 28% 65 Term Protection 60 Mortgage-Related Term 55 Whole Life 50 Stand-Alone Critical Illness Income Protection 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Consumer r and Broker r Port rtals ls show pric ice Business Protection comparison risons s that drive sale les behaviou iours rs
Evolution of VitalityLife Product and Service offering Success from innovations based on customer learnings and adaptability to changing market needs >540k 2017 2018 2007 2009 2010 2011 2013 2014 2016 VITALITY WELLNESS OPTIMISER LITE DEMENTIA AND Continuous Cover Essentials SIC Premium Saver LifestyleCare Multiple Claims plan enhancements Premium OPTIMISER Cover OPTIMISER VO and WO FRAILCARE COVER Child SIC Lifestyle cover discounts Short-term IP IP Enhancements SIC Premium Optimiser Disability Waivers Mortgage Plus Enhancements Interest Rate Optimiser UW Plan SIC Booster Optimiser Mortgage Plan Family Benefit Vitality Enhancements Protected Cover VITALITY NURSES Lives covered over time
A Global First: Dementia and FrailCare Cover Premium No additional continu nues es as SIC policies with VO VO Cover for UW or extra norm rmal al after or WO WO are eligible Life prem emium um term cover ends Deme mentia ntia an and Frail ailCare Cover Guarante teed d Funeral l Cover er 10% 10% Dement ntia 50% 50 4 Alzheimer’s Parkinson’s of remaining SIC benefit amount Strok oke severity levels of Term Life Cover benefit amount Frailty £100,000 cap which increases by £10,000 cap which increases by RPI from point of sale RPI from point of sale
Multi-channel distribution
D2C performance to date H1 2019 D2C sales were £3.2m This is up 51% on last year £1,000,000 25,000 £900,000 D2C now contributing 10% of all sales £800,000 20,000 £700,000 £600,000 15,000 £500,000 £400,000 10,000 £300,000 Total Sales APE Total Leads £200,000 5,000 £100,000 £0 -
We have seen significant member engagement 300k >64k >11k Ocado deliveries Vitality Age Apple Watch Orders completions >900k >640k >132bn Cinema codes Steps walked Gym visits >60k >980k Food packs Coffees awarded Engagement ent statist stics s for July 2018 – December er 2018
Engaged members earn significant value Average Vitality savings and rewards compared to premium Bronze Silver Gold Platinum 8% 8% 51% 51% 77% 77% 121% 1% £53 £332 £499 £650 £650 £650 £650 £597 £787 £318 £151 -£137 Gross Vitality Effective Gross Vitality Effective Gross Vitality Effective Gross Vitality Effective premium value premium premium value premium premium value premium premium value premium Vitality gave over £60m in value to members in 2017 *Based on average actual Vitality savings of Life policies with Vitality Plus in force for throughout the entire 2017.
Engagement leading to better outcomes More engagement less Serious Illness Cover Status tus Gym user er Over 50% Over 40% Less claims per Less claims per member when member when Silver status or regular gym usage 2 above 1 Bronze Silver, gold No gym Regular gym and Platinum 1 Based on Serious Illness and Income Protection claims of 2 Based on Serious Illness and Income Protection claims of members with Vitality Plus members with Vitality Plus for claims of those that are 40 or over.
Key performance to date +4% +11% +28% +8% +15% +38% New business Operating profit Value in force to R600m to £32.8m to R300m to £16.4m to R6.2bn to £339m 77% of New GBP millions GBP millions Business written is GBP millions Optimised H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 +16% +14% Lives covered Policies Value of New Business & Margin to >542k to >408k to R165m -27% -24% 11.5% 9.5% to £9m 6.7% 5.1% 4.32% H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H 2015 H1 2016 H1 2017 H1 2018 H1 2019
VitalityLife Overview June 2019 Herschel Mayers CEO VitalityLife and VitalityInvest
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