Insurance stufffor DataGeeks Dr. Ben Flood bflood@kpmg.com — 2017-11-23

2 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential 1The Product p. 3 4Lapse p. 6 2Death p. 4 5Financial (1 & 2) p. 7 Contents 3Longevity p. 5 6Nested Stochastic p. 9

3 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential The Product: Annuity Guarantee Account Monthly Payments Accumulation Phase Annuity Phase

4 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Death

5 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Longevity

6 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Lapse Expected Lapse Dynamic Lapse Mass Lapse

7 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Financial: CostofCapital • Question: How much money do I need to keep in my back pocket to be allowed to run the business? • Answer: To be able to survive the worst 1 year in 20, every year. • Question: How much does my business have to pay for that? • Answer: Roughly 6%

8 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential Financial: EconomicScenarios Need to project my account balance Real World Risk Neutral Best Estimate A: What I think will happen in the market B: How I think the market will price what I think Market Consistent C: Really hard to estimate D: Magic formula to make my value consistent with prices of market instruments

9 © [year] [legal member firm name], a [jurisdiction] [legal structure] and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Document Classification: KPMG Confidential NestedStochastics

Thankyou Dr. Ben Flood bflood@kpmg.com