ChallengesFacingtheLifeInsuranceIndustry-MUDGroup.pdfVIP

Challenges Facing the Life Insurance Industry William J. Wheeler President, Americas MetLife A Challenging Time for the Life Insurance Industry Lowest Interest Rates in a Generation 10-Year Treasury Percentage Yield 14 12 10 8 6 InterestRate % 4 2 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Yahoo Finance 3 Low Interest Rate Outlook over Next Several Years We expect rates to stay at these low levels until 2015.” – Richard Fisher, Dallas Federal Reserve President Source: Reuters, November 29, 2012 4 Significant Regulatory Concerns: Federal “We continue to expect that the implementation of non-bank SIFI standards will likely materially increase required capital for the largest insurers.” – Thomas Gallagher, Credit Suisse Source: Credit Suisse US Life Insurance, October 11, 2012 5 Significant Regulatory Concerns: State “There is a need to improve the regulation and transparency of… the risks that captives/SPVs may pose…” Source: National Association of Insurance Commissioners - Captives and Special Purpose Vehicles White Paper, 2012 6 Significant Regulatory Concerns: International ...Solvency II is a reality and will have a significant impact on the U.S. insurance industry at large....” Source: Solvency II and its Implications for U.S.-based Insurers. Robert Dyer and Dr. Robert Mark 7 Declining Agent Count 300,000 Number of Life Insurance Agents 256,735 200,000