Actuarial Statement for

New Business Product:

Wapic Smart LifeSavers
Plan.
Prepared for Wapic Insurance PLC by

1
07 JUNE 2016
 Address: 7th Floor
Aiico Plaza
Churchgate Street
Victoria Island

Actuarial Statement Tel:

Lagos
01-462313/4
01-2800917/8

for New Business 01-4616768

Email: info@hractuaries.com

Product: Wapic Smart

Web: www.hractuaries.com

LifeSavers Plan.
Prepared for Wapic Insurance PLC by

Contents

1. Introduction 3

2. Benefits Payable 4

3. Premiums Payable 5

4. Pricing Methodology and Assumptions 6

5. Actuarial Certificate 8

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1. Introduction

1.1. This is a savings plan that has basic life cover. It provides potential policyholders the
maximization of medium or long term savings. It provides a tax free lump sum at the
end of the selected policy duration of the plan.

1.2. Product Features

 The minimum contribution is N120,000 per annum.

 The minimum policy duration is 3 years.

 The minimum and maximum age at entry is 18 and 63 years respectively.

 Regular deductions of the insurance charge (risk premium) for life cover, permanent
disability and critical illness will be made from the contribution.

The balance will be credited to the policyholders’ investible fund in which interest will
accrue.

 The proceeds of the savings account will be paid at maturity or on surrender of the
policy. In the event of death or permanent disability, the proceeds of the savings
account plus payment of appropriate life cover is payable.

 The sum assured is 20 times the annual contribution subject to a maximum of

N10,000,000.

 There is a permanent disability cover equal to the sum assured.

 A partial withdrawal of up to 50% of the principal amount is allowed after 2 years.

1.3. General Conditions

Please refer to the enclosed policy documents for the general policy conditions.

1.4. Policy Cancellation

Please refer to the enclosed policy documents for terms and conditions relating to
policy cancellation.

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2. Benefits Payable

2.1. Death Benefit

In the event of death, the sum assured together with the account balance is payable.

2.2. Maturity Benefit

On maturity, the account balance including accrued interest is payable.

2.3. Optional Rider Benefit

In the event of critical illness or personal accident, the appropriate cover is payable.

2.4. Surrender/ Termination Benefit

The balance in the savings account is payable on surrender or terminating the policy.

Benefit Payment Conditions

2.5. Waiting Periods
There is a one-year waiting period in the event of a claim.

Policy Exclusions
2.6. Please refer to the enclosed policy documents for details of policy exclusions.

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3. Risk Premiums Payable

3.1. Charges for Insurance

The annual risk premium rate for permanent disability is 2 per N1,000 sum assured.

The annual risk premium rates for covering the life of the policyholder is detailed
according to age in the table below;

Annual Annual Annual

Premium Rate Premium Rate Premium Rate
Age Age Age
per N1,000 per N1,000 per N1,000
Sum Assured Sum Assured Sum Assured
18 0.850 34 0.790 50 4.789
19 0.850 35 0.856 51 5.377
20 0.850 36 0.937 52 6.031
21 0.850 37 1.034 53 6.755
22 0.850 38 1.150 54 7.556
23 0.850 39 1.285 55 8.441
24 0.850 40 1.443 56 9.419
25 0.663 41 1.624 57 10.497
26 0.663 42 1.832 58 11.686
27 0.663 43 2.068 59 12.994
28 0.663 44 2.335 60 14.433
29 0.663 45 2.637 61 16.014
30 0.654 46 2.977 62 17.750
31 0.671 47 3.358 63 19.655
32 0.699 48 3.784 64 21.743
33 0.738 49 4.259 65 24.031

3.2. Lapse Policy

The insurance provided under the policy will lapse if contributions are not made when
due.

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4. Pricing Methodology and Assumptions

4.1. Pricing Methodology

A monthly discounted cashflow approach was adopted for determining the emerging profits,
explicitly taking into account all related cashflows including the cost of setting up statutory
reserves.

Policyholder cashflows

 Contributions
 less monthly insurance charge for life cover
 less monthly insurance charge on riders
 plus investment return credited at prevailing T-bill rate less 6% (flat).

Company (profit) cashflows

 Unallocated returns on policyholder funds (i.e. the net of tax return earned over and
above that credited to policyholder accounts)
 plus charge for insurance on life
 plus charge for insurance on riders
 Less initial and renewal expenses, NAICOM fees and stamp duties payable
 Less increase in non-unit reserves
 Plus return on reserves and net non-unit cashflows

4.2. Pricing Assumptions

The following assumptions were made in the determination of the profit margins:

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 Assumptions
Mortality 100% UK A6770 Mortality Table
Initial Expense (overhead contribution) N7,500 per policy
Maintenance Expense N5,000 per policy per annum
Expense Inflation 9.5% pa
Stamp Duty 0.15% of sum assured
NAICOM Fee 0.5% of contribution
Commission Policy Term
Less than 5 yrs 5 yrs and
above
Year 1 2.5% 5%
Year 2 2.5% 5%
Year 3 2.5% 5%
Year 4+ 0% 0%
Investment Return earned 12% pa
Investment return credited 6% lower than investment returned earned
Shareholder Risk Discount Rate 15% pa
Profit Loading 2%
Fund Withdrawal Rates Surrender Rate
Year 1 0%
Year 2 0%
Year 3 5.0%
Year 4 15%
Year 5+ 12.5%
Additional Assumptions for Reserving
Expense margin Pricing assumption + 10%
Valuation interest rate 10% pa

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 Actuarial Certificate

Product: Wapic Smart LifeSavers Plan.

I hereby confirm that the above product complies with all relevant laws,
regulations, guidelines and actuarial standards.

………………………………………….

Olurotimi O Okpaise B.Sc, ASA, FIA

Consulting Actuary
June 2016