ERGO in Belarus. Experience, challenges and opportunities. Augustas Šernius 22 nd of October 2015, Berlin / Germany

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1 ERGO in Belarus Experience, challenges and opportunities Augustas Šernius 22 nd of October 2015, Berlin / Germany Klubabend, DBWC, den 6. Oktober 2010, Crowne Plaza, Minsk / Belarus 1

ERGO Insurance Group ERGO Group is represented in over 30 countries worldwide ERGO offers a comprehensive spectrum of insurance, provision and services. About 43,000 people work for the Group.

2 ERGO Insurance Group ERGO Group is represented in over 30 countries worldwide ERGO offers a comprehensive spectrum of insurance, provision and services. About 43,000 people work for the Group. In 2014, ERGO recorded a premium income of over 18 billion euros and paid out benefits to customers amounting to over 17 billion euros. ERGO is a part of Munich Re, one of the world's leading reinsurers and risk carriers. 2

ERGO in Belarus Solid and profitable (Results of 2014, IFRS) Strong focus on growth: GWP 4,95 million GWP plan for 2015: 7,94 million Financially stable and profitable: Solvency coverage 395% Net

3 ERGO in Belarus Solid and profitable (Results of 2014, IFRS) Strong focus on growth: GWP 4,95 million GWP plan for 2015: 7,94 million Financially stable and profitable: Solvency coverage 395% Net result 0,31 million Key ratios development in line with business model: Net LoR 58,5% Cost ratio 38,3% Solid brand and market positioning *: TOP 3 among 9 private insurers Market share among private insurers - 10,82% Attractive employer and risk carrier: 46 employees clients insurance contracts Regional sales approach: 3 sales points (Brest, Grodno, Minsk) 124 tied (unemployed) agents 4FC 2015 GWP 5,90 million Net result 0,28 million * as at , local GAAP 3

4 ERGO in Belarus Fast organic growth in the background of shrinking private insurance market (as of , local GAAP) No Name of the company Net primary + gross assumed reinsurance GWP as of in thous. Share in the group in 2015 Primary GWP, as of in thous. Primary GWP, as of in thous. Change in % 1 Belrosstrakh (RESO Group) 9, % 10, , B&B insurance company 8, % 8, , % 3, , Kupala (VIG Group) 3, % 4, , Belingostrakh (INGO Group) 2, % 2,902,91 4, Kentavr 2, % 2, , Belvneshstrakh 2, % 2, , PPF Insurance 1, % 1, , Garantiya % , Bagach * % Zepter Insurance * % Delta strahovanie ** % , TOTAL 37, % 38, , * - from 1 st of May 2015 the licenses have been revoked by the Ministry of Finance ** - from 25 th of July 2015 the license have been revoked by the Ministry of Finance Source: The share of private insurance companies in total insurance market amounts to 12,89% 4

5 Belarusian insurance market Market share accessible for private insurers in Belarus (1 st HY 2015, local GAAP) Total BY market: m P&C Insurance market: m P&C voluntary insurance market: m 6,6% 93,4% P&C Insurance Life Insurance 46,0% 54,0% Voluntary LoB Obligatory LoB 45,0% 55,0% Natural persons insurance Legal entities insurance P&C voluntary insurance market (legal entities insurance): m Accessibility of P&C Insurance market: m 25,0% Private companies 31,7% Accessible share Public and semi-state companies Unaccessible share 75,0% 68,3% 5

Belarusian insurance market Positive outlook 700 600 500 200 100 Insurance penetration in 2014 (%) 400 300 0 313 383 Long-term development potential Belarus Source: Société Générale GDP per capita in

6 Belarusian insurance market Positive outlook Insurance penetration in 2014 (%) Long-term development potential Belarus Source: Société Générale GDP per capita in - CAGR (%) P&C insurance GWP development in mn e 2016e 2017e 2018e 2019e Source: VERA (Volkswirtschaft, Erstversicherung, Rückversicherung, Analyse) Belarus GDP per capita in - CAGR (%) 3,76% General trends Despite financial crisis, the market has experienced rapid growth in the past few years ( : CAGR of 26,6%) Main growth component: voluntary risk insurance growth (annual GWP growth rates > 30% during last 4 years), driven by strong growth in consumer and mortgage lending, new car sales and higher use of transportation and medical services. Amendments in the insurance legislation were adopted in April 2014, such as: stronger requirements concerning insurers capitalization, tighten consumer protection rules, improved procedures and conditions for the compulsory insurance lines Market future In 2014 S&P assessed country risk as 'very high,' which reflected its view on Belarus' current political risks, external debt, and weakening external position against its relatively high GDP per capita for the rating level keeping, but also considering the country's durable capital basis. S&P's risk assessment for the Belarusian P/C insurance sector is 'moderate,' reflecting its negative view of the insurance sector's profitability, given its rapidly declining return on equity over S&P's view on product and market growth prospects is neutral. Slow structural reform process to liberalize the economy, country initiates privatization of state-owned enterprises Growth perspectives: The World Bank analysts are expecting GDP growth recovery in 2017 New steps for liberalization are expected: it is possible that all insurers will be allowed to provide obligatory LoB 6

7 Thank you! To insure is to understand. 7 7

AXA s operations in Northern, Central & Eastern Europe. Alfred Bouckaert, Member of AXA s Management Board. Cheuvreux Conference January 10, 2008

AXA s operations in Northern, Central & Eastern Europe Alfred Bouckaert, Member of AXA s Management Board Cheuvreux Conference January 10, 2008 Cheuvreux Conference January 10, 2007 2 Cautionary statements