CARE RELIABILITY INNOVATIONS STABILITY

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2 RELIABILITY THERE ARE THINGS YOU APPRECIATE ABOVE ALL A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so. CARE ATTENTION IS AROUND YOU INNOVATIONS FUTURE IS NEXT TO YOU Mahatma Gandhi STABILITY ASSURANCE TESTED BY TIME

3 Address of Chairman of Board We have been cooperating with the majority of our partners for many years. Last year, the Company celebrated its 21st anniversary in the market. We were reaching our legal age amid the unprecedented economic storm at all levels of the economy of the country within all its history. In 2015, the shareholders of the Company set the following key tasks before the Board: to meet all the commitments of the Company, and commitments to its customers and partners in particular; to maintain the high-level liquidity and adequacy of the capital of the Company; to retain the corporate personnel. All the management decisions were based on the experience gained by the Company during the previous crisis. Let s focus on the results. As in the previous years, the prompt and high-quality case settlement is a key indicator of relations between the Company and its customers. In 2015, the Company paid indemnities totaling to almost UAH 453 mln. Indemnity for property loss in fire was the largest one amounting to UAH mln. Individual damage indemnities totaled to UAH 84.3 mln. In the face of the economic situation, we designed a number of insurance products with flexible pricing and premium payment terms. In association with the GEB pool, we introduced winning personnel health and life insurance programs for Ukrainian and international companies in the market. We managed to retain one of the most experienced and professional teams in the insurance market, which proved to be effective within both economic growth and crisis. Today, 94 of 439 employees have been working with the Company for more than ten years, whereas eight of our colleagues have already celebrated their 20th anniversary at the Company. In 2015, we retained workplaces as well as introduced a more flexible remuneration system and various social benefits for our employees. We managed to retain the existing programs of cooperation with our partners and introduced new technological services reducing the customer service time. We would like to express special gratitude to our reinsurance partners who are the leading players in the international reinsurer market, who have been supporting the Company with reliable and high-rating high risk protection programs for many years. We proved our status as a responsible employer by retaining workplaces during the economic crisis. Last year, the Company paid UAH 94.5 mln of taxes to the state budget. Based on the 2015 results, the Company was in the TOP 100 largest profit tax payers in Ukraine, BUSINESS Magazine said. Focusing on the health of our citizens, we keep on developing INGO Medical Center. The high-quality service provided by the specialists of the clinic and affordable prices have already been appreciated by thousands of Kyiv citizens. INGO Medical Center provides services to the customers insured by our Company as well as customers of other insurers and Kyiv residents who want to get quality medical care. The representatives of the Company actively cooperate with collegial bodies, workgroups, professional organizations and business associations. The 2015 activities increased the equity capital of INGO Ukraine Insurance Co. by 22.1% up to UAH 537 mln. More than 80% of the insurance reserves amounting to UAH 567 mln at the end of the year were covered by highly liquid assets. The actual solvency margin of the Company is four and a half times higher than a normative one. The net profit of the Company amounted to UAH 73.5 mln. 7 place IN PREMIUMS th 2 th place IN INDEMNIFICATION 94,5 PAID TO THE STATE BUDGET OF UKRAINE Starting the development of a new operational strategy and modernizing the IT system in full are considered as the important corporate events. The implementation of these projects will ensure the further successful development of the Company within the next 10 years. Igor Gordienko, Chairman of Board, INGO Ukraine Insurance Co. 4 5

4 Key Performance Indicators of Company 59 % INDEMNIFICATION RATE 567 INSURANCE RESERVE 537 EQUITY CAPITAL 306 AUTHORIZED CAPITAL 1297 ASSETS 74 NET INCOME IN 2015, INGO UKRAINE RELIED ON THE RETENTION OF CAPITAL AND HIGH LIQUIDITY. THAT ALLOWED IMPROV- ING FINANCIAL PERFORMANCE AND MAINTAINING THE TRUST OF PARTNERS AND CUSTOMERS. 28 INSURANCE LICENCES 439 EMPLOYEES 94,5 PAYMENTS TO STATE BUDGET OF UKRAINE Indicator Dynamics Insurance premiums, 581,2 766,5 31,9% Insurance indemnities, 291,4 452,9 55,4% Indemnification rate, % 50,14 59,09 17,8% Equity capital, 439,3 536,6 22,1% Assets, 1173,2 1297,1 10,6% Insurance reserves, 553,1 567,2 2,6% Authorized capital, 305,5 305,5 0,0% Net profit, 56,0 73,5 31,3% Number of insurance agreements signed with ,6% individuals ,8% legal entities ,0% Number of insurance indemnities ,8% The previous year witnessed that INGO Ukraine Insurance Co. collected over UAH 766 mln of insurance premiums exceeding the 2014 results by 32%, and its net profit increased by 31.3% up to UAH 73.5 mln. In terms of premium volumes, the Company is in the top ten in the market. In 2015, the insurance indemnities increased by over 55.4% amounting to UAH mln. The increase in indemnification from 50% to 59% proved that INGO Ukraine would be able to duly meet its commitments to its customers. One of the largest indemnities paid by the Company and amounting to UAH mln was paid in INGO Ukraine Insurance Co. focused on profit growth tactics for several years. In 2015, its equity capital increased by 22.1% and reached UAH mln. More than 80% of the insurance reserves exceeding UAH 567 mln at the end of the year were covered by liquid assets in the monetary and deposit form. Today, INGO Ukraine Insurance Co. is one of the most capitalized companies in the insurance market with its actual solvency margin four and a half times higher than a normative one. Its significant financial reserves allow INGO Ukraine to keep trust among its customers at the high level as well as invest in its own development. The Company is actively introducing modern technology and automatize the existing processes. This will allow the customers to receive services faster and with higher quality. STRUCTURE OF PREMIUMS STRUCTURE OF INDEMNITIES ,5% Comprehensive Property Insurance 24,3% Personal Insurance 146,8% Special Risks 36,5% Motor Insurance 767 OF INSURANCE PREMIUMS ,2% Comprehensive Property Insurance 20,0% Personal Insurance 42,3% Special Risks 25,7% Motor Insurance 453 INSURANCE INDEMNITIES 6 7

5 Market Position AGAINST THE BACKGROUND OF HIGH COMPETITION IN THE INSURANCE MARKET, INGO UKRAINE INSURANCE CO. RETAINED ITS STRONG LEADING POSITIONS IN KEY INSURANCE AREAS AS WELL AS THE BALANCE PREMIUM PORTFOLIO. BY DIVERSIFYING INSURANCE RISKS WITHIN BUSINESS LINES, THE COMPANY HAS THE SUFFICIENT RESERVE OF FINANCIAL STABILITY AND CAN INDEMNIFY ITS CUSTOMERS FOR LARGE VOLUMES OF DAMAGES. KEY INDICATORS * Indemnification Rate Premiums, Indemnities, INGO Ukraine 59% Providna 53% АХА Insurance 45% Ingosstrakh 45% USH 43% UNIQA 42% ASKA 31% PZU Ukraine 30% Arsenal 29% Kremin 12% * 2015 Insurance TOP Rating: 12 months Thus, the equity capital of INGO Ukraine Insurance Co. is in the TOP 5 and its asset amount is third in the market. partners a reasonable tariff policy, transparent insurance conditions and financial guarantees. The insurance market showed positive dynamics in terms of premiums collected in The statistics of the National Financial Service Commission said that the growth in net insurance premiums (+20.2%) was triggered by premium increase in the following types: motor insurance (+23.1%), third party insurance (+107.2%), cargo and luggage insurance (+45.9%), medical insurance (+23.6%), aviation insurance (+60.6%), financial risk insurance (+7.6%), medical expense insurance (+45.9%). increased in The market share of the TOP 10 companies amounted to 36.3%, TOP 20 companies to 60.3%, and TOP 50 companies to 85.0%. Based on the results of the year, INGO Ukraine took the second place in insurance indemnity volume (UAH452.9 mln) and the first place in indemnification rate among the companies who were in top 20 due to premiums collected 59%. The Ukrainian insurance market is rather turbulent and has the low insurance service consumer trust. Only a few companies can be proud of the results of their activities evidenced by consumer trust and good will among their partners. The insurance premiums collected by voluntary insurance types are one of the customer loyalty criteria. Motor CASCO insurance where INGO Ukraine took the forth place having collected UAH 256 mln of premiums was one of those types. Nowadays, the insurance market is facing unprecedented challenges. Most classic insurance types have high loss ratios. Thus, ensuring their financial stability requires that the companies diversify risks to be insured. Organizing and supporting the balanced risk portfolio was an important task for the management of INGO Ukraine Insurance Co. that was successfully fulfilled in On 31 December 2015, the number of non-life insurance companies reached 312. Despite the significant number of companies, 200 non-life insurance companies (64.1%) accumulate the bulk of gross insurance premiums 99.9%. Despite the extremely complicated macroeconomic conditions, the Company kept on increasing its insurance reserves exceeding UAH 567 mln last year. Thus, INGO Ukraine took the first place in the market. INGO Ukraine feels confident in the top 10 of the largest insurance companies of the country, which take more than the third part of the market, as it offers its customers and But today and in the nearest future, insurers is focusing on how to restore and raise the customer loyalty to the institution of insurance in general. The National Financial Service Commission of Ukraine said that the concentration of the non-life insurance market The Company pays great attention to the sufficient capitalization and high-level liquidity. STRUCTURE OF PREMIUMS ** 100% 90% 80% BASED ON THE 2015 RESULTS, INGO UKRAINE TOOK THE THIRD PLACE IN THE AMOUNT OF ASSETS 2nd PLACE IN INDEMNITY VOLUME * 70% 60% 50% 40% 30% 20% 10% 1nd PLACE IN INSURANCE RESERVES AND ASSETS 0% Kremin Property Insurance Cargo Insurance АХА Insurance UNIQA Arsenal Voluntary Agricultural Product Insurance Voluntary Medical Insurance ASKA PZU Ukraine INGO Ukraine Medical Expense Insurance (Tourism) CASCO Insurance Ingosstrakh Providna USH Compulsory Motor TPL Insurance Others *2015 Insurance TOP Rating: 12 months ** 2015 Insurance TOP Rating: 12 months 8 9

6 RELIABILITY THERE ARE THINGS YOU APPRECIATE ABOVE ALL

7 Motor Insurance MOTOR INSURANCE TAKING MORE THAN 53% IN THE TOTAL PREMIUMS COLLECTED AS OF THE END OF 2015 IS ONE OF THE PRIORITY BUSINESS LINES OF INGO UKRAINE. MOTOR CASCO INSURANCE Index, % 60% 61% 56% Indemnification Rate, % 60% 40% 59,3% MOTOR CASCO INSURANCE INDEMNITIES One of the key tasks of INGO Ukraine Insurance Co. is to provide car owners with comprehensive protection insuring cars, the life and health of driver and passengers, and car owner third party liability. Thus, the Company traditionally keeps developing motor insurance, including motor CAS- CO insurance, compulsory motor third-party liability insurance in Ukraine (CMTPLI) and abroad (Green Card), voluntary third party liability insurance in Ukraine (VMTPLI), traffic accident insurance for drivers and passengers % 0% Premiums Indemnities Premiums Indemnities Individuals Legal Entities Indemnification Rate TOP-4 MOTOR CASCO INSURANCE PREMIUMS AND INDEMNITIES STRUCTURE OF PREMIUMS 408,62 INSURANCE PREMIUMS 256,17 The balanced tariff policy of the Company ensures high liquidity that allows meeting financial commitments to customers and partners duly and in full. The Insurance TOP study showed that INGO Ukraine took the forth place in the Motor CASCO Insurance market in 2015 with the premiums collected equaling to UAH 256 mln and its indemnities reaching 59%. The Company keeps holding high market positions as it strictly meets the terms and conditions of insurance agreements and builds transparent ties with its customers. In 2015, the system of motor insurance case settlement was sophisticated. The modern IT environment enabled INGO Ukraine Insurance Co. to solve the most issues related to car repair directly with a motor service station and without any customer s involvement. Remote insurance case settlement also saved the trouble of contacting the insurer. The improved technological procedures resulted in the simplified and accelerated settlement processes leading to the reduced indemnification decision-making period up to six business days. That had a positive effect on the INGO Ukraine net promoter score (NPS) equaling to to 85% in MTPLI Index, Individuals 74% 57% Legal Entities 54% 45% Premiums Indemnities Premiums Indemnities Indemnification Rate, % 80% 60% 40% 20% 0% Indemnification Rate Today, our task is to be technological, highly liquid and adequate in terms of the product price-quality ratio. Ensuring these conditions on a regular basis will allow us to secure our status of a reliable company preferred by customers and partners for longterm cooperation. Victor Shevchenko, Deputy Chairman of Board of INGO Ukraine Insurance Co. Motor CASCO Insurance MTPLI 11,26 96,03 Green Card 45,16 VTMPL and Traffic Accident Insurance Insurance type Premiums, Indemnities, Market Share* Motor CASCO Insurance 256,17 151,8 6,7 MTPLI 45,16 21,8 1,5 Green Card 96,03 30,09 9,5 VTMPL and Traffic Accident Insurance 11,26 2,51 3,9 Transport Insurance, TOTAL 408,62 206,20 5,0 *2015 Insurance TOP Rating: 12 months In 2015, the Company started actively developing the concept of the fair price for Motor CASCO Insurance for individuals. Telemetry technology is its key element. A fair price is based on estimating a risk for each customer based on his/her individual driving style. The telemetry technology also allows the customer to control his/her safety while driving a car. Insurance Type MARKET POSITION AND INDEMNIFICATION RATE * INGO Ukraine in Premium Collection Rating INGO Ukraine Indemnification Rate Average Market Indemnification Rate Motor CASCO Insurance 4 59% 48% MTPLI 25 48% 36% Green Card 6 31% 26% *2015 Insurance TOP Rating: 12 months 12 13

8 Property and Liability Insurance COMPREHENSIVE PROPERTY AND LIABILITY INSURANCE IS TRADITIONALLY A STRONG BUSINESS LINE OF INGO UKRAINE, WHERE IT HAS THE LONG-TERM EXPERIENCE OF RISK ASSESSMENT, INSURANCE SETTLEMENT AND LARGE DAMAGE INDEMNIFICATION. STRUCTURE OF PREMIUMS 34,9 22,8 46,6 Property insurance Special risk insurance Financial and credit risk insurance Nuclear installation operator third party liability insurance 1,5 15,2 24,4 млн грн 22,1 251 INSURANCE PREMIUMS 83,5 Voluntary third-party liability insurance Voluntary agricultural product insurance Cargo insurance Other The last year witnessed that INGO Ukraine paid one of its largest indemnities exceeding UAH 147 mln. In addition, INGO Ukraine paid most of its indemnities under agricultural insurance agreements that equaled to UAH 4.6 with two major insurance cases: UAH 3.6 mln for loss of winter wheat and winter rape plantings due to winterkilling in Khmelnytskyi and Odesa regions and UAH 887,000 for corn and winter rape shortfall due to drought and strong wind in Zhytomyr and Odesa regions. Meanwhile, the IFC agricultural insurance market study showed that 44.5% of total market indemnities under agricultural insurance agreements were paid by INGO Ukraine in the underwriting year The previous year witnessed that INGO Ukraine increased the comprehensive insurance premiums by 28.2% up to UAH 251 mln. The premiums increased due to special risk insurance (+148%), voluntary third-party liability insurance (+75%), nuclear installation operator liability insurance (+73%) and financial risk insurance (+48%). In 2015, the Company focused on the market needs and developed new property and liability insurance products. For instance, INGO Ukraine offered its customers the Political Violence Insurance, an insurance program against manifestations of political violence that was unique in Ukraine. Thus, the insurance agreement provides for the indemnification of damages caused by acts of war, terrorist attacks or vandalism. This insurance provides indemnification guarantees ensured by risk reinsurance in Lloyd s Syndicates. Insurance type Premiums, Indemnities, Property insurance 83,5 14,0 Cargo insurance 15,2 1,9 Nuclear installation operator third party liability insurance 24,4 0,0 Financial risk insurance 34,9 148,7 Voluntary third-party liability insurance 22,8 0,6 Voluntary agricultural product insurance 22,1 4,7 Special risk insurance 46,6 3,9 Other 1,5 0,0 Comprehensive property and liability insurance, TOTAL ,7 SPECIAL RISK INSURANCE INGO Ukraine Insurance Co. simultaneously collected more insurance premiums in several types of special risk insurance. In 2015, the aviation insurance premium portfolio increased up to UAH 29.3 mln. UAH 28.2 mln thereof belonged to compulsory civil aviation insurance and UAH 1 mln to voluntary insurance of air transport owner s liability. INGO Ukraine holds 21.8% of the voluntary water transport insurance market with its premiums amounting to UAH 4.6 mln. STRUCTURE OF PREMIUMS Marine Insurance 6,1 0,2 1,3 Railway Transport Insurance Other 29,3 9,7 Air Insurance 46,6 INSURANCE PREMIUMS Carrier and Forwarder Insurance In 2015, the Company proved its status as one of the most professional players in the property and liability insurance market. We provide our customers with quality risk audit and support them when insuring industrial enterprises and other sites. The indemnities paid witness that the Company meets its financial commitments in full. Alexandr Matsak, Deputy Chairman of Board of INGO Ukraine Insurance Co

9 Service and Settlement INGO UKRAINE INSURANCE CO. IS CONSTANTLY IMPROVING ITS SERVICE QUALITY AT ANY STAGE OF ITS INTERACTION WITH ITS CUSTOMERS, INCLUDING RISK ASSESSMENT, AGREEMENT EXECUTION, INSURANCE CASE SETTLEMENT AND INDEMNIFICATION. THE COMPANY AIMS AT BECOMING THE MARKET LEADER IN TERMS OF SERVICING MAKING IT AS EFFICIENT AND COMFORTABLE FOR ANY CUSTOMER AS POSSIBLE. Technical assistance covers two areas of work INGO Ukraine Insurance Co. has its own modern and high-tech contact center that records occurrences and informs customers of any issues. The Company also cooperates with international assistance centers and other partners to maintain the risks insured. Therefore, we offer our customers effective solutions in property, liability, life and health insurance and innovative technological solutions to protect business from damages. The partnership with international assistance companies also allows delegating functions related to insurance administration and settlement to facilitate insureds who travel abroad. In 2015, 45,000 customers of the Company bought travel insurance. Any of them could expect 24-hour consultations, medical care organization, treatment support and service payment in the country of their stay 24/7. To ensure the full support for the customers, both INGO Ukraine Insurance Co. and its partner organizations are involved at any stage of the interaction with the insurer. Surveyors inspect sites before they are accepted for insurance; average commissioners search for causes resulting in occurrences and can arrive at the place at any time; adjusters make indemnification decisions and determine indemnity amounts. The customers receive all information on how to occurrences are settled at every stage. Motor insurance is one of the most active settlement areas. The segment witnessed 15,000 occurrences settled by INGO Ukraine Insurance Co. in Customers did appreciate the service: 85% of the respondents were satisfied with the quality of the settlement of motor CASCO damages and would recommend the Company to their friends. The internal system of analytical reports ensures that the data required for a quick settlement process are collected. Thus, it takes only 2 minutes to find an answer to customers queries and provide a relevant advice. In addition to the high speed, the system has the high-level failure resistance. Regular internal automatic verifications reduce any risks related to a human factor, and all the data are encrypted immediately ensuring reliable information storage. In 2015, INGO Ukraine Insurance Co. continued investing in its service development making the settlement process very comfortable. In a year, a customer service time in the contact center (when solving technical assistance issues) was reduced by seconds with an operator s time to answer equaling to 4.1 seconds. With modern technology, the Company managed to simplify the settlement process for some motor occurrences. Today, customers may file minor road accidents remotely by sending all the required information to the insurer in an electronic form. In such a case, our customers should not wait unless the average commissioner arrives that significantly saves time. PHONE CALLS DISTRIBUTION Area 1 is to register calls / applications related to occurrences, to explain the sequence of actions when an occurrence has taken place, to advise customers on how to prepare and submit the relevant documents to the insurer, to inform of the case consideration and the indemnification deadlines. Area 2 is to support insurance agreements and to provide additional information to customers and potential insured persons. The contact center supports the process of agreement re-execution and provides any information on services and rates communicating with customers. LARGEST INDEMNITIES BY TYPE Business Line Insurance Type Indemnity in 2015, FEC Comprehensive property and liability insurance 147,6 Hire and purchase Motor CASCO insurance 35,7 Hire and purchase Motor CASCO insurance 9,3 Hire and purchase Motor CASCO insurance 8,9 Hire and purchase Motor CASCO insurance 7,3 46% TECHNICAL ASSISTANCE 54% INFORMATION LINE AVERAGE OPERATOR S TIME TO ANSWER 4,1 sec. PROCESSED REQUESTS IN ,6 ths 16 17

10 Reinsurance GEOGRAPHY OF COMPREHENSIVE OBLIGATORY REINSURANCE PARTNERS INGO UKRAINE INSURANCE CO. COMPLIES WITH HIGH RISK MANAGEMENT STANDARDS AND ACTIVELY PARTICIPATES IN REINSURANCE. THE COMPANY ALSO PAYS HIGH ATTENTION TO THE REINSURANCE PROGRAM SAFETY RATING. The company has automatized reinsurance and passes the insured risks to leading international companies such as Swiss Re (Switzerland), Hannover Re (Germany), SCOR (France) and Partner Re (Switzerland). At the end of 2015, the share of reinsurance in companies with A- or higher rating (according to S&P and A. M. Best) under effective comprehensive obligatory property, liability, cargo and sea risk insurance agreements exceeded 77%. KEY PARAMETERS OF REINSURANCE AGREEMENTS OF INGO UKRAINE AS OF DECEMBER 31, 2015 RUSSIA Details Reinsurer Property insurance (including builder s risk insurance); business (production) interruption Hannover Rе (Germany) Cargo insurance; forwarder s liability insurance; day-cruiser insurance and day-cruiser owner s liability insurance SCOR (France) Swiss Re (Switzerland) VIG Rе (Czech Republic) GERMANY POLAND Partner Rе (Switzerland) CZECH REPUBLIC General third party liability, employer s liability, producer s liability, professional liability Sava Re (Slovenia) Polish Re (Poland) Milli Re (Turkey) FRANCE SWITZERLAND SLOVENIA Russian Re (Russia) Motor CASCO insurance Gen Re (Germany) Agriculture (crop and animal) insurance Voluntary medical insurance Hannover Re (Germany) Gen Re (Germany) TURKEY 18 19

11 CARE ATTENTION IS AROUND YOU

12 Personal Insurance MEDICAL ASSISTANCE INGO Ukraine medical assistance provides its customers with reliable support in urgent cases 24/7. More than 80 experienced coordinating doctors can provide the customers with comprehensive and professional recommendations and organize remote medical aid at any moment. AGAINST THE BACKGROUND OF THE COMPLICATED MARKET SITUATION, INGO UKRAINE INSURANCE CO. TOOK PERSONAL INSURANCE TO THE WHOLE NEW SERVICE LEVEL. OPTIMIZING THE COSTS, THE COMPANY RESERVED HIGH-LEVEL INDEMNITIES TO ITS CUSTOMERS. STRUCTURE OF PREMIUMS Travel Insurance Voluntary Medical Insurance Accident Insurance 11,63 2,27 94,05 107,95 INSURANCE PREMIUMS In 2015, the adequate risk acceptance system was implemented in the personal insurance segment. In addition to the decrease in acquisition costs, it resulted in realizing the planned effectiveness indicators. The improved business processes and insurance products enabled the Company to increase the voluntary medical insurance (VMI) premium amount by 24%. The 2015 results showed that they exceeded UAH 94 mln. The number of the insured persons equaled to 28.4 ths. INGO Ukraine Insurance Co. retained high indemnification level exceeding 71%. Transnational companies remain were major VMI customers. By expending the partnership with Generali Employee Benefits (GEB), 28 VMI agreements insuring over 3,500 corporate employees were executed in The premiums collected equaled to UAH 26.3 mln. Within 2015, INGO Ukraine Insurance Co. increased the number of traveler s medical cost insurance agreements by 10% up to 45.1 ths. An average amount of travel insurance indemnity amounted to approx. UAH 7,000 with the total indemnities exceeding UAH 7 mln. Meanwhile, the insurance premiums collected increased up to UAH 11.6 mln. INGO Ukraine Insurance Co. also provide an opportunity of calculating the price and purchasing a travel insurance policy on the Company s website. All medical assistance employees have passed respective psychological trainings and can help customers under any circumstances. Improving the medical service is one of the key tasks within the development of INGO Ukraine as the Company provides voluntary medical insurance services for approx. 30,000 customers. In 2015, INGO Ukraine facilitated the internal business processes and the information system where the medical assistance operates. That allowed speeding up and improving customer service significantly. An average operator s time to answer halved (from 31.2 to 14 seconds). An average percentage of calls answered within the first 20 seconds increased from 66.2% to 75%. TOTAL NUMBER OF PHONE CALLS OPERATOR S TIME TO ANSWER WITHIN FIRST 20 SECONDS % of calls AVERAGE TIME TO ANSWER seconds Dumping appears to be one of the greatest problems in the voluntary medical insurance market. Such an approach affects the service quality and market reputation. INGO Ukraine has preferred a different strategy: we offer our customers economically sound rates, transparent insurance terms and conditions, insurance programs adapted to customers needs and service quality and volume control. In addition, the Company managed to decrease the loss ratio in the VMI ensuring that its customers were provided with comprehensive and high-quality medical services within one institution. The Medical Center of INGO Ukraine and the opportunity of serving some insured persons there allowed it. Gennadiy Mysnik, Deputy Head of Board of INGO Ukraine Insurance Co

13 Life Insurance INGO UKRAINE LIFE INSURANCE CO. HAS BEEN TAKING CARE OF THE MOST IMPORTANT THING WE HAVE OUR CITIZENS LIFE AND HEALTH FOR ALMOST TEN YEARS. COOPERATING WITH GENERALI EMPLOYEE BENEFITS (GEB) POOL FACILITATES TO OFFER COMPANIES BETTER INSURANCE TERMS AND CONDITIONS, INCLUDING UNDERWRITING AND PRICING POLICY, SERVICE AND DECISION-MAKING FLEXIBILITY, AS WELL AS GUARANTEES TO DULY MEET FINANCIAL COMMITMENTS. INGO Ukraine LIFE Insurance Co. became the partner of Generali Employee Benefits (GEB) in Ukraine in GEB belongs to Generali Group one of the leading players of the global insurance and financial product market and #1 international insurance pool in the world in terms of employees reimbursement programs. This cooperation allows expanding corporate risk life insurance programs. Furthermore, INGO Ukraine LIFE Insurance Co. in association with GEB has been offering Extra Pension a new long-term corporate life insurance program since This pension scheme harmonizes with a personal insurance program package offered by the Ukrainian companies. In 2015, 69 agreements insuring more than 10,000 employees were executed as the part of the partnership between GEB and INGO Ukraine LIFE. The premiums collected increased by 30% and amounted to UAH 9.2 mln. Corporate employee life insurance programs help formulate the policy of corporate social responsibility, provide tax allowances, allow motivating and retaining key employees and recruit new professionals. Insurance reserves increase 5, The largest indemnities in , The National Financial Service Committee of Ukraine said that net life insurance premiums increased by 1.2% in 2015 as compared to % thereof were paid by individuals and 5.5% by legal entities. The life insurance market witnessed moderate monopolization. The market share of TOP 10 companies, in particular, amounted to 87.9%, and the market share of TOP 20 ones to 99%. At the end of 2015, the number of life insurance companies equaled to 49. The majority of net insurance premiums 99.9% is actually accumulated by 20 life insurers. INGO Ukraine LIFE Insurance Co. has been one of the market leaders in the corporate risk life insurance segment for the recent years. In 2015, the Company proved the status having taken the second place in the corporate risk life insurance segment with the market share exceeding 25%. The premiums increased by 11% up to UAH 11.1 mln. In 2015, the company indemnified the insured persons UAH 6.3 mln, and UAH ths thereof were paid for disability UAH ths diagnosing critical diseases those indemnities were the largest ones. Based on the 2015 results, the Company indemnified for 239 occurrences. 805,9 UAH ths DISABILITY 478,6 UAH ths CRITICAL DISEASES INGO UKRAINE LIFE HOLDS THE LEADING POSITIONS IN THE CORPORATE LIFE INSURANCE MARKET WITH THE MARKET SHARE EQUALING TO 25.24% In 2015, INGO Ukraine LIFE Insurance Co. took significant efforts to adapt the exiting and develop new insurance programs. The Extra Pension program offered by our Company in association with GEB pool has attracted more employers due to changes to tax laws classifying insurance indemnities as net expenses of companies and exempting from the unified social tax and individual income tax. Tatiana Ryzhova, Director-General of INGO Ukraine LIFE Insurance Co

14 INGO Medical Center NUMBER OF PATIENTS: 14 thousand 2014 NUMBER OF SERVICES PROVIDED: 77 thousand thousand thousand 2015 IN JANUARY 2016, INGO MEDICAL CENTER CELEBRATED THE SECOND ANNIVERSARY OF ITS SUCCESSFUL WORK. TODAY, THIS IS ONE OF A FEW ANALOGOUS PROJECTS IN THE MARKET THAT HAS CONQUERED A HIGH LEVEL OF TRUST AMONG CUSTOMERS AND HAS PROVED THE PROFESSIONALISM OF ITS SPECIALISTS. INGO Medical Center is an outpatient institution with an area exceeding 2,500 m2 and daily capacity equaling to 1,300 patients. The clinic has 86 doctors ensuring comprehensive treatment in 37 areas. Customers may visit any of 70 offices and nine diagnostics and healthcare subdivisions. The diversity and laboratory and functional diagnostics of INGO Medical Center allow providing all necessary services within one institution. The clinic also has a separate child s division where 19 specialists work and essential infrastructure (a separate entrance, a playroom) to facilitate visits with children. All employees of INGO Medical Center have the medical practice and can provide medical aid at any moment. The clinic works 7 days per week. When needed, the specialists visit and treat patients at home. TOP-5 CONSULTATIONS 216 AVERAGE NUMBER OF PATIENTS PER DAY To increase the effectiveness, the clinic has automated all medical processes: medical histories are in an electronic form, and test results are sent by . Customer can make appointments with any precise doctor. To ensure the highest quality of services, the specialists work only with the most innovative equipment produced by global companies. In addition to INGO Ukraine Insurance Co., INGO Medical Center has executed partnership agreements with 42 insurers. More than 30 thereof order medical services extensively. An increase in visits of commercial customers who pay for services by themselves is one of the greatest achievements of the Medical Center. At the end of 2015, 46% of applications were received from such customers showing a high level of trust to the specialists of INGO MC. WITHIN TWO YEARS OF ITS ACTIVITY, INGO MC PAID MORE THAN UAH 12.4 MLN OF TAXES 46% COMMERCIAL CUSTOMERS 370 MAXIMUM NUMBER OF PATIENTS PER DAY 23% INGO UKRAINE CUSTOMERS Within two years of its existence, the Medical Center ran no largescale advertisement campaigns or sales promotions. Nevertheless, the brand has become more recognizable up to 26% - and almost 50% of our customers are commercial customers. During the last year, we doubled the number of customer visits and the services rendered. We managed to achieve that success having found the balance between high-quality medical services and affordable prices. In 2016, we are going to increase the number of customer visits by 25%. 192 TOTAL NUMBER OF MC EMPLOYEES THERAPEUTIST TRAUMATOLOGIST NEUROLOGIST ENT SPECIALIST GYNECOLOGIST 31% CUSTOMERS OF OTHER INSURERS Sergey Dzhevaga, Director-General of INGO Medical Center 26 27

15 Regional Network THE NETWORK OF INGO UKRAINE INSURANCE CO. PROVIDES ADDITIONAL OPTIONS OF INTERACTION WITH CUSTOMERS THROUGHOUT THE COUNTRY ALLOWING THEM TO EASILY ACCESS THE WHOLE RANGE OF PRODUCTS AND SERVICES. We started to develop our own regional network more than 20 years ago. And today, INGO Ukraine Insurance Co. has 25 branches. In addition, customers may visit more than 100 sales and service centers and an extensive network of insurance agents. This allows INGO Ukraine Insurance Co. to ensure services at a high level throughout the country and depending on regional peculiarities. The vast majority of the branches showed positive dynamics in the premiums collected last year. In general, INGO Ukraine Insurance Co. collected UAH 202 mln of premiums throughout the country. The premiums collected by Vinnytsia, Poltava and Kherson branches, in particular, increased by 100% or more. The highest insurance premiums were collected by Odesa branch (UAH 51.4 mln), Lviv branch (UAH 21.3 mln) and Dnipropetrovsk branch (UAH18.4 mln). In the regional network, motor insurance premiums traditionally keep their high level 40% of total premiums collected. In 2015, the Green Card international motor third party liability insurance was highly demanded by the customers of the regional network. Furthermore, agricultural insurance was in high demand in the central and southern regions. Odesa branch managed to collect 50% more premiums by executing aviation insurance agreements. The regional network is an important element of INGO Ukraine business. It involves local representatives who provide customers with any information on insurance products and deepen the cooperation with the Company. To create significant competitive service advantages throughout the country, INGO Ukraine Insurance Co. is constantly training its agents and investing in the development of its regional service centers. Last year, the Company realized remote Internet trainings. This is a convenient way for the regional representatives of the Company to duly obtain new essential knowledge and necessary information constantly improving their erudition. 18,4 202 PREMIUMS COLLECTED IN THE COUNTRY more than 100 SALES AND SERVICE CENTERS 40% INSURANCE PREMIUMS IN MOTOR CASCO INSURANCE 21,3 LVIV BRANCH 51,4 ODESA BRANCH DNIPROPETROVSK BRANCH 15,5 ZAPORIZHZHIA BRANCH 12 KHARKIV BRANCH PREMIUMS COLLECTED BY VINNYTSIA, POLTAVA AND KHERSON BRANCHES INCREASED BY 100% or more 28 29

16 THE EMPLOYEES OF INGO UKRAINE INSURANCE CO. CREATE THE TEAM OF PROFESSIONALS WITH LONG EXPERIENCE CONTRIBUTING TO THE SUSTAINABLE DEVELOPMENT OF THE COMPANY. NUMBER OF FULL-TIME EMPLOYEES Team and HR policy 311 CENTRAL OFFICE 128 BRANCHES The focus on long-term cooperation is one of the priorities of the HR policy at INGO Ukraine Insurance Co. We are proud that almost 50% of the employees of the Company have been working with us for 5 years and more. At the end of 2015, eight of our employees celebrated their 20th anniversaries at the Company. Some people have immense experience and have been staying with INGO Ukraine Insurance Co. since its foundation. In 2015, against the backdrop of the complicated economic situation in the country, INGO Ukraine SIC managed to retain one of the most professional teams in the insurance market by improving corporate motivation and investing in personnel development. The Company keeps its reputation as a stable and reliable employer strictly meeting all its commitments to the employees. INGO Ukraine Insurance Co. provides all social guarantees as required by the effective laws and offers its employees and their family favorable insurance terms and conditions. Participation in Professional Associations FOR OVER 20 YEARS OF ITS EXISTENCE, INGO UKRAINE INSURANCE CO. HAS BEEN ACTIVELY SUPPORTING THE DEVELOPMENT OF THE UKRAINIAN INSURANCE MARKET WITH ITS EXPERTS PARTICIPATING IN THE DESIGN, DISCUSSION AND PROMOTION OF KEY LEGAL INITIATIVES. The Company uses its own resources to constantly analyze the effective law to improve and develop it. Any offers are discussed with the other players of the insurance market and governmental authorities. INGO Ukraine Insurance Co. supports country future-oriented legal initiatives and participates in their design. The Company has been constantly participating in professional associations since its foundation. The interaction with the National Financial Service Commission is an equally important area of INGO Ukraine activities. The employees of the Company are the members of expert boards and task forces, exchange experience and expert appraisal and develop new initiatives to improve insurance law. Actively cooperating with governmental authorities and professional industry organizations, the Company can protect its own interests and contribute to designing the civilized market. Meanwhile, the association with the professional players in the insurance market helps outline and agree upon issues influencing insurance development in Ukraine. Within the year, the progressive remuneration system was introduced allowing increasing the personnel motivation. If the production plan is exceeded, INGO Ukraine pays its employees bonuses for the efforts made. The Company actively supports the Ukrainian youth. For years, INGO Ukraine Insurance Co. has been inviting students graduating economic universities to get practice. The best of them are offered full-time jobs and opportunities for professional and career growth. 50% OF EMPLOYEES WITH 5-YEAR OR MORE EXPERIENCE AT THE COMPANY 90% OF EMPLOYEES WITH HIGHER EDUCATION EUROPEAN BUSINESS ASSOCIATION AMERICAN CHAMBER OF COMMERCE IN UKRAINE NUCLEAR INSURANCE POOL MOTOR (TRANSPORT) IN- SURANCE BUREAU OF UKRAINE The Corporate Code helps keep corporate culture among the employees of the Company at a high level. The Code is base on customer orientation, which requires that every employee has high professionalism and ethics. Adhering to these rules strictly and ultimately has allowed INGO Ukraine Insurance Co. to achieve an impeccable goodwill among customers and partners INTERNATIONAL CHAMBER OF COMMERCE (ICC) UKRAINE UKRAINIAN UNION OF LESSOR UKRAINIAN INSURANCE FEDERATION 30 31

17 INNOVATIONS FUTURE IS NEXT TO YOU

18 INGO UKRAINE INSURANCE CO. HAS BEEN HOLDING THE LEADING POSITIONS IN THE MARKET AND OFFERING INNOVATIVE INSURANCE SERVICES TO ITS CUSTOMERS FOR MANY YEARS RUNNING. NOWADAYS, THE COMPANY HAS SET ITS NEW AND AMBITIOUS GOAL TO BE AT THE FOREFRONT OF THE INSURANCE MARKET FOR THE NEXT YEARS. SERVICE Operation Strategy! RISKS EXPENSES QUALITY INGO Ukraine Insurance Co. laid the foundation for achieving the goal in The Company started designing the large Operation Strategy project and formulating the perspective of the corporate development for the next 10 years. The project aims at modernizing the Company and adapting it to the realities of the modern world where digital technology and online customer communication are becoming the major driving force for development. The strategic nature of the project implies that INGO Ukraine Insurance Co. will ensure completely new service by optimizing the majority of the current processes. A new operation strategy provides for implementing innovative IT solutions, and Big Data solutions in particular. This information will allow the specialists of INGO Ukraine Insurance Co. to better understand the needs of customers and, thus, realize individual insurance solutions. Using modern analytical systems will allow taking into account and tracking all current internal business processes and carrying out their statistical analysis. New technologies will be a powerful driving force for development and customer service. The specialists of the Company will be able to immediately trace the history of the cooperation with the insured. Meanwhile, customers, including corporate ones, will be able to access the information on their case settlement online. This will allow ensuring the highest level of transparency and improving communication between customers and settlement experts. Today, a new operation strategy is comprehensive and involves all types of business. Retail business, corporate business and VMI, where the Company relies on quality, affordable and justified prices and fast servicing, are considered to be key areas. The key objective of the project is to increase the operation effectiveness of the business model in each of these segments as well as at the Company as a whole. PROJECT DESIGNING BASED ON SMART INSURANCE HAS ALLOWED LAYING THE FOUNDATION FOR DEVELOPING INGO UKRAINE INSURANCE CO. WITHIN NEXT SEVERAL YEARS. Within the year, INGO Ukraine Insurance Co. was actively working on optimizing internal processes and increasing the effectiveness of the IT Department. The data processing center (DPC) of the Company the complex of engineering, network and server equipment needed to build the reliable IT infrastructure and to ensure the faultless functioning of all corporate digital systems and business processes was launched two years ago. In 2015, we switched VMI and travel insurance to our own DPC. Now, the medical assistance of INGO Ukraine SIC can quickly and efficiently answer customers calls and provide advice as soon as possible. The year witnessed a decrease in call duration by seconds. Within 2015, INGO Ukraine Insurance Co. was actively working on designing and testing telematics for motor insurance. In future, the telematics systems will be implemented on a mass scale allowing the Company to improve the service quality and create a more flexible rate policy. It will allow marketing more affordable insurance products. The active development of digital products is another area of the activity. Customers can remotely order certain services on the website of the Company without visiting its office. Nowadays, the Company is expanding the list of online options. They, inter alia, include an option to sign any agreement, to read financial reports, to make an appointment with a doctor and other options for individual and corporate customers. IT Projects Within 2015, our team was exploring the experience of our Western colleagues; we were actively working on implementing new developments in the nearest future. Next year, the IT Department will be doubled ensuring more dynamic development. It is important to understand that today INGO Ukraine Insurance Co. declares the organization of effective servicing as well as invests in digital systems, which allows implementing this strategy in practice. Igor Filipenko, Development Deputy Head of Board of INGO Ukraine Insurance Co

19 STABILITY ASSURANCE TESTED BY TIME

20 Finance Accounting and Investments INGO UKRAINE PRIVATE JOINT-STOCK INSURANCE COMPANY HAS BEEN SUCCESSFULLY WORKING IN THE UKRAINIAN INSURANCE MARKET FOR 21 YEARS. AGAINST THE BACKGROUND OF THE HIGHLY COMPETITIVE MARKET, THE COMPANY DEMONSTRATES FINANCIAL STABILITY PROVED BY ITS PERFORMANCE INDICATORS AND TRANSPARENT REPORTS. The current financial status of the Company allows meeting commitments to its customers duly and in full. Realizing all external and internal loss ratio-oriented factors, INGO Ukraine Insurance Co. takes measures to reduce them. Therefore, the Company increases its loss settlement control, changes its rate policy, automatizes processes and develops methodological frameworks. INGO Ukraine Insurance Co. also adds some restrictions to insurance agreements and introduces prudential risk insurance. In 2015, the investment activities of INGO Ukraine Insurance Co. kept on taking a conservative line. The Company focused on risk minimization, investment reliability and reversibility provided that the expected profit was received. The Company meets all and any legal principles and standards when allocating its own funds and insurance reserves. INGO Ukraine Insurance Co. has been holding the leading positions in insurance indemnification and reserves for the recent years. The Company is one of the largest Ukrainian insurance organizations in terms of premium volumes and assets. It should be noted that the economic and political situations in Ukraine have been affecting the development of the insurance market for the recent two years. For instance, actual salaries in Ukraine decreased by 9.9% within the previous year, and the purchasing power of the population dropped down along with the rapid UAH depreciation. The latest studies of GfK Ukraine Rating Agency show that the Ukrainian consumption rate is minimal. Meanwhile, prices for medications, car maintenance and others have been raised. In spite of the downfall of the financial and consumer markets caused by the crisis and high economic turbulence, INGO Ukraine Insurance Co. proved its reliability and financial stability owing to its reserves. Today, INGO Ukraine Insurance Co. is one of the most capitalized companies in the insurance market. The actual solvency margin of the Company is four and a half times higher than a normative one. Approx. 80% of the reserves are secured with liquid assets in the monetary and deposit forms also witnessed certain management decisions allowing focusing on the retention of liquidity and an increase in profitability. In spite of large indemnities paid in 2015, INGO Ukraine Insurance Co. meets high requirements of shareholders, customers and partners in full. The effort of the corporate team ensured that the insurance business of the Company remained financially stable with its net profit amounting to UAH 73.5 mln. We still are a reliable partner of our customers. In 2015, against the background of a tough economic situation, the Company retained its liquidity. In 2015, the shareholder s equity of INGO Ukraine Insurance Co. increased by 22% up to UAH 537 mln with insurance reserves equaling to UAH 567 mln and assets equaling to UAH 1,297 mln. The 2015 results showed that the net profit of the Company from insurance activities amounted to UAH 73.5 mln. In 2015, bank deposits were the key investments. Meanwhile, the Company follows the policy of the highest capital retention assessing, first, the reliability of the financial institution and, second, its profitability. It is very important taking into account an unstable bank system. Therefore, INGO Ukraine Insurance Co. prefers large and reliable banks with foreign or state capital as its partners. Since any business aims at making profit, our key objective is to take control of the financial health of the enterprise and adjust its activities when needed. We always assess the financial efficiency of the Company in an integrated manner. An important point is to correctly digitize current and future goals, to correctly design the system of performance indicators, for the Risk Committee to work efficiently and etc. Lyudmila Kolisetska, Chief Financial Officer of INGO Ukraine Insurance Co

21 Independent Auditor s Report misrepresentation in the financial statements caused by fraud or error. While assessing these risks, the auditor considers internal control measures related to drawing up and truly representing financial statements by the Company to develop auditing procedures for the relevant circumstances rather than to express his/her opinion on the effectiveness of the internal corporate control system. The audit also assesses the adequacy of the approved accounting policy, the eligibility of the accounting estimates made by the management and the general representation of the financial statements. We believe that we have obtained sufficient and acceptable audit evidence to express our opinion. ATTN.: CHAIRMAN OF BOARD OF INGO UKRAINE INSURANCE CO. MR. I. M. GORDIENKO Our Opinion We consider that the financial statements truly show the financial condition of the Company as of in all essential aspects and as required by the IFRS. As of , the authorized capital of the Company was proved to be formed as required by the effective laws and paid only in a monetary form amounting to UAH 305,543.0 ths (three hundred and five million five hundred forty-three thousand). Financial Statements Report We have audited the financial statements drawn up as required by the International Financial Reporting Standards (hereinafter referred to as the IFRS), including the Balance Sheet (the Statement of Financial Condition) as of , the Financial Results Report (the Statement of Total Income), the Cash Flow Statement (using a direct method), the Statement of Shareholder s Equity, Annual Financial Report Remarks and 2015 Insurer Income and Expenses Report, to verify the accuracy of the authorized capital and the sufficiency of the net assets of INGO Ukraine Private Joint Stock Insurance Company (hereinafter referred to as the Company). There is no public property share in the authorized capital of the Company. As of , the net assets of the Company equaled to UAH 523,858.1 ths. The net assets exceeded the authorized capital by UAH 218,315.1 ths. As of the date specified, the actual solvency margin of the Company exceeded the estimated normative solvency margin by UAH 406,668.8 ths. Management Responsibility for Financial Reporting The management is responsible for drawing up and accurately representing these financial statements as required by the IFRS and for an internal control system, which the management considers necessary to ensure that financial statements contain no significant misrepresentation caused by fraud or errors. Auditor s Responsibility We are responsible for expressing our opinion on these financial statements based on the results of our audit. We have carried out the audit as determined by the International Standards on Quality Control, Auditing, Review, Other Assurance and Related Services, and ISA 700: Forming an Opinion and Reporting on Financial Statements in particular. These standards require us to meet the relevant ethical requirements as well as to plan and carry out the audit to sufficiently ensure that the financial statements contain no significant misrepresentation. The audit implies auditing procedures for obtaining auditing evidence of the amounts and information disclosed in the financial statements. Procedures depend on the auditor s professional judgment, including the assessment of risks of significant Auditors Signatures: Director-General of HLB UKRAINE LLC (Cert. # АПУ (APU), Diploma: ACCA DipIFR # ) HLB UKRAINE LLC Suite 3, 11/11 Husovskiy Str., Kyiv City O.P. Samusieva March 21,