2014 CONFERENCE FOR ANALYSTS, INVESTORS AND BANKERS

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1 2014 CONFERENCE FOR ANALYSTS, INVESTORS AND BANKERS Annuities Mark Konen President Insurance and Retirement Solutions November 20, National Corporation

2 CONSISTENT RESULTS WITH UPSIDE POTENTIAL is a consistent and long term leader in delivering profitable annuity products that help consumers manage retirement risks and maximize income. Quality Block of Business Outstanding Financial Performance Positioned for Growth

3 STEADY GROWTH. STRONG RETURNS. CONSISTENT BUSINESS Annuity Operating Earnings ($M) Average ROE, M % 21% Operating ROE Operating ROE including VA hedge performance 2 Consistent earnings growth with limited volatility Selling through cycles, with steady net flows totaling $19B Excellent returns, including hedge program performance 1 9M represents first 9 months of the year 2 Includes operating earnings and VA net derivative results, excluding impact of NPR

4 CONSISTENT APPROACH TO THE BUSINESS Product Distribution Diverse portfolio Deep producer base Consistent presence Strategic partners Sustainable design Quality Block of Business Diverse channel mix Industry leading hedge program Experience and assumption monitoring Strong Enterprise Risk Management culture Risk Management

5 DIVERSE PRODUCT PORTFOLIO Continued success selling high return VA living benefits Growing VA without living benefits and Fixed Annuities Goal of 30% VA sales without a living benefit by % 80% 60% 40% 20% 0% Variable Annuity Deposits with GLB with reinsured GLB without GLB Annuities Account Value $120 Billion as of 9/30/ % 40% 15% 26% 41% without VA living benefits Fixed Annuity VA without GLB VA with GLB: non risk managed funds VA with GLB: risk managed funds 2 1 Guaranteed Living Benefits is abbreviated as GLB 2 Includes reinsured GLB

6 POSITIONED TO ADDRESS GROWING TAX CONCERNS Investor Advantage Growth powered by tax deferral Motivated by 2013 tax law changes Investments powered by excellence Top fund managers Tax free exchanges among 125 options Total Sales ($Millions) Investor Advantage SM Cumulative Daily Sales $100M SALES 100 DAYS June 23 through October 1, 2014 Income powered by innovation Proven ability to deliver tax efficient exit vehicle with i4life Achieve annuitization tax benefits and maintain access to account value

7 CONSISTENT PRESENCE IN THE MARKETPLACE Single Life, Issue Age 55, Income 60 Single Life, Issue Age 60, Income 65 Jackson Prudential AIG 2 MetLife Trans. Nationwide Historic income range 1 Current income Jackson Prudential AIG 2 MetLife Trans. Nationwide 4% 5% 6% 7% 8% 9% 10% 11% Competitor rates are tightly aligned s guaranteed income rates have remained consistent Competitors have had wider income ranges historically Jackson Prudential AIG 2 MetLife Trans. Nationwide 4% 5% 6% 7% 8% 9% 10% 11% Single Life, Issue Age 60, Income 70 1Income rates are calculated by combining roll up and minimum payout rates. The graphs show the VA rider providing the highest guaranteed income at the point income would begin. Range reflects 2005 to 3Q AIG: Current income benefit is reduced when account value equals 0 4% 5% 6% 7% 8% 9% 10% 11%

8 SUSTAINABLE PRODUCT DESIGN GLB NAR as a % of AV GMDB NAR as a % of AV 15% 15% 12.6% 11.3% 10% 10% 6.5% 7.0% 5% 0% 0.2% 0.2% 0.4% 0.7% Ameriprise AIG Hartford 1.2% 2.3% MetLife Prudential 2.9% 3.0% AXA Jackson Voya 5% 0% 0.4% 0.7% 2.1% 2.2% 2.2% 2.6% Ameriprise MetLife AIG Prudential Jackson Hartford Voya AXA History of selling through market cycles with rational benefit levels Source: 10K and other financial statements published by each company; All values on this slide are as of 12/31/2013 See appendix for information about Net Amount of Risk sources and calculations

9 INCREASING DEMAND FOR OUR SOLUTIONS Retirement Security Tax Concerns Life expectancy at age 65 Top federal income tax rates 85 40% Population (thousands) Age 65+ Investable assets ($T) 28% Annuity guaranteed lifetime income Loss of pension plans Uncertain future of social retirement programs Consumer directed retirement planning Annuity tax efficiency Recent legislation Uncertain future rates Growing tax concerns Source: 2013 OASDI Trustees Report (left graph), US Census Bureau (middle graph), Tax Foundation (right graph)

10 POSITIONED TO CAPITALIZE ON GROWING CONSUMER BASE Top 10 VA Companies Guaranteed Living Benefit Investment Only VA Tax efficient Exit Strategy 1 RIA Solution Structured Solution Fixed Indexed Annuity Deferred Income Annuity Single Premium Immediate Annuity A B C D E F G H I Solution offered 1Achieve tax benefits of annuitization while maintaining access to account value

11 CONSISTENT RESULTS WITH UPSIDE POTENTIAL Quality Block of Business Outstanding Financial Performance Positioned for Growth