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1 ASX announcement SCHEME BOOKLET REGISTERED WITH ASIC Sydney, 20 February 2017: Cover-More Group Limited (Cover-More) is pleased to announce that the Australian Securities and Investments Commission (ASIC) has registered the scheme booklet (Scheme Booklet) in relation to the proposed acquisition of all the shares in Cover- More by Zurich Travel Solutions Pty Limited (ACN ), a wholly owned subsidiary of Zurich Insurance Company Ltd (ZIC), by way of a scheme of arrangement (the Scheme). This follows the issuance of orders by the Federal Court of Australia (the Court) today approving despatch of the Scheme Booklet to Cover-More shareholders and the convening of a meeting of Cover-More shareholders to consider and vote on the Scheme (Scheme Meeting), which was announced by Cover-More earlier today. Further, the Independent Expert appointed by the Board of Directors of Cover-More in relation to the Scheme, KPMG Corporate Finance, has concluded that the Scheme is in the best interests of Cover-More shareholders. A copy of the Scheme Booklet, including the Notice convening the Scheme Meeting and the Independent Expert's Report, is attached to this announcement. A copy of the Scheme Booklet, including the Notice convening the Scheme Meeting and the Independent Expert's Report, will be sent to Cover-More shareholders on Friday, 24 February Those Cover-More shareholders who have previously elected to receive notifications from Cover-More s share registry in electronic format will be sent the material electronically and Cover-More will send the materials to all other shareholders by post. The Board of Directors of Cover-More continues to unanimously recommend that Cover- More shareholders vote in favour of the Scheme at the upcoming Scheme Meeting, in the absence of a superior proposal. ENDS For investor relations contact Michael Brown, For media enquiries contact Peter Brookes, About Cover-More Cover More Group is a specialist and integrated travel insurance, medical assistance and employee assistance provider. Cover-More has the leading market position in Australia with an approximate 36% share of the national travel insurance market and operations in India, China, Malaysia, Singapore, New Zealand, the United Kingdom and most recently, the United States.

2 ACN SCHEME BOOKLET For a scheme of arrangement in relation to the proposed acquisition of all Cover-More Shares held by Scheme Shareholders by Zurich Travel Solutions Pty Limited (ACN ) (Zurich BidCo), a wholly owned subsidiary of Zurich Insurance Company Ltd (ZIC) YOUR DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU APPROVE THE SCHEME BY VOTING IN FAVOUR OF THE SCHEME RESOLUTION, IN THE ABSENCE OF A SUPERIOR PROPOSAL AND SUBJECT TO THE INDEPENDENT EXPERT CONTINUING TO CONSIDER THE SCHEME TO BE IN THE BEST INTERESTS OF COVER-MORE SHAREHOLDERS VOTE IN FAVOUR This is an important document and requires your immediate attention. You should read this document carefully and in its entirety before deciding whether or not to vote in favour of the resolution to approve the Scheme. If you are in doubt as to what you should do, you should consult your legal, financial or other professional adviser. If, after reading this Scheme Booklet, you have any questions about the Scheme or the number of Cover-More Shares you hold or how to vote, please call the Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). If you have recently sold all of your Cover-More Shares, please disregard this document. Financial Adviser Legal Adviser

3 CONTENTS Important notices 2 Chairman s letter 4 Key dates 6 Purpose of this Scheme Booklet 7 Next steps 9 How to vote 10 Frequently asked questions 12 1 Summary of the Scheme 21 2 Cover-More Directors recommendation and matters relevant to your vote on the Scheme 23 3 Implementation of the Scheme 27 4 Information on Cover-More 35 5 Information on ZIC, Zurich BidCo and Zurich Insurance Group 45 6 What if the Scheme is not implemented? 54 7 Taxation implications for Scheme Shareholders 58 8 Additional information 63 9 Glossary 67 Attachment A Notice of Scheme Meeting 73 Attachment B Scheme Implementation Agreement 76 Attachment C Scheme of Arrangement under section 411 of the Corporations Act 139 Attachment D Deed Poll 158 Attachment E Independent Expert s Report 172 Attachment F Sample Proxy Form 250 Corporate Directory IBC COVER-MORE GROUP LIMITED

4 SCHEME BOOKLET 1

5 IMPORTANT NOTICES Defined terms Capitalised terms used in this Scheme Booklet are defined in the Glossary in section 9 of this Scheme Booklet. This Scheme Booklet This Scheme Booklet includes the explanatory statement required to be sent to Cover-More Shareholders in relation to the Scheme under Part 5.1 of the Corporations Act. A copy of the proposed Scheme is set out in Attachment C to this Scheme Booklet. You should read this Scheme Booklet carefully and in its entirety before making a decision as to how to vote on the resolution to be considered at the Scheme Meeting. If you are in doubt as to what you should do, you should consult your legal, financial or other professional adviser. Responsibility for information (a) Except as provided in paragraphs (b) to (d) below, the information in this Scheme Booklet has been provided by Cover-More and is the responsibility of Cover-More. Zurich Insurance Group and their directors, officers and advisers do not assume any responsibility for the accuracy or completeness of any such Cover- More information. (b) ZIC has provided and is responsible for the Zurich Insurance Group Information. Cover-More and its directors, officers and advisers do not assume any responsibility for the accuracy or completeness of the Zurich Insurance Group Information. (c) Deloitte has provided and is responsible for the information contained in section 7 of this Scheme Booklet. Neither Cover-More nor the Zurich Insurance Group assumes any responsibility for the accuracy or completeness of the information contained in section 7 of this Scheme Booklet. Deloitte does not assume any responsibility for the accuracy or completeness of the information contained in this Scheme Booklet other than that contained in section 7. (d) The Independent Expert, KPMG Corporate Finance, has provided and is responsible for the information contained in Attachment E to this Scheme Booklet. Cover-More does not assume any responsibility for the accuracy or completeness of the information contained in Attachment E to this Scheme Booklet except in relation to information given by it to the Independent Expert. The Zurich Insurance Group does not assume any responsibility for the accuracy or completeness of the information contained in Attachment E to this Scheme Booklet. The Independent Expert does not assume any responsibility for the accuracy or completeness of the information contained in this Scheme Booklet other than that contained in Attachment E. (e) Link has had no involvement in the preparation of any part of this Scheme Booklet other than being named as Cover-More s Share Registry. Link has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of this Scheme Booklet. Investment decisions The information in this Scheme Booklet does not constitute financial product advice. This Scheme Booklet has been prepared without reference to the investment objectives, financial situation or particular needs of any Cover-More Shareholder or any other person. This Scheme Booklet should not be relied on as the sole basis for any investment decision. Independent legal, financial and taxation advice should be sought before making any investment decision in relation to your Cover-More Shares. ASIC and ASX involvement This document is the explanatory statement for the scheme of arrangement between Cover-More and the holders of Cover-More Shares as at the Scheme Record Date for the purposes of section 412(1) of the Corporations Act. A copy of the proposed Scheme is included in this Scheme Booklet as Attachment C. A copy of this Scheme Booklet (including the Independent Expert s Report) has been lodged with and registered for the purposes of section 412(6) of the Corporations Act by ASIC. ASIC has been requested to provide a statement in accordance with section 411(17)(b) of the Corporations Act that ASIC has no objection to the Scheme. If ASIC provides that statement, then it will be produced to the Court on the Court Approval Date. Neither ASIC nor any of its officers take any responsibility for the contents of this Scheme Booklet. A copy of this Scheme Booklet will be lodged with ASX. Neither ASX nor any of its officers take any responsibility for the contents of this Scheme Booklet. Important notice associated with Court order under subsection 411(1) of the Corporations Act The fact that under subsection 411(1) of the Corporations Act the Court has ordered that a meeting be convened and has approved the explanatory statement required to accompany the notice of the meeting does not mean that the Court: (a) has formed any view as to the merits of the proposed Scheme or as to how members should vote (on this matter members must reach their own decision); or (b) has prepared, or is responsible for the content of, the explanatory statement. Notice regarding Second Court Hearing and if a Cover-More Shareholder wishes to oppose the Scheme The date of the Second Court Hearing to approve the Scheme is 31 March The hearing will be at 10:15am (Sydney time) at the Federal Court of Australia at Law Courts Building, 184 Phillip Street, Sydney NSW Each Cover-More Shareholder has the right to appear and be heard at the Second Court Hearing and may oppose the approval of the Scheme at the Second Court Hearing. If you wish to oppose in this manner, you must file and serve on Cover-More a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on Cover-More at its address for service at least one day before 31 March The address for service for Cover-More is: Cover-More Group Limited, Level 10, 60 Miller Street, North Sydney NSW 2060 (Attention: Suzanne Evans) suzanne.evans@covermore.com Disclosure regarding forward-looking statements This Scheme Booklet contains both historical and forward-looking statements. The forward-looking statements in this Scheme Booklet are not based on historical facts, but rather reflect the current views of Cover-More or, in relation to the Zurich Insurance Group Information, ZIC and Zurich BidCo, held only as at the date of this Scheme Booklet concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as believe, aim, expect, anticipated, intending, foreseeing, likely, should, planned, may, estimated, potential, or other similar words and phrases. Similarly, statements that describe Cover-More s, ZIC s and Zurich BidCo s objectives, plans, goals or expectations are or may be forwardlooking statements. 2 COVER-MORE GROUP LIMITED

6 The statements in this Scheme Booklet about the impact that the Scheme may have on the results of Cover-More s operations, and the advantages and disadvantages anticipated to result from the Scheme, are also forward-looking statements. Any forward-looking statements included in the Zurich Insurance Group Information have been made on reasonable grounds. Although ZIC and Zurich BidCo believe that the views reflected in any forward-looking statements included in the Zurich Insurance Group Information have been made on a reasonable basis, no assurance can be given that such views will prove to have been correct. Any other forward-looking statements included in this Scheme Booklet and made by Cover-More have been made on reasonable grounds. Although Cover- More believes that the views reflected in any forward-looking statements in this Scheme Booklet (other than the Zurich Insurance Group Information, the information in section 7 and the information in Attachment E) have been made on a reasonable basis, no assurance can be given that such views will prove to have been correct. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause either Cover- More s, ZIC s and Zurich BidCo s actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward-looking statements. Deviations as to future results, performance and achievements are both normal and to be expected. Cover-More Shareholders should note that the historical financial performance of Cover-More is no assurance of future financial performance of Cover-More (whether the Scheme is implemented or not). Cover-More Shareholders should review carefully all of the information included in this Scheme Booklet. The forwardlooking statements included in this Scheme Booklet are made only as of the date of this Scheme Booklet. Neither Cover-More, nor ZIC nor Zurich BidCo nor their directors give any representation, assurance or guarantee to Cover-More Shareholders that any forward-looking statements will actually occur or be achieved. Cover-More Shareholders are cautioned not to place undue reliance on such forward-looking statements. Subject to any continuing obligations under law or the ASX Listing Rules, Cover-More, ZIC and Zurich BidCo do not give any undertaking to update or revise any forward-looking statements after the date of this Scheme Booklet to reflect any change in expectations in relation to those statements or any change in events, conditions or circumstances on which any such statement is based. Privacy and personal information Cover-More, ZIC and Zurich BidCo may collect personal information to implement the Scheme. The personal information may include the names, contact details and details of holdings of Cover-More Shareholders, plus contact details of individuals appointed by Cover-More Shareholders as proxies, corporate representatives or attorneys at the Scheme Meeting. The collection of some of this information is required or authorised by the Corporations Act. Link advises that personal information it holds about you (including your name, address, date of birth and details of the financial assets) is collected by Link organisations to administer your investment. Personal information is held on the public register in accordance with Chapter 2C of the Corporations Act. Some or all of your personal information may be disclosed to contracted third parties, or related Link companies in Australia and overseas. Your information may also be disclosed to Australian government agencies, law enforcement agencies and regulators, or as required under other Australian law, contract, and court or tribunal order. For further details about our personal information handling practices, including how you may access and correct your personal information and raise privacy concerns, visit our website at for a copy of the Link Group Privacy Policy, or contact us by phone on (free call within Australia) 9:00am to 5:00pm (Sydney time) Monday to Friday (excluding public holidays) to request a copy of our complete privacy policy. The information may be disclosed to print and mail service providers, and to Cover-More and ZIC and their respective related bodies corporate and advisers to the extent necessary to effect the Scheme. If the information outlined above is not collected, Cover-More may be hindered in, or prevented from, conducting the Scheme Meeting or implementing the Scheme effectively or at all. Cover-More Shareholders who appoint an individual as their proxy, corporate representative or attorney to vote at the Scheme Meeting should inform that individual of the matters outlined above. Notice to persons outside Australia This Scheme Booklet and the Scheme are subject to Australian disclosure requirements, which may be different from the requirements applicable in other jurisdictions. The financial information included in this document is based on financial statements that have been prepared in accordance with Australian equivalents to International Financial Reporting Standards, which may differ from generally accepted accounting principles in other jurisdictions. This Scheme Booklet and the Scheme do not in any way constitute an offer of securities in any place in which, or to any person to whom, it would not be lawful to make such an offer. Effect of rounding A number of figures, amounts, percentages, estimates, calculations of value and fractions in this Scheme Booklet are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this Scheme Booklet. Times and dates Unless otherwise stated, all times referred to in this Scheme Booklet are times in Sydney, Australia. All dates following the date of the Scheme Meeting are indicative only and are subject to the Court approval process and the satisfaction or, where applicable, waiver of the conditions precedent to the implementation of the Scheme (see section 1.2 of this Scheme Booklet). Currency The financial amounts in this Scheme Booklet are expressed in Australian currency unless otherwise stated. A reference to $ and cents is to Australian currency, unless otherwise stated. Date This Scheme Booklet is dated 20 February SCHEME BOOKLET 3

7 CHAIRMAN S LETTER Dear Cover-More Shareholder On 12 December 2016, Cover-More announced that it had entered into the Scheme Implementation Agreement with ZIC, a wholly owned subsidiary of Zurich Insurance Group Ltd, under which it is proposed that Zurich BidCo, a wholly owned subsidiary of ZIC, will acquire all of the issued share capital of Cover-More by way of the Scheme. The Scheme is subject to regulatory and shareholder approvals and other conditions precedent. On behalf of the Cover-More Board, I am pleased to provide you with this Scheme Booklet which contains details of the proposed Scheme and important matters relevant to your vote in relation to the Scheme. If the Scheme is approved and implemented, Cover-More Shareholders will receive Total Cash Payments of $1.95 per Cover-More Share, which is expected to comprise: a fully franked Special Dividend of $0.05 cash per Cover-More Share that they hold on the Special Dividend Record Date; and Scheme Consideration of $1.90 per Cover-More Share that they hold on the Scheme Record Date. The Cover-More Board has announced an intention to pay the fully franked Special Dividend of $0.05 per Cover-More Share, subject to the Scheme becoming Effective. If the Special Dividend is declared by the Cover-More Board and the Scheme becomes Effective, it will form part of the Total Cash Payments to be received by Cover-More Shareholders. The proposed Special Dividend is expected to be paid to Cover-More Shareholders on the Implementation Date. If the Special Dividend is not declared by the Cover-More Board but the Scheme nevertheless becomes Effective, the Scheme Consideration will be $1.95 per Cover-More Share. ZIC and/or Zurich BidCo has agreed to provide a loan to Cover-More to fund the fully franked Special Dividend, subject to the Scheme becoming Effective, details of which are set out in section 5.7. Those Cover-More Shareholders who are able to realise the full benefit of franking credits attached to the Special Dividend (if declared) will realise additional value of approximately $0.02 per Cover-More Share. Whether you will be able to realise the full benefit of the franking credits attached to the Special Dividend will depend on your individual tax circumstances. The Total Cash Payments of $1.95 per Cover-More Share represent an attractive premium of: 48.3% to the closing price of Cover-More Shares on 9 December 2016 (being the last trading day before the announcement of the entry into the Scheme Implementation Agreement); 47.4% to the 1 month volume weighted average price to 9 December 2016; 40.9% to the 3 month volume weighted average price to 9 December 2016; 46.1% to the 6 month volume weighted average price to 9 December 2016; and 62.5% to the entitlement offer price at which Cover-More raised equity in September The proposal represents an implied market capitalisation of $741 million and an implied enterprise value of $846 million for Cover-More. 1 Although we believe that Cover-More has significant growth prospects as an independent ASX-listed company, your Directors consider that the Scheme proposal is compelling for Cover-More Shareholders and recognises the inherent value of the business, including its global distribution footprint and market leading position in Australia. Your Directors unanimously recommend that Cover-More Shareholders vote in favour of the Scheme and intend to vote the Shares they own or control in favour of the Scheme at the Scheme Meeting, in each case, in the absence of a Superior 1. Assumes 380,082,011 Cover-More Shares on issue (being the fully diluted number of Cover-More Shares on issue taking into account the Vesting Employee Performance Rights that will vest in the event the Scheme is implemented), and net debt of A$104.4 million. 4 COVER-MORE GROUP LIMITED

8 Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders. Cover-More has a clear strategy as a stand-alone entity that your Directors believe will deliver improving returns for Cover-More Shareholders. However, no strategy is without execution risk and, on balance, your Directors believe that there is greater certainty that the Scheme will deliver higher value to Cover-More Shareholders than Cover-More continuing as a stand-alone entity. Your Directors unanimously consider that the Scheme is in the best interests of Cover-More Shareholders for the following reasons: the Total Cash Payments of $1.95 per Cover-More Share represent an opportunity for Cover-More Shareholders to realise certain cash value for their Cover-More Shares and is superior to other strategic options available to Cover-More; the Total Cash Payments of $1.95 per Cover-More Share represent a significant premium to Cover-More s recent trading prices and the price at which Cover-More raised equity in September 2016; and the Independent Expert has concluded that the Scheme is in the best interests of Cover-More Shareholders, in the absence of a Superior Proposal. Independent Expert Your Directors appointed KPMG Corporate Finance as the Independent Expert to assess the merits of the Scheme. The Independent Expert has concluded that the Scheme is in the best interests of Cover-More Shareholders, in the absence of a Superior Proposal. The Independent Expert has assessed the full underlying value of Cover-More at between $1.70 and $1.96 per Cover-More Share. The Total Cash Payments of $1.95 per Cover-More Share are within this valuation range. A complete copy of the Independent Expert s Report is included in Attachment E of this Scheme Booklet. How to vote Your vote is important and your Directors encourage you to vote by attending the Scheme Meeting or alternatively by completing the Proxy Form accompanying this Scheme Booklet. The Scheme requires court approval and the approval of Cover-More Shareholders at a Scheme Meeting to be held at 10:00am on Monday, 27 March 2017 at Harbourview Hotel, 17 Blue Street, North Sydney NSW If you wish for the Scheme to proceed, it is important that you vote in favour of the Scheme and approve the Scheme. Further information This Scheme Booklet sets out important information regarding the Scheme, including the reasons for your Directors recommendation and the Independent Expert s Report. It also sets out some of the reasons why you may wish to vote against the Scheme. Please read this document carefully and in its entirety as it will assist you in making an informed decision on how to vote. Your Directors would also encourage you to seek independent financial, legal and taxation advice before making any investment decision in relation to your Cover-More Shares. If you require any further information, please call the Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). Your Directors would also like to take this opportunity to thank you for your continued support of Cover-More. Yours sincerely Louis Carroll Chairman Cover-More Group Limited SCHEME BOOKLET 5

9 KEY DATES All dates following the date of the Scheme Meeting are indicative only and are subject to the Court approval process and the satisfaction or, where applicable, waiver of the conditions precedent to the implementation of the Scheme (see section 1.2 of this Scheme Booklet). All dates and times, unless otherwise indicated, refer to the date and time in Sydney, Australia. Any changes to the above timetable will be announced to ASX and notified on Cover-More s website at Date 10:00am (Sydney time) on Saturday, 25 March :00pm (Sydney time) on Saturday, 25 March :00am (Sydney time) on Monday, 27 March 2017 Event Scheme Meeting proxies the last date and time by which proxy forms (including proxies lodged online), powers of attorney or certificates of appointment of body corporate representative for the Scheme Meeting must be received by the Registry Scheme meeting record date Date and time for determining eligibility to vote at the Scheme Meeting Scheme Meeting IF COVER-MORE SHAREHOLDERS APPROVE THE SCHEME AT THE SCHEME MEETING Monday, 27 March 2017 Special Dividend declared 1 Friday, 31 March 2017 Monday, 3 April :00pm (Sydney time) on Wednesday, 5 April :00pm (Sydney time) on Monday, 10 April 2017 Thursday, 13 April 2017 Second Court Hearing to approve the Scheme Effective Date this is the date on which the Scheme comes into effect and is binding on Cover-More Shareholders. Court order lodged with ASIC and announced on ASX. Cover-More Shares will be suspended from trading at the close of trading on ASX on the Effective Date. If the Scheme proceeds, this will be the last day that Cover-More Shares will trade on ASX. Special Dividend Record Date all Cover-More Shareholders who hold Cover-More Shares on the Special Dividend Record Date will be entitled to receive the Special Dividend (if declared). Scheme Record Date all Cover-More Shareholders who hold Cover-More Shares on the Scheme Record Date will be entitled to receive the Scheme Consideration. Implementation Date all Scheme Shareholders will be sent the Scheme Consideration to which they are entitled, and, if declared, the Special Dividend is also expected to be paid, on this date. 1. Subject to the determination of the Cover-More Board. 6 COVER-MORE GROUP LIMITED

10 PURPOSE OF THIS SCHEME BOOKLET On 12 December 2016, the Cover-More Directors unanimously recommended that Cover-More Shareholders vote in favour of the Scheme under which ZIC, through Zurich BidCo, would acquire all of the Cover-More Shares for Total Cash Payments of $1.95 per Cover-More Share, in the absence of a Superior Proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Cover-More Shareholders. Subject to the same qualifications, each Cover-More Director continues to recommend that Cover-More Shareholders vote in favour of the Scheme and intends to vote all Cover-More Shares that he or she controls in favour of the Scheme. The transaction will be effected by way of a scheme of arrangement, enabling Cover-More Shareholders to vote on the Scheme. The purpose of this Scheme Booklet is to explain the terms of the proposed Scheme and provide you with information on the Scheme to assist you in your decision whether or not to vote in favour of the Scheme. Voting will take place at the Scheme Meeting to be held at 10:00am on Monday, 27 March 2017 at Harbourview Hotel, 17 Blue Street, North Sydney NSW You should read this Scheme Booklet in full before deciding how to vote. The Scheme has a number of advantages, disadvantages and risks, which may affect Cover-More Shareholders in different ways depending on their individual circumstances. Cover-More Shareholders should seek professional advice on their particular circumstances, as appropriate. SCHEME BOOKLET 7

11 PURPOSE OF THIS SCHEME BOOKLET Reasons to vote in favour of the Scheme Your Directors unanimously recommend that you vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders The Independent Expert concluded that the Scheme is in the best interests of Cover-More Shareholders, in the absence of a Superior Proposal The Total Cash Payments represent a significant premium to recent historical Cover-More Share prices and the price at which Cover-More raised equity in September 2016 You will receive certain value of $1.95 cash per Cover-More Share for your investment in Cover-More As part of the Total Cash Payments to be received under the Scheme, Cover-More Shareholders are expected to receive a fully franked Special Dividend of $0.05 per Cover-More Share. Those Cover-More Shareholders who are able to realise the full benefit of franking credits attached to the Special Dividend (if declared) will realise additional value of approximately $0.02 per Cover-More Share. No Superior Proposal has emerged as at the date of this Scheme Booklet The Scheme allows you to sell all your Cover-More Shares If the Scheme does not proceed, and no Superior Proposal emerges, the Cover-More Share price may fall If the Scheme does not proceed, you will continue to be subject to the risks and uncertainties associated with Cover-More s business and general market risks You will not incur any stamp duty or brokerage charges on the transfer of your Cover-More Shares if the Scheme proceeds Reasons not to vote in favour of the Scheme You may disagree with your Directors recommendation and the opinion of the Independent Expert and consider that the Scheme is not in your best interests You may prefer to realise the potential value of Cover-More over the long term, and may consider that the Scheme does not capture Cover-More s long term potential You may believe that it is in your best interests to maintain your current investment and risk profile The tax consequences of the Scheme may not suit your current financial position You may consider that there is the potential for a Superior Proposal to be made in the foreseeable future For more information about the reasons to vote against the Scheme, please see section 2.3 of this Scheme Booklet which Cover-More Shareholders should read carefully and in its entirety. For more information about the reasons to vote in favour of the Scheme, please see section 2.2 of this Scheme Booklet which Cover-More Shareholders should read carefully and in its entirety. 8 COVER-MORE GROUP LIMITED

12 NEXT STEPS (a) Carefully read this Scheme Booklet This is an important document and you should read it carefully and in its entirety before making a decision on how to vote at the Scheme Meeting. (b) Vote on the Scheme As a Cover-More Shareholder, you are entitled to vote on whether the Scheme should proceed at the Scheme Meeting. Please refer to the following pages of this Scheme Booklet for details on how to vote at the Scheme Meeting, including by proxy. (c) Seek further information If you have any questions in relation to the Scheme or the number of Cover-More Shares you hold or how to vote, please call the Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). If you have any doubts as to the actions you should take or you have further questions, please contact your legal, investment or other professional adviser. (d) Why you should vote As a Cover-More Shareholder, you have a say in whether ZIC, through Zurich BidCo, will acquire all of the issued shares in Cover-More. This is your opportunity to play a role in deciding the future of Cover-More. SCHEME BOOKLET 9

13 HOW TO VOTE Who is entitled to vote at the Scheme Meeting? If you are registered on the Register as a Cover-More Shareholder at 5:00pm (Sydney time) on Saturday, 25 March 2017, then you will be entitled to attend and vote at the Scheme Meeting. Voting is not compulsory. Joint holders In the case of Cover-More Shares held by joint holders, only one of the joint holders is entitled to vote. If more than one shareholder votes in respect of jointly held Cover-More Shares, only the vote of the Cover-More Shareholder whose name appears first in the Register will be counted. Your vote is important In order for the Scheme to be implemented, the Scheme Resolution must be approved by Cover-More Shareholders at the Scheme Meeting. For this reason the Cover-More Directors unanimously recommend that you vote in favour of the Scheme Resolution in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider that the Scheme is in the best interests of Cover-More Shareholders. If you are unable to attend the Scheme Meeting, the Cover-More Directors urge you to complete and return, in the enclosed reply paid envelope, the personalised proxy form that accompanies this Scheme Booklet or lodge your proxy form online at Link s website ( in accordance with the instructions given there. Location and details of Scheme Meeting The details of the Scheme Meeting are as follows: Location: Harbourview Hotel, 17 Blue Street, North Sydney NSW 2060 Date: Monday, 27 March 2017 Time: 10:00am (Sydney time) Scheme Meeting A copy of the Notice of Scheme Meeting is set out in Attachment A to this Scheme Booklet. Section 3.2(b) of this Scheme Booklet provides details of the Scheme Resolution and the voting majorities that are required for the Scheme Resolution. 10 COVER-MORE GROUP LIMITED

14 Voting in person, by attorney or corporate representative If you wish to vote in person, you must attend the Scheme Meeting. If you cannot attend the Scheme Meeting, you may vote by proxy by completing the proxy form accompanying this Scheme Booklet. Attorneys who plan to attend the Scheme Meeting should bring with them the original or a certified copy of the power of attorney under which they have been authorised to attend and vote at the Scheme Meeting. A body corporate which is a Cover-More Shareholder may appoint an individual to act as its corporate representative. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the Scheme Meeting evidence of his or her appointment, including any authority under which it is signed. Voting by proxy If you wish to appoint a proxy to attend and vote at the Scheme Meeting on your behalf, please complete and sign the personalised proxy form accompanying this Scheme Booklet in accordance with the instructions set out on the proxy form or lodge your proxy vote online at Link s website ( in accordance with the instructions given there. You may complete the proxy form in favour of the Chairperson of the Scheme Meeting or appoint up to two proxies to attend and vote on your behalf at the Scheme Meeting. TO BE VALID, PROXY FORMS FOR THE SCHEME MEETING MUST BE RECEIVED BY THE REGISTRY BY NO LATER THAN 10:00AM (SYDNEY TIME) ON SATURDAY, 25 MARCH Proxy forms, duly completed in accordance with the instructions set out on the proxy form, may be returned to the Registry: by posting them in the reply paid envelope provided; by delivering them to Link Market Services Limited at Level 12, 680 George Street, Sydney NSW 2000; by faxing them to ; by posting them to Cover-More Group Limited C/ Link Market Services Limited, Locked Bag A14, Sydney South NSW 1235 Australia; or online at Login to the Link website using the details as shown on the proxy form. Select Voting and follow the prompts to lodge your vote. To use the online voting facility, Cover-More Shareholders will need their Holder Identifier (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the proxy form). Given the last date for lodgement of proxy forms falls on a Saturday, please ensure that any proxy form which you intend to post or deliver is received by close of business on Friday, 24 March Cover-More will accept proxies received by fax before 10:00am (Sydney time) on Saturday, 25 March SCHEME BOOKLET 11

15 FREQUENTLY ASKED QUESTIONS Question Answer AN OVERVIEW OF THE SCHEME Why have I received this Scheme Booklet? What is the Scheme? Who are ZIC, Zurich BidCo and the Zurich Insurance Group? How will the Scheme be implemented? This Scheme Booklet has been sent to you because you are a Cover-More Shareholder and Cover-More Shareholders are being asked to vote on a Scheme which, if approved, will result in ZIC, through Zurich BidCo, acquiring all Cover-More Shares for Total Cash Payments of $1.95 per Cover-More Share. This Scheme Booklet is intended to help you to decide how to vote on the Scheme Resolution which needs to be passed at the Scheme Meeting to allow the Scheme to proceed. The Scheme is a scheme of arrangement between Cover-More and Cover-More Shareholders. A scheme of arrangement is a statutory procedure that is commonly used in transactions which may result in a change of ownership or control of a company. On 12 December 2016, Cover-More announced the Scheme to ASX. If the Scheme is approved and implemented, Scheme Shareholders will receive Total Cash Payments of $1.95 for each Cover-More Share they own. The Zurich Insurance Group comprises Zurich Insurance Group Ltd, incorporated in Zurich, Switzerland (ZIG) and its subsidiaries. ZIC, a wholly owned subsidiary of ZIG, is a company incorporated in Zurich, Switzerland and is the main operating entity of the Zurich Insurance Group. ZIC is the entity proposing to acquire Cover-More through Zurich Bidco (Zurich Travel Solutions Pty Limited (ACN )), a wholly owned Australian incorporated subsidiary of ZIC. The Zurich Insurance Group is a leading multi-line insurance provider with a global network of subsidiaries and offices in Europe, North America, Latin America, Asia Pacific and the Middle East, and is headquartered in Switzerland. For more information on ZIC, Zurich BidCo and the Zurich Insurance Group please see section 5 of this Scheme Booklet. In order for the Scheme to be implemented, all conditions precedent under the Scheme Implementation Agreement must be satisfied or waived (where applicable), including that the Scheme Resolution must be approved by Cover-More Shareholders at the Scheme Meeting and the Scheme must be approved by the Court. Details of this Scheme Resolution and the majorities required to approve the Scheme Resolution are set out in section 3.2(b) of this Scheme Booklet. What do the Cover-More Directors recommend? The Cover-More Directors unanimously recommend that you vote in favour of the Scheme Resolution to approve the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider that the Scheme is in the best interests of Cover-More Shareholders. 12 COVER-MORE GROUP LIMITED

16 Question How are the Cover-More Directors intending to vote? What is the Independent Expert s opinion of the Scheme? Why you may consider voting in favour of the Scheme Answer Each of the Cover-More Directors intends to vote, or cause to be voted, in favour of the Scheme in respect of all the Cover-More Shares they own or control, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders. The Independent Expert concluded that the Scheme is in the best interests of Cover-More Shareholders. The Independent Expert has estimated the full underlying value of Cover-More to be in the range of $1.70 and $1.96 per Cover-More Share. The Independent Expert s Report is included as Attachment E to this Scheme Booklet. The Cover-More Directors recommend that you read the Independent Expert s Report carefully and in its entirety. Reasons why you may consider voting in favour of the Scheme include: Your Directors unanimously recommended that you vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders; The Independent Expert concluded that the Scheme is in the best interests of Cover-More Shareholders, in the absence of a Superior Proposal; The Total Cash Payments of $1.95 per Cover-More Share represent a significant premium to recent historical Cover-More share prices and the price at which Cover-More raised equity in September 2016; You will receive certain value of $1.95 cash per Cover-More Share for your investment in Cover-More; As part of the Total Cash Payments to be received by Cover-More Shareholders under the Scheme, Cover-More Shareholders will receive a fully franked Special Dividend of $0.05 per Cover-More Share if the Scheme is implemented (subject to the Special Dividend being declared by the Cover-More Board). Those Cover-More Shareholders who are able to realise the full benefit of franking credits attached to the Special Dividend (if declared) will realise additional value of approximately $0.02 per Cover-More Share; No Superior Proposal has emerged as at the date of this Scheme Booklet; The Scheme allows you to sell all your Cover-More Shares; If the Scheme does not proceed, and no Superior Proposal emerges, the Cover-More Share price may fall; If the Scheme does not proceed, you will continue to be subject to the risk and uncertainties associated with the Cover-More business and also general market risks; and You will not incur any stamp duty or brokerage charges on the transfer of your Cover-More Shares if the Scheme proceeds. SCHEME BOOKLET 13

17 FREQUENTLY ASKED QUESTIONS continued Question Why you may consider voting against the Scheme What will happen if a Superior Proposal emerges? Answer Reasons why you may consider voting against the Scheme include: You may disagree with your Directors recommendation and the opinion of the Independent Expert and consider that the Scheme is not in your best interests; You may prefer to realise the potential value of Cover-More over the long term and may consider that the Scheme does not capture Cover-More s long term potential; You may believe it is in your best interests to maintain your current investment and risk profile; The tax consequences of the Scheme may not suit your current financial position; and You may consider that there is the potential for a Superior Proposal to be made in the foreseeable future. If Cover-More receives a Competing Transaction from a third party, the following applies: If the proposal is a Superior Proposal, Cover-More must notify ZIC in writing as soon as practicable and in any event within 3 Business Days after receipt of the Superior Proposal of the material terms and conditions of the Superior Proposal (including price) and, subject to the Fiduciary Exception (defined in section 3.9(b)), the identity of the third party making or proposing the Superior Proposal; Cover-More must not enter into a binding agreement to implement a Competing Transaction unless it is a Superior Proposal and Cover-More has notified the above details (including the identity of the third party making the proposed Competing Transaction) to ZIC; ZIC will be given 3 Business Days during which it can put forward a counter proposal; and If ZIC provides a counter proposal and the Cover-More Directors decide, acting in good faith, that the counter proposal will provide an equivalent or superior outcome for Cover-More Shareholders as a whole than the Competing Transaction, then Cover-More and ZIC must use their best endeavours to agree, as soon as reasonably practicable, any amendments to the Scheme Implementation Agreement as are reasonably necessary to reflect and implement ZIC s counter proposal. Details of these provisions (and other provisions) of the Scheme Implementation Agreement are set out in section 3. Since the announcement of the entry into the Scheme Implementation Agreement on 12 December 2016 and up to the date of this Scheme Booklet, no Superior Proposal has emerged. 14 COVER-MORE GROUP LIMITED

18 Question Is there a reimbursement or break fee payable by Cover-More? What are the risks associated with an investment in Cover-More if the Scheme does not become Effective? Answer Under the Scheme Implementation Agreement, Cover-More must pay to ZIC the Cover-More Reimbursement Fee, which is approximately $7.41 million, if certain events occur, including where: a third party makes or announces a proposal to acquire Control of Cover-More (or any of Cover-More s material Subsidiaries), or an economic interest in all or a material part of the business or assets of the Cover-More Group, on or before 30 June 2017 (or the earlier valid termination of the Scheme Implementation Agreement) and such a proposal is completed, implemented or consummated within 12 months of the announcement; any Cover-More Director fails to make, withdraws or adversely changes his or her recommendation that Cover-More Shareholders vote in favour of the Scheme at the Scheme Meeting, or otherwise makes a public statement indicating the he or she no longer supports the Scheme, except where the Independent Expert concludes that the Scheme is not in the best interests of Cover-More Shareholders (other than where the reason for that conclusion is a Competing Transaction); Cover-More terminates the Scheme Implementation Agreement because the Independent Expert concludes that the Scheme is not in the best interests of Cover-More Shareholders or adversely changes its previously given opinion in the Independent Expert s Report that the Scheme is in the best interests of Cover-More Shareholders, where the reason for that conclusion is a Competing Transaction; or ZIC validly terminates the Scheme Implementation Agreement because of a breach by Cover-More of the Scheme Implementation Agreement (or a representation or warranty given by Cover-More under the Scheme Implementation Agreement), which is material in the context of the Scheme taken as a whole. Details of these provisions of the Scheme Implementation Agreement are set out in section If the Scheme does not proceed, and no Superior Proposal emerges, then the Cover-More Share price may fall or trade at a price below the Total Cash Payments of $1.95 per Cover-More Share, at least in the immediate near term. In addition, if the Scheme does not proceed and no Superior Proposal emerges, Cover-More Shareholders will continue to be subject to the specific risks associated with Cover-More s business and other general risks. Details of these risks are set out in section 6.3. AN OVERVIEW OF THE TOTAL CASH PAYMENTS What are the Total Cash Payments? Cover-More Shareholders will receive Total Cash Payments of $1.95 for each Cover-More Share, which is expected to comprise: a fully franked Special Dividend of $0.05 per Cover-More Share that they hold on the Special Dividend Record Date; and Scheme Consideration of $1.90 per Cover-More Share that they hold on the Scheme Record Date. The Special Dividend has not yet been declared by the Cover-More Board and remains at the absolute discretion of the Cover-More Board. If the Cover-More Board does not declare the Special Dividend but the Scheme nevertheless proceeds, the Scheme Consideration will be $1.95 per Cover-More Share. SCHEME BOOKLET 15

19 FREQUENTLY ASKED QUESTIONS continued Question What is the premium of Total Cash Payments to Cover-More s Share price? How is ZIC and/or Zurich BidCo funding the Total Cash Payments? Who is entitled to participate in the Scheme? When will I receive the Total Cash Payments? What are the tax implications of the Scheme for you? Will I have to pay brokerage or stamp duty? Answer The Total Cash Payments of $1.95 per Cover-More Share represents a premium of: 48.3% to the closing price of Cover-More Shares on 9 December 2016 (the last trading day before the announcement of the entry into the Scheme Implementation Agreement on 12 December 2016); 47.4% to the 1 month VWAP to 9 December 2016; 40.9% to the 3 month VWAP to 9 December 2016; 46.1% to the 6 month VWAP to 9 December 2016; and 62.5% to the entitlement offer price at which Cover-More raised equity in September ZIC has undertaken to provide sufficient funding to Zurich BidCo to ensure that it has, at all necessary times, sufficient funding and liquidity to meet any of its funding obligations under, or in connection with, the Scheme. The funds to be provided by ZIC to Zurich BidCo will be met by ZIC s current cash reserves. On 3 February 2017, Cover-More announced an intention to declare a fully franked Special Dividend of $0.05 per Cover-More Share. Any declaration and payment of the Special Dividend will be subject to the Scheme becoming Effective. ZIC and/or Zurich BidCo has agreed to provide funding to Cover-More to facilitate payment of the Special Dividend, subject to the Scheme becoming Effective. For more information on ZIC and Zurich BidCo s funding arrangements see section 5 of this Scheme Booklet. Persons who hold Cover-More Shares on the Scheme Record Date will participate in the Scheme and, if the Scheme is approved and implemented, those persons will receive the Scheme Consideration in respect of each Cover-More Share held on the Scheme Record Date. If all conditions for the Scheme are satisfied or waived (as applicable): Cover-More Shareholders on the Register on the Scheme Record Date will be sent the Scheme Consideration on the Implementation Date; and if the Special Dividend is declared by the Cover-More Board, Cover-More Shareholders on the Register on the Special Dividend Record Date are expected to be sent the Special Dividend on the Implementation Date. The tax implications for Scheme Shareholders if the Scheme is approved and implemented will depend on the specific taxation circumstances of each Scheme Shareholder. General information about the likely Australian tax consequences of the Scheme is set out in section 7 of this Scheme Booklet. You should not rely on those descriptions as advice for your own affairs. For information about your individual financial or taxation circumstances please consult your financial, legal, taxation or other professional adviser. No, you will not have to pay brokerage or stamp duty if your Cover-More Shares are acquired under the Scheme. 16 COVER-MORE GROUP LIMITED

20 Question Can I sell my Cover-More Shares now? SPECIAL DIVIDEND What is the Special Dividend? Am I eligible to receive the Special Dividend? When will I receive the Special Dividend? Will I receive any further dividends from Cover-More? Will the Special Dividend be franked? Will I get the benefit of franking credits attached to the Special Dividend? Answer You can sell your Cover-More Shares on-market at any time before the close of trading on ASX on the Effective Date. However, if you do so you will receive the prevailing on-market price set at the time of sale which may not be the same price as the Scheme Consideration, you will not be paid the Special Dividend and you may also be required to pay brokerage. The Cover-More Board has announced an intention to pay a fully franked Special Dividend of $0.05 per Cover-More Share. The Special Dividend has not yet been declared by the Cover-More Board and remains at the absolute discretion of the Cover-More Board. If the Special Dividend is declared by the Cover-More Board, it will form part of the Total Cash Payments to be received by Cover-More Shareholders if the Scheme becomes Effective. If the Special Dividend is not declared by the Cover-More Board but the Scheme nevertheless becomes Effective, the Scheme Consideration will be $1.95 per Cover-More Share. If the Special Dividend is declared, the Scheme becomes Effective, and you hold Cover-More Shares on the Special Dividend Record Date, you will be eligible to receive the Special Dividend. If the Scheme becomes Effective and the Special Dividend is declared, the Special Dividend is expected to be paid to Cover-More Shareholders on the Implementation Date. The Special Dividend (if declared) will be conditional on the Scheme becoming Effective. If the Scheme does not become Effective, the Special Dividend will not be paid to Cover-More Shareholders. Under the Scheme Implementation Agreement, Cover-More is permitted to pay a fully franked Special Dividend of up to $0.05 per Cover-More Share. No further dividends will be paid by Cover-More. Cover-More intends that the Special Dividend (if declared) will be fully franked. If you are an Australian resident for tax purposes and satisfy the qualified person rules, you may be able to access franking credits attached to the Special Dividend. If you are not an Australian resident for tax purposes, you will not be able to access franking credits attached to the Special Dividend, but the Special Dividend should ordinarily not be subject to Australian tax. Further information is provided at section 7.2 of this Scheme Booklet. The comments in section 7.2 are general in nature and should not be relied upon as advice for your affairs. It is recommended that you consult your financial, legal, taxation or other professional adviser with respect to the potential tax consequences of receiving the Special Dividend. SCHEME BOOKLET 17

21 FREQUENTLY ASKED QUESTIONS continued Question Answer SCHEME, VOTING AND APPROVALS Are there any conditions that must be satisfied or waived in order for the Scheme to be implemented? What happens if these conditions are not satisfied or the Scheme Implementation Agreement is terminated? Yes there are. The conditions which remain outstanding as at the date of this Scheme Booklet are: Court approval of the Scheme; the Scheme Resolution being passed by the Requisite Majorities (see section 3.2(b) of this Scheme Booklet for further details) at the Scheme Meeting; no other orders or restraints being issued by any court or any Regulatory Authority preventing the implementation of the Scheme are in place; ZIC receives approval under the Hart-Scott-Rodino Antitrust Improvements Act 1976 for the Scheme; ZIC receives approval under the Financial Services and Markets Act (UK) for the Scheme; and no Cover-More Prescribed Event occurs. The conditions of the Scheme are summarised in further detail in section 1.2 of this Scheme Booklet. Cover-More Shareholders should also be aware that the Scheme Implementation Agreement may be terminated in certain circumstances (details of which are summarised in section 3.8 of this Scheme Booklet). If the Scheme Implementation Agreement is terminated, the Scheme will not proceed. As at the date of this Scheme Booklet, the Cover-More Directors are not aware of any reason why these conditions should not be satisfied or waived (as applicable). If the conditions precedent to the Scheme becoming Effective are not satisfied or waived (as applicable) or the Scheme Implementation Agreement is terminated then the Scheme will not be implemented and, as set out in section 6.1 of this Scheme Booklet: you will retain your Cover-More Shares and they will not be acquired by Zurich BidCo; you will not receive the proposed Total Cash Payments of $1.95 per Cover-More Share; Cover-More will continue to operate as a stand-alone company listed on ASX; and if the Scheme does not proceed, and no comparable proposal or Superior Proposal emerges, then the Cover-More Share price may fall or trade at a price below the Total Cash Payments of $1.95 per Cover-More Share, at least in the immediate near term. 18 COVER-MORE GROUP LIMITED

22 Question What happens if the Scheme proceeds? Can the Scheme Implementation Agreement be terminated? Am I entitled to vote at the Scheme Meeting? How do I vote? When and where will the Scheme Meeting be held? Is voting compulsory? What voting majorities are required to approve the Scheme? Answer If the Scheme becomes Effective and you remain a Cover-More Shareholder as at the Scheme Record Date for the Scheme, on the Implementation Date all of your Cover-More Shares will be transferred to Zurich BidCo under the Scheme, and, if the Cover-More Board declare the Special Dividend, you will receive the Scheme Consideration of $1.90 cash for each Cover-More Share you hold on the Scheme Record Date. Separately, if the Cover-More Board declares the Special Dividend, you will receive a further fully franked dividend of $0.05 cash per Cover-More Share for each Cover-More Share registered in your name as at the Special Dividend Record Date. If the Cover-More Board does not declare the proposed Special Dividend but the Scheme nevertheless becomes Effective, the Scheme Consideration will be $1.95 cash per Cover-More Share to ensure that you still receive a Total Cash Payment of $1.95 per Cover-More Share. The Scheme Implementation Agreement may be terminated in certain circumstances, details of which are summarised in section 3.8. If the Scheme Implementation Agreement is terminated, the Scheme will not proceed. If you are registered as a Cover-More Shareholder on the Register at 5:00pm (Sydney time) on Saturday, 25 March 2017, then you will be entitled to attend and vote at the Scheme Meeting. Details of the Scheme Meeting and voting are on pages Voting at the Scheme Meeting may be in person, by attorney, by proxy or, in the case of a corporation, by corporate representative. If you wish to vote in person, you must attend the Scheme Meeting. If you cannot attend the Scheme Meeting, you may complete the enclosed personalised proxy form in accordance with the instructions or lodge your proxy form online at Link s website ( in accordance with the instructions given there. The deadline for lodging your proxy form for the Scheme Meeting is 10:00am (Sydney time) on Saturday, 25 March Details of the Scheme Meeting and voting are on pages The Scheme Meeting will be held at 10:00am (Sydney time) on Monday, 27 March, 2017 at Harbourview Hotel, 17 Blue Street, North Sydney NSW Voting is not compulsory. However, the Scheme will only be successful if it is approved by the Requisite Majorities of Cover-More Shareholders so voting is important and the Cover-More Directors encourage you to vote. If the Scheme is approved, you will be bound by the Scheme whether or not you voted and whether or not you voted in favour of it. For the Scheme to proceed, the Scheme Resolution must be passed by the following Requisite Majorities: a majority in number (more than 50%) of Cover-More Shareholders who vote on the Scheme Resolution (noting that the Court may waive this requirement); and at least 75% of the votes cast on the Scheme Resolution. SCHEME BOOKLET 19

23 FREQUENTLY ASKED QUESTIONS continued Question What happens if I do not vote or if I vote against the Scheme? Can I keep my Cover-More Shares? When will the results of the Scheme Meeting be available? What do I do if I oppose the Scheme? FURTHER INFORMATION What if I want further information? Answer If you do not vote, or vote against the Scheme, the Scheme may not be approved at the Scheme Meeting by the Requisite Majorities of Cover-More Shareholders. If this occurs then the Scheme will not proceed, you will not receive the Total Cash Payments and you will remain a Cover-More Shareholder. For more information on what happens if the Scheme is not implemented, please see section 6 of this Scheme Booklet. However, if the Scheme is approved by the Requisite Majorities and the Scheme is implemented, your Cover-More Shares will be transferred to Zurich BidCo under the Scheme and you will receive the Scheme Consideration for each Cover-More Share you hold on the Scheme Record Date whether or not you voted in favour of the Scheme. For more information on the implementation of the Scheme, please see section 3 of this Scheme Booklet. If the Scheme is implemented, your Cover-More Shares will be transferred to Zurich BidCo. This is so even if you did not vote at all or you voted against the Scheme Resolution at the Scheme Meeting. The results of the Scheme Meeting will be available shortly after the conclusion of the Scheme Meeting and will be announced to the ASX once available. Even if the Scheme Resolution is passed at the Scheme Meeting by the Requisite Majorities, the Scheme will only proceed if Court approval of the Scheme is obtained and all of the other conditions precedent are satisfied or waived (as applicable). If you, as a Cover-More Shareholder, oppose the Scheme, you should: call the Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time) and obtain further information; attend the Scheme Meeting either in person or by proxy and vote against the Scheme Resolution; and/or if shareholders pass the Scheme Resolution at the Scheme Meeting and you wish to appear and be heard at the Second Court Hearing and if so advised, oppose the approval of the Scheme at the Second Court Hearing, you must lodge a notice of intention to appear at the Second Court Hearing, attend the hearing and indicate opposition to the Scheme. Please see the Important notices section for further details under the heading Notice regarding Second Court Hearing and if a Cover-More Shareholder wishes to oppose the Scheme on page 2. If you have any questions about the Scheme or you would like additional copies of this Scheme Booklet, please contact the Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). For information about your individual financial or taxation circumstances please consult your financial, legal, taxation or other professional adviser. 20 COVER-MORE GROUP LIMITED

24 1. SUMMARY OF THE SCHEME 1.1 Scheme On 12 December 2016, Cover-More announced that it had entered into the Scheme Implementation Agreement with ZIC, under which it is proposed that ZIC, through Zurich BidCo, will acquire all of the Cover-More Shares on issue by way of the Scheme. If the Scheme is approved by Cover-More Shareholders at the Scheme Meeting and by the Court, and if all other necessary approvals and conditions for the Scheme are satisfied or waived (as applicable), Cover-More will become a wholly-owned subsidiary of Zurich BidCo and will be delisted from ASX. This Scheme Booklet contains information that the Cover-More Board considers is material to Cover-More Shareholders in making a decision whether or not to vote in favour of the Scheme. You should carefully read this Scheme Booklet as part of your consideration of the Scheme. 1.2 Conditions precedent The Scheme is subject to a number of conditions precedent. The following conditions precedent are outstanding as at the date of this Scheme Booklet: (a) (Court approval) The Court approves the Scheme in accordance with section 411(4)(b) of the Corporations Act. (b) (Shareholder approval) Cover-More Shareholders approve the Scheme at the Scheme Meeting by the Requisite Majorities. (c) (Foreign regulatory approvals) Before 8:00am on the Second Court Date: (i) the applicable waiting period for the Scheme under the Hart-Scott-Rodino Antitrust Improvements Act 1975 (US), and the associated rules and regulation, has expired (or early termination has been granted by the Federal Trade Commission); and (ii) the Financial Conduct Authority (FCA) approves the Scheme in accordance with the Financial Services and Markets Act (2000) (UK). (d) (No regulatory intervention) As at 8:00am on the Second Court Date, no Court or Regulatory Authority has issued or announced that it has taken steps to issue an order, temporary restraining order, preliminary or permanent injunction, decree or ruling or taken any action enjoining, restraining or otherwise imposing a legal restraint or prohibition preventing the Scheme and no such order, decree, ruling, other action or refusal is in effect as at 8:00am on the Second Court Date; (e) (No Cover-More Prescribed Event) No Cover-More Prescribed Event occurs between the date of the Scheme Implementation Agreement and 8:00am on the Second Court Date. The conditions set out in paragraphs 1.2(a) to (d) above cannot be waived. The conditions of the Scheme are set out in clause 3 of the Scheme Implementation Agreement which is Attachment B to this Scheme Booklet. SCHEME BOOKLET 21

25 1. SUMMARY OF THE SCHEME continued 1.3 Implementation of the Scheme The Scheme is proposed to be undertaken pursuant to a Court approved scheme of arrangement. A scheme of arrangement is a legal arrangement that shareholders vote on and, if the Requisite Majorities of shareholders vote in favour of it and it is approved by the Court, it binds the company and all of its shareholders upon the Court orders approving the scheme of arrangement being lodged with ASIC. Approval of a scheme of arrangement requires a 50% majority of the number of shareholders voting (unless the Court orders otherwise) and a 75% majority of the total votes cast being in favour of the scheme, as well as approval by the Court. The Scheme will become binding on Cover-More and Cover-More Shareholders only if the conditions to the Scheme are satisfied or waived (as applicable). 1.4 If the Scheme is approved If the Scheme is approved and becomes Effective and you remain a Cover-More Shareholder as at the Scheme Record Date for the Scheme, each of your Cover-More Shares will be acquired by Zurich BidCo on the Implementation Date. 22 COVER-MORE GROUP LIMITED

26 2. COVER-MORE DIRECTORS RECOMMENDATION AND MATTERS RELEVANT TO YOUR VOTE ON THE SCHEME 2.1 Recommendation The Cover-More Directors unanimously recommend that Cover-More Shareholders vote in favour of the Scheme Resolution in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders. Subject to the same qualifications, each Cover-More Director who holds or controls Cover-More Shares intends to vote, or cause to be voted, those Cover-More Shares in favour of the Scheme. 2.2 Reasons for recommendation and advantages of the Scheme The factors that the Cover-More Directors have taken into account in recommending the Scheme to Cover-More Shareholders include: (a) Your Directors unanimously recommend that you vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders Your Directors unanimously recommend that, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders, you vote in favour of the Scheme Resolution required to implement the Scheme at the Scheme Meeting. In reaching their recommendation, your Directors have assessed the Scheme having regard to the reasons to vote in favour of, or against, the Scheme, as set out in this Scheme Booklet. In the absence of a Superior Proposal, each of your Directors intends to vote all Cover-More Shares held or controlled by them in favour of the Scheme. The interests of Cover-More Directors are set out in section 8.1. (b) The Independent Expert concluded that the Scheme is in the best interests of Cover-More Shareholders, in the absence of a Superior Proposal Your Directors appointed KPMG Corporate Finance to prepare the Independent Expert s Report, including an opinion as to whether the Scheme is in the best interests of Cover-More Shareholders. The Independent Expert concluded that the Scheme is in the best interests of Cover-More Shareholders, in the absence of a Superior Proposal. The Independent Expert, in arriving at this opinion, assessed whether the Scheme was fair and reasonable to Cover-More Shareholders. The basis for this conclusion is that the Total Cash Payments of $1.95 per Cover-More Share is within the valuation range (as concluded by the Independent Expert) of $1.70 to $1.96 per Cover-More Share. A complete copy of the Independent Expert s Report is included in Attachment E to this Scheme Booklet and your Directors encourage you to read this report in its entirety. (c) The Total Cash Payments represent a significant premium to recent historical Cover-More Share prices and the price at which Cover-More raised equity in September 2016 Under the terms of the Scheme, subject to the Scheme becoming Effective, if the Special Dividend is declared, Cover-More Shareholders will receive $1.90 cash per Cover-More Share held on the Scheme Record Date plus a Special Dividend of $0.05 cash per Cover-More Share held on the Special Dividend Record Date, excluding the potential benefit of franking credits associated with the Special Dividend. If the Special Dividend is not declared by the Cover-More Board but the Scheme becomes Effective, the Scheme Consideration received by SCHEME BOOKLET 23

27 2. COVER-MORE DIRECTORS RECOMMENDATION AND MATTERS RELEVANT TO YOUR VOTE ON THE SCHEME continued Cover-More Shareholders will be $1.95 per Cover-More Share. The Total Cash Payments represent a significant premium of: 48.3% to the closing price of Cover-More Shares on 9 December 2016 (the last trading day before the announcement of the entry into the Scheme Implementation Agreement on 12 December 2016); 47.4% to the 1 month VWAP to 9 December 2016; 40.9% to the 3 month VWAP to 9 December 2016; 46.1% to the 6 month VWAP to 9 December 2016; and 62.5% to the entitlement offer price at which Cover-More raised equity in September The graph below illustrates the premium implied by the Total Cash Payments of $1.95 per Cover-More Share to the range of benchmarks listed above. $3.00 Implied premium of Total Cash Payments: 48.3% 47.4% 40.9% 46.1% 62.5% $2.50 $2.00 Total Cash Payments: $1.95 per Cover-More Share $1.50 $1.32 $1.32 $1.38 $1.34 $1.20 $1.00 $0.50 $0.00 Closing price on 9 December mth VWAP to 9 December mth VWAP to 9 December mth VWAP to 9 December 2016 Capital raising price in September 2016 (d) You will receive certain value of $1.95 cash per Cover-More Share for your investment in Cover-More The Total Cash Payments of $1.95 per Cover-More Share, excluding the potential benefit of franking credits associated with the Special Dividend (if declared), provides you with certainty of value for your Cover-More Shares (subject to the Scheme becoming Effective). The certainty of the Total Cash Payments should be compared with the risks and the uncertainties of remaining a Cover-More Shareholder if the Scheme is not implemented, which include, but are not limited to, the risks set out in section 6.3. (e) If the Special Dividend is declared and the Scheme becomes Effective, as part of the Total Cash Payments to be received under the Scheme, Cover-More Shareholders will receive a fully franked Special Dividend of $0.05 per Cover-More Share. Those Cover-More Shareholders who are able to realise the full benefit of franking credits attached to the Special Dividend (if declared) will realise additional value of approximately $0.02 per Cover-More Share. If declared, the Special Dividend is currently expected to be paid on the Implementation Date. 24 COVER-MORE GROUP LIMITED

28 (f) No Superior Proposal has emerged as at the date of this Scheme Booklet From the announcement of the entry into the Scheme Implementation Agreement to the ASX on 12 December 2016 to the date of this Scheme Booklet, no Superior Proposal has emerged and your Directors are not aware, as at the date of this Scheme Booklet, of any Superior Proposal that is likely to emerge. (g) The Scheme allows you to sell all of your Cover-More Shares The Scheme provides you with an opportunity to dispose of all your Cover-More Shares in a single transaction for certain cash value. (h) If the Scheme does not proceed, and no Superior Proposal emerges, the Cover-More Share price may fall If the Scheme is not implemented and in the absence of a Superior Proposal, the price of Cover-More Shares on the ASX may fall. Since market close on 9 December 2016, the last trading day prior to the announcement of the Scheme Implementation Agreement, Cover-More s share price has increased 45% up to $1.92 on the Last Practicable Trading Date. Your Directors are unable to predict the price at which Cover-More Shares will trade in the future, but consider that, in the absence of implementation of the Scheme, and in the absence of a Superior Proposal, the price of Cover-More Shares may fall. This view is also supported by the Independent Expert, which states in the Independent Expert s Report: The current share price of Cover-More reflects the terms of the Scheme and therefore includes a control element. As such, in the absence of the Scheme, an alternative proposal or speculation concerning an alternative proposal, the Cover-More share price is likely to fall to levels consistent with trading prices prior to the announcement of the Scheme with allowance for any company specific initiatives or financial achievements in the subsequent period which the market may assess as value enhancing, and the impact of trends in broader equity markets. (i) If the Scheme does not proceed, you will continue to be subject to the risks and uncertainties associated with the Cover-More business and general market risks Your Directors consider that the underlying profitability and overall outlook for Cover-More remains strong and that Cover-More has significant growth prospects, including from current growth initiatives, as an independent ASX-listed company. Nevertheless, these initiatives will take time to fully implement and carry execution risks, some of which are outside the control of Cover-More. If the Scheme does not proceed, Cover-More Shareholders will continue to be subject to these execution risks, as well as other specific risks inherent in Cover-More s business, including those risks summarised in more detail in section 6.3. The Scheme removes these risks and uncertainties for Cover-More Shareholders and allows Cover-More Shareholders to exit their investment in Cover-More at a price that your Directors consider to be attractive. (j) You will not incur any stamp duty or brokerage charges on the transfer of your Cover-More Shares if the Scheme proceeds You should not incur any brokerage or stamp duty on the transfer of your Cover-More Shares to Zurich BidCo pursuant to the Scheme. If you sell your Cover-More Shares on the ASX (rather than disposing of them via the Scheme), you may incur brokerage charges (and, potentially GST on those charges). SCHEME BOOKLET 25

29 2. COVER-MORE DIRECTORS RECOMMENDATION AND MATTERS RELEVANT TO YOUR VOTE ON THE SCHEME continued 2.3 Reasons why Cover-More Shareholders may consider voting against the Scheme and disadvantages of the Scheme Although the Cover-More Directors unanimously recommend that you vote in favour of the Scheme Resolution in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders, factors which may lead Cover-More Shareholders to vote against the Scheme include: (a) You may disagree with your Directors recommendation and the opinion of the Independent Expert and consider that the Scheme is not in your best interests Despite the view of your Directors and the opinion of the Independent Expert that the Scheme is in the best interests of Cover-More Shareholders (in the absence of a Superior Proposal), you may believe that the Scheme is not in your best interests or that of other Cover-More Shareholders. (b) You may prefer to realise the potential value of Cover-More over the long term, and may consider that the Scheme does not capture Cover-More s long term potential If the Scheme is approved and implemented, it is expected to complete in April This time frame may not be consistent with your investment objectives and you may consider that your Cover-More Shares have greater value over the longer term. You may consider that Cover-More has stronger long term growth potential and that the Total Cash Payments do not fully reflect your views on long term value. You may therefore prefer to retain your listed Cover-More Shares and realise the value of your Cover-More Shares over the longer term. (c) You may believe it is in your best interests to maintain your current investment and risk profile You may wish to keep your Cover-More Shares as you may want to preserve your investment in a publicly listed company with the specific characteristics of Cover-More. In particular, you may consider that, despite the risk factors relevant to Cover-More s potential future operations (including those set out in section 6.3 of this Scheme Booklet), Cover-More may be able to return greater value from its assets by remaining independent, or seeking alternative commercialisation strategies. (d) The tax consequences of the Scheme may not suit your current financial position Implementation of the Scheme may trigger taxation consequences for Cover-More Shareholders. A general guide to the taxation implications of the Scheme is set out in section 7. This guide is expressed in general terms only and Cover-More Shareholders should seek professional taxation advice regarding the tax consequences applicable to their own circumstances. (e) You may consider that there is the potential for a Superior Proposal to be made in the foreseeable future It is possible that a more attractive proposal for Cover-More Shareholders could materialise in the future. However, as at the date of this Scheme Booklet, your Directors have not received or become aware of any Superior Proposal and are not aware of any Superior Proposal that is likely to emerge. 26 COVER-MORE GROUP LIMITED

30 3. IMPLEMENTATION OF THE SCHEME 3.1 Scheme Consideration The terms of the proposed Scheme provide that Cover-More Shareholders will receive from Zurich BidCo $1.95 cash per Cover-More Share less the amount of the Special Dividend (if any). On 3 February 2017, Cover-More announced an intention to declare a fully franked Special Dividend of $0.05 per Cover-More Share. If that Special Dividend is declared and the Scheme becomes Effective, it is expected that it will be paid on the Implementation Date. Whether or not the Special Dividend is declared is a matter for the discretion of the Cover-More Board. The declaration of the Special Dividend is not a condition of the Scheme. If the Special Dividend is declared and the Scheme becomes Effective: Cover-More Shareholders will receive a fully franked Special Dividend of $0.05 cash per Cover-More Share that they hold on the Special Dividend Record Date; and the Scheme Consideration to be paid by Zurich BidCo to Scheme Shareholders under the terms of the Scheme will be $1.90 per Cover-More Share (being $1.95, less the Special Dividend of $0.05). If the Special Dividend is not declared and the Scheme becomes Effective, the Scheme Consideration to be paid by Zurich BidCo under the terms of the Scheme will be $1.95 per Cover-More Share. A summary of how Zurich BidCo will be funding the Scheme Consideration, including the Special Dividend (if declared), is set out in section Steps for implementing the Scheme (a) Preliminary steps Cover-More and ZIC entered into the Scheme Implementation Agreement on 11 December 2016, pursuant to which, among other things, Cover-More agreed to propose the Scheme. ZIC and Zurich BidCo have executed the Deed Poll pursuant to which ZIC and/or Zurich BidCo will, subject to the Scheme becoming Effective, agree to provide to each Scheme Shareholder the Scheme Consideration to which each Scheme Shareholder is entitled under the terms of the Scheme. A copy of the proposed Scheme is set out in Attachment C to this Scheme Booklet. A copy of the Deed Poll is set out in Attachment D to this Scheme Booklet. (b) Scheme Meeting The Court has ordered that the Scheme Meeting be held at 10:00am on Monday, 27 March 2017 at Harbourview Hotel, 17 Blue Street, North Sydney NSW 2060 for the purposes of approving the Scheme Resolution. The Notice of Scheme Meeting for Cover-More Shareholders which sets out the Scheme Resolution is included in Attachment A to this Scheme Booklet. Each Cover-More Shareholder who is registered on the Register at 5:00pm (Sydney time) on Saturday, 25 March 2017 is entitled to attend and vote at the Scheme Meeting, either in person or by proxy or attorney or in the case of a body corporate, by its corporate representative appointed in accordance with section 250D of the Corporations Act. Instructions on how to attend and vote at the Scheme Meeting in person, or to appoint a proxy to attend and vote on your behalf, are set out on page 10 of this Scheme Booklet. SCHEME BOOKLET 27

31 3. IMPLEMENTATION OF THE SCHEME continued The Scheme Resolution must be approved by the Requisite Majorities, being: (i) a majority in number (more than 50%) of Cover-More Shareholders present and voting at the Scheme Meeting (whether in person, by proxy, by attorney or, in the case of corporate Cover-More Shareholders, by a corporate representative) (the Headcount Test); and (ii) at least 75% of the total number of votes cast on the Scheme Resolution at the Scheme Meeting. It should be noted that the Court has the power to waive the Headcount Test. (c) Second Court Hearing In the event that: (i) the Scheme Resolution is approved by the Requisite Majorities of Cover-More Shareholders at the Scheme Meeting; and (ii) all conditions precedent of the Scheme have been satisfied or remain capable of being satisfied, or waived (if applicable), Cover-More will apply to the Court for orders approving the Scheme. (d) Effective Date If the Court makes orders approving the Scheme at the Second Court Hearing, Cover-More will lodge with ASIC an office copy of the Court orders given under section 411(4)(b) of the Corporations Act approving the Scheme. It is anticipated that this will occur on the Business Day immediately following the Court Approval Date. Once the Scheme becomes Effective: (i) Zurich BidCo will become bound to pay the Scheme Consideration to the Scheme Shareholders on the Implementation Date; (ii) if the Special Dividend has been declared, ZIC and/or Zurich BidCo will become bound to fund, and Cover-More will become bound to pay, the Special Dividend (this is expected to occur on the Implementation Date); and (iii) subject to the payment of the aggregate Scheme Consideration by ZIC and/or Zurich BidCo as referred to in section 3.3(a), Cover-More will become bound to take the steps required for Zurich BidCo to become the holder of all Cover-More Shares. 3.3 Implementation of the Scheme payment of Scheme Consideration On the Implementation Date, currently anticipated to be 13 April 2017, the Scheme will be implemented by Cover-More and ZIC and/or Zurich BidCo undertaking the following steps. (a) Deposit of aggregate Scheme Consideration by ZIC and/or Zurich BidCo No later than two Business Days before the Implementation Date, ZIC and/or Zurich BidCo will deposit (or will procure the deposit of) the aggregate Scheme Consideration payable to all Scheme Shareholders in cleared funds to an account nominated by Cover-More to be held on trust by Cover-More for Scheme Shareholders. (b) Transfer of all Cover-More Shares to Zurich BidCo Subject to payment of the aggregate Scheme Consideration by ZIC and/or Zurich BidCo as referred to in paragraph (a), all of the Cover-More Shares will be transferred to Zurich BidCo by Cover-More and Cover-More will enter the name of Zurich BidCo in the Register in respect of all Cover-More Shares. (c) Payment of Scheme Consideration and Special Dividend (if declared) The Scheme Consideration will be paid by Cover-More by either: (i) sending a cheque for the Scheme Consideration that you are entitled to receive under the Scheme to your address shown in the Register as at the Scheme Record Date; or (ii) making a payment to your nominated bank account with the Registry as at the Scheme Record Date. If the Special Dividend is declared, it will be paid by Cover-More in the same way that you have previously elected to receive dividends from Cover-More. Accordingly, Cover-More Shareholders are encouraged to elect to receive their dividend entitlements via electronic funds transfer. 28 COVER-MORE GROUP LIMITED

32 If you have not previously notified the Registry of your nominated bank account or you would like to change your existing nominated bank account, you should contact the Cover-More Investor Information Line on: (toll free within Australia) or (outside Australia) Monday to Friday between 8.30am and 5:00pm (Sydney time) before the Scheme Record Date. If a Scheme Shareholder has not nominated a bank account and their whereabouts are unknown as at the Scheme Record Date, the Scheme Consideration and Special Dividend (if any) will be paid into a separate bank account and held by Cover-More until claimed or applied under laws dealing with unclaimed money. If you wish to confirm your current address details with the Registry, you may do so using the contact details above. 3.4 Determination of persons entitled to Scheme Consideration (a) Dealings on or prior to the Scheme Record Date For the purpose of establishing the persons who are Scheme Shareholders, dealings in Cover-More Shares will only be recognised if: (i) in the case of dealings of the type to be effected by CHESS, the transferee is registered in the Register as a holder of the relevant Cover-More Shares as at the Scheme Record Date; and (ii) in all other cases, registrable transfers or transmission applications are received at the place where the Register is maintained by 5:00pm (Sydney time) on the Scheme Record Date (in which case, Cover-More must register such transfers or transmission applications before 5:00pm (Sydney time) on the Scheme Record Date). Cover-More will not accept for registration nor recognise for the purpose of establishing the persons who are Scheme Shareholders any transmission application or transfer in respect of Cover-More Shares received after such times or received prior to these times and not in registrable form. (b) Dealings after the Scheme Record Date For the purposes of determining entitlements to Scheme Consideration, Cover-More will, until the Scheme Consideration has been paid to Scheme Shareholders and the name and address of Zurich BidCo has been entered in the Register as the holder of all the Cover-More Shares, maintain the Register in accordance with the terms of the Scheme, and the Register in this form will solely determine entitlements to the Scheme Consideration. As from 5:00pm (Sydney time) on the Scheme Record Date, each entry currently on the Register will cease to be of any effect other than as evidence of entitlement to the Scheme Consideration in respect of the Cover- More Shares relating to that entry. Any share certificates or statements of holding in respect of Cover-More Shares shall, from the Scheme Record Date, cease to have any effect as documents of evidence of title in respect of such Cover-More Shares. 3.5 Determination of persons entitled to Special Dividend (if declared) For the purpose of establishing the persons who are entitled to receive the Special Dividend (if it is declared), dealings in Cover-More Shares will only be recognised if: (a) in the case of dealings of the type to be effected by CHESS, the transferee is registered in the Register as a holder of the relevant Cover-More Shares as at the Special Dividend Record Date; and (b) in all other cases, registrable transfers or transmission applications are received at the place where the Register is maintained by 5:00pm (Sydney time) on the Special Dividend Record Date (in which case, Cover-More must register such transfers or transmission applications before 5:00pm (Sydney time) on the Special Dividend Record Date). Cover-More will not accept for registration nor recognise for the purpose of establishing the persons who are entitled to receive the Special Dividend (if it is declared) any transmission application or transfer in respect of Cover-More Shares received after such times or received prior to these times and not in registrable form. SCHEME BOOKLET 29

33 3. IMPLEMENTATION OF THE SCHEME continued 3.6 Cover-More Employee Performance Rights (a) Cover-More Employee Performance Rights As at the date of this Scheme Booklet, Cover-More had 2,001,373 Cover-More Employee Performance Rights on issue, which, if they vest, convert into Cover-More Shares on a one-for-one basis. (b) Intended treatment of Cover-More Employee Performance Rights Under the LTIP, in the event of a proposed change of control of Cover-More, the Cover-More Board has discretion to determine the treatment of any unvested Cover-More Employee Performance Rights and the timing of such treatment. In accordance with the LTIP, the Cover-More Board has exercised its discretion and determined that the Cover-More Employee Performance Rights will vest as part of the Scheme in the manner described below: (i) 964,145 Cover-More Employee Performance Rights (the Vesting Employee Performance Rights) will, subject to the Scheme becoming Effective, vest and automatically convert into Cover-More Shares before the Special Dividend Record Date to allow the relevant former holders of those Cover-More Employee Performance Rights to participate in the Scheme; and (ii) the remaining outstanding 1,037,228 Cover-More Employee Performance Rights will, subject to the Scheme becoming Effective, lapse and be cancelled for no consideration. If the Scheme becomes Effective, Cover-More Shares issued to the holders of the Vesting Employee Performance Rights in accordance with paragraph (i) above will be acquired by Zurich BidCo along with the other Cover-More Shares held by Cover-More Shareholders, and the holders of those Cover-More Shares will be entitled to receive the Scheme Consideration and Special Dividend (if declared). 3.7 Deed Poll ZIC and Zurich BidCo have executed the Deed Poll, pursuant to which ZIC and/or Zurich BidCo have undertaken in favour of each Scheme Shareholder to provide each Scheme Shareholder with the Scheme Consideration to which they are entitled under the Scheme, subject to the Scheme becoming Effective. A copy of the Deed Poll is contained in Attachment D. 3.8 Termination rights The termination rights of Cover-More and of ZIC are set out in clause 13 of the Scheme Implementation Agreement (which is Attachment B to this Scheme Booklet). In summary: (a) either party may terminate the Scheme Implementation Agreement: (i) if a condition precedent has not been satisfied or waived (as applicable) and Cover-More and ZIC are unable to agree on a course of action; or (ii) if the Court refuses to make orders convening the Scheme Meeting or approving the Scheme (and all appeals have been exhausted); (b) ZIC may terminate the Scheme Implementation Agreement if any member of the Cover-More Board: (i) fails to make, withdraws, adversely changes or qualifies his or her recommendation that Cover-More Shareholders vote in favour of the Scheme unless: (A) there is a Superior Proposal; or (B) the Independent Expert concludes in the Independent Expert s Report (or any update or variation to that report) that the Scheme is not in the best interests of Cover-More Shareholders, or adversely changes its previously given opinion in the Independent Expert s Report (or any update or variation to that report) that the Scheme is in the best interests of Cover-More Shareholders; or (ii) otherwise makes a public statement indicating that he or she no longer supports the Scheme; 30 COVER-MORE GROUP LIMITED

34 (c) either party may terminate the Scheme Implementation Agreement if the other party commits a breach of the Scheme Implementation Agreement or a representation or warranty given by that party under the Scheme Implementation Agreement, which is material in the context of the Scheme taken as a whole and which is not rectified within 5 Business Days of notification of the breach by the non-breaching party; (d) ZIC may terminate the Scheme Implementation Agreement if a third party acquires a Relevant Interest in more than 20% of the Cover-More Shares after 11 December 2016 (except as a custodian, nominee or bare trustee); (e) Cover-More may terminate the Scheme Implementation Agreement if a majority of the Cover-More Board publicly recommends a Competing Transaction that is a Superior Proposal, provided that the Competing Transaction was not solicited or facilitated by Cover-More or its representatives in breach of Cover-More s exclusivity obligations described in section 3.9 below; (f) Cover-More may terminate the Scheme Implementation Agreement if the Independent Expert concludes in the Independent Expert s Report (or any update or variation to that report) that the Scheme is not in the best interests of Cover-More Shareholders, or adversely changes its previously given opinion in the Independent Expert s Report (or any update or variation to that report) that the Scheme is in the best interests of Cover-More Shareholders; and (g) the parties may terminate the Scheme Implementation Agreement by mutual agreement. 3.9 Exclusivity Under the Scheme Implementation Agreement, Cover-More is subject to exclusivity obligations, including no-shop, no-talk, no due diligence, notification obligations and matching rights in respect of Competing Transactions. These provisions are set out in clause 9 of the Scheme Implementation Agreement (which is Attachment B to this Scheme Booklet). In summary: (a) (No-shop) From the date of the Scheme Implementation Agreement until the earlier of the valid termination of the Scheme Implementation Agreement and 30 June 2017 (Exclusivity Period), Cover-More must not, and must ensure that its representatives do not, directly or indirectly: (i) solicit, invite, encourage or initiate any enquiries, negotiations or discussions; or (ii) communicate any intention to do any of the things listed in sub-paragraph (i), with a view to obtaining any offer, proposal or expression of interest from any person (other than ZIC) in relation to a Competing Transaction. (b) (No-talk) During the Exclusivity Period, Cover-More must not, and must ensure that its representatives do not, negotiate, or enter into or participate in negotiations or discussions with any person regarding, a Competing Transaction, or any agreement, understanding or arrangement that may be reasonably expected to lead to a Competing Transaction, even if: (i) that person s Competing Transaction was not directly or indirectly solicited, invited, encouraged or initiated by Cover-More or any of its representatives; or (ii) that person has publicly announced the Competing Transaction. Cover-More s no-talk obligations described above do not apply to the extent that they restrict Cover-More or the Cover-More Board from taking or refusing to take any action with respect to a genuine Competing Transaction (which was not solicited, invited, encouraged or initiated by Cover-More or its representatives in contravention of Cover-More s no-shop obligations described in section 3.9(a) above) if the Cover-More Board determines, in good faith and acting reasonably, that: (i) after consultation with its financial advisors, such a genuine Competing Transaction is, or could reasonably be considered to become, a Superior Proposal; and (ii) after receiving written legal advice from Cover-More s legal advisers (who must be reputable and experienced in transactions of this nature) that failing to respond to such a genuine Competing Transaction would be reasonably likely to constitute a breach of the Cover-More Board s fiduciary or statutory obligations, (the Fiduciary Exception). SCHEME BOOKLET 31

35 3. IMPLEMENTATION OF THE SCHEME continued (c) (No due diligence) Subject to the Fiduciary Exception, during the Exclusivity Period, Cover-More must not, and must ensure that its representatives do not, in relation to a Competing Transaction: (i) enable any person (other than ZIC) to undertake due diligence investigations on any member of the Cover-More Group or their businesses or operations; or (ii) make available to any person (other than ZIC in the course of due diligence investigation or otherwise) or permit any such person to receive any non-public information relating to any member of the Cover-More Group or their businesses or operations. (d) (Notification obligation) During the Exclusivity Period, Cover-More must inform ZIC as soon as practicable and in any event within 3 Business Days if Cover-More (or any of its representatives): (i) receives an unsolicited approach with respect to a Competing Transaction, in which case Cover-More must also disclose to ZIC: (A) the fact that such an approach has been made; (B) all material terms of any Competing Transaction (to the extent known by Cover-More); and (C) subject to the Fiduciary Exception, details of the proposed bidder or acquirer (to the extent known by Cover-More); (ii) receives any request made by any third party for any information relating to any member of the Cover-More Group or any of their businesses or operations, or any request to access to the books or records of a member of the Cover-More Group, which Cover-More has reasonable grounds to suspect may be in connection with, or for the purpose of, that third party formulating, developing or finalising a Competing Transaction; or (iii) provides any information relating to any member of the Cover-More Group or any of their businesses or operations to any third party in connection with, or for the purposes of, that third party formulating, developing or finalising a Competing Transaction. (e) (Matching rights) During the Exclusivity Period, Cover-More must not enter into a binding agreement, arrangement or understanding to give effect to an actual, proposed or potential Competing Transaction and must use its reasonable endeavours to procure that no Cover-More Director withdraws or changes their recommendation in respect of the Scheme, or otherwise makes a public statement to endorse or recommend an actual, proposed or potential Competing Transaction, unless: (i) the Competing Transaction is a Superior Proposal; (ii) Cover-More has provided ZIC with the material terms and conditions of the Competing Transaction, including price and the identity of the third party making or proposing to undertake the Competing Transaction; (iii) Cover-More has given ZIC 3 Business Days after the provision of the information referred to in paragraph (ii) above to provide a matching or superior proposal to the terms of the Competing Transaction; and (iv) ZIC has not provided a matching or superior counter proposal by the expiry of the 3 Business Day period referred to in paragraph (iii) above. If ZIC proposes to Cover-More, or announces amendments to the Scheme or a new proposal that constitute a matching or superior proposal to the terms of the Competing Transaction (ZIC Counterproposal) by the expiry of the 3 Business Day period referred to in paragraph (iii) above, Cover-More must procure that the Cover-More Board considers the ZIC Counterproposal and if the Cover-More Board, acting reasonably and in good faith, determines that the ZIC Counterproposal would provide an equivalent or superior outcome for Cover-More Shareholders as a whole compared with the Competing Transaction, taking into account the material terms and conditions of the ZIC Counterproposal, then: (i) Cover-More and ZIC must use their best endeavours to agree the amendments to the Scheme Implementation Agreement and, if applicable, the Scheme and Deed Poll that are reasonably necessary to reflect and implement the ZIC Counterproposal as soon as reasonably practicable; and 32 COVER-MORE GROUP LIMITED

36 (ii) Cover-More must use its reasonable endeavours to procure that each of the Cover-More Directors recommends the Scheme (as modified by the ZIC Counterproposal) to Cover-More Shareholders Cover-More Reimbursement Fee and limitation on Cover-More s liability The Cover-More Reimbursement Fee provisions are set out in clause 10 of the Scheme Implementation Agreement (which is Attachment B to this Scheme Booklet). In summary, Cover-More must pay to ZIC a reimbursement fee of 1% of the total Scheme Consideration payable for all the Cover-More Shares under the Scheme (before any reduction for the amount of the Special Dividend, if any) (Cover-More Reimbursement Fee) if: (a) a third party makes or announces a proposal to: (i) acquire Control of Cover-More or any of Cover-More s material Subsidiaries (a Subsidiary of Cover-More will be considered to be material if it contributes 30% or more of the consolidated net profit after tax of Cover-More or the business or assets of the Subsidiary represents 30% or more of the total consolidated assets of Cover-More); (ii) acquire an economic interest in all or a material part of the business or assets the Cover-More Group (the acquisition of an interest in the business or assets of Cover-More or any of its Subsidiaries will be material if the relevant business or assets contributes 30% or more of the consolidated net profit after tax, or represents 30% or more of the total consolidated assets, of Cover-More); or (iii) otherwise acquire or merge (including by a reverse takeover bid or dual listed company structure) with Cover-More, on or before 30 June 2017 (or the earlier valid termination of the Scheme Implementation Agreement) and such a transaction is completed, implemented or consummated within 12 months of the announcement; (b) any Cover-More Director fails to make, withdraws or adversely changes, his or her recommendation that Cover-More Shareholders vote in favour of the Scheme at the Scheme Meeting, or otherwise makes a public statement indicating that he or she no longer supports the Scheme, except where the Independent Expert concludes that the Scheme is not in the best interests of Cover-More Shareholders (other than where the reason for that conclusion is a Competing Transaction); (c) Cover-More validly terminates the Scheme Implementation Agreement due to the Independent Expert concluding in the Independent Expert s Report (or any update or variation to that report) that the Scheme is not in the best interests of Cover-More Shareholders, or adversely changing its previously given opinion in the Independent Expert s Report (or any update or variation to that report) that the Scheme is in the best interests of Cover-More Shareholders, where the reason for that conclusion is a Competing Transaction; (d) ZIC validly terminates the Scheme Implementation Agreement due to a breach by Cover-More of the Scheme Implementation Agreement which is material in the context of the Scheme taken as a whole and which is not rectified within 5 Business Days of ZIC notifying Cover-More of the breach; or (e) ZIC validly terminates the Scheme Implementation Agreement due to a breach by Cover-More of a representation or warranty given by Cover-More under the Scheme Implementation Agreement which is material in the context of the Scheme taken as a whole and which is not rectified within 5 Business Days of ZIC notifying Cover-More of the breach. The maximum liability of Cover-More to ZIC under or in connection with the Scheme Implementation Agreement (including in respect of any breach of the Scheme Implementation Agreement) is an amount equal to the Cover-More Reimbursement Fee, and in no event will the aggregate liability of Cover-More under or in connection with a breach of the Scheme Implementation Agreement exceed an amount equal to the Cover-More Reimbursement Fee. SCHEME BOOKLET 33

37 3. IMPLEMENTATION OF THE SCHEME continued 3.11 ZIC Reimbursement Fee and limitation on ZIC s liability The ZIC Reimbursement Fee provisions are set out in clause 11 of the Scheme Implementation Agreement (which is Attachment B to this Scheme Booklet). In summary, ZIC must pay to Cover-More a reimbursement fee of 1% of the total Scheme Consideration payable for all the Cover-More Shares under the Scheme (before any reduction for the amount of the Special Dividend, if any) (ZIC Reimbursement Fee) if: (a) Cover-More validly terminates the Scheme Implementation Agreement due to a breach by ZIC of the Scheme Implementation Agreement which is material in the context of the Scheme taken as a whole and which is not rectified within 5 Business Days of Cover-More notifying ZIC of the breach; or (b) Cover-More validly terminates the Scheme Implementation Agreement due to a breach by ZIC of a representation or warranty given by ZIC under the Scheme Implementation Agreement which is material in the context of the Scheme taken as a whole and which is not rectified within 5 Business Days of Cover-More notifying ZIC of the breach. The maximum liability of ZIC to Cover-More under or in connection with the Scheme Implementation Agreement (including in respect of any breach of the Scheme Implementation Agreement) is an amount equal to the ZIC Reimbursement Fee, and in no event will the aggregate liability of ZIC under or in connection with a breach of the Scheme Implementation Agreement exceed an amount equal to the ZIC Reimbursement Fee Delisting If the Scheme becomes Effective, on a date after the Implementation Date to be determined by ZIC, Cover-More will apply for termination of the official quotation of Cover-More Shares on the ASX, and to be removed from the official list of ASX End date If the Scheme has not become Effective on or before 30 June 2017 (or such later date that Cover-More and ZIC agree in writing), either Cover-More or ZIC is able to terminate the Scheme Implementation Agreement. If the Scheme Implementation Agreement is terminated, the Scheme will not proceed Further questions If you have any further questions, you should call the Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). 34 COVER-MORE GROUP LIMITED

38 4. INFORMATION ON COVER-MORE 4.1 About Cover-More Cover-More is a specialist and integrated travel insurance and medical assistance provider with approximately 1,000 employees globally. Cover-More maintains a market leading position in Australia and operations in North America, China, India, Malaysia, New Zealand, Singapore and the UK. In 2016, Cover-More expanded its North American operations through the acquisition of Travelex Insurance Services, the third largest specialty retail travel insurer 1 in the USA. Cover-More was established in 1986 and has grown to become the leading travel insurance provider in Australia and travel insurance partner to many well-known financial institutions as well as domestic and international airlines. Cover-More maintains long term relationships with Flight Centre, helloworld and agents and representatives in Australia and other international markets. Cover-More s current market position, high-level capability and global operating platform provide multiple growth drivers across various distribution channels, geographies and markets. For the financial year ended 30 June 2016, Cover-More reported net revenue of $220.3 million, EBITDA of $44.6 million and NPAT of $18.7 million. 4.2 Overview of operations Cover-More competes with large domestic and international general insurers, online providers and aggregators in the travel insurance industry, and specialist medical assistance and employee assistance providers in the medical assistance industry. Cover-More is differentiated by its multi-channel (agency, intermediary and direct) distribution model, which includes a number of well-recognised partners. Cover-More s travel insurance businesses sell travel insurance to primarily retail customers through multiple channels (namely agency partners such as Flight Centre, intermediary partners such as Air New Zealand, Virgin and Medibank and online through the Cover-More website). Cover-More s key activities include developing and pricing travel insurance products as well as managing the sales strategy and claims processing. Cover-More outsources distribution of its travel insurance products to its distribution partners and the underwriting risk associated with the claims of its travel insurance products is borne by Cover-More s underwriting partners, such as Berkshire Hathaway Specialty Insurance or Zurich Insurance Group. As a result, Cover-More is not required to hold any regulatory capital as it is not an underwriter. However, it maintains control over product construction, marketing, claims handling, medical assistance and sales optimisation. It is this differentiated approach that allows Cover-More to focus on controlling the value chain across which it operates. (a) Key segments Cover-More operates across two key segments: Travel Insurance, Medical Assistance and Employee Assistance. (i) Travel Insurance The travel insurance business (representing circa 69% of H1 FY17 net revenue) operates in the key markets of Australia & New Zealand, the USA, India, China, Malaysia and is the market leader in Australia with circa 40% market share (FY16 Gross Written Premium). Cover-More operates across the travel insurance value chain (product development, pricing, sales, distribution and claims management) and distributes its products via multiple channels including travel agencies, aviation partners, financial institutions and direct under the Cover-More brand. 1. While Travelex Insurance Services is licenced in 50 states in the United States, similar to Cover-More it is not a primary insurer and does not take direct underwriting risk. Travelex Insurance Services has an underwriting agreement in place with Transamerica. SCHEME BOOKLET 35

39 4. INFORMATION ON COVER-MORE continued (ii) Medical Assistance and Employee Assistance Medical assistance is a valuable part of the travel insurance product offering. It is also a profitable business segment (with medical assistance and employee assistance representing circa 31% of H1 FY17 net revenue). Travel medical assistance is provided under the CustomerCare brand and is a market leader in Australia. Operating under the Davidson Trahaire Corpsych (DTC) brand, employee assistance has a multi-lingual team including doctors, nurses, psychologists and exercise physiologists. DTC provides services to a large number of national and multi-national companies, including 9 of Australia s top 10 companies by revenue, and has an established position in the employee assistance sector in Australia. (b) Financial performance by business segment Revenue - H1 FY17 ($110.5m) EBITDA - H1 FY17 ($20.8m) 31% 41% 69% 59% Travel Insurance Medical & Employee Assistance Travel Insurance Medical & Employee Assistance (c) Financial performance by geographic region Revenue H1 FY17 EBITDA H1 FY17 9% 5% 5% 3% 86% 92% AU, NZ, UK North America Asia AU, NZ, UK North America Asia Since July 2016, Cover-More has been working towards optimising its operating model around industry verticals, where each vertical would represent an area of core competency and strong expertise. The new operating model is expected to deliver scalable platforms in Cover-More s key geographies. The approach allows Cover-More to efficiently drive growth by winning global contracts, reduce operating costs by centralising core support services and deliver an aligned service offering for its go-to-market approach. Following its entry into the US market in May 2016, Cover-More announced the purchase of Travelex Insurance Services in September Travelex Insurance Services is a strategic fit for Cover-More, providing an accelerated growth path in the North American market and complementing its presence in the Indian and Australian markets to complete Cover-More s global follow-the-sun platform. Travelex Insurance Services has 3,400 distribution partners, 70 specialty risk clients and 85 insurance programs. Travelex Insurance Services insured 1.3 million travellers in 2015 and has licences in all 50 USA states. 36 COVER-MORE GROUP LIMITED

40 4.3 Cover-More Board and senior management team (a) Cover-More Directors Cover-More s Board is comprised of the following directors: Name Louis Carroll Mike Emmett Stephen Loosley Trevor Matthews Lisa McIntyre Sam Mostyn William Easton Position Independent Chairman Group Chief Executive Officer and Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director (b) Cover-More senior management Cover-More s senior leadership team includes: Name Mike Emmett Mark Steinberg Carole Tokody Meredith Staib Judith Crompton Michele Grow Cameron Pearson Tanya Dawson Mike Ambrose Dev Karvat Position Group Chief Executive Officer and Managing Director Group Chief Financial Officer and Company Secretary CEO, Financial Institutions and Direct CEO, Global Medical Assistance CEO, Travel and Aviation CEO, Employee Assistance Chief Strategy Officer Chief HR and People Officer CEO, Travelex Insurance Services CEO, Emerging Markets 4.4 Cover-More Directors intentions If the Scheme becomes Effective, the Cover-More Directors (other than Cover-More s Group CEO, Mike Emmett) will resign and the Cover-More Board will be reconstituted in accordance with the instructions of Zurich BidCo after the Implementation Date (see section 5.6(e)). Accordingly, it is not possible for the Cover-More Directors to provide a statement of their intentions regarding: the continuation of the business of Cover-More or how Cover-More s existing business will be conducted; any major changes to be made to the business of Cover-More, including any redeployment of the fixed assets of Cover-More; or the future employment of the present employees of Cover-More, in each case, after the Scheme is implemented. If the Scheme is implemented, Zurich BidCo will own all of the Cover-More Shares and will be the ultimate Controller of Cover-More. The Cover-More Directors have been advised that the intentions of ZIC and Zurich BidCo are as set out in section 5. SCHEME BOOKLET 37

41 4. INFORMATION ON COVER-MORE continued 4.5 Cover-More s equity structure The equity structure of Cover-More at the date of this Scheme Booklet is as follows: Type of security Number of securities Cover-More Shares 379,117,866 Cover-More Employee Performance Rights 2,001,373 See section 3.6 for further information on the intended treatment of Cover-More Employee Performance Rights in connection with the Scheme. 4.6 Cover-More s substantial shareholders The substantial shareholders of Cover-More Shares as at the Last Practicable Trading Date are: Substantial Shareholder Number of shares Percentage of issued capital Challenger Limited 2 31,190, % JCP Investment Partners 28,881, % Credit Suisse Holdings 28,098, % BT Investment Management Limited 3 25,357, % The shareholdings listed in this section 4.6 are as disclosed to Cover-More by the shareholders in substantial holding notices. Information in regard to substantial holdings arising, changing or ceasing after this time or in respect of which the relevant announcement is not available on the ASX website is not included above. 4.7 Recent Cover-More share price performance The Scheme was announced to the market on Monday, 12 December The last recorded closing price for Cover-More on the ASX before the public announcement of the entry into the Scheme Implementation Agreement was $1.32 (on 9 December 2016). During the period leading up to the announcement of the entry into the Scheme Implementation Agreement on 12 December 2016, the VWAP for Cover-More Shares was: $1.32 per Cover-More Share for the 1 month ended 9 December 2016; $1.38 per Cover-More Share for the 3 months ended 9 December 2016; and $1.34 per Cover-More Share for the 6 months ended 9 December The closing price of Cover-More shares on the ASX on 14 February 2017, being the Last Practicable Trading Date, was $1.92, being a discount of 1.5% to the Total Cash Payments of $1.95 per Cover-More Share. 2. Includes holdings of a number of boutique funds managed by Challenger Limited on behalf of Fidante Partners. 3. Westpac Banking Corporation (Westpac) has disclosed in a substantial holding notice provided to Cover-More that it is an associate (as that term is defined in the Corporations Act) of BT Investment Management Limited (BTIM). Accordingly, while Westpac has provided a substantial holding notice disclosing a substantial shareholding in Cover-More, as the disclosed shareholding includes Cover-More Shares held by BTIM, Westpac is not separately identified in this table as a substantial shareholder of Cover-More. 38 COVER-MORE GROUP LIMITED

42 The following chart highlights the movements in the Cover-More Share price from June 2016 and ending on 14 February 2017, being the Last Practicable Trading Date. $2.00 $1.90 $1.80 $1.70 Share Price For personal use only 12 Dec 16: Announcement of Scheme Implementation Agreement between Cover-More and Zurich Insurance Group $1.60 $1.50 $1.40 $1.30 $1.20 $1.10 $1.00 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Source: IRESS as at 14 February Historic financial information The financial information provided in this section is in an abbreviated form and does not contain all the disclosures that are usually provided in an annual report, prepared in accordance with the Corporations Act. The financial information has been extracted from Cover-More s financial statements for the full financial year ended 30 June 2015 (FY15), 30 June 2016 (FY16) and the half year ended 31 December 2016 (H1 FY17). Cover-More s full financial accounts, including all notes to those accounts, can be found in: the Cover-More Group 2015 Annual Report for the financial year ended 30 June 2015 (released to the ASX on 21 August 2015); the Cover-More Group 2016 Annual Report for the financial year ended 30 June 2016 (released to the ASX on 19 August 2016); and the Cover-More Group H1 FY17 Financial Report for the half year ended 31 December 2016 (released to the ASX on 13 February 2017). Copies of these reports are available within the Investors & Prospectus section of the Cover-More website ( Alternatively, Cover-More Shareholders may obtain copies of these documents free of charge by calling the Cover-More Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). Cover-More s financial reports for FY15 and FY16 were prepared in accordance with applicable Australian accounting standards. The audit opinions relating to those financial reports were unqualified. Cover-More s financial report for H1 FY17 was reviewed by Cover-More s auditor, PricewaterhouseCoopers (PwC), which stated that, based on its review, which was not an audit, PwC had not become aware of any matter that made PwC believe that Cover-More s H1 FY17 financial report was not in accordance with the Corporations Act. SCHEME BOOKLET 39

43 4. INFORMATION ON COVER-MORE continued Consolidated income statement The historical consolidated income statements for H1 FY17, FY16 and FY15 are presented below: $000s H1 FY17 FY16 FY15 Revenue 110, , ,241 Cost of sales 65, , ,462 Gross profit 44,577 87,064 89,779 Other income 2,878 3,160 3,779 Other Expenses from ordinary activities Occupancy 4,819 10,267 8,377 Advertising and promotion 2,009 4,128 4,424 Administration 22,706 44,979 40,913 Other ,803 30,449 39,681 Acquisition-related costs 1,168 Scheme of arrangement-related costs 740 Finance costs 2,521 2,971 2,851 Profit before income tax 13,374 27,478 36,830 Income tax expense 4,776 8,799 11,077 Profit for the period 8,598 18,679 25,753 Profit is attributable to: Owners of Cover-More Group Limited 8,598 18,679 25, COVER-MORE GROUP LIMITED

44 Consolidated balance sheet The historical consolidated balance sheets for H1 FY17, FY16 and FY15 are presented below: $000s H1 FY17 FY16 FY15 Assets Current assets Cash and cash equivalents 38,720 23,980 24,034 Trade and other receivables 38,143 39,868 31,340 Current tax receivable 331 Total current assets 77,194 63,848 55,374 Non-current assets Receivables 12,747 1,930 Plant and equipment 4,261 4,090 4,693 Intangible assets 394, , ,794 Deferred tax assets 1, Total non-current assets 412, , ,984 Total assets 490, , ,358 Liabilities Current liabilities Trade and other payables 53,397 37,569 34,516 Deferred liabilities Borrowings 7, Current tax provisions 812 1,322 4,548 Provisions 6,016 5,122 4,198 Total current liabilities 67,828 44,219 43,488 Non-current liabilities Deferred liabilities 155 Borrowings 135,554 63,837 56,079 Provisions 2,240 1, Deferred tax liabilities 5,977 5,903 7,169 Derivative financial instruments Total non-current liabilities 143,901 71,248 64,568 Total liabilities 211, , ,056 Net Assets 278, , ,302 Equity Contributed equity 291, , ,067 Other reserves 13,492 5,230 6,887 Retained earnings (26,317) (26,659) (25,652) Total equity 278, , ,302 SCHEME BOOKLET 41

45 4. INFORMATION ON COVER-MORE continued Consolidated statement of cash flows The historical consolidated statement of cash flows balance sheets for H1 FY17, FY16 and FY15 are summarised below: $000s H1 FY17 FY16 FY15 Cash flows from operating activities Receipts from customers (inclusive of GST) 117, , ,181 Payments to suppliers and employees (inclusive of GST) (94,578) (187,119) (176,806) 23,134 34,254 50,375 Transaction costs relating to acquisition of subsidiaries (644) Other revenue 1,075 2,442 4,418 Income taxes paid (5,402) (13,529) (15,126) Net cash inflow from operating activities 18,163 23,167 39,667 Cash flows from investing activities Payments for acquisition of subsidiaries, net of cash (139,997) acquired Payments for plant and equipment (876) (1,503) (1,830) Payments for intangible assets (3,243) (6,793) (4,601) Proceeds from sale of plant and equipment Interest received Net cash inflow/(outflow) from investing activities (143,983) (8,060) (6,220) Cash flows from financing activities Proceeds from issue of shares 73,341 Proceeds from borrowings 94,865 22,778 43,767 Share issue transaction costs (2,259) Repayment of borrowings (12,500) (15,000) (33,200) Finance lease payments (5) (6) (250) Interest and other finance costs paid (4,998) (3,084) (2,479) Dividends paid to Company s shareholders (8,256) (19,686) (38,735) Net cash inflow/(outflow) from financing activities 140,188 (14,998) (30,897) Net increase in cash and cash equivalents 14, ,550 Cash and cash equivalents at the beginning of the period 23,980 24,034 20,615 Effects of exchange rate changes on cash and cash 372 (163) 869 equivalents Cash and cash equivalents at end of the period 38,720 23,980 24, COVER-MORE GROUP LIMITED

46 4.9 Material changes in Cover-More s financial position since 31 December 2016 So far as the Cover-More Board is aware, the financial position of Cover-More has not materially changed since 31 December 2016, as reported in the Cover-More Group H1 FY17 Financial Report for the 6 months ended 31 December 2016, other than: the accumulation of profits in the ordinary course of trading; as disclosed in this Scheme Booklet or as otherwise disclosed to the ASX by Cover-More; or in accordance with generally known market conditions. A copy of the Cover-More Group H1 FY17 Financial Report is available in electronic form on Cover-More s website at: Outlook At the time of the release of Cover-More s H1 FY17 Financial Report on 13 February 2017, Cover-More indicated that: strong progress had been made on its strategy to move from a geographic based business model to an industry vertical model, increasing Cover-More s scalability and operational efficiency; as previously announced to the market, it had signed a new underwriting agreement with Berkshire Hathaway Specialty Insurance; a focus on cost reduction, with a number of cost-out initiatives occurring during the six months to 31 December 2016, would deliver future savings (to be partially realised in H2 FY17 and further benefit in FY18); Travelex Insurance Services was acquired in November Early integration was progressing well, with the business delivering in line with expectations; and Cover-More still expects to deliver FY17 EBITDA of between $54 million to $57 million Risks relating to Cover-More s business There are existing risks relating to Cover-More s business and investment in Cover-More which will continue to be relevant to Cover-More Shareholders if the Scheme does not become Effective. A summary of the key risks relating to Cover-More s business and an investment in Cover-More is set out in section Publicly available information about Cover-More Cover-More is a listed disclosing entity for the purpose of the Corporations Act and as such is subject to regular reporting and disclosure obligations. Specifically, as a company listed on ASX, Cover-More is subject to the ASX Listing Rules which require (subject to some exceptions) continuous disclosure of any information Cover-More has that a reasonable person would expect to have a material effect on the price or value of Cover-More Shares. ASX maintains files containing publicly disclosed information about all entities listed on ASX. Information disclosed to ASX by Cover-More is available on ASX s website at In addition, Cover-More is required to lodge various documents with ASIC. Copies of documents lodged with ASIC by Cover-More may be obtained from an ASIC office. SCHEME BOOKLET 43

47 4. INFORMATION ON COVER-MORE continued Cover-More Shareholders may obtain a copy of: the Cover-More Group 2016 Annual Report and H1 FY17 Financial Report (being the most recent financial reports recently lodged with ASX before the registration of this Scheme Booklet with ASIC); and any announcements given to ASX by Cover-More after the lodgement by Cover-More of the H1 FY17 Financial Report and before the date of this Scheme Booklet, free of charge, by calling the Cover-More Shareholder Information Line on (within Australia) or (outside Australia) Monday to Friday between 9:00am and 5:00pm (Sydney time). A list of announcements made by Cover-More to ASX from 12 December 2016 to the Last Practicable Trading Date are listed below: 4 Announcement Date H1 FY17 Investor presentation 13 February 2017 H1 FY17 Delivering a more sustainable & profitable business 13 February 2017 Half Yearly Report and Accounts 13 February 2017 Timing of Release of H1 FY17 Results 7 February 2017 Update on Scheme of Arrangement 7 February 2017 Scheme update and intention to declare Special Dividend 3 February 2017 Appendix 3B 3 January 2017 Group CEO Remuneration Arrangements 12 December 2016 Scheme Implementation Agreement with Zurich 12 December 2016 A substantial amount of information about Cover-More, including financial information and releases to ASX, is available in electronic form on Cover-More s website at: 4. This excludes announcements relating to substantial holding notices. 44 COVER-MORE GROUP LIMITED

48 5. INFORMATION ON ZIC, ZURICH BIDCO AND ZURICH INSURANCE GROUP 5.1 Information about the Zurich Insurance Group Information contained in this section has been prepared by Zurich Insurance Company Ltd (ZIC). The information concerning the Zurich Insurance Group, of which ZIC is the main operating entity, and the intentions, views and opinions contained in this section are the responsibility of ZIC. Cover-More and its directors and officers do not assume any responsibility for the accuracy or completeness of this information, except to the extent that Cover-More provided ZIC with information for the purpose of ZIC preparing information on the merged entity following the implementation of the Scheme. The intentions of ZIC and Zurich BidCo have been formed on the basis of facts and information concerning Cover-More which are known to them, the general business environment and the circumstances affecting the business of Cover-More as at the date of this Scheme Booklet. 5.2 Overview of the Zurich Insurance Group (a) Corporate overview The Zurich Insurance Group comprises Zurich Insurance Group Ltd, incorporated in Zurich, Switzerland (ZIG) and its subsidiaries. ZIC, a wholly owned subsidiary of ZIG, is a company incorporated in Zurich, Switzerland and is the main operating entity of the Zurich Insurance Group. ZIC is the entity proposing to acquire Cover- More through Zurich Travel Solutions Pty Limited, a wholly owned Australian incorporated subsidiary of ZIC (see section 5.4 for further details). The Zurich Insurance Group is a leading multi-line insurance provider with a global network of subsidiaries and offices in Europe, North America, Latin America, Asia Pacific and the Middle East. ZIG is headquartered in Zurich, Switzerland, and is a publicly traded company whose shares are listed on the SIX Swiss Exchange trading under the symbol ZURN and had a market capitalisation of approximately US$42bn as at 31 December The Zurich Insurance Group is subject to group supervision by the Swiss Financial Market Supervisory Authority (FINMA). ZIC is subject to insurance supervision by FINMA, as well as to branch supervision in the jurisdictions it operates via licensed branches. The Zurich Insurance Group has approximately 54,000 employees and provides a range of property and casualty, and life insurance products and services in more than 210 countries and territories. Its customers include individuals, small businesses and mid-sized and large companies, as well as multinational corporations. In the year ended 31 December 2016, the Zurich Insurance Group earned a business operating profit of US$4.5bn and net income attributable to shareholders of US$3.2bn. As at 31 December 2016, the Zurich Insurance Group had total consolidated assets of US$382,679m. SCHEME BOOKLET 45

49 5. INFORMATION ON ZIC, ZURICH BIDCO AND ZURICH INSURANCE GROUP continued (b) Principal activities/operations The Zurich Insurance Group has three main business segments as follows: General Insurance (46% 1 of business operating profit for the year ended 31 December 2016): Business: property and casualty insurance and services and risk insight; Market segments: individual, small and medium enterprises (SME), commercial and corporate customers; Distribution channels: include agents, brokers, banks, direct; Geography: global. Global Life (25% 2 of business operating profit for the year ended 31 December 2016): Business: protection, savings and investment solutions; Market segments: individual, commercial and corporate customers; Distribution channels: agents, brokers, banks, independent financial advisers, employee benefit consultants, direct; Geography: global. Farmers 3 (29% 4 of business operating profit for the year ended 31 December 2016): Business: management services related to property and casualty insurance; Market segments: individual and commercial customers; Distribution channels of the Farmers Exchanges 5 : exclusive and independent agents, direct; Geography: United States. The Zurich Insurance Group is in the process of reshaping and simplifying its organisation. Accordingly, the business segments as described in this Scheme Booklet for the year ended 31 December 2016 may change in the future. (c) Zurich Australia Group The Zurich Insurance Group operates an insurance and financial services business in Australia through Zurich Financial Services Australia Limited (ABN ) (ZFSA) and its wholly owned subsidiaries (Zurich Australia Group). ZFSA is a wholly owned subsidiary of ZIC. The Zurich Australia Group conducts the following businesses in Australia: a general insurance business operated by Zurich Australian Insurance Limited, an authorised general insurer under the Insurance Act 1973 (Cth); a life insurance business operated by Zurich Australia Limited, an authorised life insurer under the Life Insurance Act 1995 (Cth); an investment management business operated by Zurich Investment Management Limited (ZIM). ZIM is the responsible entity of several registered managed investment schemes; and a superannuation business operated by Zurich Australian Superannuation Pty Limited (ZAS). ZAS is the trustee of the Zurich Master Superannuation Fund. 1. Segment contributions, before other/non-core businesses. 2. Segment contributions, before other/non-core businesses. 3. The Farmers Exchanges are owned by their policyholders. Farmers Group Inc, a wholly owned subsidiary of the Zurich Insurance Group, provides certain non-claims administration and management services to the Farmers Exchanges as attorney-in-fact and receives fees for its services. 4. Segment contributions, before other/non-core businesses. 5. All references to Farmers Exchanges mean Farmers Insurance Exchange, Fire Insurance Exchange, Truck Insurance Exchange and their subsidiaries and affiliates. 46 COVER-MORE GROUP LIMITED

50 5.3 Directors of ZIG and ZIC As at the date of this Scheme Booklet, the directors of ZIG and ZIC are as follows: (a) Tom de Swaan, Chairman, Chairperson of the Governance, Nominations and Corporate Responsibility Committee, member of the Remuneration Committee Tom de Swaan has served in the banking industry in Europe for over 40 years. He has been a member of the boards of ZIG and of ZIC since April In March 2012 he was elected vice-chairman, acting as chairman from August 2013 on. He was elected chairman of the Board in September In addition Mr. de Swaan has been Chief Executive Officer a.i. from December 2015 to early March Tom de Swaan joined De Nederlandsche Bank N.V. in 1972 and from 1986 until 1998 was a member of the governing board. In January 1999, he became a member of the managing board and chief financial officer of ABN AMRO Bank. He retired from ABN AMRO in May 2006, but continued as an adviser to the managing board until June Between 1987 and 1988, Mr. de Swaan was chairman of the Amsterdam Financial Center and from 1995 to 1997, chairman of the banking supervisory sub-committee of the European Monetary Institute. He was also a member of the Basel Committee on Banking Supervision from 1991 to 1996, its chairman from 1997 to 1998, and a non-executive director on the board of the UK s Financial Services Authority from January 2001 until the end of From 2006 until May 2015 he was a non-executive member of the board of GlaxoSmithKline Plc. From 2008 until February 2016, Mr. de Swaan was a member of the supervisory board of Van Lanschot NV, the holding company of F. van Lanschot Bankiers, an independent Dutch bank. He also served as its chairman until December (b) Fred Kindle, Vice-Chairman, member of the Governance, Nominations and Corporate Responsibility Committee, member of the Remuneration Committee Fred Kindle has been a member of the boards of ZIG and of ZIC since April He was elected vice-chairman in September Fred Kindle worked at Hilti AG in Liechtenstein from 1984 until From 1988 until 1992 he was a consultant with McKinsey & Company in New York and Zurich. He then joined Sulzer AG in Switzerland, where he held several management positions. In 1999 he was appointed CEO of Sulzer Industries and in 2001 he became CEO of Sulzer AG. After joining ABB Ltd in 2004, Mr. Kindle was appointed CEO of ABB Group, a position he held until From 2008 to 2015 he was a partner of Clayton, Dubilier & Rice LLP, a private equity firm based in New York and London. In 2016 he took on the role of operating adviser to that company. (c) Joan Amble, Chairperson of the Audit Committee, member of the Risk and Investment Committee Joan Amble has substantial financial industry experience. She has been a member of the Boards of ZIG and of ZIC since April She started her professional career as an accountant with Ernst & Young in From 1984 to 1989 she served at the Financial Accounting Standards Board (FASB), specializing in pensions, derivatives and other financial instruments. She then spent 14 years with General Electric Company (GE) in various leadership roles, including CFO GE Real Estate, COO and CFO GE Capital Markets, and as Vice President and corporate controller for GE Capital Services. From 2003 to May 2011, Ms. Amble served as executive vice president and corporate comptroller, and until the end of 2011 as executive vice president, Finance, of the American Express Company. In December 2011, Ms. Amble completed a four-year term as a member of the Financial Accounting Standards Advisory Council (FASAC). (d) Susan Bies, member of the Audit Committee, Chairperson of the Risk and Investment Committee Susan Bies has been a member of the boards of ZIG and of ZIC since April She began her career in 1970 as regional and banking structure economist with the Federal Reserve Bank of St. Louis, Missouri. In 1972, she became assistant professor of economics at Wayne State University, Detroit, Michigan. In 1977, she moved to Rhodes College, Memphis, Tennessee, in a similar role and in 1979 joined First Tennessee National Corporation in Memphis, where she remained until Her areas of responsibility SCHEME BOOKLET 47

51 5. INFORMATION ON ZIC, ZURICH BIDCO AND ZURICH INSURANCE GROUP continued included tactical planning and corporate development. In 1984 she became chief financial officer and chairman of the asset/liability committee. In 1995, she became executive vice president of risk management and auditor and chairman of the risk management committee, as well as continuing her duties with the asset/liability committee. From 2001 until 2007, she was a member of the Board of Governors of the Federal Reserve System. Between 1996 and 2001, Ms. Bies was a member of the Emerging Issues Task Force of the Financial Accounting Standards Board. (e) Dame Alison Carnwath, member of the Governance, Nominations and Corporate Responsibility Committee, member of the Risk and Investment Committee Dame Alison Carnwath has substantial financial industry experience. She was made a Dame of the British Empire (DBE) for services to business in the 2014 New Year Honours List in the UK. She has been a member of the boards of ZIG and of ZIC since March She began her career with Peat Marwick Mitchell, now KPMG, where she practiced as a chartered accountant from 1975 to From 1980 to 1982, she worked as a corporate financier for Lloyds Bank International. From 1982 to 1993, she was assistant director, then director, at J. Henry Schroder Wagg & Co in London and New York. From 1993 to 1997, Dame Alison was a senior partner at the financial advisory firm Phoenix Partnership. The firm was taken over by Donaldson, Lufkin & Jenrette (DLJ) in late 1997; Dame Alison continued working for DLJ until Dame Alison has held several board offices. From 2000 to 2005, she was the chairman of the board of Vitec Group plc, from 2001 to 2006 a director of Welsh Water, from 2004 to 2007 of Friends Provident plc, from 2004 to 2007 of Gallaher Group and from 2007 to 2010, she was the independent chairman of MF Global Inc. She also served on the boards of directors of Barclays from 2010 to 2012, and of Man Group plc from 2001 to (f) Christoph Franz, member of the Governance, Nominations and Corporate Responsibility Committee, Chairperson of the Remuneration Committee Christoph Franz became a member of the boards of ZIG and ZIC in April He started his professional career in 1990 at Deutsche Lufthansa AG. From 1994 until 2003 he held different executive functions at Deutsche Bahn AG, including as member of the executive board and CEO of the passenger transport division. In 2004 he became CEO of Swiss International Air Lines Ltd, and in 2009 was promoted to the role of deputy chairman of the executive board of Deutsche Lufthansa AG and CEO Passenger Airlines. From 2011 to 2014, Mr. Franz was chairman of the executive board and CEO of Deutsche Lufthansa AG. (g) Jeffrey Hayman, member of the Risk and Investment Committee Mr. Hayman has been a member of the boards of ZIG and of ZIC since March He began his career as a claims representative in the property and casualty department of Travelers Companies in the U.S. in 1983, where he later held several positions. In 1998 he joined AIG as regional vice president, personal lines at AIU Far East in Japan. Beginning in 2003, he held various leadership positions within AIG, including as chairman of AIU Insurance Company in Japan and president and CEO of AIU Far East Holdings, Japan and Korea. From 2009 to 2011, Mr. Hayman served as senior vice president and chief administrative officer, and from 2011 to 2013 as executive vice president and CEO, Global Consumer Insurance, at AIG. In 2013 he served as president of international insurance operations at Starr Companies. He then became an independent consultant and advisor. (h) Monica Mächler, member of the Audit Committee, member of the Risk and Investment Committee Monica Mächler has substantial legal, regulatory and governance expertise in a national and international context. She has been a member of the boards of ZIG and of ZIC since April She served as vice-chair of the board of directors of the integrated Swiss Financial Market Supervisory Authority (FINMA) from 2009 to 2012, after having been the director of the Swiss Federal Office of Private Insurance from 2007 to From 2010 to 2012, Ms. Mächler chaired the Technical Committee of the International Association of Insurance Supervisors (IAIS). She assumed the roles of Group General Counsel and Head of the Board Secretariat of the Zurich Insurance Group from 1999 to 2006 and was appointed a member 48 COVER-MORE GROUP LIMITED

52 of the Zurich Insurance Group Management Board in 2001 after joining in During the years 1985 to 1990 she was in private practice specializing in banking and business law. Ms. Mächler has been a member of several Swiss federal expert commissions on regulatory projects and regularly speaks, lectures and publishes on matters related to international business law and regulation, and their impact. (i) Kishore Mahbubani, member of the Remuneration Committee, member of the Risk and Investment Committee Kishore Mahbubani has been a member of the boards of ZIG and of ZIC since April He began his career as a diplomat with the Singapore Foreign Service in 1971 in which he served until 2004, with postings in Cambodia, Malaysia, Washington D.C. and New York. He served two postings as Singapore s ambassador to the UN and as President of the UN Security Council in January 2001 and May Mr. Mahbubani was permanent secretary of the Foreign Ministry from 1993 to He has spoken and published globally on geopolitical and economic issues. His latest book, The Great Convergence: Asia, the West and the Logic of One World, was selected by the Financial Times as one of the best books of (j) David Nish, member of the Audit Committee David Nish has been a member of the boards of ZIG and of ZIC since March He started his professional career in 1981 at Price Waterhouse (now PwC) in the UK, where he served as an audit and transaction partner from 1993 to In 1997, he joined ScottishPower plc as deputy finance director, and in 1999 he was promoted to group finance director, a role he held until 2005 when he became executive director responsible for the division operating ScottishPower s regulated transmission and distribution business. In 2006, Mr. Nish became group finance director at global investment management and life insurance group Standard Life plc, and was promoted to group CEO of Standard Life plc in 2010, a position he held until During his career, he has also served as deputy chairman of the Association of British Insurers, as a member of TheCityUK board advisory committee, and as a member of the financial services advisory board of the Scottish government. 5.4 Zurich BidCo Zurich Travel Solutions Pty Limited (ACN ) (Zurich BidCo) was incorporated as a proprietary limited company registered in the State of New South Wales, Australia on 17 January 2017 for the purpose of acquiring Cover-More Shares under the Scheme. Zurich BidCo is a wholly-owned subsidiary of ZIC. If the Scheme Resolution is approved by the Requisite Majorities of Cover-More Shareholders and the Scheme is approved by the Court, then subject to the terms of the Scheme, on the Implementation Date Zurich BidCo will acquire all the shares held by Cover-More Shareholders so that following implementation of the Scheme, Zurich BidCo will own 100% of the issued shares of Cover-More. As at the date of the Scheme Booklet, the directors of Zurich BidCo are Jack Howell, CEO Asia Pacific of the Zurich Insurance Group, Giovanni Giuliani, Chief Strategy, Innovation and Business Development Officer of the Zurich Insurance Group and Cathy Manolios, General Counsel, Head of Corporate Governance of Zurich Australia Group. Following implementation of the Scheme, ZIC intends that the board of Zurich BidCo will comprise Jack Howell, Giovanni Giuliani and Mike Emmett, the Group CEO of Cover-More. 5.5 Rationale for the proposed acquisition of Cover-More The Scheme supports the Zurich Insurance Group s global strategy to expand its travel insurance business and become a leading provider of travel insurance solutions. Cover-More has substantial expertise in travel insurance, including product design, distribution and claims handling. Cover-More is active in the global travel insurance industry and has been pursuing a strategy to expand its global offering, including through its recent acquisition of Travelex Insurance Services, a significant travel insurance provider in the United States. The proposed acquisition provides the Zurich Insurance Group with opportunities to leverage Cover-More s expertise in its business both in Australia and overseas. SCHEME BOOKLET 49

53 5. INFORMATION ON ZIC, ZURICH BIDCO AND ZURICH INSURANCE GROUP continued Cover-More distributes travel insurance and assistance services through relationships with corporate partners. The Scheme provides opportunities for the Zurich Insurance Group to expand its distribution network globally, building on Cover-More s current offerings in Australia, New Zealand, India, China, Malaysia, Singapore, the United Kingdom and the United States. The Scheme also presents opportunities for the Zurich Insurance Group to grow its global travel insurance business by underwriting Cover-More travel insurance policies in jurisdictions in which Cover-More carries on business. In particular, a member of the Zurich Insurance Group currently underwrites Cover-More policies in Hong Kong, and the Zurich Insurance Group intends to become the underwriter of Cover-More travel insurance policies in other jurisdictions, subject to Cover-More s existing contractual arrangements and the Zurich Insurance Group being able to offer competitive terms. See section 5.6(b) of this Scheme Booklet for further details. See section 5.6 of this Scheme Booklet for further information regarding ZIC and Zurich BidCo s intentions. 5.6 Intentions of ZIC and Zurich BidCo if the Scheme is Implemented This section sets out the intentions of ZIC and Zurich BidCo in relation to the continuation of the business of Cover-More, any major changes to the business of Cover-More including any redeployment of the fixed assets of Cover-More and the future employment of the present employees of Cover-More, assuming Zurich BidCo acquires 100% of the shares in Cover-More as a result of implementation of the Scheme. These statements of intention are based on information concerning Cover-More, the circumstances affecting the business of Cover-More and the general business environment which is known to ZIC and Zurich BidCo at the date of this Scheme Booklet. In addition to publicly available information, certain other information has been made available to ZIC and its advisers by Cover-More. However, ZIC and Zurich BidCo do not currently have knowledge of all information, facts and circumstances that are necessary to determine all the operational, commercial, taxation and financial implications of its current intentions. Following implementation of the Scheme, the Zurich Insurance Group will conduct a general review of its travel insurance business, including Cover-More. Final decisions on these matters will only be made after that review and in light of all relevant facts and circumstances at the relevant time if the Scheme is implemented. Accordingly, the statements set out in this section 5.6 are statements of current intention only, which may change as new information becomes available or circumstances change, and the statements in this section should be read in that context and as being subject to the law (including the Corporations Act) and the legal obligations of the directors of each of ZIC and Zurich BidCo from time to time to act in good faith in the best interests of ZIC and Zurich BidCo respectively. ZIC and Zurich BidCo s intentions concerning the business, assets and employees of Cover-More are as follows: (a) Corporate Structure Zurich BidCo, a wholly owned subsidiary of ZIC, will be the direct holding company of Cover-More upon implementation of the Scheme, with ZIG as the ultimate holding company. Following implementation of the Scheme, Cover-More may convert to a proprietary company. (b) Strategy and operations Following implementation of the Scheme, it is intended that Cover-More will continue to operate as a discrete business and continue to conduct its existing lines of business substantially in the same manner as they are currently conducted. ZIC intends to support Cover-More to expand its travel and employee assistance product offerings, including by considering opportunities for those services to be used by the Zurich Insurance Group s global network of subsidiaries and affiliated companies. ZIC also intends to support Cover-More to develop and grow its business by contributing underwriting expertise and assisting Cover-More to leverage the Zurich Insurance Group s global brand and financial strength. 50 COVER-MORE GROUP LIMITED

54 It is ZIC s intention that following implementation of the Scheme, members of the Zurich Insurance Group will become the underwriters for Cover-More s travel insurance policies in jurisdictions in which Cover-More carries on business, subject to existing contractual arrangements and the Zurich Insurance Group being able to offer competitive commercial terms. ZIC and Zurich BidCo have no intention to make major changes to, or dispose of any parts of, the Cover-More business, redeploy any of Cover-More s fixed assets or to transfer any of ZIC s current businesses or material assets to Cover-More. (c) Cover-More to be delisted If the Scheme is implemented, Zurich BidCo will arrange for Cover-More to be removed from the official list of ASX. (d) Head office If the Scheme is implemented Cover-More s head office will remain located in Sydney, New South Wales. (e) Directors In accordance with the Scheme Implementation Agreement, on the Implementation Date, Cover-More will appoint persons nominated by ZIC to the Cover-More Board and procure the resignation of each of the current Cover-More Directors, other than the Group CEO of Cover-More. The identity of ZIC s nominees has not yet been determined but ZIC expects that such nominees would at least include some of the directors of Zurich BidCo and that the Group CEO of Cover-More will remain on the Cover-More Board. ZIC and Zurich BidCo currently do not intend to change the directors on the boards of Cover-More s subsidiaries. (f) Employees and incentive plans Following implementation of the Scheme, ZIC intends to operate Cover-More as a discrete business and retain Cover-More s management team to help safeguard the key drivers of Cover-More s success, including its strong brand and entrepreneurial culture of innovation. ZIC and Zurich BidCo acknowledge that Cover-More s employees are key drivers of Cover-More s success and expect there to be significant value and knowledge in the existing employees of Cover-More. Accordingly, ZIC and Zurich BidCo intend to retain Cover-More s employees. Overall, the key operational responsibilities held by Cover-More s management are expected to remain largely unchanged. ZIC and Zurich BidCo currently intend to introduce new incentive plans for Cover-More s key management to ensure ongoing alignment of incentives following Implementation. A number of Cover-More Performance Rights are currently on issue to certain Cover-More employees. If the Scheme becomes Effective, those Performance Rights will be dealt with in the manner set out in section 3.6 of this Scheme Booklet. ZIC and Zurich BidCo will endeavour to minimise the disruption (if any) to Cover-More and its employees from the implementation of the Scheme. 5.7 Funding of the Scheme (a) Cash consideration The Scheme Consideration will be paid wholly in cash. The maximum cash consideration payable by ZIC and/or Zurich BidCo in connection with the Scheme will be approximately A$741 million. This amount represents the aggregate of A$1.95 in cash for every Cover-More Share held as at the Scheme Record Date, including in relation to shares issued as a result of the vesting and exercise of 964,145 Cover-More Performance Rights currently on issue, less the amount of the Special Dividend of A$0.05 per Cover-More Share (if the Special Dividend is declared) and the amount of any other interim and/or special dividend that is declared or determined by the Cover-More Board to be paid to Cover-More Shareholders on or prior to the Implementation Date. SCHEME BOOKLET 51

55 5. INFORMATION ON ZIC, ZURICH BIDCO AND ZURICH INSURANCE GROUP continued On 3 February 2017, Cover-More announced an intention to declare a fully franked Special Dividend of A$0.05 per Cover-More Share. Any declaration and payment of the Special Dividend will be subject to the Scheme becoming Effective. ZIC and/or Zurich BidCo has agreed to provide funding to Cover-More to facilitate payment of the Special Dividend, subject to the Scheme becoming Effective. Pursuant to the Deed Poll, ZIC and Zurich BidCo have undertaken in favour of each Scheme Shareholder to deposit, or procure the deposit of, an amount equal to the aggregate Scheme Consideration payable to all Scheme Shareholders in a trust account operated by or on behalf of Cover-More as trustee for the Scheme Shareholders, subject to and in accordance with the Scheme. For further details regarding ZIC s and Zurich BidCo s obligations under the Deed Poll, see section 3.7 of this Scheme Booklet. (b) Overview of funding arrangements The cash necessary to fund the payment of the Scheme Consideration and related transaction costs will be provided to Zurich BidCo pursuant to intercompany funding arrangements between Zurich BidCo and ZIC. ZIC has entered into a letter agreement (Letter Agreement) with Zurich BidCo whereby ZIC undertakes to provide sufficient funding to Zurich BidCo to ensure that it has, at all necessary times, sufficient funding and liquidity to meet any of its funding obligations under, or in connection with, the Scheme. The provision by ZIC of funds to Zurich BidCo pursuant to the Letter Agreement is not subject to any conditions or third party consents. The funds to be provided to Zurich BidCo pursuant to the Letter Agreement will be met by ZIC s current cash reserves. ZIC has access to in excess of A$741 million cash to pay A$1.95 for every Cover-More Share held as at the Scheme Record Date including in relation to shares issued as a result of the vesting and exercise of 964,145 Performance Rights currently on issue. As at 31 December 2016, ZIC had US$7.2bn in cash and cash equivalents on its balance sheet, which materially exceeds the maximum cash amount payable by Zurich BidCo to the Scheme Shareholders if the Scheme becomes Effective. ZIC is not aware of any security interests, rights of set off or other arrangements that might materially affect ZIC s ability to make the funds available to Zurich BidCo to fund the payment of the Scheme Consideration and related transaction costs. For further information regarding ZIC, see section 5.2 of this Scheme Booklet. On the basis of arrangements described in this section 5.7(b), each of ZIC and Zurich BidCo are of the opinion that it has a reasonable basis for forming the view, and it holds the view, that it will have sufficient funds available to fund the payment of the Scheme Consideration and related transaction costs. 5.8 Interests and Dealings in Cover-More Shares (a) Interests in Cover-More Shares As at the date of this Scheme Booklet: none of ZIC, Zurich BidCo nor any of their associates has any Relevant Interest in any Cover-More Shares or any voting power in Cover-More; and no director or senior manager of ZIC or Zurich BidCo has any Relevant Interest in any Cover-More Shares. (b) No dealings in Cover-More Shares in the four months prior to the date of this Scheme Booklet Except for the Scheme Consideration to be provided under the Scheme, during the period of four months before the date of this Scheme Booklet, none of ZIC, Zurich BidCo nor any of their associates has provided or agreed to provide consideration for any Cover-More Shares under a purchase or other agreement. 52 COVER-MORE GROUP LIMITED

56 (c) Benefits to holders of Cover-More Shares Other than as set out in this Scheme Booklet, neither ZIC nor any of its associates has given or offered to give or agreed to give a benefit to another person that was likely to induce the other person, or an associate of that person to: vote in favour of the Scheme; or dispose of Cover-More Shares, during the period of four months ending on the date of this Scheme Booklet and which was not offered to all other Cover-More Shareholders. 5.9 Other Material Information Other material information relating to ZIC and Zurich BidCo in relation to the Scheme is set out below. (a) FIRB approval As Cover-More announced to the ASX on 7 February 2017, the Foreign Investment Review Board (FIRB) has provided written confirmation to ZIC that the Commonwealth has no objections to the Scheme. Receipt of FIRB approval in respect of the Scheme was one of the key conditions to implementation of the Scheme, and this condition has been satisfied. (b) Other regulatory approvals As outlined in section 1.2, the Scheme is also subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Approval) and approval of the Financial Conduct Authority (FCA). HSR Approval is expected to be received by 7 March 2017 and the target date for receiving approval of the FCA is 24 March (c) Benefits in connection with retirement from office There is no retirement payment or other benefit that is proposed to be made by the Zurich Insurance Group or given by the Zurich Insurance Group to any director, secretary or executive officer of Cover-More as compensation for the loss of or consideration for or in connection with his or her retirement from office in Cover-More in connection with the Scheme. No payment will be made by the Zurich Insurance Group and no benefit will be given by the Zurich Insurance Group to any current member of the Cover-More Board as compensation or consideration for, or otherwise in connection with, their resignation from the Cover-More Board, if the Scheme becomes effective and the Cover-More Board is accordingly reconstituted. (d) No other information Except as set out in this Scheme Booklet, there is no other information regarding the Zurich Insurance Group, or its intentions regarding Cover-More, that is material to the making of a decision by a Cover-More Shareholder in relation to the Scheme, being information that is within the knowledge of ZIC as at the Last Practicable Trading Date, which has not been previously disclosed to Cover-More Shareholders. SCHEME BOOKLET 53

57 6. WHAT IF THE SCHEME IS NOT IMPLEMENTED? 6.1 What if the Scheme is not implemented? If the Scheme is not implemented, there will be no change to Cover-More and it will continue to operate on a stand-alone basis. As such, Cover-More will remain listed on the ASX and you will retain your Cover-More Shares and they will not be acquired by Zurich BidCo. While it is not possible to predict the future performance of Cover-More, in deciding whether or not to vote in favour of the Scheme you should have regard to the prospects of Cover-More on a stand-alone basis (that is, if the Scheme is not approved and implemented). The following are some possible implications of the Scheme not being implemented: Cover-More Shareholders will retain their Cover-More Shares and they will not be acquired by Zurich BidCo; Cover-More Shareholders will not receive the Total Cash Payments of $1.95 per Cover-More Share; Cover-More will, in the absence of another proposal, continue to operate as a stand-alone company listed on ASX and, as such, Cover-More Shareholders will be exposed to the risks relating to Cover-More s business (refer to section 6.3 for more risk related commentary); and if no comparable proposal or Superior Proposal emerges, then the Cover-More Share price may fall or trade at a price below the Total Cash Payments of $1.95 per Cover-More Share, at least in the immediate near term. This view is also supported by the Independent Expert which states in its report: The current share price of Cover-More reflects the terms of the Scheme and therefore includes a control element. As such, in the absence of the Scheme, an alternative proposal or speculation concerning an alternative proposal, the Cover-More share price is likely to fall to levels consistent with trading prices prior to the announcement of the Scheme with allowance for any company specific initiatives or financial achievements in the subsequent period which the market may assess as value enhancing, and the impact of trends in broader equity markets. 6.2 Strategy and intentions for Cover-More if the Scheme does not proceed Should the Scheme not proceed or if a Superior Proposal does not emerge, Cover-More will continue to operate on a stand-alone basis in accordance with its publicly stated strategy. The strategy, as outlined at Cover-More s FY16 results briefing and Annual General Meeting will see it evolve its structure from a geographic based business model to an industry vehicle model. By adopting a go-to-market industry approach, Cover-More believes it will increase its scalability and operational efficiency. The new industry approach is also designed to better position Cover-More to win new aviation and travel clients, while retaining existing key partners. The strategy would also see Cover-More maintain a focus on cost reduction, following the implementation of a number of cost-out initiatives during the six months to 31 December Those initiatives are expected to deliver future savings (to be partially realised in 2H17 and further benefit in FY18). Growth in new markets remains part of Cover-More s strategy and the successful acquisition of Travelex Insurance Services in November 2016 delivered a scalable platform in North America for Cover-More. Cover-More will continue to look at opportunities to increase its growth profile, both organically and via acquisition where appropriate. The points above should be considered in conjunction with the comments on certain Cover-More risks outlined in section 6.3 below. 54 COVER-MORE GROUP LIMITED

58 6.3 Risks associated with Cover-More if the Scheme is not implemented If the Scheme is not implemented Cover-More will remain as a listed company and, as such Cover-More will continue to be subject to various risks. Some notable risks that could have an impact on Cover-More and therefore a continued investment in Cover-More Shares are set out below. The risks described below are not to be taken as exhaustive or listed in any order of importance. The risks described below, as well as other risks not described below, could, in the future, materially and adversely affect the financial performance of Cover-More and the value of Cover-More Shares. (a) Distribution Agreements Cover-More s key distribution agreements may be terminated, not renewed or renewed on less favourable terms, or the volume of travel insurance distributed under key distribution arrangements may decline or be lower than expected. (b) Travel industry Travel is a relatively discretionary activity and its underlying demand is influenced by a number of macroeconomic factors. There is a risk that travel and/or the demand for travel insurance may decline in Cover- More s key markets. (c) Underwriting agreement Cover-More s business model relies on an insurer to hold the underwriting risk. There is a risk that Cover-More may be unable to secure its underwriting risk or the pricing of the underwriting risk may worsen. (d) Underwriting partners Cover-More relies on the ability of its underwriting partners to meet its obligations under the travel insurance policies which have been distributed to date. There is a risk that the financial position and/or reputation of Cover-More s key underwriting partners may deteriorate, which may adversely impact Cover-More s ability to honour its travel insurance policies and consequently, its reputation, contractual relationship with its distribution partners and its financial position, financial performance and share price. (e) Medical assistance customers Cover-More s medical assistance businesses typically operate under short or medium contracts to provide its services on a fixed fee or fee-for-service basis. There is a risk that Cover-More s key assistance customers may not renew their contracts or Cover-More may fail to win new contracts. (f) Exchange rates A significant part of Cover-More s revenues, costs and profit are denominated in foreign currency, including Indian Rupees, Chinese Renminbi, Malaysian Ringgits, New Zealand Dollars, UK Pounds Sterling, Euro and US Dollars. Cover-More s earnings may be affected by fluctuations in foreign exchange rates. (g) Claims costs Cover-More s underwriting partners receive a share of premiums in exchange for those insurers taking on claims risk in relation to insurance policies sold. In most of these contracts, the amount receivable is based on previous claims experience. There is a risk that Cover-More may be adversely impacted by an increase in claims under the travel insurance policies, which can increase the underwriting costs and thereby reduce the share of premiums earned by Cover-More. SCHEME BOOKLET 55

59 6. WHAT IF THE SCHEME IS NOT IMPLEMENTED? continued (h) Technology Cover-More s ability to provide reliable services, efficient distribution and effective monitoring and repricing for its own operations, as well as that of its agency and white label partners (who form a critical part of its current operations and future growth), depends on the efficient and uninterrupted operation of its core technologies, which include specialised and proprietary software systems and infrastructure and back-end data processing systems, as well as its websites and other e-commerce applications. There is a risk that Cover-More s technology platform and communications systems may be disrupted, attacked, become outdated or cease to function efficiently for both Cover-More and its distribution partners and thus become a source of operational failure. (i) Growth strategy Cover-More may be unable to execute its growth strategy and growth initiatives for its current and future businesses, as it is executing a range of new untested growth initiatives, including newly developed ancillary products, new distribution partnerships and entry into new markets. (j) Employees Cover-More may be unable to attract and/or retain skilled personnel across all parts of its business and operations. (k) Increased competition There is a risk that Cover-More experiences increased competition from existing or new competitors, which may reduce its growth, market share and/or margins. (l) Asset impairment The Cover-More Board regularly monitors impairment risk. Where the value of an asset is assessed to be less than its carrying value, Cover-More is obliged to recognise an impairment charge in its profit and loss accounts. Asset impairment charges may result from the occurrence of unexpected adverse events that impact Cover-More s expected performance. Assets are tested for impairment more frequently if events or changes in circumstances indicate that they might be impaired. This could result in the recognition of impairment provisions that could be significant and could adversely impact Cover-More s financial position. Cover-More s balance sheet includes a significant number of intangible assets recognised as a result of various acquisitions. Intangible assets must be regularly tested for impairment. Impairment results from a permanent diminution in value indicated by a decrease in profits below the level that supports the value of this asset. In the event that any of Cover-More s intangible assets are found to be impaired to a level below their carrying value, Cover-More would need to write down the value of the intangible asset. This will result in an expense in the income statement and reduced profit for Cover-More. (m) Revenue Cover-More earns a share of the premiums on the sale of travel insurance as revenue. The portion of premiums that Cover-More earns can change based on the prevailing claim, economic, regulatory, taxationrelated and competitive factors that impact on the prices charged for travel insurance and allocation of premiums between the underwriter, Cover-More and Cover-More s distribution partners. Because Cover-More does not solely determine, and cannot predict, the timing or extent of changes to this allocation of premiums, Cover-More cannot predict the effect any changes may have on Cover-More s operations. There is a risk that Cover-More may be adversely impacted by various factors which cause a reduction in the portion of premiums paid to Cover-More. 56 COVER-MORE GROUP LIMITED

60 (n) Reputation Cover-More s reputation is critical to the provision of both its travel and medical assistance businesses. There is a risk that Cover-More incurs reputational damage in relation to a publicised negative customer experience. (o) Inappropriate medical advice Cover-More provides medical advice and treatment through its medical assistance business and its employee assistance business. There is a risk that Cover-More may be negatively impacted by risks associated with inadequate or inappropriate medical advice or treatment. (p) Intellectual property Cover-More utilises both specialised e-commerce technology platforms as well as comprehensive insurance databases for its business, on which its distribution and pricing capabilities rely. There is a risk that unauthorised use or copying of Cover-More s software, data, specialised technology or databases, or that Cover-More s intellectual property rights may be unenforceable or challenged by third parties. (q) Tax/accounting The Australian Accounting Standards are set by the Australian Accounting Standards Board (AASB) and are outside Cover-More s control. There is a risk that changes to the Australian Accounting Standards issued by the AASB or changes to the interpretation, implementation or enforcement of these standards could materially and adversely affect Cover-More and the financial position and performance reported in Cover-More s financial statements. (r) Interest rate risk Cover-More is subject to the risk of rising interest rates associated with borrowing on a floating rate basis. Movements in interest rates may have a material adverse impact on Cover-More s financial position, financial performance and share price. (s) Legislation and government regulations Cover-More may be affected by changes in legislation, taxes, and governmental or regulatory policies. Changes to or repeal of policy, legislation and regulations may have a substantial impact on Cover-More s outlook and may also create uncertainty concerning Cover-More, which in turn may adversely affect Cover-More s share price in the event the Scheme is not implemented. Further, transitional challenges may arise when Cover-More, and the markets in which it operates, need to transition from one existing legal framework to a new framework. (t) Share market conditions The value of Cover-More Shares can be expected to fluctuate depending on various factors beyond the control of Cover-More and its directors, including, but not limited to, general worldwide economic conditions, changes in government policies, investor perceptions, movements in interest rates and the rate of inflation, general movements in worldwide stock markets, variations in the operating expenses, as well as in the cost of capital replacement which Cover-More may in the future require, announcement of new technologies or geo-political instability. (u) Disputes and litigation Cover-More may be exposed to potential legal claims, disputes and litigation in the future, with respect to its operations, suppliers or customers in the ordinary course of business. Proceedings may result in high legal costs, adverse monetary judgments and/or damage to Cover-More s reputation, which could have an adverse effect on Cover-More and its financial performance. SCHEME BOOKLET 57

61 7. TAXATION IMPLICATIONS FOR SCHEME SHAREHOLDERS The following comments provide a general summary of the potential Australian income tax, capital gains tax (CGT), GST and stamp duty issues for Cover-More Shareholders who participate in the Scheme. The comments in this summary are applicable only to those Cover-More Shareholders (including individuals, complying superannuation entities, companies, trusts or partnerships) who hold their Cover-More Shares on capital account for Australian income tax purposes. This summary does not consider the consequences for Cover-More Shareholders who are insurance companies or banks, Cover-More Shareholders that hold their Cover-More Shares on revenue account or carry on a business of trading in shares, Cover-More Shareholders who acquired their Cover-More Shares in connection with an employee share scheme, or Cover-More Shareholders who are exempt from Australian income tax. This summary also does not cover the consequences for Cover-More Shareholders who are subject to Division 230 of the Tax Act (the Taxation of Financial Arrangements or TOFA regime) with respect to their Cover-More Shares. This summary is based on the Australian tax laws (together with established interpretations of those laws) in force as at the date of this Scheme Booklet, which are subject to change. This summary does not take into account the tax law of countries other than Australia. This summary is general in nature and is not intended to be an authoritative or complete statement of the applicable law. Given that the precise tax implications of the Scheme will depend upon the specific circumstances of each Cover-More Shareholder, Cover-More Shareholders should obtain independent advice on the taxation implications of participating in the Scheme, taking into account their specific circumstances (including whether they are an Australian tax resident). 7.1 Disposal of Cover-More Shares under the Scheme (a) Australian Tax Resident Cover-More Shareholders The disposal of a Cover-More Share under the Scheme should give rise to a CGT event. A capital gain should arise to the extent that the capital proceeds on disposal exceed the cost base of the Cover-More Share (being, broadly, the amount paid to acquire the Cover-More Share plus certain non-deductible transaction costs). Where the Cover-More Shareholder is a partnership, the partners of that partnership (and not the partnership itself) should ordinarily be treated as realising any capital gain arising from the disposal of a Cover-More Share (according to their proportionate holdings). The capital proceeds from the disposal of a Cover-More Share should equal the Total Cash Payments received in respect of the disposal of the Cover-More Share. In this regard, it should be noted that any Special Dividend payable on the Cover-More Share is likely to form part of the capital proceeds from the disposal of that Cover-More Share. Principally, this is on the basis that the Special Dividend is to be funded by a loan from ZIC and/or Zurich BidCo, who have consented to payment of the Special Dividend under the Scheme. Notwithstanding the above, provided that the Special Dividend is also included in the assessable income of the Cover-More Shareholder (which is generally anticipated to be the case, as indicated below), any capital gain otherwise realised by the Cover-More Shareholder should be reduced by the amount of the Special Dividend, pursuant to specific anti-overlap provisions. A CGT discount may be applied against any capital gain (after reducing the capital gain, by applying against it any applicable capital losses of the taxpayer) where the entity which realises the capital gain is an individual, complying superannuation entity or trustee. The CGT discount may be applied in these circumstances, provided that the Cover-More Share has been held for at least 12 months (not including the date of 58 COVER-MORE GROUP LIMITED

62 acquisition or disposal for CGT purposes) and certain other requirements have been satisfied. Where the CGT discount applies, any capital gain arising to individuals and entities acting as trustees (other than trustees of a complying superannuation entity) may be reduced by 50%, after offsetting current year or prior year capital losses. For a complying superannuation entity, any capital gain may be reduced by one third, after offsetting current year or prior year capital losses. If the Cover-More Shareholder who realises the capital gain and is entitled to the CGT discount is the trustee of a trust (other than the trustee of a complying superannuation entity), the CGT discount may flow through to the beneficiaries of the trust, provided those beneficiaries are not companies. Cover-More Shareholders that are trustees should seek specific advice regarding the tax consequences of distributions to beneficiaries who may qualify for discounted capital gains. A capital loss should be realised to the extent that the reduced cost base of a Cover-More Share (which should generally be calculated in a similar manner to the cost base) exceeds the capital proceeds from its disposal. In this regard, it is important to note that any capital loss should be calculated by subtracting from the reduced cost base of a Cover-More Share the Total Cash Payments received in respect of the disposal of the Cover-More Share (including any Special Dividend payable on the Cover-More Share). That is, unlike the rules which apply to the determination of capital gains, there are no anti-overlap provisions that will adjust the amount of a capital loss to take account of the Special Dividend. Capital losses may only be offset against capital gains realised in the same income year or future income years, subject to any applicable loss recoupment tests being satisfied. Capital losses cannot be offset against other assessable income. As with capital gains, where the Cover-More Shareholder realising the capital loss is a partnership, the partners of that partnership (and not the partnership itself) should ordinarily be treated as realising the capital loss (according to their proportionate holdings). By contrast, any capital loss realised by a Cover-More Shareholder who is the trustee of a trust should not flow through to the beneficiaries of the trust, but may be utilised by the Cover-More Shareholder to offset capital gains in the same income year or future income years, subject to the satisfaction of applicable loss recoupment tests. (b) Non-Australian Tax Resident Cover-More Shareholders The disposal of a Cover-More Share by a Cover-More Shareholder who is not a tax resident of Australia should give rise to a CGT event. A capital gain may initially arise to the extent that the capital proceeds on disposal exceed the cost base of the Cover-More Share (refer section 7.1(a) for further details). However, any capital gain initially arising as a result of the CGT event should be disregarded unless the Cover-More Share constitutes taxable Australian property. In the ordinary case, a Cover-More Share should not constitute taxable Australian property unless both of the following requirements are satisfied: The Cover-More Shareholder (together with any associates of the Cover-More Shareholder) holds an interest of at least 10% in Cover-More at the time of the disposal of the Cover-More Share, or has held such an interest throughout a 12 month period in the 24 months preceding the disposal; and Cover-More is land rich for Australian income tax purposes (broadly, because more than 50% of the value of Cover-More s assets, including those of certain downstream subsidiaries, is comprised by Australian real property interests (including leasehold interests) and/or certain interests in respect of Australian minerals). A Cover-More Share should also constitute taxable Australian property if it is used by a Cover-More Shareholder in carrying on a business in Australia through a permanent establishment (for example, a fixed place of business, such as an office, which is located in Australia). Based on Cover-More s asset profile as at the date of this Scheme Booklet, Cover-More is not anticipated to be land rich for Australian income tax purposes. Accordingly, unless a Cover-More Shareholder who is not a tax resident of Australia holds their Cover-More Share through an Australian permanent establishment (as mentioned above), any capital gain arising on disposal of the Cover-More Share is likely to be disregarded. SCHEME BOOKLET 59

63 7. TAXATION IMPLICATIONS FOR SCHEME SHAREHOLDERS continued In the event that a Cover-More Shareholder who is not a tax resident of Australia realises a capital gain in connection with the disposal of a Cover-More Share that constitutes taxable Australian property, the Cover- More Shareholder should ordinarily be required to lodge an Australian income tax return including the capital gain. In such circumstances, the Cover-More Shareholder should generally not be entitled to claim the benefit of the CGT discount to reduce the amount of the capital gain included (refer section 7.1(a) for further details), but may be able to offset the capital gain with available capital losses, subject to any applicable loss recoupment tests being satisfied. The amount of the capital gain, after application of available capital losses, should be subject to Australian income tax at the Cover-More Shareholder s marginal tax rate. A capital loss should initially be realised by a Cover-More Shareholder who is not a tax resident of Australia to the extent that the reduced cost base of a Cover-More Share exceeds the capital proceeds from its disposal (refer section 7.1(a) for further details). However, as with capital gains, a capital loss should be disregarded by the Cover-More Shareholder unless the Cover-More Share being disposed of constitutes taxable Australian property. Capital losses which are not disregarded may only be offset against capital gains from the disposal of taxable Australian property in the same income year or future income years, subject to any applicable loss recoupment tests being satisfied. (i) Non-resident CGT withholding New rules have recently been introduced which can apply to the disposal of certain taxable Australian property under contracts entered into from 1 July Pursuant to the new rules, a 10% non-final withholding tax may be applied to such transactions at settlement. Based on the existing asset profile of Cover-More, the new rules are not anticipated to apply in respect of the Scheme as Cover-More is not anticipated to be land rich for Australian income tax purposes. 7.2 Payment of the Special Dividend under the Scheme Cover-More proposes to pay a fully-franked Special Dividend in conjunction with the Scheme, which will reduce the Scheme Consideration on a dollar-for-dollar basis. Any Special Dividend will be sourced from Cover-More s retained earnings and/or current year profits and will be funded by a loan from ZIC and/or Zurich BidCo, subject to the Scheme becoming Effective. See section 5.7 of this Scheme Booklet for further information. On this basis, the Australian tax consequences associated with payment of the Special Dividend are anticipated to be as set out below. (a) Australian Tax Resident Cover-More Shareholders The Special Dividend should constitute assessable income of a Cover-More Shareholder. Cover-More Shareholders who are individuals or complying superannuation entities should include the Special Dividend in their assessable income in the year they derive the Special Dividend. If such a Cover-More Shareholder satisfies the qualified person rules (refer to further comments below), the Cover-More Shareholder should also include any franking credit attached to the Special Dividend in their assessable income. However, the Cover-More Shareholder should be entitled to a tax offset equal to the franking credit. The tax offset can be applied to reduce the income tax payable on the Cover-More Shareholder s taxable income. Where the tax offset exceeds the income tax payable on the Cover-More Shareholder s taxable income in an income year, these categories of Cover-More Shareholders should be entitled to a tax refund equal to the amount of the excess. Cover-More Shareholders who are companies should be required to include both the Special Dividend and associated franking credit in their assessable income, subject to satisfaction of the qualified person rules. A tax offset should then be allowed up to the amount of the franking credit on the Special Dividend. In addition, Cover-More Shareholders who are companies should be entitled to a credit in their own franking account to the extent of the franking credit attached to the Special Dividend received. Such Cover-More Shareholders can pass on the benefit of this credit to their own investor(s) on the payment of franked dividends by the Cover-More Shareholder. 60 COVER-MORE GROUP LIMITED

64 Where franking credits received by a Cover-More Shareholder who is a company exceed the income tax payable by that Cover-More Shareholder, the excess cannot give rise to a refund, but may be able to be converted into carry forward tax losses. Cover-More Shareholders who are trustees (other than trustees of complying superannuation entities) or partnerships should include the Special Dividend in their assessable income in determining the net income of the trust or partnership. Subject to satisfaction of the qualified person rules, such Cover-More Shareholders should also include any franking credit attached to the dividend in their net income. As a result, a relevant beneficiary or partner may be entitled to a tax offset equal to the beneficiary s or partner s share of the franking credit received by the Cover-More Shareholder. Notably, as the qualified person rules can be complex in the context of distributions received indirectly via a trust or partnership, it is strongly recommended that relevant investors seek independent advice on the tax consequences arising in these circumstances. (i) Qualified person rules The benefit of franking credits attached to the Special Dividend can be denied where a Cover-More Shareholder does not satisfy the qualified person rules, in which case the Cover-More Shareholder should not be required to include an amount for the franking credits in their assessable income and should also not be entitled to a tax offset. Broadly, to satisfy the qualified person rules, a Cover-More Shareholder must satisfy the holding period rule or, if necessary, the related payment rule. In the present case, Cover-More Shareholders are expected to make a related payment to ZIC and/or Zurich BidCo with respect to the Special Dividend. This is because the Special Dividend effectively reduces the Scheme Consideration otherwise payable under the Scheme on a dollar-for-dollar basis. Accordingly, the related payment rule is expected to apply. The related payment rule requires a Cover-More Shareholder to hold the Cover-More Shares continuously at risk for not less than 45 days (excluding the date of acquisition and disposal) in the period that commences 45 days before and ends 45 days after the ex-dividend date for the Special Dividend. Practically, the ex-dividend date is anticipated to occur one day after the Special Dividend Record Date. Very broadly, a Cover-More Share should be held at risk to the extent that no material positions are adopted in relation to the Cover-More Share which have the effect of diminishing the economic exposure associated with holding the Cover-More Share (for example, certain option and derivative agreements, or agreements to sell the Shares). In this regard, it is generally expected that a Cover-More Share will cease to be held at risk on and from the Scheme Record Date. This is because, on and from this date, Cover- More Shareholders will effectively be required to dispose of their Cover-More Shares to Zurich BidCo. Consequently, in order to satisfy the related payment rule and be able to access franking credits in respect of the Special Dividend, a Cover-More Shareholder will practically need to hold their Cover-More Shares at risk for a continuous period of 45 days (not including the date of acquisition or disposal) in the period that commences 45 days before the ex-dividend date (as described above) and ends on the day before the Scheme Record Date. As indicated above, the qualified person rules can be particularly complex for distributions received by an investor indirectly (for example, via an interposed trust). It is strongly recommended that investors in such situations seek independent taxation advice. (ii) Anti-Avoidance Provisions Apart from the qualified person rules described above, there are a number of additional anti-avoidance provisions which may, in certain circumstances, operate or be applied by the Australian Taxation Office (ATO) to preclude an Australian tax resident Cover-More Shareholder from accessing the benefit of franking credits attached to the Special Dividend. SCHEME BOOKLET 61

65 7. TAXATION IMPLICATIONS FOR SCHEME SHAREHOLDERS continued Whilst application of these rules is generally a discretionary matter for the ATO, based on the ATO s published guidance in respect of schemes of arrangement with similar features to the Scheme, the rules are not anticipated to apply in the context of the Special Dividend. This is particularly in light of the fact that the Special Dividend is to be paid equally to all participating Cover-More Shareholders and is to be fully franked regardless of the tax profile of Cover-More Shareholders. (b) Non-Australian Tax Resident Cover-More Shareholders A Cover-More Shareholder who is not a tax resident of Australia should not be subject to Australian tax (including Australian dividend withholding tax) with respect to the Special Dividend unless they receive the Special Dividend in connection with a business carried on via a permanent establishment in Australia. This is on the basis that the Special Dividend is fully franked. 7.3 GST A Cover-More Shareholder should not be liable for GST as a result of participating in the Scheme. A Cover-More Shareholder may not be entitled to claim full input tax credits in respect of any GST paid on costs incurred in connection with the Scheme. Separate GST advice should be sought by Cover-More Shareholders in this respect. 7.4 Stamp duty A Cover-More Shareholder should not be liable for stamp duty as a result of participating in the Scheme. 7.5 Tax file number (TFN) withholding On the basis that the Special Dividend is fully franked, the TFN withholding rules are not expected to apply in connection with the Special Dividend. This means that mandatory withholding is not expected to be required by Cover-More with respect to the Special Dividend, irrespective of whether a particular Cover-More Shareholder has failed to quote their TFN or Australian Business Number to Cover-More. 62 COVER-MORE GROUP LIMITED

66 8. ADDITIONAL INFORMATION 8.1 Interests of Cover-More Directors in Cover-More securities The table below lists the Relevant Interests of Cover-More Directors in Cover-More Shares and Cover-More Employee Performance Rights as at the date of this Scheme Booklet. Cover-More Director Position Relevant Interest in Cover-More Shares Relevant Interest in Cover-More Employee Performance Rights Louis Carroll Independent Chairman 285,388 Nil Mike Emmett Group Chief Executive Officer and Managing Director 71, ,000 (of which 166,667 are Vesting Employee Performance Rights) Stephen Loosley Non-Executive Director 48,847 Nil Trevor Matthews Non-Executive Director 119,231 Nil Lisa McIntyre Non-Executive Director 41,732 Nil Sam Mostyn Non-Executive Director 50,000 Nil William Easton Non-Executive Director Nil Nil Cover-More Directors who hold Cover-More Shares will be entitled to vote at the Scheme Meeting and receive the Total Cash Payments along with the other Scheme Shareholders. Each Cover-More Director intends to vote any Cover-More Shares held or controlled by him or her in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cover-More Shareholders. 8.2 Interests in Zurich Insurance Group held by Cover-More Directors No Cover-More Director holds any interest in a Zurich Insurance Group Member. 8.3 Interests held by Cover-More Directors in contracts of a Zurich Insurance Group Member No Cover-More Director has an interest in any contract entered into by a Zurich Insurance Group Member. 8.4 Other interests of Cover-More Directors Other than as set out in section 8.5 below, no Cover-More Director has any interest, whether as a director, member or creditor of Cover-More or otherwise, which is material to the Scheme, other than in their capacity as a holder of Cover-More Shares or Cover-More Employee Performance Rights. 8.5 Agreements or arrangements with Cover-More Directors As announced to the ASX on 12 December 2016, in connection with the Scheme, the Cover-More Board resolved to amend the remuneration of the Cover-More Group Chief Executive Officer, Mike Emmett, as follows: FY17 short-term incentive (STI): in accordance with the terms of Cover-More s STI plan, for the purposes of determining whether the performance conditions for the payment of Mr Emmett s STI have been satisfied, the Cover-More Board will assess whether the performance conditions have been satisfied based on existing hurdles, and will its exercise discretion to not defer a portion of Mr Emmett s STI; SCHEME BOOKLET 63

67 8. ADDITIONAL INFORMATION continued sign-on arrangement: the full value of Mr Emmett s unvested sign-on arrangements will be paid in cash rather than in Cover-More Shares; and transaction bonus: Mr Emmett will receive a bonus of 50% of his annual fixed remuneration, of which: 40% will be paid in cash in equal monthly instalments between December 2016 and March 2017; and the remaining 60% will be paid in cash on the Implementation Date. Other than as described above, there have been no changes to Mr Emmett s fixed remuneration in connection with the Scheme. In addition, Mr Emmett holds 500,000 Cover-More Employee Performance Rights (of which 166,667 are Vesting Employee Performance Rights) that will be subject to the regime described in section 3.6. Other than as described above, there is no agreement or arrangement made between any Cover-More Director and any other person, including a Zurich Insurance Group Member, in connection with or conditional upon the outcome of the Scheme. 8.6 Payments and other benefits to directors, secretaries or executive officers of Cover-More Other than as described in section 8.5 above, no payment or other benefit is proposed to be made or given to a director, secretary or executive officer of Cover-More or any member of Cover-More Group as compensation for loss of, or as consideration for or in connection with their retirement from, office in Cover-More or any member of Cover-More Group as a result of the Scheme. 8.7 Suspension of trading of Cover-More Shares If the Court approves the Scheme, Cover-More will immediately notify ASX. It is expected that suspension of trading on ASX in Cover-More Shares will occur at the close of business on the Effective Date. 8.8 Warranty by Scheme Shareholders about their Cover-More Shares The effect of clause 5.6 of the Scheme is that all Scheme Shareholders, including those who vote against the Scheme and those who do not vote, will be deemed to have warranted to ZIC and Cover-More that their Cover-More Shares are fully paid and not subject to any of the encumbrances specified in that clause, and that they have full power and capacity to transfer their Cover-More Shares to Zurich BidCo together with any rights and entitlements attaching to those Cover-More Shares. Clause 5.6 of the Scheme is set out in Attachment C to this Scheme Booklet. 8.9 ASX waivers Cover-More has applied to the ASX for, and received, a waiver of ASX Listing Rule to permit Cover-More to effect the treatment of Cover-More Employee Performance Rights described in section ASIC relief Regulation of the Corporations Regulations requires that, unless ASIC allows otherwise, the Scheme Booklet must contain all of the matters set out in Part 3 of Schedule 8 to the Corporations Regulations. As some of these requirements are not applicable or appropriate in respect of the Scheme, ASIC has allowed the following variations in this Scheme Booklet. Clause 8302(h) of Part 3 of Schedule 8 of the Corporations Regulations requires the Scheme Booklet to disclose the extent to which the financial position of Cover-More has materially changed since the date of the last balance sheet laid before Cover-More s general meeting, being its financial statements for the financial year ended 30 June COVER-MORE GROUP LIMITED

68 ASIC has allowed Cover-More to confine its disclosure in this Scheme Booklet to all material changes to Cover-More s financial position between 31 December 2016 (being the date of the latest financial statements for Cover-More in the half yearly accounts lodged with the ASX) and the date of this Scheme Booklet on the basis that: (a) Cover-More has complied with Division 2 of Part 2M.3 of the Act in respect of the half year ended 31 December 2016; (b) Cover-More discloses all material changes to its financial position occurring after the half-year ended 31 December 2016 and prior to the date of this Scheme Booklet, in the Scheme Booklet and/or in announcements to the ASX; (c) Cover-More discloses in announcements to the market operated by ASX any material changes to its financial position that occur after the date lodgement of the Scheme Booklet for registration with ASIC but prior to the Scheme being approved by the Court; (d) the Scheme Booklet states that Cover-More will give a copy of the financial reports for the financial year ended 30 June 2016 and half-year ended 31 December 2016 free of charge to anyone who requests a copy before the Scheme to which the Scheme Booklet relates is approved by order of the Court; and (e) the Scheme Booklet sent to Scheme Shareholders is substantially in the form given to ASIC on 17 February Consents (a) The following parties have given, and have not withdrawn before the date of this Scheme Booklet, their consent to be named in this Scheme Booklet in the form and context in which they are named: (i) Macquarie Capital as financial adviser to Cover-More in relation to the Scheme; (ii) Link as the manager of the Registry; (iii) Deloitte as tax adviser in relation to the Scheme; and (iv) Gilbert + Tobin as legal adviser to Cover-More in relation to the Scheme. (b) The Independent Expert has given and has not withdrawn its consent to be named in this Scheme Booklet and to the inclusion of the Independent Expert s Report in Attachment E to this Scheme Booklet and to the references to the Independent Expert s Report in this Scheme Booklet being made in the form and context in which each such reference is included. (c) Each of ZIC and Zurich BidCo has given and has not withdrawn its consent to be named in this Scheme Booklet and in relation to the inclusion of the Zurich Insurance Group Information in this Scheme Booklet in the form and context in which that information is included. (d) Each person named in this section 8.11: (i) has not authorised or caused the issue of this Scheme Booklet; (ii) does not make, or purport to make, any statement in this Scheme Booklet or any statement on which a statement in this Scheme Booklet is based, other than as specified in this section 8.11; and (iii) to the maximum extent permitted by law, expressly disclaims all liability in respect of, makes no representation regarding, and takes no responsibility for, any part of this Scheme Booklet, other than a reference to its name and the statement (if any) included in this Scheme Booklet with the consent of that party as specified in this section Documents available An electronic version of this Scheme Booklet including the Independent Expert s Report and the Scheme Implementation Agreement are available for viewing and downloading online at Cover-More s website at SCHEME BOOKLET 65

69 8. ADDITIONAL INFORMATION continued 8.13 Continuous disclosure Cover-More is subject to regular reporting and disclosure obligations under the Corporations Act and ASX Listing Rules. Cover-More has an obligation (subject to limited exceptions) to notify ASX immediately upon becoming aware of any information which a reasonable person would expect to have a material effect on the price or value of Cover-More Shares. Copies of documents filed with ASX may be obtained from ASX s website at In addition, Cover-More is also required to lodge various documents with ASIC. Copies of documents lodged with ASIC in relation to Cover-More may be obtained from, or inspected at, an ASIC office Supplementary information If Cover-More becomes aware of any of the following between the date of lodgement of this Scheme Booklet for registration with ASIC and the Court Approval Date: a material statement in this Scheme Booklet is false or misleading; a material omission from this Scheme Booklet; a significant change affecting a matter in this Scheme Booklet; or a significant new matter has arisen and it would have been required to be included in this Scheme Booklet if known about at the date of lodgement with ASIC, depending on the nature and timing of the changed circumstances, and subject to obtaining any relevant approvals, Cover-More may circulate and publish any supplementary document by: making an announcement to ASX; placing an advertisement in a prominently published newspaper which is circulated generally throughout Australia; posting the supplementary document to Cover-More Shareholders at their registered address as shown in the Register; or posting a statement on Cover-More s website at as Cover-More in its absolute discretion considers appropriate Other (a) Lodgement of Scheme Booklet with ASIC This Scheme Booklet was lodged with ASIC on 20 February 2017 in accordance with section 411(2)(b) of the Corporations Act. (b) Other material information Otherwise than as contained or referred to in this Scheme Booklet, including the Independent Expert s Report and the information that is contained in the Attachments to this Scheme Booklet, there is no other information that is material to the making of a decision by a Cover-More Shareholder whether or not to vote in favour of the Scheme Resolution to approve the Scheme, being information that is known to any Cover-More Director and which has not previously been disclosed to Cover-More Shareholders. 66 COVER-MORE GROUP LIMITED

70 9. GLOSSARY In this Scheme Booklet unless the context otherwise requires: TERM MEANING $ means Australian dollars unless otherwise stated. ASIC ASX ASX Listing Rules ATO Business Day CGT CHESS Competing Transaction means the Australian Securities and Investments Commission. means ASX Limited ACN or the market operated by it, as the context requires. means the Listing Rules of the ASX and any other applicable rules of ASX modified to the extent of any express written waiver by ASX. means the Australian Taxation Office. means a week day on which trading banks in Sydney are open for trading and the ASX is open for trading. means capital gains tax. means the Clearing House Electronic Subregister System, which provides for electronic share transfers in Australia. means a proposal or transaction or arrangement (including by way of takeover bid, scheme of arrangement, capital reduction, sale of assets, sale or issue of securities or joint venture) which, if completed, would mean a person (other than ZIC or its Related Bodies Corporate) whether alone or together with its associates would: (a) directly or indirectly, acquire an interest or Relevant Interest in or become the holder of more than 20% of Cover-More Shares (but not as a custodian, nominee or bare trustee); (b) acquire control of Cover-More, within the meaning of section 50AA of the Corporations Act, or any of Cover-More s material Subsidiaries; (c) directly or indirectly acquire, obtain a right to acquire, or otherwise obtain an economic interest in all or a material part of the assets of or business conducted by the Cover-More Group; (d) otherwise acquire or merge (including by a reverse takeover bid or dual listed company structure) with Cover-More. For the purposes of paragraph (b) above, a Subsidiary of Cover-More will be a material Subsidiary if: (a) the business or assets of the Subsidiary contributes 30% or more of the consolidated net profit after tax of Cover-More; or (b) the business or assets of the Subsidiary represents 30% or more of the total consolidated assets of Cover-More. SCHEME BOOKLET 67

71 9. GLOSSARY continued TERM Competing Transaction continued Control Corporations Act Court Court Approval Date MEANING For the purposes of paragraph (c) above, the acquisition of an interest in the business or assets of Cover-More or any of its Subsidiaries will be material if: (a) the relevant business or assets contributes 30% or more of the consolidated net profit after tax of Cover-More; or (b) the business or assets represents 30% or more of the total consolidated assets of Cover-More. has the meaning given in section 50AA of the Corporations Act and Controller has the corresponding meaning. means the Corporations Act 2001 (Cth), as amended from time to time. means the Federal Court of Australia or such other court of competent jurisdiction under the Corporations Act agreed to in writing by Cover-More and ZIC. means the date when the Court grants its approval to the Scheme under section 411(4) of the Corporations Act. Cover-More means Cover-More Group Limited (ACN ). Cover-More Board Cover-More Director or your director Cover-More Employee Performance Right Cover-More Group Cover-More Employee Performance Rights Cover-More Prescribed Event Cover-More Reimbursement Fee means the board of directors of Cover-More. means a director of Cover-More as at the date of this Scheme Booklet. means a Performance Right issued to an employee of the Cover-More Group under the LTIP. means Cover-More and each of its Subsidiaries, and Cover-More Group Member means any of those entities. has the meaning given to that term in section 3.6. means Target Prescribed Event, as that term is defined in the Scheme Implementation Agreement, and includes where any person validly exercises any rights under a distribution agreement to which a member of the Cover-More Group is a party, which results, or could reasonably be expected to result, either individually or when aggregated with any other similar occurrences or events, in the loss or reduction in the value of EBITDA of the Cover-More Group of at least $4,500,000, provided that if the term of any such distribution agreement expires or lapses in accordance with the terms of that agreement, or any such distribution agreement is terminated but the parties to it enter into a replacement agreement on terms no less favourable to the relevant member of the Cover-More Group, those occurrences will not be taken into account in calculating whether the above threshold has been reached. has the meaning given to that term in section COVER-MORE GROUP LIMITED

72 TERM Cover-More Share Cover-More Shareholders Deed Poll Deloitte EBITDA Effective Effective Date MEANING means a fully paid ordinary share issued in the capital of Cover-More. means each person who is registered in the Register of Cover-More as the holder of Cover-More Shares. means the deed poll in the form of Attachment D to this Scheme Booklet, executed by ZIC and Zurich BidCo in favour of Scheme Shareholders. means Deloitte Tax Services Pty Ltd. means earnings before interest, tax, depreciation and amortisation. means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to the Scheme. means the date on which the Scheme becomes Effective. Exclusivity Period has the meaning given to that term in section 3.9. Fiduciary Exception GST GST Law has the meaning given to that term in section 3.9(b). means a goods and services tax or similar value added tax levied or imposed under the GST Law. has the meaning given to it in the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Headcount Test has the meaning given to it in section 3.1. Implementation Date Independent Expert Independent Expert s Report Last Practicable Trading Date means the third Business Day following the Scheme Record Date or such other date as Cover-More and ZIC agree. means the independent expert appointed by Cover-More, being KPMG Financial Advisory Services (Australia) Pty Ltd (of which KPMG Corporate Finance is a division). means the report prepared by the Independent Expert, a copy of which is set out in Attachment E to this Scheme Booklet. means 14 February 2017, being the last practicable trading date before the date of this Scheme Booklet. Link means Link Market Services Limited ACN LTIP means the Cover-More Group Limited Long Term Incentive Plan operated by Cover-More and adopted by the Cover-More Board on 12 June Macquarie Capital means Macquarie Capital (Australia) Limited (ABN ). SCHEME BOOKLET 69

73 9. GLOSSARY continued TERM Register Regulatory Authority Related Body Corporate Relevant Interest Requisite Majorities Scheme Scheme Booklet Scheme Consideration Scheme Implementation Agreement Scheme Meeting Scheme Record Date MEANING means the register of Cover-More Shareholders kept by Cover-More and Registry means the manager from time to time of the Register (currently Link). includes: (a) ASX, ACCC, ASIC and the Takeovers Panel; (b) a government or governmental, semi-governmental or judicial entity or authority; (c) a minister, department, office, commission, delegate, instrumentality, agency, board, authority or organisation of any government; and (d) any regulatory organisation established under statute. has the meaning given to that term in the Corporations Act. has the same meaning as given by sections 608 and 609 of the Corporations Act. means the threshold for approval of the Scheme Resolution set out in section 3.2(b), being votes in favour of the resolution received from: (a) a majority in number (more than 50%) of Cover-More Shareholders present and voting at the Scheme Meeting (whether in person, by proxy, by attorney or, in the case of corporate Cover-More Shareholders, by a corporate representative); and (b) at least 75% of the total number of votes cast on the Scheme Resolution at the Scheme Meeting. means a members scheme of arrangement pursuant to Part 5.1 of the Corporations Act between Cover-More and Scheme Shareholders, on the terms described in Attachment C to this Scheme Booklet, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act. means this scheme booklet in relation to the Scheme. means, in respect of each Cover-More Share held by a Scheme Shareholder on the Scheme Record Date: (a) if the Special Dividend is declared, $1.90 cash; or (b) if the Special Dividend is not declared, $1.95 cash. means the Scheme Implementation Agreement dated 11 December 2016 between Cover-More and ZIC in the form set out in Attachment B of this Scheme Booklet. means the meeting of Cover-More Shareholders ordered by the Court to be convened pursuant to section 411(1) of the Corporations Act in relation to the Scheme, and includes any adjournment of that meeting. means 5:00pm (Sydney time) on the fifth Business Day following the Effective Date (or such other date as Cover-More and ZIC agree). 70 COVER-MORE GROUP LIMITED

74 TERM Scheme Resolution Scheme Shareholder Second Court Date Special Dividend Special Dividend Record Date Subsidiary Superior Proposal MEANING means a resolution of Cover-More Shareholders to approve the Scheme, the form of which is set out in the Notice of Scheme Meeting in Attachment A to this Scheme Booklet. means a holder of Cover-More Shares on the Scheme Record Date. means the first day on which an application made to the Court for an order under section 411(4)(b) of the Corporations Act approving the Scheme is heard (or, if the application is adjourned or subject to appeal for any reason, the day on which the adjourned application is heard), with such hearing being the Second Court Hearing. means a proposed fully franked special dividend of $0.05 cash per Cover-More Share that may be declared in the Cover-More Board s absolute discretion and, if so declared, to be paid by Cover-More to those Cover-More Shareholders on the Register as at the Special Dividend Record Date. means 5:00pm (Sydney time) on Wednesday, 5 April 2017, or such other date as notified by Cover-More to ASX. of an entity means another entity which: (a) is a subsidiary of the first entity within the meaning of the Corporations Act; and (b) is part of a consolidated entity constituted by the first entity and the entities it is required to include in the consolidated financial statements it prepares, or would be if the first entity was required to prepare consolidated financial statements. means a bona fide Competing Transaction which the Cover-More Board, acting in good faith, and after taking written advice from its legal advisers and advice from its financial advisers, determines: (a) is reasonably capable of being completed taking into account all aspects of the Competing Transaction, including its conditions, the identity, reputation and financial condition of the person making such proposal, and legal, regulatory and financial matters; and (b) is of a higher financial value to Cover-More Shareholders and would, if completed substantially in accordance with its terms, be more likely than not to result in a transaction that is more favourable to Cover-More Shareholders than the Scheme, taking into account all aspects of the Competing Transaction as compared to the Scheme, including consideration (including the nature or form of the consideration), conditionality (including the nature and status of outstanding conditions precedent and whether those conditions precedent are likely to be satisfied or waived (as applicable)), funding, certainty and timing; and (c) is necessary for the Cover-More Board to pursue, accept or recommend because failing to do so would be reasonably likely to constitute a breach of the Cover-More Board s fiduciary or statutory obligations, SCHEME BOOKLET 71

75 9. GLOSSARY continued TERM Superior Proposal continued Takeovers Panel Total Cash Payments VWAP ZIC MEANING provided that if the Cover-More Board has received written advice from Cover-More s legal advisers (who must be reputable and experienced in transactions of this nature) that requiring the Competing Transaction to have a higher financial value to Cover-More Shareholders, as an essential element, in order to be a Superior Proposal would be reasonably likely to constitute a breach of the Cover-More Board s fiduciary or statutory obligations in the relevant circumstances, then the Cover-More Board may determine that a bona fide Competing Transaction is a Superior Proposal if it otherwise satisfies the criteria set out above (with financial value to Cover-More Shareholders being one of the factors for consideration by the Cover-More Board). means the Takeovers Panel constituted under the Australian Securities and Investments Commission Act 2001 (Cth). means the total cash payments of $1.95 per Cover-More Share if the Scheme becomes Effective (comprising a proposed Special Dividend of $0.05 cash per Cover-More Share and Scheme Consideration of $1.90 cash per Cover-More Share, with the Scheme Consideration being $1.95 cash per Cover-More Share if the Special Dividend is not declared). means volume weighted average price. means Zurich Insurance Company Ltd, a company incorporated under the laws of Switzerland. ZIC Reimbursement Fee has the meaning given to that term in section Zurich BidCo Zurich Insurance Group Zurich Insurance Group Information means Zurich Travel Solutions Pty Limited (ACN ) (a body incorporated in Australia), being a wholly owned subsidiary of ZIC. means collectively or individually (as the context requires) Zurich Insurance Group Ltd and their affiliates, and Zurich Insurance Group Member means any of those entities. means the information contained in section 5, and under the headings Who are ZIC, Zurich BidCo and Zurich Insurance Group? on page 12 and How is ZIC and/or Zurich BidCo funding the Total Cash Payments? on page 16, of this Scheme Booklet. 72 COVER-MORE GROUP LIMITED

76 ATTACHMENT A. NOTICE OF SCHEME MEETING Cover-More Group Limited (ACN ) Notice is hereby given that by an order of the Federal Court of Australia (Court) made on 20 February 2017 pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act) a meeting of the holders of ordinary shares in Cover-More Group Limited (ACN ) (Cover-More) will be held at 10:00am on Monday, 27 March 2017 at Harbourview Hotel, 17 Blue Street, North Sydney NSW The Court has also directed that Louis Carroll act as Chairperson of the meeting or failing him Stephen Loosley, and has directed the Chairperson to report the result of the meeting to the Court if the resolution is approved. Business of the meeting Scheme Resolution To consider, and if thought fit, to pass the following resolution in accordance with section 411(4)(a)(ii) of the Corporations Act: That, pursuant to and in accordance with section 411 of the Corporations Act, the Scheme, the terms of which are contained in and more particularly described in the Scheme Booklet (of which this Notice of Scheme Meeting forms part) is approved (with or without modification as approved by the Court). By Order of the Court Mark Steinberg Company Secretary 20 February 2017 Explanatory notes To enable you to make an informed decision on the Scheme Resolution, further information on the Scheme is set out in the Scheme Booklet, of which this Notice of Scheme Meeting forms part. Terms used in this Notice of Scheme Meeting have the same meaning as set out in the Glossary in section 9 of the Scheme Booklet. These notes should be read in conjunction with the Notice of Scheme Meeting. Requisite Majorities In accordance with section 411(4)(a)(ii) of the Corporations Act, the Scheme Resolution must be approved by: a majority in number of the holders of Cover-More Shares present and voting (either in person, by proxy or attorney or in the case of a corporate holder, by duly appointed corporate representative) at the Scheme Meeting; and at least 75% of the votes cast on the Scheme Resolution. Entitlement to vote The Court has ordered that, for the purposes of the Scheme Meeting, Cover-More Shares will be taken to be held by the persons who are registered as members of Cover-More as of 5:00pm (Sydney time) on Saturday, 25 March Accordingly, transfers registered after this time will be disregarded in determining entitlements to vote at the Scheme Meeting. Voting at the meeting You may vote in person at the meeting or appoint a proxy or attorney to attend and vote for you. SCHEME BOOKLET 73

77 ATTACHMENT A. NOTICE OF SCHEME MEETING continued 1.1 Jointly held securities If Cover-More Shares are jointly held, either one of the joint shareholders is entitled to vote. If more than one joint shareholder votes in respect of jointly held shares, only the vote of the shareholder whose name appears first in the register will be counted. 1.2 Corporate shareholders To vote at the Scheme Meeting (other than by proxy or attorney), a corporation that is a Cover-More Shareholder must appoint a person to act as its representative. The appointment must comply with section 250D of the Corporations Act. The representative must bring to the Scheme Meeting evidence of his or her appointment including any authority under which it is signed. (a) Voting by proxy A Cover-More Shareholder entitled to attend and vote at the Scheme Meeting is also entitled to vote by proxy. The proxy form is enclosed with the Scheme Booklet. You may appoint not more than two proxies to attend and act for you at the Scheme Meeting. A proxy need not be a holder of Cover-More Shares. If 2 proxies are appointed, each proxy may be appointed to represent a specified number or proportion of your votes. If no such number or proportion is specified, each proxy may exercise half your votes. If you do not instruct your proxy on how to vote, your proxy may vote as he or she sees fit at the Scheme Meeting. Please refer to the enclosed proxy form for instructions on completion and lodgement. Please note that proxy forms must be received at the registered office of Cover-More or the Registry whose details are listed below no less than 48 hours prior to the commencement of the Scheme Meeting. (b) Voting by attorney Powers of attorney must be received by the Registry, or at the registered office, by no later than 10:00am on Saturday, 25 March 2017 (or if the Scheme Meeting is adjourned, at least 48 hours before the resumption of the Scheme Meeting in relation to the resumed part of the Scheme Meeting). An attorney will be admitted to the Scheme Meeting and given a voting card upon providing at the point of entry to the Scheme Meeting written evidence of their appointment, of their name and address and the identity of their appointer. The sending of a power of attorney will not preclude a Cover-More Shareholder from attending in person and voting at the Scheme Meeting if the Cover-More Shareholder is entitled to attend and vote. 74 COVER-MORE GROUP LIMITED

78 Lodgement of proxies and queries Proxy forms, powers of attorney and authorities should be sent to Cover-More at the address specified on the enclosed reply paid envelope or to the address specified below: Address: Cover-More Group Limited C/- Link Market Services Limited, Locked Bag A14 Sydney South NSW 1235 Facsimile: Online: Login to the website using the details as shown on the proxy form. Select Voting and follow the prompts to lodge your vote. To use the online voting facility, Cover-More Shareholders will need their Holder Identifier (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the proxy form). Holders of Cover-More Shares should contact the Registry on (within Australia) or (outside Australia) Monday to Friday between 8.30am and 7.30pm (Sydney time) (excluding public holidays) with any queries regarding the number of Cover-More Shares held, how to vote and lodgement of proxy forms. Court approval If the Scheme Resolution is approved at the Scheme Meeting by the Requisite Majorities, the implementation of the Scheme (with or without modification) will be subject, among other things, to the subsequent approval of the Court. SCHEME BOOKLET 75

79 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT 76 COVER-MORE GROUP LIMITED

80 Scheme Implementation Agreement Dated 11 December 2016 Zurich Insurance Company Limited ( Bidder ) Cover-More Group Limited (ACN ) ( Target ) King & Wood Mallesons Level 61 Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Australia T F DX 113 Sydney _17 SCHEME BOOKLET 77

81 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Scheme Implementation Agreement Contents Details 1 General terms 3 1 Definitions and interpretation Definitions General interpretation 12 2 Agreement to propose and implement Scheme Target to propose Scheme Nomination of acquirer Subsidiary Agreement to implement Scheme 13 3 Conditions Precedent Conditions Precedent Reasonable endeavours Regulatory matters FIRB conditions Waiver of Conditions Precedent Notices in relation to Conditions Precedent Consultation on failure of Condition Precedent Failure to agree 18 4 Outline of Scheme Scheme Scheme Consideration Payment of Scheme Consideration Dividends Employee Performance Rights No amendment to the Scheme without consent 19 5 Implementation General obligations Target's obligations Bidder s obligations Scheme Booklet responsibility statement Disagreement on content of Scheme Booklet Verification Conduct of Court proceeding Appeal process Transaction Implementation Committee No partnership or joint venture 26 6 Target Board recommendation Reasonable endeavours Withdrawal or change of recommendation 27 7 Directors and employees Release of Bidder and Bidder Indemnified Parties 27 King & Wood Mallesons _17 Scheme Implementation Agreement 11 December 2016 i 78 COVER-MORE GROUP LIMITED

82 7.2 Benefit for Bidder Indemnified Parties Release of Target and Target Indemnified Parties Benefit for Target Indemnified Parties Appointment/retirement of Target directors Directors' and officers' insurance Period of undertaking Benefit of undertaking for Target Group Bidder acknowledgement regarding insurance 29 8 Conduct of business Overview Specific obligations Prohibited actions Exceptions to conduct of business provisions Access to people and Target Information Change of control 31 9 Exclusivity No existing discussions No-shop No-talk Due diligence information Exceptions Further exceptions Notice of unsolicited approach Matching right Bidder counterproposal Legal advice Target Reimbursement Fee Background Payment by Target to Bidder No amount payable if Scheme becomes Effective Timing of payment Nature of payment Target s limitation of liability Compliance with law Bidder Reimbursement Fee Background Payment by Bidder to Target No amount payable if Scheme becomes Effective Timing of payment Nature of payment Bidder s limitation of liability Representations and warranties Target's representations and warranties Notices in relation to Target s Representations and Warranties Target's indemnity Qualifications on Target Representations and Warranties Bidder s representations and warranties 42 King & Wood Mallesons _17 Scheme Implementation Agreement ii SCHEME BOOKLET 79

83 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued 12.6 Notices in relation to Bidder s Representations and Warranties Bidder s indemnity Qualifications on Bidder Representations and Warranties Termination Termination events Termination Effect of Termination Damages Public announcements Public announcement of Scheme Required disclosure Other announcements Confidential Information Notices and other communications Form Delivery When effective When taken to be received Receipt outside business hours GST Definitions and interpretation GST exclusive Payment of GST Adjustment events Reimbursements No merger Costs Costs Stamp duty and registration fees General Variation and waiver Consents, approvals or waivers Discretion in exercising rights Partial exercising of rights Conflict of interest Remedies cumulative Indemnities and reimbursement obligations Inconsistent law Supervening law Counterparts Entire agreement Further steps No liability for loss Severability Rules of construction Assignment 50 King & Wood Mallesons _17 Scheme Implementation Agreement iii 80 COVER-MORE GROUP LIMITED

84 19.17 Enforceability Foreign resident capital gains withholding No representation or reliance Governing law Governing law and jurisdiction Serving documents Appointment of process agent 51 Schedule 1 Timetable (clause 5.1) 53 Signing page 54 Annexure A Scheme of Arrangement 55 Annexure B Deed Poll 56 King & Wood Mallesons _17 Scheme Implementation Agreement iv SCHEME BOOKLET 81

85 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Scheme Implementation Agreement Details Parties Bidder and Target Bidder Name Zurich Insurance Company Ltd Address Mythenquai 2 CH-8002, Zurich Switzerland Attention Cc: group.legal@zurich.com Group General Counsel Ms Cathy Manolios cathy.manolios@zurich.com.au Target Name Cover-More Group Limited ACN Address Level 2 60 Miller Street North Sydney NSW 2060 Australia Attention Cc: Mark.Steinberg@covermore.com Mark Steinberg Jason Maywald Jason.Maywald@covermore.com Governing law New South Wales Recitals A Target and Bidder have agreed to propose and implement a members scheme of arrangement under Part 5.1 of the Corporations Act. B At the request of Bidder, Target intends to propose the Scheme and issue the Scheme Booklet. King & Wood Mallesons _17 Scheme Implementation Agreement 1 82 COVER-MORE GROUP LIMITED

86 C D Target and Bidder have agreed to implement the Scheme on the terms and conditions of this document. Bidder has agreed that, if Target s Insurance Services Agreement (ISA) with the Australasian branch of Berkshire Hathaway Specialty Insurance Company (BHSI) described in Target s ASX announcement on 9 December 2016 is lawfully terminated by either party without breach by Target, Bidder will provide services similar to those that would have been provided by BHSI had the ISA not been terminated on terms substantially similar to, and not materially less favourable to Target than, the ISA for a term of one year, terminable on giving 6 months written notice which may be served following expiry of the one year term. King & Wood Mallesons _17 Scheme Implementation Agreement 2 SCHEME BOOKLET 83

87 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Scheme Implementation Agreement General terms 1 Definitions and interpretation 1.1 Definitions Unless the contrary intention appears, these meanings apply: ACCC means the Australian Competition and Consumer Commission. ASIC means the Australian Securities & Investments Commission. Associate has the meaning set out in section 12 of the Corporations Act, as if section 12(1) of the Corporations Act included a reference to this document. ASX means ASX Limited or the market operated by it, as the context requires. Authorised Officer means a director or secretary of a party or any other person nominated by a party to act as an Authorised Officer for the purposes of this document. Bidder Board means the board of directors of Bidder. Bidder Confidential Information means all confidential, non-public or proprietary information regardless of how the information is stored or delivered, exchanged between the parties before, on, or after the date of this document relating to the business, technology or other affairs of Bidder. Bidder Group means Bidder and its Subsidiaries. Bidder Indemnified Parties means Bidder, its officers, employees and advisers, its Related Bodies Corporate and the officers, employees and advisers of each of its Related Bodies Corporate. Bidder Information means the information regarding Bidder as is required to be included in the Scheme Booklet under the Corporations Act, Corporations Regulations or ASIC Regulatory Guide 60. Bidder Information does not include information about the Target Group (except to the extent it relates to any statement of intention relating to the Target Group following the Effective Date). Bidder Nominee has the meaning given to that term in clause 2.2. Bidder Reimbursement Fee means the amount equal to 1% of the total Scheme Consideration payable for all the Target Shares under the Scheme (before any reduction for the amount of any Permitted Dividend in accordance with clause 4.4(d)). Bidder Representations and Warranties means the representations and warranties of Bidder set out in clause Business Day means a business day as defined in the Listing Rules. Competing Transaction means a proposal or transaction or arrangement (including by way of takeover bid, scheme of arrangement, capital reduction, sale of assets, sale or issue of securities or joint venture) which, if completed, would mean a person (other than Bidder or its Related Bodies Corporate) whether alone or together with its Associates would: King & Wood Mallesons _17 Scheme Implementation Agreement 3 84 COVER-MORE GROUP LIMITED

88 (a) (b) (c) (d) directly or indirectly, acquire an interest or Relevant Interest in or become the holder of more than 20% of the Target Shares (but not as a custodian, nominee or bare trustee); acquire control of Target, within the meaning of section 50AA of the Corporations Act, or any of the Target s material Subsidiaries; directly or indirectly acquire, obtain a right to acquire, or otherwise obtain an economic interest in all or a material part of the assets of or business conducted by the Target Group otherwise acquire or merge (including by a reverse takeover bid or dual listed company structure) with Target. For the purposes of paragraph (b) above, a Subsidiary of Target will be a material Subsidiary if: (1) the business or assets of the Subsidiary contributes 30% or more of the consolidated net profit after tax of Target; or (2) the business or assets of the Subsidiary represents 30% or more of the total consolidated assets of Target. For the purposes of paragraph (c) above, the acquisition of an interest in the business or assets of Target or any of its Subsidiaries will be material if: (1) the relevant business or assets contributes 30% or more of the consolidated net profit after tax of Target; or (2) the business or assets represents 30% or more of the total consolidated assets of Target. Conditions Precedent means the conditions precedent set out in clause 3.1. Confidentiality Deed means the Confidentiality Deed between the parties dated 18 November Confidential Information means Bidder Confidential Information or Target Confidential Information. Controller has the meaning it has in the Corporations Act. Corporations Act means the Corporations Act 2001 (Cth). Corporations Regulations means the Corporations Regulations 2001 (Cth). Costs includes costs, charges and expenses, including those incurred in connection with advisers and any legal costs on a full indemnity basis. Court means the Federal Court of Australia, or such other court of competent jurisdiction under the Corporations Act agreed by the parties. Court Documents means the documents required for the purposes of a Court Hearing, including (as applicable) originating process, affidavits, submissions and draft minutes of Court orders. Court Hearing means the First Court Hearing or Second Court Hearing (as applicable), and Court Hearings means both of them. Deed Poll means a deed poll substantially in the form of Annexure B to this document, or as otherwise agreed by Bidder and Target. King & Wood Mallesons _17 Scheme Implementation Agreement 4 SCHEME BOOKLET 85

89 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Details means the section of this document headed Details. Disclosed means fairly disclosed: (a) (b) in the Disclosure Materials; or in any announcement made by Target on ASX prior to the date of this document. Disclosure Letter means the letter so entitled from Target addressed to Bidder and provided to the Bidder prior to 2pm on Sunday, 11 December Disclosure Materials means the information in relation to the Target Group disclosed in writing by or on behalf of Target to Bidder and its Representatives, in: (a) (b) (c) the documents and information contained in the Intralinks online data room ( Online Data Room ) to which Bidder and its Representatives were given access prior to 7:00pm on Thursday, 8 December 2016; any written answers to requests for further information made by Bidder and its Representatives as contained in the Online Data Room prior to 7:00pm on Thursday, 8 December 2016; and the Disclosure Letter. Effective, when used in relation to the Scheme, means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) in relation to the Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC. Effective Date means the date on which the Scheme becomes Effective. Employee Performance Right means a Performance Right issued under the LTIP. Encumbrance means any security for the payment of money or performance of obligations, including a mortgage, charge, lien, pledge, trust, power or title retention or flawed deposit arrangement and any security interest as defined in sections 12(1) or 12(2) of the PPSA or any agreement to create any of them or allow them to exist. End Date means 30 June 2017 or such other date as is agreed by Bidder and Target. Excluded Information means Confidential Information which: (a) (b) (c) is in or becomes part of the public domain other than through breach of this document or an obligation of confidence owed to the party providing the Confidential Information; or the recipient of the Confidential Information can prove by contemporaneous written documentation was already known to it at the time of disclosure by the party providing the Confidential Information (unless such knowledge arose from disclosure of information in breach of an obligation of confidentiality); or the recipient of the Confidential Information acquires from a source other than the party providing the Confidential Information or any Representative of the party providing the Confidential Information where such source is entitled to disclose it. King & Wood Mallesons _17 Scheme Implementation Agreement 5 86 COVER-MORE GROUP LIMITED

90 Exclusivity Period means the period from and including the date of this document to the earlier of: (a) (b) the termination of this document in accordance with its terms; and the End Date. FIRB Act means the Foreign Acquisitions and Takeovers Act 1975 (Cth). First Court Date means the first day on which an application made to the Court, in accordance with clause 5.2(h), for orders under section 411(1) of the Corporations Act convening the Scheme Meeting is heard (or if the application is adjourned or subject to appeal for any reason, the day on which the adjourned application is heard) with such hearing being the First Court Hearing. FSMA means Financial Services and Markets Act (2000) (UK). Implementation Date means the 5 th Business Day following the Record Date or such other date as Target and Bidder agree. Incoming Directors means the persons nominated in writing to Target by Bidder no later than 5 Business Days before the Implementation Date. Independent Expert means the independent expert appointed by the Target under clause 5.2(c), being KPMG Financial Advisory Services (Australia) Pty Ltd (of which KPMG Corporate Finance is a division). Independent Expert s Report means the report from the Independent Expert for inclusion in the Scheme Booklet, including any update or supplementary report, stating whether or not in the Independent Expert s opinion the Scheme is in the best interests of Target Shareholders. A person is Insolvent if: (a) (b) (c) (d) (e) (f) (g) it is (or states that it is) an insolvent under administration or insolvent (each as defined in the Corporations Act); or it is in liquidation, in provisional liquidation, under administration or wound up or has had a Controller appointed to any part of its property; or it is subject to any arrangement, assignment, moratorium or composition, protected from creditors under any statute or dissolved (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by the other parties to this document); or an application or order has been made (and in the case of an application, it is not stayed, withdrawn or dismissed within 14 days), resolution passed, proposal put forward, or any other action taken, in each case in connection with that person, which is preparatory to or could result in any of the things described in paragraphs (a), (b) or (c); it is taken (under section 459F(1) of the Corporations Act) to have failed to comply with a statutory demand; or it is the subject of an event described in section 459C(2)(b) or section 585 of the Corporations Act (or it makes a statement from which another party to this document reasonably deduces it is so subject); or it is otherwise unable to pay its debts when they fall due; or King & Wood Mallesons _17 Scheme Implementation Agreement 6 SCHEME BOOKLET 87

91 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (h) something having a substantially similar effect to (a) to (g) happens in connection with that person under the law of any jurisdiction. Listing Rules means the Listing Rules of ASX and any other applicable rules of ASX modified to the extent of any express written waiver by ASX. Losses means all claims, demands, damages, losses, costs, expenses and liabilities. LTIP means the Cover-More Group Limited Long Term Incentive Plan operated by the Target and adopted by the Target Board on 12 June Material Contract means: (a) (b) (c) any underwriting agreement; a contract or commitment (or a group of related contracts or commitments with the same party or group of related parties or relating to the same matter or project) involving annual revenue or annual expenditure in excess of $10,000,000; or a contract or commitment agreeing to, or accepting, a restraint of trade undertaking applicable to the conduct of the business of the Target Group. Outgoing Directors means the Target Directors advised in writing to Target by Bidder no later than 5 Business Days before the Implementation Date. Permitted Dividend means an interim dividend and/or special dividend (which may be franked) declared or determined by Target Board, provided that the maximum aggregate amount paid or payable by Target per Target Share in respect of all such dividends is A$0.05 per Target Share. Post-End Date Dividend means one or more dividends declared or determined by Target Board in respect of the period 1 January 2017 to 30 June 2017, provided that the maximum aggregate amount paid or payable by Target per Target Share in respect of all such dividends is A$0.05 per Target Share. PPSA means the Personal Property Securities Act 2009 (Cth). Recommendation has the meaning given to that term in clause 6.1. Record Date means 5.00pm on the 5th Business Day following the Effective Date or such other date as Target and Bidder agree. Register means the share register of Target and Registry has a corresponding meaning. Regulator s Draft has the meaning given to that term in clause 5.2(f). Regulatory Approval means a waiver, consent or approval of a Regulatory Authority in connection with the Scheme. Regulatory Authority includes: (a) (b) ASX, ACCC, ASIC and the Takeovers Panel; a government or governmental, semi-governmental or judicial entity or authority; King & Wood Mallesons _17 Scheme Implementation Agreement 7 88 COVER-MORE GROUP LIMITED

92 (c) (d) a minister, department, office, commission, delegate, instrumentality, agency, board, authority or organisation of any government; and any regulatory organisation established under statute. Regulatory Review Period means the period from the date on which the Regulator s Draft is submitted to ASIC to the date on which ASIC confirms that it does not intend to make any submissions at the Court hearing on the First Court Date or otherwise object to the Scheme. Related Body Corporate has the meaning it has in the Corporations Act. Relevant Employee means any executive or employee of the Target Group whose annual base salary exceeds A$250,000 per annum, and any Target Director. Relevant Interest has the meaning it has in sections 608 and 609 of the Corporations Act. Representative means, in relation to a party: (a) (b) (c) a Related Body Corporate; a director, officer or employee of the party or any of the party s Related Bodies Corporate; or an adviser to the party or any of the party s Related Bodies Corporate, where an adviser means, in relation to an entity, a financier, financial adviser, corporate adviser, legal adviser, or technical or other expert adviser or consultant who provides advisory services in a professional capacity and who has been engaged by that entity. Scheme means the scheme of arrangement under part 5.1 of the Corporations Act under which all the Target Shares will be transferred to Bidder substantially in the form of Annexure A or as otherwise agreed by Bidder and Target, together with any amendment or modification made pursuant to section 411(6) of the Corporations Act. Scheme Booklet means, in respect of the Scheme, the information booklet to be approved by the Court and despatched to Target Shareholders which includes the Scheme, an explanatory statement complying with the requirements of the Corporations Act and notices of meeting and proxy forms. Scheme Consideration means the consideration payable by Bidder (or the Bidder Nominee) for the transfer of Target Shares held by a Scheme Participant to Bidder (or the Bidder Nominee), being, in respect of each Target Share, $1.95 less the amount of the Permitted Dividend paid in respect of the Target Share in accordance with clause 4.4(d). Scheme Meeting means the meeting to be convened by the Court at which Target Shareholders will vote on the Scheme. Scheme Participants means each person who is a Target Shareholder at the Record Date. Second Court Date means the day on which the Court makes an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme (or if the application is adjourned or subject to appeal for any reason, the day on which the adjourned application is heard), with such hearing being the Second Court Hearing. King & Wood Mallesons _17 Scheme Implementation Agreement 8 SCHEME BOOKLET 89

93 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Subsidiary of an entity means another entity which: (a) (b) is a subsidiary of the first entity within the meaning of the Corporations Act; and is part of a consolidated entity constituted by the first entity and the entities it is required to include in the consolidated financial statements it prepares, or would be if the first entity was required to prepare consolidated financial statements. Superior Proposal means a bona fide Competing Transaction which the Target Board, acting in good faith, and after taking written advice from its legal advisers and advice from its financial advisers, determines: (a) (b) (c) is reasonably capable of being completed taking into account all aspects of the Competing Transaction, including its conditions, the identity, reputation and financial condition of the person making such proposal, and legal, regulatory and financial matters; and is of a higher financial value to Target Shareholders and would, if completed substantially in accordance with its terms, be more likely than not to result in a transaction that is more favourable to Target Shareholders than the Scheme, taking into account all aspects of the Competing Transaction as compared to the Scheme, including consideration (including the nature or form of the consideration), conditionality (including the nature and status of outstanding Conditions Precedent and whether those Conditions Precedent are likely to be satisfied or waived), funding, certainty and timing; and is necessary for the Target Board to pursue, accept or recommend because failing to do so would be reasonably likely to constitute a breach of the Target Board s fiduciary or statutory obligations, provided that if the Target Board has received written advice from the Target s legal advisers (who must be reputable and experienced in transactions of this nature) that requiring the Competing Transaction to have a higher financial value to Target Shareholders, as an essential element, in order to be a Superior Proposal would be reasonably likely to constitute a breach of the Target Board s fiduciary or statutory obligations in the relevant circumstances, then the Target Board may determine that a bona fide Competing Transaction is a Superior Proposal if it otherwise satisfies the criteria set out above (with financial value to Target Shareholders being one of the factors for consideration by the Target Board). Target Board means the board of directors of Target. Target Confidential Information means all confidential, non-public or proprietary information regardless of how the information is stored or delivered, exchanged between the parties before, on or after the date of this document relating to the business, technology or other affairs of Target. Target Constitution means the constitution of Target. Target Group means Target and its Subsidiaries. Target Indemnified Parties means Target, its officers, employees, and advisers and its Related Bodies Corporate and the officers, employees and advisers of each of its Related Bodies Corporate. Target Information means all information contained in the Scheme Booklet other than the Bidder Information, the Independent Expert s Report and any King & Wood Mallesons _17 Scheme Implementation Agreement 9 90 COVER-MORE GROUP LIMITED

94 information in respect of which a statement that a third party assumes responsibility for that information is included in the Scheme Booklet. Target Prescribed Event means, except to the extent contemplated by this document or the Scheme, any of the following events: (a) (b) (c) (conversion) Target converts all or any of its shares into a larger or smaller number of shares; (reduction of share capital) Target or another member of the Target Group resolves to reduce its share capital in any way or resolves to reclassify, combine, split or redeem or repurchase directly or indirectly any of its shares; (buy-back) Target or another member of the Target Group: (i) (ii) enters into a buy-back agreement; or resolves to approve the terms of a buy-back agreement under the Corporations Act; (d) (e) (distribution) Target makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie) except for the Permitted Dividend and (to the extent permitted by clause 4.4(c)) the Post-End Date Dividend; (issuing or granting shares or options) any member of the Target Group: (i) (ii) (iii) issues shares; grants an option over its shares; or agrees to make such an issue or grant such an option, in each case to a person outside the Target Group, other than an issue of shares pursuant to the granting of (or in satisfaction of) an Employee Performance Right under the LTIP as permitted by clause 4.5; (f) (g) (h) (i) (securities or other instruments) any member of the Target Group issues or agrees to issue securities or other instruments convertible into shares or debt securities (other than the type of securities described in paragraph (e) above) in each case to a person outside the Target Group; (constitution) Target adopts a new constitution or modifies or repeals its constitution or a provision of it; (disposals) any member of the Target Group disposes, or agrees to dispose of the whole or a substantial part of its business or property; (acquisitions, disposals or tenders) any member of the Target Group, in a single transaction or series of related transactions: (i) (ii) (iii) acquires or disposes of; agrees to acquire or dispose of; or offers, proposes, announces a bid or tenders for, King & Wood Mallesons _17 Scheme Implementation Agreement 10 SCHEME BOOKLET 91

95 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued any assets, other than equipment and business supplies in the ordinary course of the Target Group s business, or any business, entity or undertaking; (j) (Encumbrances) any member of the Target Group creates, or agrees to create, any Encumbrance over the whole or a substantial part of its business or property, other than: (i) (ii) any security required in connection with the Westpac Facility; or a lien which arises by operation of law or legislation or arises in the ordinary course of the Target Group s business; (k) (l) (loss of distribution agreements) any person validly exercising any rights under a distribution agreement to which a member of the Target Group is a party, which results, or could reasonably be expected to result, either individually or when aggregated with any other similar occurrences or events, in the loss or reduction in the value of EBITDA of the Target Group of at least $4,500,000, provided that if the term of any such distribution agreement expires or lapses in accordance with the terms of that agreement, or any such distribution agreement is terminated but the parties to it enter into a replacement agreement on terms no less favourable to the relevant member of the Target Group, those occurrences will not be taken into account in calculating whether the above threshold has been reached; (Insolvency) Target or any of its Related Bodies Corporate becomes Insolvent, provided that a Target Prescribed Event listed in items (a) to (k) will not occur where: (m) (n) Target has first consulted with Bidder in relation to the event and Bidder has approved the proposed event in writing (and the Bidder will consider in good faith, acting reasonably, any request for consent for the Target Group to proceed with any transaction that would constitute a Target Prescribed Event listed in item (i) where Target has provided reasonable details of the proposed transaction and its material terms in writing to the Bidder); or the relevant fact, matter or circumstance that would otherwise give rise to the Target Prescribed Event has been Disclosed. Target Reimbursement Fee means the amount equal to 1% of the total Scheme Consideration payable for all the Target Shares under the Scheme (before any reduction for the amount of any Permitted Dividend in accordance with clause 4.4(d)). Target Representations and Warranties means the representations and warranties of Target set out in clauses 9.1 and Target Share means an ordinary fully paid share in the capital of Target. Target Shareholder means each person registered in the Register as a holder of Target Shares. Tax Act means the Income Tax Assessment Act 1936 (Cth) or the Income Tax Assessment Act 1997 (Cth), or both as the context requires. Tax Authority means any government agency responsible for the imposition, collection or recovery of any Tax. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

96 Taxes means taxes, levies, imposts, charges and duties (including stamp and transaction duties) paid, payable or assessed as being payable by any authority together with any fines, penalties and interest in connection with them. Timetable means the timetable set out in Schedule. Transaction Implementation Committee means a committee to be made up of: (a) (b) Cathy Manolios; and Mark Steinberg; and such other persons as the parties may agree from time to time. Treasurer means the Treasurer of Australia. Westpac Facility means the agreement entitled Senior Facilities Agreement dated 20 December 2010 between Travel Assist Pty Limited and others, and Westpac Banking Corporation and others, as amended and restated on or about 3 October 2012, 21 December 2012, 24 September 2013, 2 December 2013, 21 December 2015, 18 October 2016 and 15 November 2016 between Target, Cover-More Finance Pty Limited (ACN ), Travel Assist Pty Ltd (ABN ), Travel Insurance Partners Pty Limited (ABN ), Cover-More Insurance Services Pty Ltd (ABN ), Westpac Banking Corporation (ABN ), Westpac Administration Pty Limited (ABN ) and others, a copy of which has been Disclosed in the Disclosure Materials. Zurich Australia means Zurich Financial Services Australia Limited (ACN ). 1.2 General interpretation Headings and labels used for definitions are for convenience only and do not affect interpretation. Unless the contrary intention appears, in this document: (a) (b) (c) (d) (e) (f) (g) (h) the singular includes the plural and vice versa; a reference to a document includes any agreement or other legally enforceable arrangement created by it (whether the document is in the form of an agreement, deed or otherwise); a reference to a document also includes any variation, replacement or novation of it; the meaning of general words is not limited by specific examples introduced by including, for example, such as or similar expressions; a reference to person includes an individual, a body corporate, a partnership, a joint venture, an unincorporated association and an authority or any other entity or organisation; a reference to a particular person includes the person s executors, administrators, successors, substitutes (including persons taking by novation) and assigns; a reference to a time of day is a reference to Sydney time; a reference to dollars, $ or A$ is a reference to the currency of Australia; King & Wood Mallesons _17 Scheme Implementation Agreement 12 SCHEME BOOKLET 93

97 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (i) (j) (k) (l) (m) a reference to law includes common law, principles of equity and legislation (including regulations); a reference to any legislation includes regulations under it and any consolidations, amendments, re-enactments or replacements of any of them; a reference to regulations includes instruments of a legislative character under legislation (such as regulations, rules, by-laws, ordinances and proclamations); a reference to a group of persons is a reference to any 2 or more of them jointly and to each of them individually; and a reference to any thing (including an amount) is a reference to the whole and each part of it. 2 Agreement to propose and implement Scheme 2.1 Target to propose Scheme Target agrees to propose the Scheme on and subject to the terms and conditions of this document. 2.2 Nomination of acquirer Subsidiary At any time prior to the Business Day before the First Court Date, Bidder may nominate any wholly-owned Subsidiary of Bidder ( Bidder Nominee ) to acquire Target Shares under the Scheme by providing a written notice which sets out the details of Bidder Nominee to Target. If Bidder decides to nominate Bidder Nominee to acquire Target Shares: (a) (b) (c) the parties must procure that the Target Shares transferred under the Scheme are transferred to Bidder Nominee rather than Bidder; Bidder must procure that Bidder Nominee complies with all of the relevant obligations of Bidder under this document and the Deed Poll; and any such nomination will not relieve Bidder of its obligations under this document, including the obligation to pay (or procure the payment by Bidder Nominee of) the Scheme Consideration in accordance with the terms of the Scheme. 2.3 Agreement to implement Scheme The parties agree to implement the Scheme on the terms and conditions of this document. 3 Conditions Precedent 3.1 Conditions Precedent Subject to this clause 3, the Scheme will not become Effective, and the respective obligations of the parties to complete the implementation of the Scheme (including the obligations of the Bidder under clause 4.3) are not binding, until and unless each of the following Conditions Precedent are satisfied or waived to the extent and in the manner set out in this clause 3. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

98 Condition Precedent Party entitled to benefit Party responsible (a) (FIRB approval) before 5.00pm on the Business Day before the Second Court Date either: Cannot be waived Bidder (i) the Treasurer (or the Treasurer s delegate) has provided a written no objection notification to the Scheme either without conditions or with conditions acceptable to Bidder (acting reasonably); or (ii) following notice of the proposed Scheme having been given by Bidder to the Treasurer under the FIRB Act, the Treasurer has ceased to be empowered to make any order under Part 3 of the FIRB Act because the applicable time limit on making orders and decisions under the FIRB Act has expired. (b) (Shareholder approval) Target Shareholders approve the Scheme by the requisite majorities in accordance with the Corporations Act, except to the extent the Court orders otherwise under section 411(4)(a)(ii)(A) of the Corporations Act. Cannot be waived Target (c) (Court approval) the Court approves the Scheme in accordance with section 411(4)(b) of the Corporations Act. Cannot be waived Target (d) (Other Regulatory Approvals) before 8.00am on the Second Court Date: Bidder Both (i) the waiting period applicable to the transactions contemplated by this document under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the associated rules and regulation, have expired (or early termination has been granted by the Federal Trade Commission); (ii) the Financial Conduct Authority ( FCA ) has given written notice (and such notice not having expired or withdrawn) in accordance with: (A) section 189(4) of FSMA that it approves unconditionally the Bidder and any other person who would, on Implementation, become a controller (as defined in the FSMA) of the Target as a consequence of their King & Wood Mallesons _17 Scheme Implementation Agreement 14 SCHEME BOOKLET 95

99 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Condition Precedent relationship with the Bidder, parent undertakings of the Bidder or otherwise (in each case, an Additional Controller ) acquiring control of the Target pursuant to this document; or Party entitled to benefit Party responsible (B) section 189(7) of FSMA that it approves the Bidder and any Additional Controller acquiring control of the Target pursuant to this document subject to conditions and those conditions are satisfactory to the Bidder. (e) (Regulatory intervention) no Court or Regulatory Authority has issued or announced that it has taken steps to issue an order, temporary restraining order, preliminary or permanent injunction, decree or ruling or taken any action enjoining, restraining or otherwise imposing a legal restraint or prohibition preventing the Scheme and no such order, decree, ruling, other action or refusal is in effect as at 8.00am on the Second Court Date. Bidder Both (f) (No Target Prescribed Event) no Target Prescribed Event occurs between the date of this document and 8.00am on the Second Court Date. Bidder Target 3.2 Reasonable endeavours Each of Target and Bidder agree to use reasonable endeavours to procure that: (a) each of the Conditions Precedent for which it is a party responsible (as noted in clause 3.1): (i) (ii) is satisfied as soon as practicable after the date of this document; and continues to be satisfied at all times until the last time it is to be satisfied (as the case may require); and (b) there is no occurrence that would prevent the Condition Precedent for which it is a party responsible being satisfied. 3.3 Regulatory matters (a) Without limiting clause 3.2: (i) (applying for Regulatory Approvals Bidder) Bidder must promptly apply for all relevant Regulatory Approvals contemplated by the Conditions Precedent in clauses 3.1(a) and King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

100 (d) and provide the Target with a copy of those applications (provided that any commercially sensitive information may be redacted from the copy provided); (ii) (iii) (Regulatory Approvals process) each party must take all steps it is responsible for as part of the applicable approval or consent process in respect of the relevant Regulatory Approvals, including responding to requests for information at the earliest practicable time; (representation) each party acknowledges and agrees that the other party has the right to be represented and make submissions at any meeting with any Regulatory Authority relating to a Regulatory Approval; (b) Without limiting clause 3.2, each party: (i) (consultation) must consult with the other party in advance in relation to all material communications (whether written or oral, and whether direct or via a Representative) with any Regulatory Authority relating to any approval or consent required to satisfy a Condition Precedent, or any action taken or proposed by, or any enquiries made by, a Regulatory Authority in relation to the Scheme ( Regulatory Matters ) and: (A) (B) provide the other party with drafts of any material written communications to be sent to a Regulatory Authority and taking any reasonable comments made by the other party into account in good faith when making any amendments; and provide copies of any material written communications sent to or received from a Regulatory Authority to the other party promptly upon despatch or receipt (as the case may be), in each case to the extent it is reasonable to do so; and (ii) (Regulatory Authority) subject to the terms of the applicable Condition Precedent, must promptly offer to the relevant Regulatory Authority, and agree or accept, all undertakings, commitments and conditions reasonably necessary or appropriate in order to obtain the approval or consent (as the case may be) as soon as possible, unless it would be unreasonable to do so. 3.4 FIRB conditions The parties acknowledge that the standard tax conditions issued by FIRB from time to time are acceptable if included in the no objections notifications. 3.5 Waiver of Conditions Precedent (a) A Condition Precedent may only be waived in writing by the party or parties entitled to the benefit of that Condition Precedent as noted in clause 3.1 and will be effective only to the extent specifically set out in that waiver. (b) A party entitled to waive the breach or non-fulfilment of a Condition Precedent under this clause 3.5 may do so in its absolute discretion. King & Wood Mallesons _17 Scheme Implementation Agreement 16 SCHEME BOOKLET 97

101 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (c) If either Target or Bidder waives the breach or non-fulfilment of a Condition Precedent in accordance with this clause 3.5, then: (i) (ii) subject to clause 3.5(c)(ii), that waiver precludes that party from suing the other for any breach of this document arising as a result of the breach or non-fulfilment of that Condition Precedent or arising from the same event which gave rise to the breach or non-fulfilment of that Condition Precedent; but if the waiver of the Condition Precedent is itself conditional and the other party: (A) (B) accepts the condition, the terms of that condition apply notwithstanding any inconsistency with clause 3.5(c)(i); or does not accept the condition, the Condition Precedent has not been waived. (d) A waiver of a breach or non-fulfilment in respect of a Condition Precedent does not constitute: (i) (ii) a waiver of a breach or non-fulfilment of any other Condition Precedent arising from the same event; or a waiver of a breach or non-fulfilment of that Condition Precedent resulting from any other event. 3.6 Notices in relation to Conditions Precedent Each party must: (a) (b) (c) (notice of satisfaction) promptly notify the other party of the satisfaction of a Condition Precedent, and must keep the other party informed of any material development of which it becomes aware that may lead to the breach or non-fulfilment of a Condition Precedent; (notice of failure) immediately give written notice to the other of a breach or non-fulfilment of a Condition Precedent, or of any event which will prevent a Condition Precedent being satisfied; and (notice of waiver) upon receipt of a notice given under clause 3.6(b), give written notice to the other party as soon as possible (and in any event before 5.00pm on the day before the Second Court Date) as to whether or not it waives the breach or non-fulfilment of any Condition Precedent resulting from the occurrence of that event, specifying the Condition Precedent in question. 3.7 Consultation on failure of Condition Precedent If: (a) (b) there is a breach or non-fulfilment of a Condition Precedent which is not waived in accordance with this document by the time or date specified in this document for the satisfaction of the Condition Precedent; there is an act, failure to act or occurrence which will prevent a Condition Precedent being satisfied by the time or date specified in this document for the satisfaction of the Condition Precedent (and the breach or nonfulfilment which would otherwise occur has not already been waived in accordance with this document); or King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

102 (c) the Scheme has not become Effective by the End Date, the parties must consult in good faith with a view to determine whether: (d) (e) (f) the Scheme may proceed by way of alternative means or methods; to extend the relevant time for satisfaction of the Condition Precedent or to adjourn or change the date of an application to the Court; or to extend the End Date. 3.8 Failure to agree If the parties are unable to reach agreement under clause 3.7 within 5 Business Days (or any shorter period ending at 5.00pm on the day before the Second Court Date): (a) (b) subject to clause 3.8(b), either party may terminate this document (and that termination will be in accordance with clause 13.1(h)(i)); or if a Condition Precedent may be waived and exists for the benefit of one party only, that party only may waive that Condition Precedent or terminate this document (and that termination will be in accordance with clause 13.1(h)(ii)), in each case before 8.00am on the Second Court Date. However, a party will not be entitled to terminate this document under this clause 3.8 if the relevant Condition Precedent has not been satisfied or agreement cannot be reached as a result of a breach of this document by that party or a deliberate act or omission of that party. 4 Outline of Scheme 4.1 Scheme Target must propose a scheme of arrangement under which: (a) (b) all of the Target Shares held by Scheme Participants at the Record Date will be transferred to Bidder (or if applicable, Bidder Nominee); and each Scheme Participant will be entitled to receive the Scheme Consideration. 4.2 Scheme Consideration Subject to and in accordance with this document and the Scheme, each Scheme Participant is entitled to receive the Scheme Consideration in respect of each Target Share held by that Scheme Participant at the Record Date. 4.3 Payment of Scheme Consideration Subject to this document and the Scheme, Bidder undertakes to Target (in its own right and separately as trustee or nominee of each Scheme Participant) that, in consideration of the transfer to Bidder of each Target Share held by a Scheme Participant, Bidder will, on the Implementation Date: (a) (b) accept (or if applicable, cause Bidder Nominee to accept) that transfer; and pay or procure the payment of the Scheme Consideration in accordance with the Scheme. King & Wood Mallesons _17 Scheme Implementation Agreement 18 SCHEME BOOKLET 99

103 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Where the calculation of the Scheme Consideration to be provided to a particular Scheme Participant would result in the Scheme Participant becoming entitled to a fraction of a cent, the fractional entitlement will be rounded up or down (as applicable) to the nearest cent. 4.4 Dividends (a) Bidder acknowledges and agrees that, at any time on or before the Implementation Date, Target may announce, declare and pay a Permitted Dividend. (b) (c) (d) (e) Target may frank a Permitted Dividend but only to the extent that it does not cause Target s franking account to be in deficit (as defined in section (2) of the Tax Act). Target must provide Bidder with any information pertaining to the franking position of Target that is reasonably requested by Bidder at any time. If Target announces, declares and/or pays a Permitted Dividend in accordance with clause 4.4(a), the Scheme Consideration per Target Share will be reduced by the aggregate amount per Target Share of the Permitted Dividend. Bidder acknowledges and agrees that if the Scheme has not become Effective by the End Date, and the delay in implementing the Scheme by that End Date is not as a result of a breach of this document by Target or a deliberate act or omission by Target, and the parties agree to extend the End Date, then Target may announce, declare and pay a Post-End Date Dividend, and the Scheme Consideration per Target Share will not be reduced by the aggregate amount per Target Share of the Post-End Date Dividend. Any Post-End Date Dividend may also be franked by Target, but only to the extent that it does not cause the Target s franking account to be in deficit (as defined in section (2) of the Tax Act). 4.5 Employee Performance Rights (a) Target must ensure that, by no later than the Record Date, there are no outstanding Employee Performance Rights. (b) In order to comply with its obligation under clause 4.5(a), Target must: (i) (ii) to the extent Disclosed to Bidder, cause 1,164,145 outstanding Employee Performance Rights to vest in accordance with the LTIP rules (but subject to the Scheme becoming Effective) and, following such vesting, cause 1,164,145 Target Shares to be transferred or issued to the relevant former holders of the relevant Employee Performance Rights in sufficient time to allow those relevant former holders to participate in the Scheme; and take such action as may be necessary to cancel all outstanding Employee Performance Rights (subject to the Scheme becoming Effective) which it does not cause to vest in accordance with clause 4.5(b)(i). 4.6 No amendment to the Scheme without consent Target must not consent to any modification of, or amendment to, or the making or imposition by the Court of any condition in respect of, the Scheme without the prior written consent of Bidder (not to be unreasonably withheld or delayed). King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

104 5 Implementation 5.1 General obligations Target and Bidder must each: (a) (b) use all reasonable endeavours and commit reasonably necessary resources (including management and corporate relations resources and the resources of external advisers); and procure that its officers and advisers work in good faith and in a timely and co-operative fashion with the other party (including by attending meetings and by providing information), to produce the Scheme Booklet and implement the Scheme as soon as reasonably practicable and in accordance with the Timetable. 5.2 Target's obligations Target must take all reasonable steps to implement the Scheme on a basis consistent with this document and as soon as reasonably practicable, and in particular must: (a) (announce directors' recommendation) following execution of this document, announce (on the basis of statements made to Target by each member of the Target Board) that: (i) (ii) the Target Board intends to unanimously recommend to Scheme Participants that the Scheme be approved; and each Target Board member who holds Target Shares, intends to vote his or her Target Shares in favour of the Scheme, subject to: (iii) (iv) the Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Target Shareholders; and there being no Superior Proposal. (b) (preparation of Scheme Booklet) subject to clause 5.2(e)(i), as soon as practicable after the date of this document, prepare (other than the Bidder Information and the Independent Expert s Report) and despatch the Scheme Booklet: (i) (ii) in accordance with all applicable laws, including the Corporations Act, Corporations Regulations, ASIC Regulatory Guide 60 and the Listing Rules; and which includes a statement by the Target Board: (A) (B) unanimously recommending that Target Shareholders vote in favour of the Scheme subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Target Shareholders and there being no Superior Proposal; and that each Target Board member who holds Target Shares intends to vote his or her Target Shares in favour of the Scheme subject to the Independent Expert continuing to conclude that the Scheme is in the best King & Wood Mallesons _17 Scheme Implementation Agreement 20 SCHEME BOOKLET 101

105 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued interests of Target Shareholders and there being no Superior Proposal; (c) (d) (e) (Independent Expert) promptly appoint the Independent Expert and provide any assistance and information reasonably requested by the Independent Expert to enable the Independent Expert to prepare the Independent Expert s Report as soon as practicable; (section 411(17)(b) statement) apply to ASIC for the production of a statement pursuant to section 411(17)(b) of the Corporations Act stating that ASIC has no objection to the Scheme; (consultation with Bidder) consult with Bidder as to the content and presentation of: (i) the Scheme Booklet, which includes: (A) (B) (C) (D) providing Bidder with drafts of the Scheme Booklet in a timely manner, and allowing Bidder a reasonable opportunity to review and make comments on drafts of the Scheme Booklet (accepting that any review of the Independent Expert s Report is limited to review for factual accuracy including of those parts that include information relating to Bidder); acting reasonably and in good faith, taking any reasonable comments made by Bidder and its Representatives on those drafts into account in good faith when producing a revised draft of the Scheme Booklet, provided that such comments are provided to Target in a timely manner (however, in relation to the Independent Expert s Report, Target makes no representation as to the extent to which the Independent Expert will receive or consider those comments); providing to Bidder a revised draft of the Scheme Booklet within a reasonable time before the draft of the Scheme Booklet which is provided to ASIC for approval pursuant to section 411(2) of the Corporations Act is finalised; and obtaining Bidder s consent to the inclusion of the Bidder Information (including in respect of the form and context in which the Bidder Information appears in the Scheme Booklet) in accordance with clause 5.3(b); and (ii) documents required for the purposes of the Court hearings held for the purposes of sections 411(1) and 411(4)(b) of the Corporations Act in relation to the Scheme (including originating processes, affidavits, submissions and draft minutes of Court orders), which includes providing Bidder with drafts of those documents in a timely manner, and considering in good faith and acting reasonably, any reasonable comments on, or suggested amendments to, those documents from Bidder or its Representatives prior to filing those documents with the Court; (f) (lodgement of Regulator s Draft) (i) no later than 14 days before the First Court Date, provide an advanced draft of the Scheme Booklet ( Regulator s Draft ) to King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

106 ASIC for its review for the purposes of section 411(2) of the Corporations Act, and provide a copy of the Regulator s Draft to Bidder immediately thereafter (for the avoidance of doubt, Target will not be deemed to have breached its obligation to use reasonable endeavours under this clause 5.2(f) if it has used reasonable endeavours in respect of matters reasonably within the control of Target and will not be deemed to have breached this clause 5.2(f) to the extent that Bidder, Bidder Group, a Representative of Bidder or the Independent Expert has caused or contributed to the failure of Target to lodge the Regulator s Draft with ASIC by the required time); and (ii) keep Bidder reasonably informed of any material issues raised by ASIC in relation to the Regulator s Draft and, where practical to do so, consult with Bidder in good faith prior to taking any steps or actions to address those material issues (provided that, where those issues relate to Bidder Information, Target must not take any steps to address them without Bidder s prior written consent, not to be unreasonably withheld); (g) (supplementary disclosure) if, after despatch of the Scheme Booklet, Target becomes aware: (i) (ii) that information included in the Scheme Booklet is or has become misleading or deceptive in any material respect (whether by omission or otherwise); or of information that is required to be disclosed to Target Shareholders under any applicable law but was not included in the Scheme Booklet, promptly consult with Bidder in good faith as to the need for, and the form of, any supplementary disclosure to Target Shareholders, and make any disclosure that Target considers reasonably necessary in the circumstances, having regard to applicable laws and to ensure that there would be no breach of clause 12.1(g) if it applied as at the date that information arose; (h) (Court application) apply to the Court for an order under section 411(1) of the Corporations Act directing Target to convene the Scheme Meeting; (i) (j) (k) (l) (send Scheme Booklet) send the Scheme Booklet to Target Shareholders as soon as practicable after the Court orders Target to convene the Scheme Meeting; (Scheme Meeting) convene the Scheme Meeting to agree to the Scheme in accordance with any orders made by the Court pursuant to section 411(1) of the Corporations Act; (director s voting) use its reasonable endeavours to procure that each member of the Target Board votes any Target Shares in which they have a Relevant Interest in favour of the Scheme at the Scheme Meeting; (Court approval) subject to all Conditions Precedent, other than the Condition Precedent in paragraph (c) in clause 3.1, being satisfied or waived in accordance with this document, apply to the Court for an order approving the Scheme in accordance with sections 411(4)(b) and 411(6) of the Corporations Act; King & Wood Mallesons _17 Scheme Implementation Agreement 22 SCHEME BOOKLET 103

107 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (m) (Conditions Precedent certificate) at the hearing on the Second Court Date, provide to the Court (through its counsel): (i) (ii) a certificate confirming (in respect of matters within Target s knowledge) whether or not the Conditions Precedent for which it is responsible, as noted in clause 3.1 (other than paragraph (c)), have been satisfied or waived in accordance with clause 3, a draft of which must be provided to Bidder by 5.00pm on the Business Day prior to the Second Court Date; and any certificate provided to it by Bidder under clause 5.3(g); (n) (o) (p) (lodge copy of Court order) lodge with ASIC an office copy of the Court order approving the Scheme as approved by the Target Shareholders at the Scheme Meeting in accordance with section 411(10) of the Corporations Act no later than the day after that office copy is received (or any later date agreed in writing by Bidder); (Register) close the Register as at the Record Date to determine the identity of Scheme Participants and their entitlements to Scheme Consideration; (instruments of transfer) subject to Bidder satisfying its obligations under clause 4.3, on the Implementation Date: (i) (ii) execute proper instruments of transfer and effect the transfer of Target Shares to Bidder (or Bidder Nominee) in accordance with the Scheme; and register all transfers of Target Shares held by Scheme Participants to Bidder (or Bidder Nominee); (q) (r) (s) (t) (Suspension of trading) apply to ASX to suspend trading in Target Shares with effect from the close of trading on the Effective Date; (listing) take all reasonable steps to maintain Target s listing on ASX, notwithstanding any suspension of the quotation of Target Shares, up to and including the Implementation Date, including making appropriate applications to ASX and ASIC; (tax ruling) discuss and co-operate in good faith with Bidder and/or its legal advisers in relation to any ruling applications made to a Tax Authority in connection with the Scheme, and in the conduct of any such ruling applications, including allowing the Bidder and/or its legal advisers to review and comment on any drafts of the ruling applications and to attend and participate in any meetings with any Tax Authority dealing with the ruling applications. Target must keep Bidder informed of all correspondence and communications with any Tax Authority (both written and oral) pertaining to any ruling application; and (other steps) if the Scheme becomes Effective, do all things contemplated of it under the Scheme and all other things (if any) reasonably necessary for the Target to do to lawfully give effect to the Scheme and the orders of the Court approving the Scheme. 5.3 Bidder s obligations Bidder must take (or cause Bidder Nominee to take) all reasonable steps to assist Target to implement the Scheme on a basis consistent with this document and as soon as reasonably practicable, and in particular must: King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

108 (a) (Bidder Information): (i) (ii) prepare and promptly provide to Target for inclusion in the Scheme Booklet the Bidder Information (in accordance with all applicable laws, including the Corporations Act, Corporations Regulations, ASIC Regulatory Guide 60 and the Listing Rules) and consent to the inclusion of that information in the Scheme Booklet; and provide Target with drafts of the Bidder Information in a timely manner and, acting reasonably and in good faith, take into account all reasonable comments from Target and its Representatives on those drafts, provided that such comments are provided to Bidder in a timely manner; (b) (confirmation of Bidder Information) subject to Target complying with clause 5.2(e) and (f), promptly after Target requests that it does so, confirm in writing to Target that: (i) (ii) it consents to the inclusion of the Bidder Information in the Scheme Booklet, in the form and context in which the Bidder Information appears; and the Bidder Information in the Scheme Booklet is not misleading or deceptive in any material respect (whether by omission or otherwise), and the inclusion of such Bidder Information, in that form and context, has been approved by the Bidder Board; (c) (further Bidder Information) promptly: (i) advise Target in writing if it becomes aware: (A) (B) of information which should have been but was not included in the Bidder Information in the Scheme Booklet (including if known at the time), and promptly provide Target with the omitted information; or that the Bidder Information in the Scheme Booklet is misleading or deceptive in any material respect (whether by omission or otherwise), and promptly provide Target with any information required to correct the misleading or deceptive statements; and (ii) provide to Target any further or new Bidder Information as may arise after the Scheme Booklet has been sent to Target Shareholders and until the date of the Scheme Meeting as may be necessary to ensure that the Bidder Information contained in the Scheme Booklet is not, having regard to applicable disclosure requirements, false, misleading or deceptive in any material respect (including because of any material omission) and to ensure that there would be no breach of clause 12.5(g) if it applied as at the date on which such further or new Bidder Information arose; (d) (assistance with Scheme Booklet and Court Documents) provide any assistance or information reasonably requested by Target or its Representatives in connection with the preparation of the Scheme Booklet (including any supplementary disclosure to Target Shareholders) or any Court Documents, including reviewing the drafts of the Scheme Booklet prepared by Target and provide comments in a timely manner on those drafts in good faith; King & Wood Mallesons _17 Scheme Implementation Agreement 24 SCHEME BOOKLET 105

109 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (e) (f) (g) (h) (i) (j) (k) (Independent Expert information) provide any assistance or information reasonably requested by Target or its Representatives, or by the Independent Expert, in connection with the preparation of the Independent Expert s Report; (Deed Poll) prior to the Scheme Booklet being dispatched to Target Shareholders, sign and deliver the Deed Poll and, if the Scheme becomes Effective, fully comply with its obligations under the Deed Poll; (Conditions Precedent certificate) before 8.00am on the Second Court Date, provide to Target for provision to the Court at the hearing on that date a certificate confirming (in respect of matters within Bidder s knowledge) whether or not the Conditions Precedent for which Bidder is responsible, as noted in clause 3.1, have been satisfied of waived in accordance with clause 3, a draft of which must be provided to Target by 5.00pm on the Business Day prior to the Second Court Date; (Share transfer) if the Scheme becomes Effective, accept a transfer of the Target Shares (or procure that a transfer of the Target Shares is accepted by Bidder Nominee) as contemplated by clause 4.3(a) and execute (or procure the execution of) proper instruments of transfer of the Target Shares to Bidder (or Bidder Nominee) in accordance with the Scheme; (Scheme Consideration) if the Scheme becomes Effective, pay or procure the payment of the Scheme Consideration in the manner and amount contemplated by clause 4.3(b) and the terms of the Scheme; (taxation) promptly review and comment on any draft ruling applications or other communications or correspondence provided to Bidder in accordance with clause 5.2(s); and (other steps) do everything reasonably within its power to ensure that the Scheme is effected in accordance with all applicable laws, regulations and policy. 5.4 Scheme Booklet responsibility statement The responsibility statement to appear in the Scheme Booklet, in a form to be agreed by the parties, will contain words to the effect that: (a) (b) Target has prepared, and is responsible for, the content of the Scheme Booklet other than, to the maximum extent permitted by law, the Bidder Information, the Independent Expert s Report or any other report or letter issued to Target by a third party; and Bidder has prepared, and is responsible for, the Bidder Information in the Scheme Booklet (and no other part of the Scheme Booklet). 5.5 Disagreement on content of Scheme Booklet If Bidder and Target disagree on the form or content of the Scheme Booklet, they must consult in good faith to try to settle an agreed form of the Scheme Booklet. If complete agreement is not reached after reasonable consultation, then: (a) (b) if the disagreement relates to the form or content of the Bidder Information contained in the Scheme Booklet, Target will make any amendments as Bidder, acting in good faith, reasonably requires; and if the disagreement relates to the form or content of any other part of the Scheme Booklet, the Target Board will, acting in good faith, decide the final form or content of the disputed part of the Scheme Booklet. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

110 5.6 Verification Each party must undertake appropriate verification processes for the information supplied by that party which is included in the Scheme Booklet. 5.7 Conduct of Court proceeding Target and Bidder (or, if applicable, Bidder Nominee) are entitled to separate representation at all Court proceedings relating to the Scheme and each of them must ensure that it is represented by counsel at the First Court Hearing and the Second Court Hearing. This document does not give Target or Bidder (or, if applicable, Bidder Nominee) any right or power to give undertakings to the Court for or on behalf of the other party without that party s prior written consent. Otherwise, Target and Bidder (or, if applicable, Bidder Nominee) must give all undertakings to the Court in all Court proceedings which are reasonably required to obtain Court approval and confirmation of the Scheme as contemplated by this document. 5.8 Appeal process If the Court refuses to make orders convening the Scheme Meeting or approving the Scheme, Target must appeal the Court s decision to the fullest extent possible (and Bidder must provide, or procure that Bidder Nominee provides, all reasonable assistance and be represented at any such appeal) except to the extent that: (a) (b) the parties agree otherwise; or an independent senior counsel of the New South Wales bar advises that, in their opinion, an appeal would have no reasonable prospect of success before the End Date, in which case either party may terminate this document in accordance with clause 13.1(h)(iii). 5.9 Transaction Implementation Committee The parties must establish a Transaction Implementation Committee as soon as reasonably practical after the date of this document. The role of the Transaction Implementation Committee will be to act as a forum to: (a) (b) oversee and coordinate the performance of the parties respective obligations to implement the Scheme in accordance with this clause 5; and subject to clause 5.10, consult with each other and plan to ensure the smooth transition of the management of the business and the affairs of the Target Group to the Bidder Group following the implementation of the Scheme, including to oversee and coordinate the matters set out in clause No partnership or joint venture Subject to this document, nothing in this clause requires either party to act at the direction of the other. The business of each party will continue to operate independently from the other until the Implementation Date. The parties agree that nothing in this document constitutes the relationship of a partnership or a joint venture between the parties. King & Wood Mallesons _17 Scheme Implementation Agreement 26 SCHEME BOOKLET 107

111 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued 6 Target Board recommendation 6.1 Reasonable endeavours Target must use its reasonable endeavours to procure that none of its directors withdraws or changes their recommendation that Target Shareholders vote in favour of the Scheme at the Scheme Meeting, unless: (a) (b) there is a Superior Proposal; or the Independent Expert concludes in the Independent Expert s Report (or any update or variation to that report) that the Scheme is not in the best interests of Target Shareholders, or adversely changes its previously given opinion in the Independent Expert s Report (or any update or variation to that report) that the Scheme is in the best interests of Target Shareholders, (Recommendation). 6.2 Withdrawal or change of recommendation Without limiting clause 9, other than in the circumstances described in clauses 6.1(a) or 6.1(b), if Target receives notice from (or is otherwise aware that) a member of the Target Board proposes to withdraw or change its Recommendation: (a) (b) Target must notify Bidder in writing as soon as reasonably practicable and in any event within 1 Business Day; and the parties must consult in good faith for 2 Business Days after the date on which the notification in sub clause (a) is given to Bidder in order to consider and determine whether the Recommendation of that member of the Target Board can be maintained and any associated implications. 7 Directors and employees 7.1 Release of Bidder and Bidder Indemnified Parties Subject to the Corporations Act, Target releases its rights, and agrees with Bidder that it will not make a claim, against any Bidder Indemnified Party (other than Bidder, the Bidder Nominee (if any) and their Related Bodies Corporate) as at the date of this document and from time to time in connection with: (a) (b) any breach of any representations and warranties of Bidder or any other member of the Bidder Group in this document; any disclosure made to the Target containing any statement which is false or misleading whether in content or by omission in connection with Scheme, whether current or future, known or unknown, arising at common law, in equity, under statute or otherwise, except when the Bidder Indemnified Party has not acted in good faith or has engaged in wilful misconduct or fraud. Nothing in this clause 7.1 limits Target s rights to terminate this document under clause Benefit for Bidder Indemnified Parties Bidder receives and holds the benefit of clause 7.1 to the extent it relates to each Bidder Indemnified Party on behalf of each of them. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

112 7.3 Release of Target and Target Indemnified Parties Subject to the Corporations Act, Bidder releases its rights, and agrees with Target that it will not make a claim, against any Target Indemnified Party (other than Target and its Related Bodies Corporate) as at the date of this document and from time to time in connection with: (a) (b) any breach of any representations and warranties of Target or any other member of the Target Group in this document; any disclosure made to the Bidder containing any statement which is false or misleading whether in content or by omission in connection with Scheme, whether current or future, known or unknown, arising at common law, in equity, under statute or otherwise, except when the Target Indemnified Party has not acted in good faith or has engaged in wilful misconduct or fraud. Nothing in this clause 7.3 limits Bidder s rights to terminate this document under clause Benefit for Target Indemnified Parties Target receives and holds the benefit of clause 7.3 to the extent it relates to each Target Indemnified Party on behalf of each of them. 7.5 Appointment/retirement of Target directors On the Implementation Date, but subject to the Scheme Consideration having been paid to the Scheme Participants and receipt by Target of signed consents to act, Target must use its reasonable endeavours to: (a) (b) cause the appointment of each Incoming Director to the Target Board; and procure that each of the Outgoing Directors retire from the Target Board and provide written notice to the effect that they have no claim outstanding for loss of office, remuneration or otherwise against Target (provided that nothing in this clause 7.5 requires any Outgoing Director to forego any rights they may have under any deed of access and indemnity or policy of insurance), in each case, in accordance with Target s constitution, the Corporations Act and the Listing Rules. 7.6 Directors' and officers' insurance Subject to the Scheme becoming Effective and subject to the Corporations Act, Bidder undertakes in favour of Target and each other person who is a Target Indemnified Party that it will: (a) (b) subject to clause 7.7, for a period of 7 years from the Implementation Date, ensure that the constitutions of Target and each other member of the Target Group continue to contain such rules as are contained in those constitutions at the date of this document that provide for each company to indemnify each of its current and former directors and officers against any liability incurred by that person in his or her capacity as a director or officer of the company to any person other than a member of the Target Group; and procure that Target and each other member of the Target Group complies with any deeds of indemnity, access and insurance made by them in favour of their respective directors and officers from time to time and without limiting the foregoing, ensure that the directors and officers run-off insurance cover for those directors and officers is maintained, King & Wood Mallesons _17 Scheme Implementation Agreement 28 SCHEME BOOKLET 109

113 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued subject to clause 7.7, for a period of 7 years from the retirement date of each director and officer. 7.7 Period of undertaking The undertakings contained in clause 7.6 are given until the earlier of the end of the relevant period specified in that clause or the relevant member of the Target Group ceasing to be part of the Bidder Group. 7.8 Benefit of undertaking for Target Group Target acknowledges that it receives and holds the benefit of clause 7.6 to the extent it relates to each director and officer of a member of the Target Group on behalf of each of them. 7.9 Bidder acknowledgement regarding insurance Bidder acknowledges that, notwithstanding any other provision of this document, Target may, prior to the Implementation Date, enter into arrangements to secure directors and officers run-off insurance for up to such 7 year period, and that any actions to facilitate that insurance or in connection therewith will not be a Target Prescribed Occurrence or breach any provision of this deed. 8 Conduct of business 8.1 Overview From the date of this document up to and including the Implementation Date, Target must, and must cause each member of the Target Group to, conduct its business in the ordinary course consistent with business plans and budgets Disclosed and otherwise in a manner generally consistent with the manner in which such business has been conducted in the 12 months prior to the date of this document. 8.2 Specific obligations Without limiting clause 8.1, and otherwise except with the prior written approval of Bidder (which approval must not be unreasonably withheld or delayed), Target must, during the period contemplated by clause 8.1, use all reasonable endeavours to ensure that Target and each member of the Target Group: (a) (b) (c) (officers and employees) retains the services of the Relevant Employees of the Target Group; (relationships) preserves its relationships with customers, suppliers, licensors, licensees, joint venturers and others with whom it has business dealings; and (cash) ensures that there is no material decrease in the amount of cash in Target Group other than as used in the ordinary course of business and consistent with Disclosed forecast cash utilisation, or as a result of reasonable costs incurred directly in relation to the transactions contemplated by the Scheme. 8.3 Prohibited actions Other than with the prior written approval of Bidder or as required by this document, Target must not, and must ensure that each member of the Target Group does not, during the period referred to in clause 8.1: (a) (Material Contracts) enter into, amend or terminate a Material Contract; King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

114 (b) (c) (d) (e) (f) (g) (h) (i) (commitments and settlements) breach in any material respect any Material Contract or do anything which is or would with the giving of notice or lapse of time constitute an event of default, prepayment event or similar event, or give another party a termination right or right to accelerate any right or obligation, under a Material Contract, or waive any material third party default, or institute or accept as a settlement or compromise of a material matter (relating to an amount in excess of $4,500,000) an amount that is less than the full compensation due to Target or a Subsidiary of Target; (employment agreements) except as required by law or as provided in an existing contract in place at the date of this document (a copy of which has been Disclosed), increase the remuneration of (including with regard to superannuation benefits) or benefits provided to or pay any bonus or issue any securities or options to, or otherwise vary the employment agreements with, any Relevant Employee; (accelerate rights) other than as permitted by clause 4.5, accelerate the rights of any of its directors or employees to compensation or benefits of any kind (including under any Target executive or employee share plans); (termination payments) pay a director, executive or Relevant Employee a termination or retention payment, other than as required by law or provided for in an existing employment contract in place as at the date of this document and a copy of which has been Disclosed; (financial arrangements) enter into any new arrangement, or amend in any material respect any arrangement in existence as a the date of this document, with its financial advisers in respect of the transactions contemplated by this document; (dividends) announce, declare or pay any dividends other than the Permitted Dividend and (to the extent permitted by clause 4.4(c)) the Post-End Date Dividend; (information technology) take any action in respect of its software or information technology systems (including to enter into, vary or terminate any contract or commitment relating to the use or development of that software or those systems) which would have a materially adverse impact on the use of that software or those systems, or the Target Group s distribution arrangements; or (agree) agree to do any of the matters set out above. 8.4 Exceptions to conduct of business provisions Nothing in this clause 8 restricts the ability of Target to take any action which: (a) (b) (c) (d) is expressly required or permitted by this document or the terms of the Scheme; is required by law, the rules of a recognised stock exchange, or a Regulatory Authority; has been Disclosed to Bidder; has been consented to in writing by Bidder (and the Bidder will consider in good faith, acting reasonably, any request for consent from Target where Target has provided reasonable details of the matter (including any material terms) in writing to the Bidder); or King & Wood Mallesons _17 Scheme Implementation Agreement 30 SCHEME BOOKLET 111

115 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (e) ensures that directors and officers run-off insurance cover for the directors and officers of Target and each member of the Target Group is maintained in accordance with clause Access to people and Target Information Between the date of this document and the Implementation Date, Target must: (a) (b) (c) as soon as reasonably practicable provide Bidder and its officers and advisers with any documents, records, and other information (subject to any existing confidentiality obligations owed to third parties, or applicable privacy laws) reasonably requested by them; and without limiting its obligations under clause 3.6, promptly notify Bidder in writing if any person validly exercises, or purports to exercise, or states an intention to exercise, any rights under a distribution agreement to which a member of the Target Group is a party which could reasonably be expected to result in the termination or expiry of that distribution agreement (without renewal or replacement on terms no less favourable to the Target Group), in which case the parties must use all reasonable endeavours to agree and implement a proposed strategy to mitigate any risks to Target Group associated with any such actual, purported or threatened exercise of rights as soon as practicable and in any event before the Second Court Date; provide Bidder and its officers and advisers with reasonable, nondisruptive access during normal business hours and on reasonable notice to Target s officers and advisers which Bidder reasonably requires for the purposes of: (i) (ii) (iii) (iv) understanding Target s financial position (including its cash flow and working capital position), trading performance and management control systems; implementing the Scheme; preparing for carrying on the business of the Target Group following implementation of the Scheme; and any other purpose which is agreed in writing between the parties, provided in every case that such access is reasonably necessary to Bidder and, in the reasonable opinion of Target, does not place an unreasonable burden on the ability of Target to run its business, and provided that (without limiting clause 6.2) nothing in this clause 8.5 shall require Target to provide Bidder with any information: (v) (vi) concerning the consideration of the Scheme or any actual or potential Competing Transaction by the Target Board (or a subcommittee of the Target Board) or Target management; or in breach of an obligation of confidentiality to any person, provided that Target must use its reasonable endeavours to obtain the person s consent to disclose the relevant information to Bidder. 8.6 Change of control As soon as practicable after the date of this document, the parties must: King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

116 (a) (b) seek to identify any change of control or similar provisions in any Material Contract which may be triggered by the implementation of the Scheme (Change of Control Requirements); and use all reasonable endeavours to agree a proposed strategy to obtain any consents required in accordance with the terms of any identified Change of Control Requirements, and, if agreed between parties as part of the proposed strategy, to then use reasonable efforts to promptly seek those consents in accordance with the agreed strategy as soon as practicable and in any event before the Second Court Date. 9 Exclusivity 9.1 No existing discussions Target represents and warrants that, other than the discussions with Bidder in respect of the Scheme, as at the date of this document, it is not currently in negotiations or discussions in respect of any Competing Transaction with any person. From the date of this document, Target must promptly enforce the terms of any confidentiality agreement entered into with a party other than Bidder in relation to a Competing Transaction before the execution of this document, and must promptly request, or must procure that the relevant Target Group company requests, the return or destruction of Target's confidential information in accordance with, but only to the extent provided by, the terms of that confidentiality agreement and terminate their access to any confidential information under that confidentiality agreement. Target agrees not to waive, and to enforce, any standstill obligations of any such party, to the extent provided by the terms of any confidentiality agreement entered into with a party other than Bidder, except in relation to a Competing Transaction where Bidder has failed to provide a matching or superior proposal which satisfies clause 9.8(e). 9.2 No-shop During the Exclusivity Period, Target must ensure that neither it nor any of its Representatives directly or indirectly: (a) (b) solicits, invites, encourages or initiates any enquiries, negotiations or discussions; or communicates any intention to do any of these things, with a view to obtaining any offer, proposal or expression of interest from any person (other than Bidder) in relation to a Competing Transaction. 9.3 No-talk Subject to clause 9.5, during the Exclusivity Period, Target must ensure that neither it nor any of its Representatives: (a) (b) negotiates or enters into; or participates in negotiations or discussions with any other person regarding, a Competing Transaction or any agreement, understanding or arrangement that may be reasonably expected to lead to a Competing Transaction, even if that person s Competing Transaction was not directly or indirectly solicited, invited, encouraged or initiated by Target or any of its Representatives or the person has publicly announced the Competing Transaction. King & Wood Mallesons _17 Scheme Implementation Agreement 32 SCHEME BOOKLET 113

117 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued 9.4 Due diligence information Subject to clauses 9.5 and 9.6, during the Exclusivity Period, Target must ensure that neither it nor any of its Representatives in relation to a Competing Transaction: (a) (b) enables any other person other than Bidder to undertake due diligence investigations on any member of the Target Group or their businesses or operations; or makes available to any other person, or permits any other person to receive, other than Bidder (in the course of due diligence investigations or otherwise) any non-public information relating to any member of the Target Group or their businesses or operations. 9.5 Exceptions Each of clause 9.3, clause 9.4 and clause 9.7(a)(iii), does not apply to the extent that it restricts Target or the Target Board from taking or refusing to take any action with respect to a genuine Competing Transaction(which was not solicited, invited, encouraged or initiated by Target or its Representatives in contravention of clause 9.2) provided that the Target Board has determined, in good faith and acting reasonably that: (a) (b) after consultation with its financial advisors, such a genuine Competing Transaction is, or could reasonably be considered to become, a Superior Proposal; and after receiving written legal advice from the Target s legal advisers (who must be reputable and experienced in transactions of this nature) that failing to respond to such a genuine Competing Transaction would be reasonably likely to constitute a breach of the Target Board s fiduciary or statutory obligations. 9.6 Further exceptions Nothing in this document prevents Target from: (a) (b) continuing to make normal presentations to, and to respond to enquiries from, brokers, portfolio investors and analysts in the ordinary course in relation to the Scheme or its business generally; or fulfilling its continuous disclosure requirements. 9.7 Notice of unsolicited approach During the Exclusivity Period, Target must inform Bidder as soon as reasonably practicable, and in any event with 3 Business Days, if it or any of its Representatives: (a) receives any unsolicited approach with respect to any Competing Transaction and must disclose to Bidder: (i) (ii) (iii) the fact that such an approach has been made; all material terms of any Competing Transaction (to the extent known by the Target); and subject to clause 9.5, details of the proposed bidder or acquirer (to the extent known by the Target); (b) receives any request for information relating to Target or any of its Related Bodies Corporate or any of their businesses or operations or King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

118 any request for access to the books or records of Target or any of its Related Bodies Corporate, which Target has reasonable grounds to suspect may be in connection with or for the purposes of the person formulating, developing or finalising a Competing Transaction; and (c) provides any information relating to Target or any of its Related Bodies Corporate or any of their businesses or operations to any person in connection with or for the purposes of the person formulating, developing or finalising a Competing Transaction. 9.8 Matching right Without limiting clauses 9.2 and 9.3, during the Exclusivity Period, Target: (a) (b) must not enter into any legally binding agreement, arrangement or understanding pursuant to which a third party, Target or both proposes or propose to undertake or give effect to an actual, proposed or potential Competing Transaction; and must use its reasonable endeavours to procure that none of its directors withdraw or change their Recommendation or otherwise make a public statement to endorse or recommend an actual, proposed or potential Competing Transaction, unless: (c) (d) (e) (f) the Competing Transaction is a Superior Proposal; Target has provided Bidder with the material terms and conditions of the actual, proposed or potential Competing Transaction, including price and the identity of the third party making or proposing to undertake or give effect to the actual, proposed or potential Competing Transaction; Target has given Bidder at least 3 Business Days after the date of the provision of the information referred to in clause 9.8(d) to provide a matching or superior proposal to the terms of the actual, proposed or potential Competing Transaction; and Bidder has not provided a matching or superior proposal to the terms of the actual, proposed or potential Competing Transaction to the Target Board by the expiry of the 3 Business Day period referred to in clause 9.8(e). Target acknowledges and agrees that each successive modification of any actual, proposed or potential Competing Transaction will constitute a new actual, proposed or potential Competing Transaction for the purposes of the requirements under clause 9.8 and accordingly Target must comply with clause 9.8(a) and clause 9.8(b) of this clause in respect of any new actual, proposed or potential Competing Transaction unless clauses 9.8(c) to 9.8(f) (inclusive) apply. 9.9 Bidder counterproposal If Bidder proposes to Target, or announces amendments to the Scheme or a new proposal that constitute a matching or superior proposal to the terms of the actual, proposed or potential Competing Transaction ( Bidder Counterproposal ) by the expiry of the 3 Business Day period referred to in clause 9.8(e), Target must procure that the Target Board considers the Bidder Counterproposal and if the Target Board, acting reasonably and in good faith, determines that the Bidder Counterproposal would provide an equivalent or superior outcome for Target Shareholders as a whole compared with the Competing Transaction, taking into account the material terms and conditions of the Bidder Counterproposal, then: King & Wood Mallesons _17 Scheme Implementation Agreement 34 SCHEME BOOKLET 115

119 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (a) (b) Target and Bidder must use their best endeavours to agree the amendments to this document and, if applicable, the Scheme and Deed Poll that are reasonably necessary to reflect the Bidder Counterproposal and to implement the Bidder Counterproposal, in each case as soon as reasonably practicable; and Target must use its reasonable endeavours to procure that each of the directors of Target recommends the Scheme (as modified by the Bidder Counterproposal) to Target Shareholders Legal advice Target acknowledges that it has received legal advice on this document and the operation of this clause. 10 Target Reimbursement Fee 10.1 Background This clause has been agreed in circumstances where: (a) (b) (c) (d) Bidder and Target believe that the Scheme will provide significant benefits to Bidder, Target and their respective shareholders, and Bidder and Target acknowledge that, if they enter into this document and the Scheme is subsequently not implemented, Bidder will incur significant costs, including those set out in clause 10.5; Bidder requested that provision be made for the Target Reimbursement Fee, without which Bidder would not have entered into this document; both the Bidder Board and Target Board believe that it is appropriate for both parties to agree to the payment referred to in this clause to secure Bidder s entry into this document and participation in the Scheme; and both parties have received legal advice on this document and the operation of this clause Payment by Target to Bidder Subject to clauses 10.3, 10.4, 10.6 and 10.7, Target agrees to pay the Target Reimbursement Fee to Bidder without withholding or set off if the Scheme does not proceed because: (a) (b) (c) (Competing Transaction) on or before the earlier to occur of the End Date and the date this document is validly terminated in accordance with its terms, a transaction of the type referred to in paragraphs (b), (c) or (d) of the definition of Competing Transaction is announced and within 12 months of such announcement, such a transaction is completed, implemented or consummated; or (change of recommendation) any Target Director fails to make the Recommendation or withdraws their Recommendation, adversely changes or qualifies their Recommendation, or otherwise makes a public statement indicating that he or she no longer supports the Scheme, except where the Independent Expert concludes that the Scheme is not in the best interests of Target Shareholders (other than where the reason for that conclusion is a Competing Transaction); (Independent Expert) Target validly terminates this document in accordance with clause 13.1(g) due to the Independent Expert concluding in the Independent Expert s Report (or any update or variation to that report) that the Scheme is not in the best interests of King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

120 Target Shareholders, or adversely changing its previously given opinion in the Independent Expert s Report (or any update or variation to that report) that the Scheme is in the best interests of Target Shareholders, where the reason for that conclusion is a Competing Transaction; or (d) (termination) Bidder validly terminates this document in accordance with: (i) (ii) clause 13.1(b); or clause 13.1(c) No amount payable if Scheme becomes Effective (a) Notwithstanding the occurrence of any event in clause 10.2, if the Scheme becomes Effective: (i) (ii) no amount is payable by Target under clause 10.2; and if any amount has already been paid under clause 10.2 it must be refunded by Bidder within 10 Business Days after the Scheme becomes Effective. (b) Target can only ever be liable to pay the Target Reimbursement Fee once Timing of payment (a) A demand by Bidder for payment of the Target Reimbursement Fee under clause 10.2 must: (i) (ii) (iii) (iv) be in writing; be made after the occurrence of the event in that clause giving rise to the right to payment; state the circumstances which give rise to the demand; and nominate an account into which Target must pay the Target Reimbursement Fee. (b) (c) Target must pay the Target Reimbursement Fee to Bidder under clause 10.2 without withholding or set off within 10 Business Days of receipt by Target of a valid demand for payment from Bidder under clause 10.4(a). The demand may only be made after the occurrence of an event referred to in clause Nature of payment The Target Reimbursement Fee is an amount to compensate Bidder for: (a) (b) (c) (d) advisory costs; costs of management and directors time; out-of-pocket expenses; the distraction of Bidder s management from conducting Bidder s business as usual caused by pursuing the Scheme; King & Wood Mallesons _17 Scheme Implementation Agreement 36 SCHEME BOOKLET 117

121 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (e) (f) reasonable opportunity costs incurred by Bidder in pursuing the Scheme or in not pursuing alternative acquisitions or strategic initiatives which Bidder could have developed to further its business and objectives; and damage to Bidder s reputation associated with a failed transaction and the implications of that damage to Bidder s business. The parties agree that the costs incurred are of a nature that they cannot be accurately quantified and that a genuine pre-estimate of the costs would equal or exceed the amount payable under clause Target s limitation of liability Notwithstanding any other provision of this document but subject to clause 10.7: (a) (b) the maximum liability of Target to Bidder under or in connection with this document including in respect of any breach of this document will be the Target Reimbursement Fee, and in no event will the aggregate liability of the Target under or in connection with a breach of this document exceed an amount equal to the Target Reimbursement Fee; and the payment by Target of the Target Reimbursement Fee represents the sole and absolute amount of liability of Target to Bidder under or in connection with this document and no further damages, fees, expenses or reimbursements of any kind will be payable by Target to Bidder in connection with this document Compliance with law If it is finally determined following the exhaustion of all reasonable avenues of appeal to the Takeovers Panel or a Court that all or any part of the amount payable under clause 10.2: (a) (b) (c) is unlawful or would if performed be, unlawful; involves a breach of the duties of the Target Board; or constitutes unacceptable circumstances within the meaning of the Corporations Act, then Target s obligation to pay the applicable amount or part of the amount payable under clause 10.2 does not apply and if Bidder has received any such part of the payment due under clause 10.2 it must refund it within 10 Business Days of such final determination. The parties must not make or cause or permit to be made any application to a Court, arbitral tribunal or the Takeovers Panel for or in relation to a determination referred to in this clause Bidder Reimbursement Fee 11.1 Background This clause has been agreed in circumstances where: (a) Bidder and Target believe that the Scheme will provide significant benefits to Bidder, Target and their respective shareholders, and Bidder and Target acknowledge that, if they enter into this document and the Scheme is subsequently not implemented, Target will incur significant costs, including those set out in clause 11.5; King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

122 (b) (c) (d) Target requested that provision be made for the Bidder Reimbursement Fee, without which Target would not have entered into this document; both the Bidder Board and Target Board believe that it is appropriate for both parties to agree to the payment referred to in this clause to secure Target s entry into this document and participation in the Scheme; and both parties have received legal advice on this document and the operation of this clause Payment by Bidder to Target Subject to clauses 11.3, 11.4 and 11.6, Bidder agrees to pay the Bidder Reimbursement Fee to Target without withholding or set off if the Scheme does not proceed because Target validly terminates this document in accordance with: (a) (b) clause 13.1(b); or; clause 13.1(d) No amount payable if Scheme becomes Effective (a) Notwithstanding the occurrence of any event in clause 11.2, if the Scheme becomes Effective: (i) (ii) no amount is payable by Bidder under clause 11.2; and if any amount has already been paid under clause 11.2 it must be refunded by Target within 10 Business Days after the Scheme becomes Effective. (b) Bidder can only ever be liable to pay the Bidder Reimbursement Fee once Timing of payment (a) A demand by Target for payment of the Bidder Reimbursement Fee under clause 11.2 must: (i) (ii) (iii) (iv) be in writing; be made after the occurrence of the event in that clause giving rise to the right to payment; state the circumstances which give rise to the demand; and nominate an account into which Bidder must pay the Bidder Reimbursement Fee. (b) (c) Bidder must pay the Bidder Reimbursement Fee to Target under clause 11.2 without withholding or set off within 10 Business Days of receipt by Bidder of a valid demand for payment from Target under clause 11.4(a). The demand may only be made after the occurrence of an event referred to in clause Nature of payment The Bidder Reimbursement Fee is an amount to compensate Target for: (a) advisory costs; King & Wood Mallesons _17 Scheme Implementation Agreement 38 SCHEME BOOKLET 119

123 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (b) (c) (d) (e) (f) costs of management and directors time; out-of-pocket expenses; the distraction of Target s management from conducting Target s business as usual caused by pursuing the Scheme; reasonable opportunity costs incurred by Target in pursuing the Scheme or in not pursuing alternative strategic initiatives which Target could have developed to further its business and objectives; and damage to Target s reputation associated with a failed transaction and the implications of that damage to Target s business. The parties agree that the costs incurred are of a nature that they cannot be accurately quantified and that a genuine pre-estimate of the costs would equal or exceed the amount payable under clause Bidder s limitation of liability Notwithstanding any other provision of this document: (a) (b) the maximum liability of Bidder to Target under or in connection with this document including in respect of any breach of this document will be the Bidder Reimbursement Fee and in no event will the aggregate liability of the Bidder under or in connection with a breach of this document exceed an amount equal to the Bidder Reimbursement Fee; and the payment by Bidder of the Bidder Reimbursement Fee represents the sole and absolute amount of liability of Bidder to Target under or in connection with this document and no further damages, fees, expenses or reimbursements of any kind will be payable by Bidder to Target in connection with this document. 12 Representations and warranties 12.1 Target's representations and warranties Subject to clause 12.4, Target represents and warrants to Bidder (on its own behalf and separately as trustee or nominee for each of the Bidder directors) that each of the following statements is true and correct in all material respects as at the date of this document and, unless expressly stated otherwise, as at 5.00pm on the Business Day immediately prior to the Second Court Date: (a) (b) (c) (status) it has been incorporated or formed in accordance with the laws of its place of incorporation; (power) it has power to enter into this document, to comply with its obligations under it and exercise its rights under it; (no contravention) the entry by it into, its compliance with its obligations and the exercise of its rights under, this document do not and will not conflict with: (i) (ii) its constituent documents or cause a limitation on its powers or the powers of its directors to be exceeded; or any law binding on it; (d) (authorisations) it has in full force and effect each authorisation necessary for it to enter into this document, to comply with its obligations and exercise its rights under it, and to allow them to be enforced; King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

124 (e) (f) (g) (h) (validity of obligations) its obligations under this document are valid and binding and are enforceable against it in accordance with its terms; (reliance) the Target Information contained in the Scheme Booklet will be included in good faith and on the understanding that Bidder and its directors will rely on that information for the purposes of considering and approving the Bidder Information in the Scheme Booklet before it is despatched, approving the entry into the Deed Poll and implementing the Scheme; (Target Information) the Target Information provided in accordance with this document and included in the Scheme Booklet as at the date of the Scheme Booklet will not contain any material statement which is misleading or deceptive in any material respect nor contain any material omission having regard to applicable disclosure requirements and will comply in all material respects with the requirements of the Corporations Act, the Listing Rules and all relevant regulatory guides and other guidelines and requirements of ASIC; (disclosure) the Disclosure Materials and all other information provided to Bidder by Target in connection with this document were prepared, compiled and made available to Bidder and its Representatives in good faith, the Disclosure Materials are not misleading or deceptive in any material respect (whether by way of omission or otherwise), and Target has not withheld from the Disclosure Materials any information actually known to the Target Board or the senior management of the Target Group after making reasonable inquiries as at the date of this document regarding matters affecting or relating to it: (i) (ii) which is not already in the public domain; and the disclosure of which might reasonably be expected to have resulted in Bidder not entering into this document at all or only entering into this document on materially different terms; (i) (j) (continuous disclosure) Target is not in breach of its continuous disclosure obligations under the Listing Rules and is not relying on the carve-out in Listing Rule 3.1A to withhold any information from disclosure (other than in connection with the transaction contemplated by this document); (compliance) the Target Group has not breached any Australian or foreign law or regulation applicable to it or an order of an Australian or foreign governmental agencies having jurisdiction over it that has or could reasonably expected to have a materially adverse effect on: (i) (ii) (iii) (iv) the conduct of the business of the Target Group; the value of the Target Group; the reputation of the Target Group, including any implication in relation to its good standing with any Regulatory Authority having jurisdiction over the Target Group or the conduct of business of the Target Group; or the satisfaction or fulfilment of any Condition Precedent in accordance with clause 3.1; (k) (licences) as at the date of this document, the Target Group has all material licenses, permits and franchises necessary for it to conduct its respective businesses as conducted as at the date of this document, King & Wood Mallesons _17 Scheme Implementation Agreement 40 SCHEME BOOKLET 121

125 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued which is generally consistent with the manner in which such businesses have been conducted in the 12 months prior to the date of this document; (l) (m) (n) (o) (p) (q) (r) (s) (opinions) any statement of opinion or belief contained in the Target Information is honestly held and there are reasonable grounds for holding the opinion or belief; (provision of information to Independent Expert) all information provided by or on behalf of Target to the Independent Expert to enable the Independent Expert s Report to be prepared and completed will be provided in good faith and on the understanding that the Independent Expert will rely upon that information for the purpose of preparing the Independent Expert s Report; (no default) as at the date of this document, and so far as the Target Board and the senior management of the Target Group are aware after making reasonable inquiries, neither Target nor any of its Subsidiaries is in default under any Material Contract nor has anything occurred which is or would with the giving of notice or lapse of time constitute an event of default, prepayment event or similar event, or give another party a termination right or right to accelerate any right or obligation, under a Material Contract; (securities) Target s issued securities as at the date of this document are 378,917,866 fully paid ordinary shares and 2,201,373 Employee Performance Rights, and other than as Disclosed it has not issued or agreed to issue any other securities or instruments which are still outstanding and which may convert into or give rights to acquire Target Shares; (no Encumbrances) other than any Encumbrance identifiable from the public records or registers of the Personal Property Securities Register or in connection with the Westpac Facility, there are no material Encumbrances over all or any of its assets or revenues. (Insolvency event) no member of the Target Group is Insolvent; (regulatory approvals) so far as Target is aware as at the date of this document, no regulatory approval is required to be obtained by Target in order for it to execute, deliver and perform this document, other than those approvals set out in clause 3.1, and so far as the Target is aware, as at the date of this document no regulatory action of any nature has been taken that would prevent or restrict its ability to fulfil its obligations under this document; and (Target Shares not indirect Australian real property interests) the relevant Target Shares held by each Scheme Participant are not, and until (and including) the Implementation Date will not be, indirect Australian real property interests within the meaning of Division 855 of the Tax Act for the Scheme Participant Notices in relation to Target s Representations and Warranties Target must give written notice to Bidder promptly, and in any event within 2 Business Days, of any breach of any of the Target Representations and Warranties, or any material development of which Target or any of its Representatives becomes aware that is reasonably likely to result in the breach of any of the Target Representations and Warranties, with such notice to include details of the relevant circumstances and any actions taken to remedy the actual or potential breach. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

126 12.3 Target's indemnity Subject to clauses 10.6 and 12.4, Target indemnifies the Bidder Indemnified Parties against all Losses incurred directly or indirectly as a result of any breach of the representations and warranties in clause Qualifications on Target Representations and Warranties The Target Representations and Warranties in clause 12.1 and the indemnity in clause 12.3 are each subject to matters that: (a) (b) have been Disclosed; or as at the date of this document are within the actual knowledge of Bidder or any of the Bidder s Representatives who have been directly involved in the assessment and/or negotiation of the transactions contemplated by this document before the date of this document Bidder s representations and warranties Bidder represents and warrants to Target (on its own behalf and separately as trustee or nominee for each of the Target directors) that each of the following statements is true and correct in all material respects as at the date of this document and as at 5.00pm on the Business Day immediately prior to the Second Court Date: (a) (b) (c) (status) it has been incorporated or formed in accordance with the laws of its place of incorporation; (power) it has power to enter into this document, to comply with its obligations under it and exercise its rights under it; (no contravention) the entry by it into, its compliance with its obligations and the exercise of its rights under, this document do not and will not conflict with: (i) (ii) its constituent documents or cause a limitation on its powers or the powers of its directors to be exceeded; or any law binding on it; (d) (e) (f) (g) (authorisations) it has in full force and effect each authorisation necessary for it to enter into this document, to comply with its obligations and exercise its rights under it, and to allow them to be enforced; (validity of obligations) its obligations under this document are valid and binding and are enforceable against it in accordance with its terms; (reliance) the Bidder Information provided to Target for inclusion in the Scheme Booklet will be provided in good faith and on the understanding that Target and its directors will rely on that information for the purposes of preparing the Scheme Booklet and proposing and implementing the Scheme in accordance with the Corporations Act; (Bidder Information) the Bidder Information provided in accordance with this document and included in the Scheme Booklet, as at the date of the Scheme Booklet, will not contain any material statement which is misleading or deceptive in any material respect nor contain any material omission having regard to applicable disclosure requirements and will comply in all material respects with the requirements of the Corporations Act, the Listing Rules and all relevant regulatory guides and other guidelines and requirements of ASIC; King & Wood Mallesons _17 Scheme Implementation Agreement 42 SCHEME BOOKLET 123

127 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (h) (i) (j) (k) (l) (m) (n) (new information) it will, as a continuing obligation, provide to Target all further or new information which arises after the Scheme Booklet has been despatched to Target Shareholders until the date of the Scheme Meeting which is necessary to ensure that the Bidder Information is not misleading or deceptive in any material respect (including by way of omission); (compliance) the Bidder Group has complied in all material respects with all Australian and foreign laws and regulations applicable to them and orders of Australian and foreign governmental agencies having jurisdiction over it and has all material licenses, permits and franchises necessary for it to conduct its businesses as presently being conducted; (opinions) any statement of opinion or belief contained in the Bidder Information is honestly held and there are reasonable grounds for holding the opinion or belief; (no dealing with Target Shareholders) neither it nor any of its associates has any agreement, arrangement or understanding with any Target Shareholder under which that Target Shareholder (or an associate of that Target Shareholder) would be entitled to receive consideration for their Target Shares different from the Scheme Consideration or under which the Target Shareholder agrees to vote in favour of the Scheme or against any Competing Transaction; (reasonable basis) it has a reasonable basis to expect that it will, by the Implementation Date, have available to it sufficient cash amounts (whether from internal cash reserves or external funding arrangements, including equity and debt financing or a combination of both) to satisfy Bidder s obligations to pay the Scheme Consideration in accordance with its obligations under this document, the Scheme and the Deed Poll; (Insolvency event) no member of the Bidder Group is Insolvent; and (regulatory approvals) so far as the Bidder is aware, no regulatory approval is required to be obtained by Bidder in order for it to execute, deliver and perform this document, other than those approvals set out in clause 3.1, and so far as the Bidder is aware, as at the date of this document no regulatory action of any nature has been taken that would prevent or restrict its ability to fulfil its obligations under this document Notices in relation to Bidder s Representations and Warranties Bidder must give written notice to Target promptly, and in any event within 2 Business Days, of any breach of any of the Bidder Representations and Warranties, or any material development of which Bidder or any of its Representatives becomes aware that is reasonably likely to result in the breach of any of the Bidder Representations and Warranties, with such notice to include details of the relevant circumstances and any actions taken to remedy the actual or potential breach Bidder s indemnity Subject to clause 11.6, Bidder indemnifies the Target Indemnified Parties against all Losses incurred directly or indirectly as a result of any breach of the representations and warranties in clause Qualifications on Bidder Representations and Warranties The Bidder Representations and Warranties in clause 12.5 and the indemnity in clause 12.7 are each subject to matters that as at the date of this document are within the actual knowledge of Target or any of the Target s Representatives who King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

128 have been directly involved in the assessment and/or negotiation of the transactions contemplated by this document before the date of this document. 13 Termination 13.1 Termination events This document may be terminated: (a) (b) (c) (lack of support) by Bidder at any time prior to 8.00am on the Second Court Date if any member of the Target Board fails to make the Recommendation withdraws their Recommendation, adversely changes or qualifies their Recommendation, or otherwise makes a public statement indicating that he or she no longer supports the Scheme; (material breach of document) by either Bidder or Target at any time prior to 8.00am on the Second Court Date, if the other is in material breach of a term of this document (other than a breach of representation and warranty, which is dealt with in clause 13.1(c) or 13.1(d), as applicable), taken in the context of the Scheme as a whole, provided that Bidder or Target (as the case may be) has, if practicable, given notice to the other setting out the relevant circumstances and the relevant circumstances continue to exist 5 Business Days (or any shorter period ending at 8.00am on the Second Court Date) after the time such notice is given; (material breach of Target Representations and Warranties) by Bidder if the Target Representations and Warranties are not true and accurate in all material respects, provided that: (i) (ii) (iii) Bidder has given written notice to Target setting out the relevant circumstances and stating an intention to terminate this document or to allow the Scheme to lapse; the relevant breach or circumstances have not been remedied within 5 Business Days after such notice is given (or any shorter period ending at 8:00am on the Second Court Date); and the relevant breach of the Target Representations and Warranties is material in the context of the Scheme taken as a whole; (d) (material breach of Bidder Representations and Warranties) by Target if the Bidder Representations and Warranties are not true and accurate in all material respects, provided that: (i) (ii) (iii) Target has given written notice to Bidder setting out the relevant circumstances and stating an intention to terminate this deed or to allow the Scheme to lapse; the relevant breach or circumstances have not been remedied within 5 Business Days after such notice is given (or any shorter period ending at 8:00am on the Second Court Date); and the relevant breach of the Bidder Representations and Warranties is material in the context of the Scheme taken as a whole; (e) (competing interest) by Bidder, if a person (other than Bidder or its Associates) acquires a Relevant Interest in more than 20% of the Target King & Wood Mallesons _17 Scheme Implementation Agreement 44 SCHEME BOOKLET 125

129 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Shares after the date of this document (except as a custodian, nominee or bare trustee); (f) (g) (h) (Competing Transaction) by Target if, at any time before 8:00am on the Second Court Date, a majority of the Target Board publicly recommends a Competing Transaction that is a Superior Proposal, and provided that the Competing Transaction was not solicited or facilitated by Target or its Representatives in breach of Target s obligations in clause 9; (Independent Expert) by Target if the Independent Expert concludes in the Independent Expert s Report (or any update or variation to that report) that the Scheme is not in the best interests of Target Shareholders, or adversely changes its previously given opinion in the Independent Expert s Report (or any update or variation to that report) that the Scheme is in the best interests of Target Shareholders; (consultation or appeal failure) in accordance with and pursuant to: (i) (ii) (iii) clause 3.8(a); clause 3.8(b); or clause 5.8; or (i) (agreement) if agreed to in writing by Bidder and Target Termination Where a party has a right to terminate this document, that right for all purposes will be validly exercised if the party delivers a notice in writing to the other party stating that it terminates this document Effect of Termination If this document is terminated by either party, or if this document otherwise terminates in accordance with its terms, then in either case all further obligations of the parties under this document, other than the obligations set out in this clause and in clauses 5.8, 7, 10.2, 11.2 and 14 to 20 (inclusive) will immediately cease to be of further force and effect without further liability of any party to the other, provided that nothing in this clause releases any party from liability for any pre-termination breach of this document Damages Subject to clauses 10.6 and 11.6, in addition to the right of termination under clause 13.1 where there is no appropriate remedy for the breach in this document (other than termination), the non-defaulting party is entitled to damages for Losses suffered by it and expenses incurred by it as a result of the breach of the terms of this document. 14 Public announcements 14.1 Public announcement of Scheme Immediately after signing this document (or any other time the parties agree), Target and Bidder must each issue a public announcement of the proposed Scheme in a form agreed between Target and Bidder before the execution of this document. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

130 14.2 Required disclosure Where a party is required by any applicable law or any Listing Rule to make any announcement or make any disclosure in connection with the Scheme, it must use all reasonable endeavours, to the extent possible, to consult with the other party prior to making the relevant disclosure Other announcements Subject to clauses 14.1 and 14.2, no party may make any public announcement or disclosure in connection with the Scheme (including disclosure to a Regulatory Authority) other than in a form approved by each party (acting reasonably). Each party will use all reasonable endeavours to provide such approval as soon as practicable. 15 Confidential Information Each party acknowledges and agrees that it continues to be bound by the Confidentiality Deed in respect of all the Bidder Confidential Information and Target Confidential Information (as applicable) received by it from the other party on, before or after the date of this document. 16 Notices and other communications 16.1 Form Unless this document expressly states otherwise, all notices, demands, certificates, consents, approvals, waivers and other communications in connection with this document must be in writing and signed by the sender (if an individual) or an Authorised Officer of the sender. All communications (other than communications) must also be marked for the attention of the person referred to in the Details (or, if the recipient has notified otherwise, then marked for attention in the way last notified). communications must state the first and last name of the sender and are taken to be signed by the named sender Delivery Communications must be: (a) (b) (c) left at the address referred to in the Details; sent by regular ordinary post (airmail if appropriate) to the address referred to in the Details; sent by to the address referred to in the Details. If the intended recipient has notified changed contact details, then communications must be sent to the changed contact details When effective Communications take effect from the time they are received or taken to be received under clause 16.4 ( When taken to be received ) (whichever happens first) unless a later time is specified in the communication When taken to be received Communications are taken to be received: King & Wood Mallesons _17 Scheme Implementation Agreement 46 SCHEME BOOKLET 127

131 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (a) (b) if sent by post, 6 Business Days after posting (or 10 days after posting if sent from one country to another); if sent by (i) (ii) when the sender receives an automated message confirming delivery; or 4 hours after the time sent (as recorded on the device from which the sender sent the ) unless the sender receives an automated message that delivery failed, whichever happens first Receipt outside business hours Despite anything else in this clause 16, if communications are received or taken to be received under clause 16.4 ( When taken to be received ) after 5.00pm on a Business Day or on a non-business Day, they are taken to be received at 9.00am on the next Business Day. For the purposes of this clause, the place in the definition of Business Day is taken to be the place specified in the Details as the address of the recipient and the time of receipt is the time in that place. 17 GST 17.1 Definitions and interpretation For the purposes of this clause: (a) (b) (c) GST Act means the A New Tax System (Goods and Services Tax) Act 1999 (Cth); a term which has a defined meaning in the GST Act has the same meaning when used in this clause, unless the contrary intention appears; and each periodic or progressive component of a supply to which section 156-5(1) of the GST Act applies will be treated as if it were a separate supply GST exclusive Unless this document expressly states otherwise, all consideration to be provided under this document is exclusive of GST Payment of GST (a) If GST is payable, or notionally payable, on a supply in connection with this document, the party providing the consideration for the supply agrees to pay to the supplier an additional amount equal to the amount of GST payable on that supply ( GST Amount ). (b) (c) Subject to the prior receipt of a tax invoice, the GST Amount is payable at the same time as the GST-exclusive consideration for the supply, or the first part of the GST-exclusive consideration for the supply (as the case may be), is payable or is to be provided. This clause does not apply to the extent that the consideration for the supply is expressly stated to include GST or the supply is subject to a reverse-charge. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

132 17.4 Adjustment events If an adjustment event arises for a supply made in connection with this document, the GST Amount must be recalculated to reflect that adjustment. The supplier or the recipient (as the case may be) agrees to make any payments necessary to reflect the adjustment and the supplier agrees to issue an adjustment note Reimbursements Any payment, indemnity, reimbursement or similar obligation that is required to be made in connection with this document which is calculated by reference to an amount paid by another party must be reduced by the amount of any input tax credits which the other party (or the representative member of any GST group of which the other party is a member) is entitled. If the reduced payment is consideration for a taxable supply, clause 17.3 will apply to the reduced payment No merger This clause 17 ( GST ) will not merge on termination of this document. 18 Costs 18.1 Costs The parties agree to pay their own Costs in connection with the preparation, negotiation, execution and completion of this document, except for amounts covered by clause 18.2 ( Stamp duty and registration fees ) Stamp duty and registration fees Bidder (a) (b) agrees to pay or reimburse all stamp duty, registration fees and similar taxes payable or assessed as being payable in connection with this document (including any fees, fines, penalties and interest in connection with any of those amounts); and indemnifies Target against, and agrees to reimburse and compensate it for, any liability in respect of stamp duty under clause 18.2(a). Bidder agrees to pay amounts due to Target under this clause within 3 Business Days of demand from Bidder. However, Bidder need not pay, reimburse or indemnify against any fees, fines, penalties or interest to the extent they have been imposed because of Target s delay. 19 General 19.1 Variation and waiver A provision of this document, or right, power or remedy created under it, may not be varied or waived except in writing signed by the party to be bound Consents, approvals or waivers By giving any approval, consent or waiver a party does not give any representation or warranty as to any circumstance in connection with the subject matter of the consent, approval or waiver. King & Wood Mallesons _17 Scheme Implementation Agreement 48 SCHEME BOOKLET 129

133 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued 19.3 Discretion in exercising rights Unless this document expressly states otherwise, a party may exercise a right, power or remedy or give or refuse its consent, approval or a waiver in connection with this document in its absolute discretion (including by imposing conditions) Partial exercising of rights Unless this document expressly states otherwise, if a party does not exercise a right, power or remedy in connection with this document fully or at a given time, they may still exercise it later Conflict of interest Each party may exercise their rights, powers and remedies in connection with this document even if this involves a conflict of duty or they have a personal interest in their exercise Remedies cumulative The rights, powers and remedies in connection with this document are in addition to other rights, powers and remedies given by law independently of this document Indemnities and reimbursement obligations Any indemnity, reimbursement or similar obligation in this document. (a) (b) (c) is a continuing obligation despite the satisfaction of any payment or other obligation in connection with this document, any settlement or any other thing; is independent of any other obligations under this document; and continues after this document, or any obligation arising under it, ends. It is not necessary for a party to incur expense or make payment before enforcing a right of indemnity in connection with this document Inconsistent law To the extent the law permits, this document prevails to the extent it is inconsistent with any law Supervening law Any present or future law which operates to vary the obligations of a party in connection with this document with the result that another party s rights, powers or remedies are adversely affected (including, by way of delay or postponement) is excluded except to the extent that its exclusion is prohibited or rendered ineffective by law Counterparts This document may consist of a number of copies, each signed by one or more parties to it. If so, the signed copies are treated as making up a single document and the date on which the last counterpart is executed is the date of the document Entire agreement This document constitutes the entire agreement of the parties about its subject matter and supersedes all previous agreements, understandings and negotiations on that subject matter. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

134 19.12 Further steps Each party agrees to do anything (such as obtaining consents, signing and producing documents, producing receipts and getting documents completed and signed), which the other party asks and considers necessary to: (a) (b) bind the party and any other person intended to be bound under this document; or show whether the party is complying with this document No liability for loss Unless this document expressly states otherwise, a party is not liable for any loss, liability or costs arising in connection with the exercise or attempted exercise of, failure to exercise, or delay in exercising, a right, power or remedy in connection with this document Severability If the whole or any part of a provision of this document is void, unenforceable or illegal in a jurisdiction it is severed for that jurisdiction. The remainder of this document has full force and effect and the validity or enforceability of that provision in any other jurisdiction is not affected. This clause has no effect if the severance alters the basic nature of this document or is contrary to public policy Rules of construction No rule of construction applies to the disadvantage of a party because that party was responsible for the preparation of, or seeks to rely on, this document or any part of it Assignment Subject to clause 2.2, a party may not assign or otherwise deal with its rights under this document or allow any interest in them to arise or be varied without the consent of the other party Enforceability For the purpose of this document: (a) (b) Target is taken to be acting as agent and trustee on behalf of and for the benefit of all Target Indemnified Parties; and Bidder is taken to be acting as agent and trustee on behalf of and for the benefit of all Bidder Indemnified Parties, and all of those persons are to this extent taken to be parties to this document Foreign resident capital gains withholding If Bidder (or the Bidder Nominee) determines that it must pay an amount to the Commissioner pursuant to Subdivision 14-D of Schedule 1 to the TAA with respect to the acquisition of the Target Shares from a Target Shareholder, the Bidder will, for any such Target Shareholder: (a) (b) determine the amount to be paid to the Commissioner ( Payment Amount ); remit the Payment Amount to the Commissioner within the time required under the TAA; and King & Wood Mallesons _17 Scheme Implementation Agreement 50 SCHEME BOOKLET 131

135 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued (c) reduce the amount of Scheme Consideration payable to that Target Shareholder by the Payment Amount for the purposes of this agreement and the Scheme. For the avoidance of doubt, Bidder will, for the purposes of this agreement, be deemed to have satisfied its obligations to pay the Scheme Consideration to a Target Shareholder if the amount paid to the Target Shareholder is the amount of the Scheme Consideration that would have otherwise been payable to the Target Shareholder pursuant to the Scheme under this agreement, less the Payment Amount for that Target Shareholder No representation or reliance Each party acknowledges that: (a) (b) (c) no party (nor any person acting on its behalf) has made any representation or other inducement to it to enter into this document, except for representations or inducements expressly set out in this document; it does not enter into this document in reliance on any representation or other inducement by or on behalf of any other party, except for any representation or inducement expressly set out in this document; and clauses 19.19(a) and 19.19(b) above do not prejudice any rights a party may have in relation to information which had been filed by the other party with ASIC or ASX. 20 Governing law 20.1 Governing law and jurisdiction The law in force in the place specified in the Details governs this document. The parties submit to the non-exclusive jurisdiction of the courts of that place Serving documents Without preventing any other method of service, any document in an action in connection with this document may be served on a party by being delivered or left at that party s address for service of notices under clause 16.2 ( Delivery ) or with its process agent Appointment of process agent Without preventing any method of service allowed under any relevant law, Bidder: (a) (b) irrevocably appoints Zurich Australia as its process agent to receive any document in an action in connection with this document; and agrees that failure by a process agent to notify Bidder of any document in an action in connection with this document does not invalidate the action concerned. If for any reason Zurich Australia ceases to be able to act as process agent, Bidder agrees to appoint another person as its process agent in the place referred to in clause 20.1 ( Governing law and jurisdiction ) and ensure that the replacement process agent accepts its appointment and confirms its appointment to Bidder. Zurich Australia accepts its appointment as the process agent. King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

136 Bidder agrees that service of documents on its process agent at the following address is sufficient service on it: Zurich Australia Attention: Cathy Manolios 5 Blue Street NORTH SYDNEY NSW 2060 AUSTRALIA. EXECUTED as an agreement King & Wood Mallesons _17 Scheme Implementation Agreement 52 SCHEME BOOKLET 133

137 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Scheme Implementation Agreement Schedule 1 Timetable (clause 5.1) Event Date Regulator s Draft provided to ASIC X (being 3 February 2017) First Court Date X + 15 Business Days Printing and despatch of Scheme Booklet X Business Days Scheme Meeting held Y Second Court Date Lodge Court order with ASIC (Effective Date) Record Date Implementation Date Z Z + 1 Business Day Z + 6 Business Days Z + 11 Business Days King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

138 SCHEME BOOKLET 135

139 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued 136 COVER-MORE GROUP LIMITED

140 Scheme Implementation Agreement Annexure A Scheme of Arrangement Not reproduced here please see Attachment C of the Scheme Booklet King & Wood Mallesons _17 Scheme Implementation Agreement 55 SCHEME BOOKLET 137

141 ATTACHMENT B. SCHEME IMPLEMENTATION AGREEMENT continued Scheme Implementation Agreement Annexure B Deed Poll Not reproduced here please see Attachment D of the Scheme Booklet King & Wood Mallesons _17 Scheme Implementation Agreement COVER-MORE GROUP LIMITED

142 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT SCHEME BOOKLET 139

143 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued Scheme of Arrangement Dated Cover-More Group Limited (ACN ) Scheme Participants King & Wood Mallesons Level 61 Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Australia T F DX 113 Sydney COVER-MORE GROUP LIMITED

144 Scheme of Arrangement Contents Details 1 General terms 2 1 Definitions and interpretation Definitions Reference to certain general terms Headings 5 2 Preliminary Cover-More Zurich Bidder Nominee If Scheme becomes Effective Scheme Implementation Agreement Deed Poll 6 3 Conditions precedent Conditions precedent to Scheme Conditions precedent and operation of clause Certificate in relation to conditions precedent 7 4 Scheme Effective Date Termination and End Date 7 5 Implementation of Scheme Lodgement of Court orders with ASIC Transfer and registration of Cover-More Shares Entitlement to Scheme Consideration Title and rights in Cover-More Shares Scheme Participants agreements Warranty by Scheme Participants Transfer free of encumbrances Appointment of Zurich as sole proxy 9 6 Scheme Consideration Consideration under the Scheme Satisfaction of obligations Payment of Scheme Consideration Foreign resident capital gains withholding Cancellation and re-issue of cheques Unclaimed monies Orders of a court Joint holders 11 7 Dealings in Scheme Shares Determination of Scheme Participants Register 12 King & Wood Mallesons _11 Scheme of Arrangement i SCHEME BOOKLET 141

145 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued 7.3 No disposals after Effective Date Maintenance of Cover-More Register Effect of certificates and holding statements Details of Scheme Participants Quotation of Cover-More Shares 13 8 General Scheme provisions Power of attorney Variations, alterations and conditions Further action by Cover-More Authority and acknowledgement No liability when acting in good faith Enforcement of Deed Poll Stamp duty Notices 14 9 Governing law Governing law Jurisdiction 14 King & Wood Mallesons Scheme of Arrangement ii 142 COVER-MORE GROUP LIMITED

146 Scheme of Arrangement Details Parties Cover-More and Scheme Participants Cover-More Name Cover-More Group Limited ACN Address Level 2 60 Miller Street North Sydney NSW 2060 Australia Telephone Scheme Participants Governing law Attention Name New South Wales Chief Executive Officer Each person registered as a holder of fully paid ordinary shares in Cover-More as at 5.00pm on the Record Date King & Wood Mallesons Scheme of Arrangement 1 SCHEME BOOKLET 143

147 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued General terms 1 Definitions and interpretation 1.1 Definitions In this Scheme: ACCC means the Australian Competition and Consumer Commission. ASIC means the Australian Securities and Investments Commission. ASX means ASX Limited or the market operated by it, as the context requires. Bidder Nominee has the meaning given to that term in clause 2.3 of this Scheme. Business Day means a business day as defined in the Listing Rules. Corporations Act means the Corporations Act 2001 (Cth). Court means the Federal Court of Australia, or such other court of competent jurisdiction under the Corporations Act agreed in writing by Zurich and Cover- More. Cover-More means Cover-More Group Limited (ACN ). Cover-More Share means a fully paid ordinary share in the capital of Cover- More. Cover-More Shareholder means each person registered in the Register as a holder of Cover-More Shares. Deed Poll means the deed poll dated..executed by Zurich and the Bidder Nominee substantially in the form of Annexure C of the Scheme Implementation Agreement or as otherwise agreed by Zurich, the Bidder Nominee and Cover-More under which Zurich and the Bidder Nominee each covenant in favour of each Scheme Participant to perform its respective obligations under this Scheme. Details means the section of this agreement headed Details. Effective means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to this Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC. Effective Date means the date on which the Scheme becomes Effective. Employee Performance Right means a Performance Right issued under the Cover-More Group Limited Long Term Incentive Plan operated by the Target and adopted by the Target Board on 12 June King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

148 Encumbrance means any security for payment of money or performance of obligations, including a mortgage, lien, charge, pledge, trust, power or title retention or flawed deposit arrangement and any security interest as defined in sections 12(1) or 12(2) of the Personal Property Securities Act 2009 (Cth) or any agreement to create any of them or allow them to exist. End Date means 30 June 2017 or such other date as is agreed in writing by Zurich and Cover-More. Immediately Available Funds means a bank cheque or other form of cleared funds acceptable to Cover-More. Implementation Date means the fifth Business Day following the Record Date or such other date as is agreed by Zurich and Cover-More. Listing Rules means the Listing Rules of the ASX. Permitted Dividend means an interim dividend and/or special dividend (which may be franked) declared or determined by Target Board, provided that the maximum aggregate amount paid or payable by Target per Target Share in respect of all such dividends is A$0.05 per Target Share. Record Date means the fifth Business Day following the Effective Date or such other date as Cover-More and Zurich agree. Register means the register of members of Cover-More maintained by or on behalf of Cover-More in accordance with section 168(1) of the Corporations Act and Registry has a corresponding meaning. Registered Address means, in relation to a Cover-More Shareholder, the address shown in the Register. Regulatory Authority includes: (a) (b) (c) (d) ASX, ACCC, ASIC and the Takeovers Panel; a government or governmental, semi-governmental or judicial entity or authority; a minister, department, office, commission, delegate, instrumentality, agency, board, authority or organisation of any government; and any regulatory organisation established under statute. Scheme means this scheme of arrangement between Cover-More and Scheme Participants under which all of the Scheme Shares will be transferred to Zurich (or if applicable, the Bidder Nominee) under Part 5.1 of the Corporations Act as described in clause 6 of this Scheme, in consideration for the Scheme Consideration, subject to any amendments or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act to the extent they are approved in writing by Cover-More and Zurich in accordance with clause 8.2 of this Scheme. Scheme Consideration means the consideration payable by Zurich (or if applicable, the Bidder Nominee) for the transfer of Target Shares held by a Scheme Participant to Zurich (or the Bidder Nominee), being, in respect of each Target Share, $1.95 less the amount of the Permitted Dividend paid or payable in respect of the Target Share in accordance with the Scheme Implementation Agreement. King & Wood Mallesons _11 Scheme of Arrangement 3 SCHEME BOOKLET 145

149 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued Scheme Implementation Agreement means the scheme implementation agreement dated 11 December 2016 between Cover-More and Zurich under which, amongst other things, Cover-More has agreed to propose this Scheme to Cover-More Shareholders, and each of Zurich and Cover-More has agreed to take certain steps to give effect to this Scheme. Scheme Meeting means the meeting of Cover-More Shareholders, ordered by the Court to be convened pursuant to section 411(1) of the Corporations Act at which Cover-More Shareholders will vote on this Scheme. Scheme Participant means each person who is a Cover-More Shareholder as at 5.00pm on the Record Date. Scheme Share means a Cover-More Share held by a Scheme Participant as at the Record Date and, for the avoidance of doubt, includes any Cover-More Shares issued on or before the Record Date. Second Court Date means the day on which the Court makes an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme (or if the application is adjourned or subject to appeal for any reason, the day on which the adjourned application is heard). Share Scheme Transfer means, for each Scheme Participant, a duly completed and executed proper instrument of transfer of the Scheme Shares held by that Scheme Participant for the purposes of section 1071B of the Corporations Act, which may be a master transfer of all Scheme Shares. Subsidiary has the meaning given to it in the Corporations Act. TAA means the Taxation Administration Act 1953 (Cth). Trust Account means the trust account operated by or on behalf of Cover-More to hold the Scheme Consideration on trust for the purpose of paying the Scheme Consideration to the Scheme Participants in accordance with clause 6.4 of this Scheme. Zurich means Zurich Insurance Company Ltd, a company incorporated under the laws of Switzerland. 1.2 Reference to certain general terms Unless the contrary intention appears, a reference in this Scheme to: (a) (b) (c) (d) (variations or replacement) a document, agreement (including this agreement) or instrument is a reference to that document, agreement or instrument as amended, consolidated, supplemented, novated or replaced; (clauses, annexures and schedules) a clause, annexure or schedule is a reference to a clause in or annexure or schedule to this agreement; (reference to statutes) a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them; (law) law means common law, principles of equity, and laws made by parliament (and laws made by parliament include State, Territory and Commonwealth laws and regulations and other instruments under them, and consolidations, amendments, re-enactments or replacements of any of them); King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

150 (e) (f) (g) (h) (i) (j) (k) (l) (m) (singular includes plural) the singular includes the plural and vice versa; (party) a party means a party to this Scheme; (person) the word person includes an individual, a firm, a body corporate, a partnership, a joint venture, an unincorporated body or association, or any Regulatory Authority; (executors, administrators, successors) a particular person includes a reference to the person s executors, administrators, successors, substitutes (including persons taking by novation) and assigns; (dollars) Australian dollars, dollars, A$ or $ is a reference to the lawful currency of Australia; (calculation of time) a period of time dating from a given day or the day of an act or event, is to be calculated exclusive of that day; (reference to a day) a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later; (meaning not limited) the words include, including, for example or such as when introducing an example, do not limit the meaning of the words to which the example relates to that example or examples of a similar kind; and (time of day) time is a reference to Sydney time. 1.3 Headings Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of this Scheme. 2 Preliminary 2.1 Cover-More Cover-More is: (a) (b) (c) a public company limited by shares; incorporated in Australia and registered in Victoria; and admitted to the official list of the ASX and Cover-More Shares are officially quoted on the stock market conducted by ASX. As at.., Cover-More s issued securities are: (a) (b) Cover-More Shares: ; and Employee Performance Rights:. 2.2 Zurich Zurich is a company incorporated in Switzerland. King & Wood Mallesons _11 Scheme of Arrangement 5 SCHEME BOOKLET 147

151 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued 2.3 Bidder Nominee Pursuant to clause 2.2 of the Scheme Implementation Agreement, Zurich may nominate a wholly owned Subsidiary of Zurich ( Bidder Nominee ) to pay the Scheme Consideration and to which the Scheme Shares are to be transferred in accordance with clause 5 of this Scheme. If Zurich nominates a Bidder Nominee, then clause 2.2 of the Scheme Implementation Agreement provides that: (a) (b) Zurich must procure that the Bidder Nominee complies with the Scheme Implementation Agreement as if the Bidder Nominee were a party to it in place of Zurich; and any such nomination will not relieve Zurich of its obligations under the Scheme Implementation Agreement, including the obligation to pay (or procure the payment by Bidder Nominee of) the Scheme Consideration as contemplated by the terms of this Scheme. 2.4 If Scheme becomes Effective If this Scheme becomes Effective: (a) (b) (c) in consideration of the transfer of each Scheme Share to Zurich (or if applicable, the Bidder Nominee), Zurich will provide (or procure the Bidder Nominee to provide) the Scheme Consideration to Cover-More on behalf of each Scheme Participant in accordance with the terms of this Scheme; all Scheme Shares will be transferred to Zurich (or if applicable, the Bidder Nominee) on the Implementation Date; and Cover-More will enter the name of Zurich (or if applicable, the Bidder Nominee) in the Register in respect of all Scheme Shares transferred to Zurich (or if applicable, the Bidder Nominee) in accordance with the terms of this Scheme. 2.5 Scheme Implementation Agreement Cover-More and Zurich have agreed by executing the Scheme Implementation Agreement to implement the terms of this Scheme. 2.6 Deed Poll Each of Zurich and the Bidder Nominee have executed the Deed Poll for the purpose of covenanting in favour of the Scheme Participants to perform (or procure the performance of) its respective obligations as contemplated by this Scheme, including to provide (or procure the provision of) the Scheme Consideration. 3 Conditions precedent 3.1 Conditions precedent to Scheme This Scheme is conditional on, and will not become Effective until, the satisfaction of each of the following conditions precedent: (a) as at 8.00am on the Second Court Date, neither the Deed Poll nor the Scheme Implementation Agreement have been terminated in accordance with their terms; King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

152 (b) (c) (d) all of the conditions precedent in clause 3.1 of the Scheme Implementation Agreement having been satisfied or waived (other than the condition precedent in item (c)) in accordance with the terms of the Scheme Implementation Agreement by 8:00am on the Second Court Date; the Court having approved this Scheme, with or without any modification or condition, pursuant to section 411(4)(b) of the Corporations Act, and if applicable, Cover-More and Zurich having accepted in writing any modification or condition made or required by the Court under section 411(6) of the Corporations Act; and the coming into effect, pursuant to section 411(10) of the Corporations Act, of the orders of the Court made under section 411(4)(b) of the Corporations Act (and, if applicable, section 411(6) of the Corporations Act) in relation to this Scheme. 3.2 Conditions precedent and operation of clause 5 The satisfaction of each condition of clause 3.1 of this Scheme is a condition precedent to the operation of clause 5 of this Scheme. 3.3 Certificate in relation to conditions precedent Each of Cover-More and Zurich must provide to the Court on the Second Court Date a certificate confirming (in respect of matters within their knowledge) whether or not all of the conditions precedent set out in clause 3.1 of this Scheme (other than the conditions precedent in clause 3.1(c) and clause 3.1(d) of this Scheme) have been satisfied or waived as at 8.00am on the Second Court Date. The certificates referred to in this clause 3.3 will constitute conclusive evidence of whether the conditions precedent referred to in clause 3.1 of this Scheme (other than the conditions precedent in clause 3.1(c) and 3.1(d) of this Scheme) have been satisfied or waived as at 8.00am on the Second Court Date. 4 Scheme 4.1 Effective Date Subject to clause 4.2, this Scheme will come into effect pursuant to section 411(10) of the Corporations Act on and from the Effective Date. 4.2 Termination and End Date Without limiting any rights under the Scheme Implementation Agreement, if: (a) (b) the Scheme Implementation Agreement or the Deed Poll is terminated in accordance with its terms before the Scheme becomes Effective; or the Effective Date does not occur on or before the End Date, then each of Zurich (and if applicable the Bidder Nominee) and Cover-More are released from any further obligation to take steps to implement the Scheme. King & Wood Mallesons _11 Scheme of Arrangement 7 SCHEME BOOKLET 149

153 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued 5 Implementation of Scheme 5.1 Lodgement of Court orders with ASIC If the conditions precedent set out in clause 3.1 of this Scheme (other than the condition precedent in clause 3.1(d) of this Scheme) are satisfied, Cover-More must lodge with ASIC in accordance with section 411(10) of the Corporations Act an office copy of the Court order approving this Scheme as soon as possible, and in any event by no later than 5.00pm on the first Business Day after the day on which the Court approves this Scheme or such later time as Zurich and Cover-More agree in writing. 5.2 Transfer and registration of Cover-More Shares On the Implementation Date, but subject to the provision of the Scheme Consideration for the Scheme Shares in accordance with clauses 6.1 to 6.4 of this Scheme and Zurich having provided Cover-More with written confirmation thereof: (a) the Scheme Shares, together with all rights and entitlements attaching to the Scheme Shares as at the Implementation Date, will be transferred to Zurich (or if applicable, the Bidder Nominee) without the need for any further act by any Scheme Participant (other than acts performed by Cover-More as attorney and agent for Scheme Participants under clause 8.1 of this Scheme) by: (i) (ii) Cover-More delivering to Zurich (or if applicable, the Bidder Nominee) a duly completed and executed Share Scheme Transfer executed on behalf of the Scheme Participants; and Zurich (or if applicable, the Bidder Nominee) duly executing the Share Scheme Transfer, attending to the stamping of the Share Scheme Transfer (if required) and delivering it to Cover-More for registration; and (b) as soon as practicable after receipt of the duly executed Share Scheme Transfer, Cover-More must enter, or procure the entry of, the name of Zurich (or if applicable, the Bidder Nominee) in the Register in respect of all Scheme Shares transferred to Zurich (or if applicable, the Bidder Nominee) in accordance with the terms of this Scheme. 5.3 Entitlement to Scheme Consideration On the Implementation Date, in consideration for the transfer to Zurich (or if applicable, the Bidder Nominee) of the Scheme Shares, each Scheme Participant will be entitled to receive the Scheme Consideration in respect of each of their Scheme Shares in accordance with clause 6 of this Scheme. 5.4 Title and rights in Cover-More Shares Subject to the provision of the Scheme Consideration for the Scheme Shares as contemplated by clause 6 of this Scheme, on and from the Implementation Date, Zurich (or if applicable, the Bidder Nominee) will be beneficially entitled to the Scheme Shares transferred to it under the Scheme, pending registration by Cover-More of Zurich (or if applicable, the Bidder Nominee) in the Register as the holder of the Scheme Shares. King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

154 5.5 Scheme Participants agreements Under this Scheme, each Scheme Participant agrees to the transfer of their Scheme Shares, together with all rights and entitlements attaching to those Scheme Shares, in accordance with the terms of this Scheme. 5.6 Warranty by Scheme Participants Each Scheme Participant warrants to Zurich (or if applicable, the Bidder Nominee) and is deemed to have authorised Cover-More to warrant to Zurich (or if applicable, the Bidder Nominee) as agent and attorney for the Scheme Participant by virtue of this clause 5.6, that: (a) (b) all their Scheme Shares (including any rights and entitlements attaching to those shares) transferred to Zurich (or if applicable, the Bidder Nominee) under the Scheme will, as at the date of the transfer, be fully paid and free from all Encumbrances; and they have full power and capacity to sell and to transfer their Scheme Shares (including any rights and entitlements attaching to those shares) to Zurich (or if applicable, the Bidder Nominee) under the Scheme. 5.7 Transfer free of encumbrances To the extent permitted by law, all Cover-More Shares (including any rights and entitlements attaching to those shares) which are transferred to Zurich (or if applicable, the Bidder Nominee) under this Scheme will, at the date of the transfer of them to Zurich (or if applicable, the Bidder Nominee), vest in Zurich (or if applicable, the Bidder Nominee) free from all Encumbrances and interests of third parties of any kind, whether legal or otherwise, and free from any restrictions on transfer of any kind not referred to in this Scheme. 5.8 Appointment of Zurich as sole proxy Subject to the provision of the Scheme Consideration for the Scheme Shares as contemplated by clauses 5.2 and 6.2 of this Scheme, on and from the Implementation Date until Cover-More registers Zurich (or if applicable, the Bidder Nominee) as the holder of all of the Cover-More Shares in the Register, each Scheme Participant: (a) (b) irrevocably appoints Cover-More as attorney and agent (and directs Cover-More in such capacity) to appoint Zurich (or if applicable, the Bidder Nominee) and each of its directors from time to time (jointly and each of them individually) as its sole proxy and where applicable, corporate representative, to attend shareholders meetings, exercise the votes attaching to Cover-More Shares registered in its name and sign any shareholders resolution, and no Scheme Participant may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 5.8(a)); and must take all other actions in the capacity of the registered holder of Cover-More Shares as Zurich (or if applicable, the Bidder Nominee) reasonably directs. Cover-More undertakes in favour of each Scheme Participant that it will appoint Zurich (or if applicable, the Bidder Nominee) and each of its directors from time to time (jointly and each of them individually) as that Scheme Participant s proxy or, where applicable, corporate representative in accordance with clause 5.8(a) of this Scheme. King & Wood Mallesons _11 Scheme of Arrangement 9 SCHEME BOOKLET 151

155 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued 6 Scheme Consideration 6.1 Consideration under the Scheme On the Implementation Date, Cover-More must procure Zurich to pay (or procure the payment of) the Scheme Consideration to the Scheme Participants in accordance with clauses 6.2, 6.3, 6.4 and 6.5 of this Scheme. 6.2 Satisfaction of obligations Subject to clause 6.4 of this Scheme, the obligation of Cover-More to procure payment of the Scheme Consideration pursuant to clause 6.1 of this Scheme will be satisfied by Cover-More procuring Zurich no later than two Business Days before the Implementation Date to deposit (or procure the deposit) in Immediately Available Funds the aggregate amount of the Scheme Consideration payable to all Scheme Participants into the Trust Account (except that the amount of any interest on the amount deposited (less bank fees and other charges) will be to Zurich s (or if applicable, the Bidder Nominee s) account). 6.3 Payment of Scheme Consideration On the Implementation Date, subject to receipt of the Scheme Consideration from or on behalf of Zurich (or the Bidder Nominee) in accordance with clause 6.2 of this Scheme, Cover-More must pay to each Scheme Participant an amount equal to the Scheme Consideration for each Scheme Share transferred to Zurich (or if applicable, the Bidder Nominee) on the Implementation Date by that Scheme Participant, which obligation will be satisfied by Cover-More: (a) (b) where a Scheme Participant has, before 5:00pm on the Record Date, made an election in accordance with the requirements of the Register to receive dividend payments from Cover-More by electronic funds transfer to a bank account nominated by the Scheme Participant, paying, or procuring the payment of, the relevant amount in Australian currency by electronic means in accordance with that election; whether or not a Scheme Participant has made an election referred to in clause 6.3(a), dispatching, or procuring the dispatch of, a cheque drawn on an Australian bank in Australian currency for the relevant amount to the Scheme Participant by pre-paid ordinary post (or, if the address of the Scheme Participant in the Register is outside Australia, by pre-paid airmail post) to their Registered Address at 5.00pm on the Record Date, such cheque being drawn in the name of the Scheme Participant (or in the case of joint holders, in accordance with clause 6.8). 6.4 Foreign resident capital gains withholding If Zurich (or if applicable, the Bidder Nominee) determines that it must pay an amount to the Commissioner pursuant to Subdivision 14-D of Schedule 1 to the TAA with respect to the acquisition of the Target Shares from a Scheme Participant, Zurich (or if applicable, the Bidder Nominee) will, for any such Scheme Participant: (a) (b) determine the amount to be paid to the Commissioner ( Payment Amount ); remit the Payment Amount to the Commissioner within the time required under the TAA; and King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

156 (c) reduce the amount of Scheme Consideration payable to that Scheme Participant by the Payment Amount for the purposes of the Deed Poll, this Scheme and the Scheme Implementation Agreement. For the avoidance of doubt, Zurich (and if applicable, the Bidder Nominee) will, for the purposes of the Deed Poll, this Scheme and the Scheme Implementation Agreement, be deemed to have satisfied its obligations to pay the Scheme Consideration to a Scheme Participant if the amount paid to the Scheme Participant is the amount of the Scheme Consideration that would have otherwise been payable to the Scheme Participant pursuant to the Scheme, less the Payment Amount for that Scheme Participant. 6.5 Cancellation and re-issue of cheques Cover-More may cancel a cheque issued under clause 6.3 of this Scheme if the cheque: (a) (b) is returned to Cover-More; or has not been presented for payment within six months after the date on which the cheque was sent. During the period of one year commencing on the Implementation Date, on request from a Scheme Participant (which request may not be made until the date which is five Business Days after the Implementation Date), Cover-More must reissue a cheque that was previously cancelled under this clause Unclaimed monies (a) The Unclaimed Money Act 1995 (NSW) will apply in relation to any Scheme Consideration which becomes unclaimed money (as defined in section 7 of the Unclaimed Money Act 1995 (NSW)). (b) Any interest or other benefit accruing from unclaimed Scheme Consideration will be to the benefit of Zurich. 6.7 Orders of a court In the case of notice having been given to Cover-More (or the Registry) of an order made by a court of competent jurisdiction or by a Regulatory Authority: (a) (b) which requires payment to a third party of a sum in respect of Scheme Shares held by a particular Scheme Participant, which would otherwise be payable to that Scheme Participant in accordance with clause 6.3 of this Scheme, then Cover-More shall procure that payment is made in accordance with that order; or which would prevent Cover-More from dispatching payment to any particular Scheme Participant in accordance with clause 6.3 of this Scheme, or such payment is otherwise prohibited by applicable law, Cover-More will be entitled to retain an amount, in Australian dollars, equal to the number of Scheme Shares held by that Scheme Participant multiplied by the Scheme Consideration until such time as payment in accordance with clause 6.3 of this Scheme is permitted by law. 6.8 Joint holders In the case of Scheme Shares held in joint names, any bank cheque required to be paid to Scheme Participants by or on behalf of Zurich (or if applicable, the Bidder Nominee) must be payable to the joint holders and be forwarded to the King & Wood Mallesons _11 Scheme of Arrangement 11 SCHEME BOOKLET 153

157 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued holder whose name appears first in the Register as at 5.00pm on the Record Date. 7 Dealings in Scheme Shares 7.1 Determination of Scheme Participants To establish the identity of the Scheme Participants, dealings in Scheme Shares will only be recognised by Cover-More if: (a) (b) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Register as the holder of the relevant Scheme Shares on or before 5.00pm on the Record Date; and in all other cases, registrable transmission applications or transfers in registrable form in respect of those dealings are received on or before 5.00pm on the Record Date at the place where the Register is kept. 7.2 Register Cover-More must register any registrable transmission applications or transfers of the Scheme Shares received in accordance with clause 7.1(b) of this Scheme on or before 5.00pm on the Record Date, provided that nothing in this clause 7.2 requires Cover-More to register a transfer that would result in a Cover-More Shareholder holding a parcel of Cover-More Shares that is less than a marketable parcel (as defined in the operating rules of ASX). 7.3 No disposals after Effective Date If this Scheme becomes Effective, a holder of Scheme Shares (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Shares or any interest in them after the Effective Date in any way except as set out in this Scheme and any such disposal will be void and of no legal effect whatsoever. Cover-More will not accept for registration or recognise for any purpose any transmission, application or transfer in respect of Scheme Shares received after 5.00pm on the Record Date (except a transfer to Zurich (or if applicable, the Bidder Nominee) pursuant to this Scheme and any subsequent transfer by Zurich (or if applicable, the Bidder Nominee) or its successors in title) or received prior to 5:00pm on the Record Date but not in registrable or actionable form. 7.4 Maintenance of Cover-More Register For the purpose of determining entitlements to the Scheme Consideration, Cover-More will maintain the Register in accordance with the provisions of this clause 7.4 until the Scheme Consideration has been paid to the Scheme Participants and Zurich (or if applicable, the Bidder Nominee) has been entered in the Register as the holder of all the Scheme Shares. The Register in this form will solely determine entitlements to the Scheme Consideration. 7.5 Effect of certificates and holding statements Subject to provision of the Scheme Consideration and registration of the transfer to Zurich (or if applicable, the Bidder Nominee) contemplated in clauses 5.2 and 6.3 of this Scheme, any statements of holding in respect of Scheme Shares will cease to have effect after 5.00pm on the Record Date as documents of title in respect of those shares (other than statements of holding in favour of Zurich (or if applicable, the Bidder Nominee) and its successors in title). After 5.00pm on the King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

158 Record Date, each entry current on the Register as at 5.00pm on the Record Date (other than entries in respect of Zurich (or if applicable, the Bidder Nominee) or its successors in title) will cease to have effect except as evidence of entitlement to the Scheme Consideration. 7.6 Details of Scheme Participants Within three Business Days after the Record Date Cover-More will ensure that details of the names, Registered Addresses and holdings of Scheme Shares for each Scheme Participant, as shown in the Register at 5.00pm on the Record Date are available to Zurich and the Bidder Nominee (if applicable) in such form as Zurich reasonably requires. 7.7 Quotation of Cover-More Shares (a) Suspension of trading on ASX in Cover-More Shares will occur from the close of trading on ASX on the Effective Date. (b) After the Scheme has been fully implemented, Cover-More will apply: (i) (ii) for termination of the official quotation of Cover-More Shares on the ASX; and to have itself removed from the official list of the ASX, in each case with effect on and from the close of trading day immediately following, or shortly after, the Implementation Date, as determined by Zurich. 8 General Scheme provisions 8.1 Power of attorney Each Scheme Participant, without the need for any further act by any Scheme Participant, irrevocably appoints Cover-More and each of its directors and secretaries (jointly and each of them individually) as its attorney and agent for the purpose of: (a) (b) executing any document necessary or expedient to give effect to this Scheme including the Share Scheme Transfer; enforcing the Deed Poll against Zurich (or if applicable, the Bidder Nominee), and Cover-More accepts such appointment. 8.2 Variations, alterations and conditions Cover-More may, with the consent of Zurich (or if applicable, the Bidder Nominee) (which cannot be unreasonably withheld), by its counsel or solicitor consent on behalf of all persons concerned to any variations, alterations or conditions to this Scheme which the Court thinks fit to impose. 8.3 Further action by Cover-More Cover-More will execute all documents and do all things (on its own behalf and on behalf of each Scheme Participant) necessary or expedient to implement, and perform its obligations under, this Scheme. King & Wood Mallesons _11 Scheme of Arrangement 13 SCHEME BOOKLET 155

159 ATTACHMENT C. SCHEME OF ARRANGEMENT MADE UNDER SECTION 411 OF THE CORPORATIONS ACT continued 8.4 Authority and acknowledgement Each of the Scheme Participants: (a) (b) irrevocably consents to Cover-More and Zurich (or if applicable, the Bidder Nominee) doing all things necessary or expedient for or incidental to the implementation of this Scheme; and acknowledges that this Scheme binds Cover-More and all Scheme Participants (including those who do not attend the Scheme Meeting or do not vote at that meeting or vote against the Scheme at that Meeting) and, to the extent of any inconsistency and to the extent permitted by law, overrides the constitution of Cover-More. 8.5 No liability when acting in good faith Neither Cover-More nor Zurich (and if applicable, the Bidder Nominee), nor any of their respective officers, will be liable for anything done or omitted to be done in the performance of this Scheme in good faith. 8.6 Enforcement of Deed Poll Cover-More undertakes in favour of each Scheme Participant to enforce the Deed Poll against Zurich and/or the Bidder Nominee (as applicable) on behalf of and as agent and attorney for the Scheme Participants. 8.7 Stamp duty Zurich (or if applicable, the Bidder Nominee) will: (a) (b) pay all stamp duty (if any) (including any fines, penalties and interest) payable in connection with this Scheme or the Deed Poll; and indemnify each Scheme Participant against any liability incurred by the Scheme Participant arising from failure to comply with clause 8.7(a). 8.8 Notices (a) If a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to Cover-More, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at Cover-More s registered office or at the office of the Registry. (b) The accidental omission to give notice of the Scheme Meeting or the non-receipt of such a notice by any Cover-More Shareholder shall not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings of the Scheme Meeting. 9 Governing law 9.1 Governing law This Scheme is governed by the law in force in New South Wales. 9.2 Jurisdiction Each party irrevocably and unconditionally: King & Wood Mallesons _11 Scheme of Arrangement COVER-MORE GROUP LIMITED

160 (a) (b) submits to the non-exclusive jurisdiction of the courts of that place. waives, without limitation, any claim or objection based on absence of jurisdiction or inconvenient forum. King & Wood Mallesons _11 Scheme of Arrangement 15 SCHEME BOOKLET 157

161 ATTACHMENT D. DEED POLL 158 COVER-MORE GROUP LIMITED

162 Deed Poll Dated Given by: Zurich Insurance Company Limited ( Zurich ) and Zurich Travel Solutions Pty Limited (ACN ) ( Bidder Nominee ) In favour of each registered holder of fully paid ordinary shares in Cover- More Group Limited (ACN ) ( Cover-More ) as at 5.00 pm on the Record Date ( Scheme Participants ) King & Wood Mallesons Level 61 Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Australia T F DX 113 Sydney SCHEME BOOKLET 159

163 ATTACHMENT D. DEED POLL continued Deed Poll Contents Details 1 General terms 3 1 Definitions and interpretation Definitions Interpretation Headings Nature of deed poll 3 2 Conditions precedent and termination Conditions precedent Termination Consequences of termination 4 3 Performance of obligations generally 4 4 Scheme Consideration Scheme Consideration Manner of payment Foreign resident capital gains withholding Joint holders 5 5 Representations and warranties 5 6 Continuing obligations 6 7 Notices Form - all communications Delivery When effective When taken to be received Receipt outside business hours 7 8 General Stamp duty Waiver Variation Remedies cumulative Assignment Governing law and jurisdiction Further action Service of process 8 Signing page 10 Annexure A - Scheme 11 King & Wood Mallesons _2_project machu Deed Poll i 160 COVER-MORE GROUP LIMITED

164 Deed Poll Details Parties Zurich and Bidder Nominee Zurich Name Zurich Insurance Company Limited Incorporated in Switzerland Address Mythenquai 2 CH-8002, Zurich Switzerland Attention group.legal@zurich.com Group General Counsel Bidder Nominee Name ACN Zurich Travel Solutions Pty Limited Incorporated in Australia Address 5 Blue Street, North Sydney NSW Attention group.legal@zurich.com Group General Counsel In favour of Each registered holder of fully paid ordinary shares in Cover-More as at 5.00 pm on the Record Date. Recitals A The directors of Cover-More have resolved that Cover-More should propose the Scheme. B C D E The effect of the Scheme will be that all Scheme Shares will be transferred to Zurich (or if applicable, the Bidder Nominee). Cover-More and Zurich have entered into the Scheme Implementation Agreement. In the Scheme Implementation Agreement, Zurich has agreed (amongst other things) to provide the Scheme Consideration to Cover-More on behalf of the Scheme Participants, subject to the satisfaction of certain conditions. Pursuant to clause 2.2 of the Scheme Implementation Agreement, Zurich has nominated the Bidder Nominee as the entity to acquire the Scheme Shares under the Scheme. King & Wood Mallesons Deed Poll 1 SCHEME BOOKLET 161

165 ATTACHMENT D. DEED POLL continued F Each of Zurich and the Bidder Nominee is entering into this deed poll for the purpose of covenanting in favour of Scheme Participants to perform its respective obligations in relation to the Scheme. Governing law Date of Deed Poll New South Wales See Signing page King & Wood Mallesons _2_project machu Deed Poll 15 February COVER-MORE GROUP LIMITED

166 Deed Poll General terms 1 Definitions and interpretation 1.1 Definitions In this deed poll (unless the context otherwise requires): (a) (b) (c) (d) (e) Authorised Officer means, in respect of a party, a director or secretary of the party or any other person appointed by a party to act as an Authorised Officer under this deed poll; Details means the section of this document headed Details ; Scheme Implementation Agreement means the scheme implementation agreement dated 11 December 2016 between Cover- More and Zurich under which, amongst other things, Cover-More has agreed to propose the Scheme to Cover-More Shareholders, and each of Zurich and Cover-More has agreed to take certain steps to give effect to the Scheme; Scheme means the proposed scheme of arrangement between Cover- More and Scheme Participants under which all the Scheme Shares will be transferred to Zurich (or if applicable, the Bidder Nominee) under Part 5.1 of the Corporations Act, substantially in the form of Annexure A to this deed poll, or as otherwise agreed by Zurich and Cover-More, subject to any amendments or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act, to the extent they are approved in writing by Cover-More and Zurich in accordance with clause 8.2 of the Scheme; and all other words and phrases used in this deed poll have the same meaning as given to them in the Scheme. 1.2 Interpretation Clause 1.2 of the Scheme applies to the interpretation of this deed poll except that references to this Scheme in that clause are to be read as references to this deed poll. 1.3 Headings Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of this deed poll. 1.4 Nature of deed poll Each of Zurich and the Bidder Nominee acknowledge and agree that: (a) (b) this deed poll may be relied on and enforced by any Scheme Participant in accordance with its terms even though the Scheme Participants are not a party to it; and under the Scheme, each Scheme Participant irrevocably appoints Cover- More and each of its directors, officers and secretaries (jointly and each King & Wood Mallesons _2_project machu Deed Poll 3 SCHEME BOOKLET 163

167 ATTACHMENT D. DEED POLL continued of them severally) as its agent and attorney to enforce this deed poll against Zurich and/or the Bidder Nominee (as applicable). 2 Conditions precedent and termination 2.1 Conditions precedent Each of Zurich s and the Bidder Nominee s obligations under clause 4 are subject to the Scheme becoming Effective. 2.2 Termination Each of Zurich s and the Bidder Nominee s obligations under this deed poll will automatically terminate and the terms of this deed poll will be of no further force or effect if: (a) (b) the Scheme has not become Effective on or before the End Date; or the Scheme Implementation Agreement is terminated in accordance with its terms. 2.3 Consequences of termination If this deed poll is terminated under clause 2.2, then, in addition and without prejudice to any other rights, powers or remedies available to Scheme Participants: (a) (b) each of Zurich and the Bidder Nominee is released from its respective obligations to further perform this deed poll except those obligations contained in clause 8.1 and any other obligations which by their nature survive termination; and each Scheme Participant retains the rights, powers or remedies they have against each of Zurich and/or the Bidder Nominee (as applicable) in respect of any breach of this deed poll which occurs before it is terminated. 3 Performance of obligations generally Each of Zurich and the Bidder Nominee must comply with its respective obligations under the Scheme Implementation Agreement and do all acts and things necessary or desirable on its part to give full effect to the Scheme. 4 Scheme Consideration 4.1 Scheme Consideration Subject to clause 2 and clause 4.3, each of Zurich and the Bidder Nominee undertake in favour of each Scheme Participant to pay, or to procure the payment of, the Scheme Consideration to the Trust Account on behalf of each Scheme Participant subject to and in accordance with the terms of the Scheme. 4.2 Manner of payment Subject to clause 4.3, Zurich s and the Bidder Nominee s respective obligation to provide, or procure the provision of, the Scheme Consideration to Cover-More on behalf of each Scheme Participant is satisfied by Zurich (or if applicable, the King & Wood Mallesons _2_project machu Deed Poll COVER-MORE GROUP LIMITED

168 Bidder Nominee), no later than two Business Days before the Implementation Date, depositing in Immediately Available Funds the aggregate amount of the Scheme Consideration payable to all Scheme Participants into the Trust Account (except that the amount of any interest (less bank fees and other charges) on the amount deposited will be to Zurich s or the Bidder Nominee s account). 4.3 Foreign resident capital gains withholding If Zurich (or if applicable, the Bidder Nominee) determines that it must pay an amount to the Commissioner pursuant to Subdivision 14-D of Schedule 1 to the Taxation Administration Act 1953 (Cth) ( TAA ) with respect to the acquisition of the Scheme Shares from a Scheme Participant, Zurich (or if applicable, the Bidder Nominee) will, for any such Scheme Participant: (a) (b) (c) determine the amount to be paid to the Commissioner ( Payment Amount ); remit the Payment Amount to the Commissioner within the time required under the TAA; and reduce the amount of Scheme Consideration payable to that Scheme Participant by the Payment Amount for the purposes of this deed poll, the Scheme and the Scheme Implementation Agreement. For the avoidance of doubt, Zurich (and if applicable, the Bidder Nominee) will, for the purposes of this deed poll, the Scheme and the Scheme Implementation Agreement, be deemed to have satisfied its obligations to pay the Scheme Consideration to a Scheme Participant if the amount paid to the Scheme Participant is the amount of the Scheme Consideration that would have otherwise been payable to the Scheme Participant pursuant to the Scheme, less the Payment Amount for that Scheme Participant. 4.4 Joint holders In the case of Scheme Shares held in joint names, any bank cheque required to be paid to Scheme Participants by Zurich (or if applicable, the Bidder Nominee) must be payable to the joint holders and be forwarded to the holder whose name appears first in the Register as at 5.00pm on the Record Date. 5 Representations and warranties Each of Zurich and the Bidder Nominee represent and warrant that: (a) (b) (c) (d) (e) it is a corporation validly existing under the laws of its place of registration; it has the corporate power to enter into and perform its obligations under this deed poll and to carry out the transactions contemplated by this deed poll; it has taken all necessary corporate action to authorise its entry into this deed poll and has taken or will take all necessary corporate action to authorise the performance of this deed poll and to carry out the transactions contemplated by this deed poll; this deed poll is valid and binding upon it and enforceable against it in accordance with its terms; and this deed poll does not conflict with, or result in the breach of or default under, any provision of its constitution, or any writ, order or injunction, King & Wood Mallesons _2_project machu Deed Poll 5 SCHEME BOOKLET 165

169 ATTACHMENT D. DEED POLL continued judgment, law, rule or regulation to which it is a party or subject or by which it is bound. 6 Continuing obligations Subject to clause 8.3, this deed poll is irrevocable and, subject to clause 2, remains in full force and effect until: (a) Zurich and the Bidder Nominee have fully performed their respective obligations under this deed poll; or (b) the earlier termination of this deed poll under clause Notices 7.1 Form - all communications Unless expressly stated otherwise in this deed poll, all notices, certificates, consents, approvals, waivers and other communications to Zurich and/or the Bidder Nominee in connection with this deed poll must be: (a) (b) (c) in writing; signed by the sender (if an individual) or an Authorised Officer of the sender; and marked for the attention of the person identified in the Details or, if the recipient has notified otherwise, then marked for attention in the way last notified. 7.2 Delivery Communications must be: (a) (b) (c) (d) left at the address set out or referred to in the Details; sent by prepaid ordinary post (airmail if appropriate) to the address set out or referred to in the Details; sent by fax to the fax number set out or referred to in the Details; or given in any other way permitted by law. However, if the intended recipient has notified a changed address or fax number, then communications must be to that address or fax number. 7.3 When effective Communications take effect from the time they are received or taken to be received under clause 7.4 (whichever happens first) unless a later time is specified. 7.4 When taken to be received Communications are taken to be received: (a) if sent by post, three days after posting (or seven days after posting if sent from one country to another); or King & Wood Mallesons _2_project machu Deed Poll COVER-MORE GROUP LIMITED

170 (b) if sent by fax, at the time shown in the transmission report as the time that the whole fax was sent. 7.5 Receipt outside business hours Despite clauses 7.3 and 7.4, if communications are received or taken to be received under clause 7.4 after 5.00pm in the place of receipt or on a non- Business Day, they are taken to be received at 9.00am on the next Business Day and take effect from that time unless a later time is specified. 8 General 8.1 Stamp duty Zurich (or if applicable, the Bidder Nominee) must: (a) (b) (c) pay all stamp duty (including fines, penalties and interest) payable and assessed on or in connection with this deed poll, the performance of this deed poll, or any instruments entered into under this deed poll and in respect of a transaction effected by or made under the Scheme and this deed poll; pay other costs in respect of the Scheme (including, in connection with the transfer of Scheme Shares to Zurich (or if applicable, the Bidder Nominee) in accordance with the terms of the Scheme); and indemnify on demand each Scheme Participant against any liability arising from failure to comply with clauses 8.1(a) or 8.1(b). 8.2 Waiver (a) A waiver of any right arising from a breach of this deed poll or of any right, power, authority, discretion or remedy arising upon default under this deed poll must be in writing and signed by the party giving the waiver. (b) A failure or delay in exercise, or partial exercise, of: (i) (ii) a right arising from a breach of this deed poll; or a right, power, authority, discretion or remedy created or arising upon default under this deed poll, does not result in a waiver of that right, power, authority, discretion or remedy. (c) (d) A party is not entitled to rely on a delay in the exercise or non-exercise of a right, power, authority, discretion or remedy arising from a breach of this deed poll or on a default under this deed poll as constituting a waiver of that right, power, authority, discretion or remedy. A party may not rely on any conduct of another party as a defence to exercise of a right, power, authority, discretion or remedy by that other party. 8.3 Variation A provision of this deed poll or any right created under it may not be varied, altered or otherwise amended unless: King & Wood Mallesons _2_project machu Deed Poll 7 SCHEME BOOKLET 167

171 ATTACHMENT D. DEED POLL continued (a) (b) if before the First Court Date (as defined in the Scheme Implementation Agreement), the variation is agreed to by Cover-More, Zurich and the Bidder Nominee in writing; and if on or after the First Court Date (as defined in the Scheme Implementation Agreement), the variation is agreed to by Cover-More, Zurich and the Bidder Nominee in writing and the Court indicates that the variation, alteration or amendment would not itself preclude approval of the Scheme, in which event Zurich and the Bidder Nominee must enter into a further deed poll in favour of the Scheme Participants giving effect to the variation, alteration or amendment. 8.4 Remedies cumulative The rights, powers and remedies of Zurich, the Bidder Nominee and the Scheme Participants under this deed poll are cumulative and are in addition to, and do not exclude any, other rights, powers and remedies given by law independently of this deed poll. 8.5 Assignment The rights and obligations of Zurich, the Bidder Nominee and each Scheme Participant under this deed poll are personal and must not be assigned, encumbered or otherwise dealt with at law or in equity and no person may attempt or purport to do so without the prior written consent of Zurich, the Bidder Nominee and Cover-More. 8.6 Governing law and jurisdiction This deed poll is governed by the law in force in New South Wales. Zurich and the Bidder Nominee irrevocably and unconditionally submit to the non-exclusive jurisdiction of the courts of that place. 8.7 Further action Zurich and the Bidder Nominee must execute all deeds and other documents and do all things (on their own behalf or on behalf of each Scheme Participant) necessary or expedient to give full effect to this deed poll and the transactions contemplated by it. 8.8 Service of process Without preventing any method of service allowed under any relevant law, Zurich: (a) (b) irrevocably appoints the Bidder Nominee as its process agent to receive any document in an action in connection with this document; and agrees that failure by a process agent to notify Zurich of any document in an action in connection with this document does not invalidate the action concerned. If for any reason the Bidder Nominee ceases to be able to act as process agent, Zurich agrees to appoint another person as its process agent in the place referred to in clause 8.6 and ensure that the replacement process agent accepts its appointment and confirms its appointment to Zurich. The Bidder Nominee accepts its appointment as the process agent. King & Wood Mallesons _2_project machu Deed Poll COVER-MORE GROUP LIMITED

172 Zurich agrees that service of documents on its process agent at the following address is sufficient service on it: Zurich Travel Solutions Pty Limited Attention: Cathy Manolios 5 Blue Street NORTH SYDNEY NSW 2060 AUSTRALIA. EXECUTED as a deed poll King & Wood Mallesons _2_project machu Deed Poll 9 SCHEME BOOKLET 169

173 ATTACHMENT D. DEED POLL continued Deed Poll Signing page DATED: SIGNED, SEALED AND DELIVERED by... and... as authorised signatories of ZURICH INSURANCE COMPANY LTD: ) ) ) ) Seal... Signature of authorised person... Signature of authorised person EXECUTED by ZURICH TRAVEL SOLUTIONS PTY LIMITED in accordance with section 127(1) of the Corporations Act 2001 (Cth) by authority of its directors:... Signature of director... Name of director (block letters) ) ) ) ) ) ) ) ) ) ) ) )... Signature of director/company secretary* *delete whichever is not applicable... Name of director/company secretary* (block letters) *delete whichever is not applicable King & Wood Mallesons _2_project machu Deed Poll COVER-MORE GROUP LIMITED

174 Deed Poll Annexure A - Scheme Not reproduced here please see Attachment C of the Scheme Booklet King & Wood Mallesons _2_project machu Deed Poll 11 SCHEME BOOKLET 171

175 ATTACHMENT E. INDEPENDENT EXPERT S REPORT 172 COVER-MORE GROUP LIMITED

176 ABCD KPMG Corporate Finance ABN: A division of KPMG Financial Advisory Services Telephone: (Australia) Pty Ltd Facsimile: Australian Financial Services Licence No DX: 1056 Sydney Level 38 Tower Three Barangaroo Avenue Sydney NSW 2000 P O Box H67 Australia Square Sydney NSW 1213 Australia The Directors Cover-More Group Limited Level Miller Street North Sydney NSW February 2017 Dear Directors INDEPENDENT EXPERT S REPORT AND FINANCIAL SERVICES GUIDE PART ONE INDEPENDENT EXPERT S REPORT 1 Introduction On 12 December 2016, Cover-More Group Limited (Cover-More or the Company) announced that it had entered into a Scheme Implementation Agreement (SIA), whereby Zurich Insurance Company Ltd (Zurich), would acquire all of the ordinary shares in Cover-More by way of a Scheme of Arrangement (Scheme). Under the terms of the Scheme, Cover-More shareholders (Scheme Shareholders or Shareholders) will be entitled to receive consideration of $1.95 per Cover-More share (Scheme Consideration) if the Scheme is approved and implemented. The Scheme Consideration is expected to be comprised of: cash of $1.90 per Cover-More share, and a fully franked Special Dividend of $0.05 cash per Cover-More share (Special Dividend). The Cover-More Board has announced an intention to pay the fully franked Special Dividend of $0.05 per Cover-More share, subject to the Scheme becoming effective. If the Special Dividend is not declared by the Cover-More Board but the Scheme nevertheless becomes effective, the Scheme Consideration will still be $1.95 per Cover-More share. KPMG Financial Advisory Services (Australia) Pty Ltd is affiliated with KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. SCHEME BOOKLET 173

177 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 The Scheme Consideration of $1.95 per share represents an implied market capitalisation of $741.2 million and an implied enterprise value of $845.6 million fully diluted. 1 Established in 1986, Cover-More is an integrated travel insurance and medical assistance business with its largest operations in Australia and the United States (US) and a footprint in China, India, Malaysia, New Zealand, Singapore and the UK. Cover-More is not a registered insurer, rather its underwriting risk is outsourced in the global insurance market. The Company operates through three businesses, travel insurance, medical assistance and employee assistance and operates a multi-channel (agency, intermediary and direct) distribution model with sales most commonly generated through relationships with travel agents, airlines and financial institutions. Cover-More s core competencies are product development, pricing, sales, distribution and claims management. The Zurich Insurance Group, comprising Zurich Insurance Group Ltd (ZIG) and its subsidiaries, is a global multi-line insurance provider. It provides a range of general insurance and life insurance products and services. The Zurich Insurance Group is headquartered in Zurich, Switzerland, where it was founded in ZIG is the ultimate parent company of the Zurich Insurance Group and is listed on the SIX Swiss Exchange (trading under the symbol ZURN). Zurich is a wholly owned subsidiary of ZIG. Immediately prior to the announcement of the Scheme, on 9 December 2016, Cover-More shares closed at $1.32 per share having listed on the Australian Securities Exchange (ASX) in December 2013 at a price of $2.00 per share. The Directors of Cover-More have requested that KPMG Financial Advisory Services (Australia) Pty Ltd (of which KPMG Corporate Finance is a division) (KPMG Corporate Finance) prepare an independent expert s report setting out whether the Scheme is in the best interests of Shareholders. This report outlines KPMG Corporate Finance s opinion as to the merits or otherwise of the Scheme. This report should be considered in conjunction with and not independently of the information set out in the Notice of Meeting and Explanatory Statement (Scheme Booklet). The Scheme is subject to the satisfaction of a number of conditions which are outlined in Section 5.1 of this Report and Section 1.2 of the Scheme Booklet. Further information regarding the scope of this report is set out in Section 6 of this report. KPMG Corporate Finance s Financial Services Guide is contained in Part Two of this report. 2 Requirement of our report The Directors of Cover-More have requested that KPMG Corporate Finance prepare a report in accordance with Section 411 of the Corporations Act 2001 (Cth) (Act) and the guidance provided by the Australian Securities and Investments Commission (ASIC). Although there is no technical requirement for an independent expert s report to be prepared in relation to the Scheme, it is a requirement of the SIA ,082,011 diluted shares on issue (being 379,117,866 ordinary share and 964,145 vesting performance shares) and 1H17 pro-forma net debt of $104.4 million 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

178 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 The SIA states that the Board of Cover-More s recommendation in relation to the Scheme is subject to an independent expert opining that the Scheme is in the best interests of Shareholders. Further, ASIC Regulatory Guide 60 (RG 60) notes that even if an expert report is not required under the Corporations Regulations, it is common for a scheme company to commission one voluntarily for a transaction that is complex or effects a takeover. The report prepared by the expert must state whether, in the expert s opinion, the proposed scheme of arrangement is in the best interests of the members of the body as a whole and set out the expert s reason(s) for forming that opinion. Further details regarding the basis of our assessment are set out in Section 6.2 of this report. 3 Summary of opinion In our opinion, we consider the Scheme to be in the best interests of Shareholders, in the absence of a superior proposal. In arriving at this opinion, we have assessed whether the Scheme is: fair, by comparing the consideration to our assessed value of a Cover-More share on a controlling interest basis. This approach is in accordance with the guidance set out in RG 111 Content of Expert Reports (RG111) reasonable, by assessing the implications of the Scheme for Shareholders, the alternatives to the Scheme which are available to Cover-More and Shareholders, and the consequences for Shareholders of not approving the Scheme. Based on our assessment we have formed the view that the Scheme is fair and reasonable. As such, consistent with RG 111, we have concluded that the Scheme is in the best interests of Shareholders, in the absence of a superior proposal. Cover-More listed on the ASX in late 2013, at a time when there were significant opportunities for the business to leverage their successful Australian insurance business into overseas markets. Since the Initial Public Offering (IPO), Cover-More has added new clients and expanded its distribution footprint with strong growth in the retail travel segment. Cover-More has also increased its geographical footprint, expanding its operations in India and other Asian markets. Following its entry into the US market in May 2016, Cover-More announced the acquisition of Travelex Insurance Services Inc. (Travelex) in September 2016 accelerating Cover-More s North American expansion strategy. However, despite the growth achieved, Cover-More s results have more recently been negatively impacted by higher underwriting costs and costs of geographic expansion. In addition, underwriting uncertainty, particularly in the past 12 months, has impacted the Company s share price. Whilst Cover-More has put in place a refreshed strategy, underwriting agreement and management team to drive growth and achieve value in the future, achieving this will take time and carry risks. It is in this context that KPMG Corporate Finance has assessed the cash offer by Zurich of $ KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 3 SCHEME BOOKLET 175

179 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Assessment of fairness We have assessed the value of a Cover-More share to be in the range $1.70 to $1.96. This is comparable to the Scheme Consideration of $1.95 per Cover-More share. As the Scheme Consideration falls within our assessed value range for a Cover-More share, we consider the Scheme to be fair. As required by RG 111, we have valued Cover-More on a controlling interest basis. Our analysis of the fairness of the Scheme is detailed further in Section 3.1 below. Assessment of reasonableness In accordance with RG 111, an offer is reasonable if it is fair. As we have assessed the Scheme to be fair, this means that the Scheme is reasonable. However, we have also considered a range of other factors that are relevant to assessing the reasonableness of the Scheme and which on balance, support a reasonableness conclusion. These include: the Scheme Consideration offered represents a substantial premium to the trading price of Cover- More prior to the announcement of the Scheme the Scheme Consideration provides certainty of value no alternative proposal has been presented to the market and the likelihood of an alternative proposal emerging at this time is considered low Cover-More s share price will likely fall in the absence of the Scheme by exiting their investment in Cover-More, Shareholders will not be exposed to the potential benefits and risks from any future development of the business the potential benefit of franking credits associated with the Interim and Special Dividend for Australian resident Shareholders. Shareholders should also consider conditions precedent, which if not satisfied may result in the Scheme not being implemented and the transaction costs which will be incurred irrespective of whether the Scheme is implemented. Our analysis of the reasonableness of the Scheme is detailed further in Section 3.2 below. The decision of whether or not to approve the Scheme is a matter for individual shareholders based on their views as to value, expectations about future market conditions and their particular circumstances including investment strategy and portfolio, risk profile and tax position. Shareholders should consult their own professional adviser, if in doubt, regarding the action they should take in relation to the Scheme KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

180 ABCD Cover-More Group Limited Independent Expert s Report 20 February The Scheme is fair We have assessed the value of a Cover-More share to be in the range $1.70 to $1.96. As the Scheme Consideration of $1.95 per Cover-More share falls within our assessed value range for a Cover-More share, we consider the Scheme to be fair. Our valuation is set out in Section 8 of this report and the assessment of fairness is summarised below. Table 1: Valuation Summary Section Value Value $ millions (unless otherwise stated) reference Low High Value of Cover-More business operations Less: net debt 8.5 (104.4) (104.4) Surplus assets / (liabilities) 8.4 (0.9) (0.9) Value of equity Fully diluted shares on issue Value per Cover-More share ($ per share, rounded) Source: KPMG Corporate Finance analysis Note: Table may not sum due to rounding Our valuation reflects 100% ownership of Cover-More and incorporates a control premium. Therefore, we would expect the valuation to be in excess of the price at which Cover-More shares would trade on the ASX in the absence of a takeover offer. In assessing an appropriate premium for control in accordance with RG 111, we have only considered those synergies and benefits which would be available to more than one potential purchaser (or a pool of potential purchasers) of Cover-More. As such, we have not included the value of special benefits that may be unique to Zurich. We have adopted Capitalised Earnings as our primary methodology to value the shares in Cover-More, taking into consideration: the expected maintainable earnings of Cover-More, acknowledging the impact of the recent Travelex acquisition and cost savings implemented during FY17 our assessment of an appropriate earnings multiple to be applied to the selected maintainable earnings taking into consideration the nature of the business, growth expectations, risks and exposure to the economic environment and outlook a substantial control premium to reflect opportunities for cost savings and synergies available to a number of acquirers that have existing insurance operations either in Australia or overseas net debt requirements and non-operating liabilities the vesting of performance rights. We have cross-checked our valuation of Cover-More by comparing it to a high level Discounted Cash Flow (DCF) approach and share trading analysis. In this regard: the valuation calculated under the DCF approach of $1.69 to $1.99, overlaps our valuation of Cover- More under a capitalised earnings approach 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 5 SCHEME BOOKLET 177

181 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 the trading price for Cover-More shares (adjusted to reflect a premium for control) of $1.58 to $1.78, overlaps the range derived from our primary capitalised earnings methodology. The key factors considered in our assessment of the value of Cover-More are set out below. future growth is forecast to be highest in emerging economies such as India and China. The potential growth in these markets for travel insurance is positive, however, it has associated execution risk the successful integration of Travelex in the US. Cover-More has developed a plan to leverage Travelex in order to use it as a platform to accelerate execution of the US strategy. There is a risk that Travelex will not operate at the same profitability levels as existing operations and that integration and expansion could take longer than planned the travel insurance market is exposed to discretionary consumer expenditure and macroeconomic factors which could have a positive or negative impact on Cover-More. Cover-More s business model has a level of resilience to absorb shocks (given diversification of geographies and ability to adjust pricing), however, fluctuations in macroeconomic factors, such as foreign exchange rates (particularly to the Australian dollar) impacts profitability following the appointment of new Chief Executive Officer (CEO), Mike Emmett, in July 2016, Cover-More implemented a new strategy. The timing and execution of this strategy will impact Cover-More s growth, particularly overseas, and therefore will impact profitability ability to maintain market share in the core Australian market the strengths of relationships with key distribution parties. A comparison of our assessed value per Cover-More share on a control basis to the Scheme Consideration is illustrated below. Figure 1: Assessment of fairness Scheme Consideration $1.95 Value per Cover-More Share $1.70 $1.96 Source: KPMG Corporate Finance analysis $1.60 $1.65 $1.70 $1.75 $1.80 $1.85 $1.90 $1.95 $2.00 $2.05 $2.10 As the Scheme Consideration of $1.95 falls within our assessed range of $1.70 to $1.96, we consider the Scheme to be fair KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

182 ABCD Cover-More Group Limited Independent Expert s Report 20 February The Scheme is reasonable The following factors set out below, on balance, support a reasonableness conclusion. The Scheme Consideration offered represents a substantial premium to the trading price of Cover-More The Scheme Consideration of $1.95 represents a 48.3% premium to the last closing price prior to the announcement of the Scheme on 9 December The premium is broadly consistent when calculated over a 1 month, 3 month, 6 month and 12 month period to 9 December 2016, being the day prior to announcement of the Scheme as illustrated below. We note that the offer price is at a 62.5% premium to the entitlement offer issue price of $1.20 per share, at which Cover-More raised $73.3 million of equity in September Figure 2: Premium of Scheme Consideration over the Cover-More share price $2.00 Scheme Consideration of $ % 48.3% 47.4% 40.9% 46.1% 32.9% $1.50 $1.00 $0.50 $1.20 $1.32 $1.32 $1.38 $1.33 $1.47 $0.00 Entitlement offer Last close 1 month VWAP 3 month VWAP 6 month VWAP 12 month VWAP Source: IRESS; KPMG Corporate Finance analysis With regard to our assessment of the premium implied by the Scheme Consideration, we note: it is commonly accepted that acquirers of 100% of a business should pay a premium over the value implied by the trading prices of a share to reflect their ability to obtain control over the target s strategy and operations, as well as extract synergies from integration. Observations from transaction evidence indicate that takeover premiums generally range from 20 to 35% 2 for completed takeovers depending on the individual circumstances. In transactions where it was estimated that significant synergies could be achieved, the takeover premium was frequently estimated to be at the high end of this range or greater the substantial premium offered by Zurich over Cover-More s trading price likely reflects a combination of the significant synergies available from control and cost savings available as a result of Zurich being a global, diverse insurer with the potential to achieve funding, underwriting and other operational cost savings. 2 KPMG Corporate Finance analysis based on Mergerstat data for Australian transactions completed between 2001 and 2016, comparing the closing price of the target company one day prior to the takeover announcement to the final offer price KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 7 SCHEME BOOKLET 179

183 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Certainty of value The Scheme offers Shareholders an opportunity to exit their investment in Cover-More at a price that is certain and which incorporates a value for control as noted above. Whilst liquidity in the trading of Cover-More shares is sufficient to give Shareholders confidence that they would be able to exit their investment at a time of their choosing in the future, there is no certainty as to the price at which Cover- More would realise their investment at that time. No superior alternative proposal has emerged since the announcement of the Scheme and the likelihood of an alternative proposal emerging at this time is considered low The Scheme represents at this point in time the only opportunity for Shareholders to monetise their investment at a significant premium to the pre-announcement trading price. Under the SIA, Cover-More is restricted from either soliciting or entering into discussions with third parties in relation to alternative proposals. Cover-More is also required to notify Zurich should it become aware of any possible alternative proposal and Zurich has a last right to match a competing proposal. Further, under certain circumstances Cover-More would be required to pay a reimbursement fee to Zurich of approximately 1% of the aggregate Scheme Consideration. Similarly, a reverse reimbursement fee of the same amount will be payable to Cover-More by Zurich in certain circumstances. Although the likelihood of a superior alternative proposal is impacted by these terms, it does not preclude an alternative proposal from being made. Cover-More s share price will likely fall in the absence of the Scheme The current share price of Cover-More reflects the terms of the Scheme and therefore includes a control element. As such, in the absence of the Scheme, an alternative proposal or speculation concerning an alternative proposal, the Cover-More share price is likely to fall to levels consistent with trading prices prior to the announcement of the Scheme with allowance for any company specific initiatives or financial achievements in the subsequent period which the market may assess as value enhancing, and the impact of trends in broader equity markets. By exiting their investment in Cover-More, Shareholders will not participate in the potential longer term benefits and risks from any future development of the business Whilst Cover-More s strategy is to continue to grow its business, this is not without risks to the Shareholders. Cover-More is well-positioned to capitalise on its global footprint and expansion in the US market however, there are a number of risks associated with an investment in Cover-More. These are detailed in Section 6.3 of the Scheme Booklet. By exiting their investment in Cover-More, Shareholders will not participate in the potential longer term benefits from any future development of the business, nor be exposed to any of Cover-More s future risks. Additional potential franking credit benefit If the Scheme is approved and implemented, and the Special Dividend is declared by the Cover-More Board, Shareholders will receive a fully franked Special Dividend. If the Special Dividend is declared, 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

184 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 this will give an additional potential benefit to Shareholders who are Australian tax residents and can capture the full benefit of the franking credits associated with the Special Dividend. 3.3 Other considerations In forming our opinion, we have also considered a number of other factors as outlined below. Although we do not necessarily consider these will impact our assessment of the reasonableness of the Scheme, we consider it necessary to address these considerations in arriving at our opinion. Transaction costs associated with the sale of shares are avoided Shareholders will not incur any stamp duty or brokerage charges on the transfer of their Cover-More shares if the Scheme proceeds. Taxation implications for Shareholders Section 7 of the Scheme Booklet sets out a general description of the tax consequences for Shareholders who hold their shares on capital account and acquired those shares on or after 20 September If the Scheme is implemented, those Shareholders will be deemed to have disposed of their Cover-More shares and the disposal will constitute a capital gains tax event. Shareholders will make a capital gain or loss depending on the cost base of their shares. Shareholders who are not Australian residents and who hold portfolio interests are generally not subject to Australian capital gains tax. The five cent Special Dividend is expected to form part of the capital proceeds under the Scheme, it will, however, constitute assessable income. It is expected that the dividend will be fully franked. Australian residents may be entitled to a tax offset in relation to the franking credit attached to the dividend. We note that Shareholders should consider their individual circumstances, review the Scheme Booklet for further information where it applies to their circumstances and should seek the advice of their own professional adviser. The Scheme is subject to a number of conditions There are a number of conditions, including various representations and warrantees set out in 1.2 of the Scheme, which if not satisfied will result in the Scheme not being implemented, even if the Scheme has not been approved by Shareholders. In this case, Shareholders would continue to hold their existing shares. One-off transaction costs Cover-More management has estimated total one-off transaction costs in relation to the Scheme to be approximately $10.3 million, of which approximately $2.0 million will have been paid, or committed, prior to the Scheme Meeting. 3.4 Consequences if the Scheme does not proceed In the event that the Scheme is not approved or any conditions precedent prevent the Scheme from being implemented, Cover-More will continue to operate in its current form and remain listed on the ASX. As a consequence: Cover-More will continue to operate as a standalone entity and execute on its strategy as set out in Section 7.14 of this report 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 9 SCHEME BOOKLET 181

185 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Shareholders will not receive the Scheme Consideration and the implications of the Scheme, as summarised above, will not occur, other than with respect to the one-off transaction costs incurred, or committed to, prior to the Scheme Meeting. Cover-More would not be liable to pay a reimbursement fee under certain circumstances Shareholders will continue to be exposed to the benefits and risks associated with an investment in Cover-More Cover-More s share price will likely fall, for the reasons set out previously. 4 Other matters In forming our opinion, we have considered the interests of the Shareholders as a whole. This advice therefore does not consider the financial situation, objectives or needs of individual Shareholders. It is not practical or possible to assess the implications of the Scheme on individual Shareholders as their financial circumstances are not known. The decision of Shareholders as to whether or not to approve the Scheme is a matter for individuals based on, amongst other things, their risk profile, liquidity preference, investment strategy and tax position. Individual Shareholders should therefore consider the appropriateness of our opinion to their specific circumstances before acting on it. As an individual s decision to vote for or against the proposed resolutions may be influenced by his or her particular circumstances, we recommend that individual Shareholders, including residents of foreign jurisdictions, seek their own independent professional advice. Our report has also been prepared in accordance with the relevant provisions of the Act and other applicable Australian regulatory requirements. This report has been prepared solely for the purpose of assisting Shareholders in considering the Scheme. We do not assume any responsibility or liability to any other party as a result of reliance on this report for any other purpose. All currency amounts in this report are denominated in Australian dollars unless otherwise stated. Neither the whole nor any part of this report or its attachments or any reference thereto may be included in or attached to any document, other than the Scheme Booklet to be sent to Shareholders in relation to the Scheme, without the prior written consent of KPMG Corporate Finance as to the form and context in which it appears. KPMG Corporate Finance consents to the inclusion of this report in the form and context in which it appears in the Scheme Booklet. The above opinion should be considered in conjunction with and not independently of the information set out in the remainder of this report, including the appendices. Yours faithfully Joanne Lupton Authorised Representative Ian Jedlin Authorised Representative 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

186 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Contents Independent Expert s Report and Financial Services Guide 1 Part One Independent Expert s Report 1 1 Introduction 1 2 Requirement of our report 2 3 Summary of opinion The Scheme is fair The Scheme is reasonable Other considerations Consequences if the Scheme does not proceed 9 4 Other matters 10 5 The Proposal Conditions of the Scheme Cost of the Scheme 14 6 Scope of the report Purpose Basis of assessment Limitations and reliance on information Disclosure of information 17 7 Company overview Overview Travel Insurance Medical and employee assistance Multi-channel distribution network Market differentiation Partnerships Global Direct - Zurich Insurance Group US market Acquisitions Underwriting agreements Financial performance KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 11 SCHEME BOOKLET 183

187 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February Financial position Cash flow Strategy and outlook Dividends Franking credits Broker consensus forecasts Capital structure and ownership Trading performance Liquidity 36 8 Valuation of Cover-More Summary Valuation methodology Value of business operations Surplus assets / non-operating liabilities Net debt Number of shares on issue Valuation cross-checks 52 Appendix 1 KPMG Corporate Finance Disclosures 56 Appendix 2 Sources of information 57 Appendix 3 - Industry overview 58 Appendix 4 Broker estimates 64 Appendix 5 Valuation methodology 65 Appendix 6 Market Evidence 67 Appendix 7 Selection of discount rate 74 Part Two Financial Services Guide KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

188 ABCD Cover-More Group Limited Independent Expert s Report 20 February The Proposal On 12 December 2016, the Board of Directors of Cover-More announced that it had entered into an SIA whereby Zurich would acquire all of the ordinary shares in Cover-More by way of a Scheme. Under the terms of the Scheme, Shareholders will be entitled to receive consideration of $1.95 per Cover- More share if the Scheme is approved and implemented. The Scheme Consideration is expected to be comprised of: cash of $1.90 per Cover-More share, and a fully franked Special Dividend of $0.05 cash per Cover-More share. The Cover-More Board has announced an intention to pay the fully franked Special Dividend of $0.05 per Cover-More share, subject to the Scheme becoming effective. If the Special Dividend is not declared by the Cover-More Board but the Scheme nevertheless becomes effective, the Scheme Consideration will still be $1.95 per Cover-More share. The Board of Cover-More has indicated that it unanimously recommends that Shareholders vote in favour of the Scheme and that each Director of Cover-More intends to vote all shares held or controlled by them in favour of the Scheme in the absence of a superior proposal and subject to the independent expert concluding that the Scheme is in the best interests of Shareholders. 5.1 Conditions of the Scheme The Scheme is subject to a number of conditions which are set out in Section 1.2 of the Scheme Booklet. The key conditions are: no prescribed event occurring approval of Shareholders no other orders or restraints being issued by any court or any regulatory authority preventing the implementation of the Scheme Court Approval Foreign Investment Review Board (FIRB) approval Hart-Scott-Rodino Antitrust Improvements Act 1976 approval Financial Services and Markets Act (2000) (UK) approval. The SIA also contains customary exclusivity provisions including no shop, no talk and no due diligence restrictions, a notification obligation and a matching right, subject to the Directors fiduciary obligations. A reimbursement fee of approximately 1% of the aggregate Scheme Consideration may be payable to Zurich by Cover-More in certain circumstances. Similarly, a reverse reimbursement fee of the same amount will be payable to Cover-More by Zurich in certain circumstances. Further details are contained in Sections 3.9, 3.10 and 3.11 of Scheme Booklet KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 13 SCHEME BOOKLET 185

189 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Shareholders should also be aware that the SIA may be terminated in certain circumstances, as detailed in Section 3.8 of the Scheme Booklet. If the SIA is terminated or the conditions are not satisfied, the Scheme will not proceed. 5.2 Cost of the Scheme The total transaction and implementation costs in relation to the Scheme are estimated to be approximately $10.3 million. In the event the Scheme does not proceed, Cover-More will incur costs of approximately $2.0 million. 6 Scope of the report 6.1 Purpose The Directors of Cover-More have requested that KPMG Corporate Finance prepare an independent expert s report in accordance with Section 411 of the Corporations Act (Act) and the guidance provided by ASIC. Although there is no technical requirement for an independent expert s report to be prepared in relation to the Scheme, it is a requirement of the SIA. The SIA states that the recommendation by the Board of Cover-More in relation to the Scheme is subject to an independent expert opining that the Scheme is in the best interests of Shareholders. Further, RG 60 notes that even if an expert report is not required under the Corporations Regulations, it is common for a scheme company to commission one voluntarily for a transaction that is complex or effects a takeover. The report prepared by the expert must state whether, in the expert s opinion, the proposed scheme of arrangement is in the best interests of the members of the body as a whole and set out the expert s reason(s) for forming that opinion. 6.2 Basis of assessment RG 111 Content of expert reports, issued by ASIC, indicates the principles and matters which it expects a person preparing an independent expert report to consider. RG states that where a scheme of arrangement has the effect of a takeover bid, the form of analysis undertaken by the expert should be substantially the same as for a takeover bid. That form of analysis considers whether the transaction is fair and reasonable and, as such, incorporates issues as to value. In particular: fair and reasonable is not regarded as a compound phrase an offer is fair if the value of the offer price or consideration is equal to or greater than the value of the securities subject to the offer the comparison should be made assuming 100% ownership of the target and irrespective of whether the consideration is scrip or cash the expert should not consider the percentage holding of the bidder or its associates in the target when making this comparison an offer is reasonable if it is fair KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

190 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 RG states that if an expert would conclude that a proposal was fair and reasonable if it was in the form of a takeover bid, it will also be able to conclude that the scheme is in the best interests of the members of the company. In the circumstance of a not fair but reasonable outcome, RG states that the expert can also conclude that the scheme is in the best interests on the basis that it clearly states that the consideration is less than the value of the securities subject to the scheme but that there are sufficient reasons for shareholders to vote in favour of the scheme in the absence of a higher offer. RG 111 provides that an offer is fair if the value of the consideration is equal to or greater than the value of the shares subject to the offer. It is a requirement of RG 111 that the comparison be made assuming 100% ownership of the target and irrespective of whether the consideration is scrip or cash and without regard to the percentage holding of the bidder or its associates in the target prior to the bid. That is, RG 111 requires the value of the target to be assessed as if the bidder was acquiring 100% of the issued equity (i.e. on a controlling interest basis). In addition to the points noted above, RG 111 notes that the weight of judicial authority is that an expert should not reflect special value that might accrue to the acquirer. Accordingly, when assessing the full underlying value of Cover-More we have considered those synergies and benefits which would be available to more than one potential purchaser (or a pool of potential purchasers) of Cover-More. As such, we have not included the value of special benefits that may be unique to the bidder. Accordingly, our valuation of Cover-More has been determined without regard to the specific bidder, and any special benefits have been considered separately. Reasonableness involves an analysis of other factors that shareholders might consider prior to accepting an offer, such as: the bidder s pre-existing shareholding in the target other significant shareholdings in the target the liquidity of the market in the target s shares any special value of the target to the bidder the likely market price of the target s shares in the absence of the offer the likelihood of an alternative offer being made any other advantages, disadvantages and risks associated with accepting the offer. In forming our opinion, we have considered the interests of Shareholders as a whole. As an individual Shareholder s decision to vote for or against the proposed resolutions may be influenced by their particular circumstances, we recommend they each consult their own financial advisor. 6.3 Limitations and reliance on information In preparing this report and arriving at our opinion, we have considered the information detailed in Appendix 2 of this report. In forming our opinion, we have relied upon the truth, accuracy and completeness of any information provided or made available to us without independently verifying it KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 15 SCHEME BOOKLET 187

191 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Nothing in this report should be taken to imply that KPMG Corporate Finance has in any way carried out an audit of the books of account or other records of Cover-More for the purposes of this report. Further, we note that an important part of the information base used in forming our opinion is comprised of the opinions and judgements of management. In addition, we have also had discussions with Cover- More s management in relation to the nature of the Company s business operations, its specific risks and opportunities, its historical results and its prospects for the foreseeable future. This type of information has been evaluated through analysis, enquiry and review to the extent practical. However, such information is often not capable of external verification or validation. Cover-More has been responsible for ensuring that information provided by it or its representatives is not false or misleading or incomplete. Complete information is deemed to be information which at the time of completing this report should have been made available to KPMG Corporate Finance and would have reasonably been expected to have been made available to KPMG Corporate Finance to enable us to form our opinion. We have no reason to believe that any material facts have been withheld from us but do not warrant that our inquiries have revealed all of the matters which an audit or extensive examination might disclose. The statements and opinions included in this report are given in good faith, and in the belief that such statements and opinions are not false or misleading. The information provided to KPMG Corporate Finance included forecasts/projections and other statements and assumptions about future matters (forward-looking financial information) prepared by the management of Cover-More. Whilst KPMG Corporate Finance has relied upon this forward-looking financial information in preparing this report, Cover-More remains responsible for all aspects of this forward-looking financial information. The forecasts and projections as supplied to us are based upon assumptions about events and circumstances which have not yet transpired. We have not tested individual assumptions or attempted to substantiate the veracity or integrity of such assumptions in relation to any forward-looking financial information, however we have made sufficient enquiries to satisfy ourselves that such information has been prepared on a reasonable basis. Notwithstanding the above, KPMG Corporate Finance cannot provide any assurance that the forwardlooking financial information will be representative of the results which will actually be achieved during the forecast period. Any variations in the forward looking financial information may affect our valuation and opinion. It is not the role of the independent expert to undertake the commercial and legal due diligence that a company and its advisers may undertake. The Directors of Cover-More, together with the Company s legal advisers, are responsible for conducting due diligence in relation to the Scheme. KPMG Corporate Finance provides no warranty as to the adequacy, effectiveness or the completeness of the due diligence process, which is outside our control and beyond the scope of this report. We have assumed that the due diligence process has been and is being conducted in an adequate and appropriate manner. The opinion of KPMG Corporate Finance is based on prevailing market, economic and other conditions at the date of this report. Conditions can change over relatively short periods of time. Any subsequent changes in these conditions could impact upon our opinion. We note that we have not undertaken to 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

192 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 update our report for events or circumstances arising after the date of this report other than those of a material nature which would impact upon our opinion. 6.4 Disclosure of information In preparing this report, KPMG Corporate Finance has had access to all financial information considered necessary in order to provide the required opinion. Cover-More has requested KPMG Corporate Finance limit the disclosure of some commercially sensitive information relating to Cover-More and its subsidiaries. This request has been made on the basis of the commercially sensitive and confidential nature of the operational and financial information of the operating entities comprising Cover-More. As such the information in this report has been limited to the type of information that is regularly placed into the public domain by Cover-More KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 17 SCHEME BOOKLET 189

193 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February Company overview 7.1 Overview Established in 1986, Cover-More is an integrated travel insurance and medical assistance business with its largest operations in Australia and the US and a footprint in China, India, Malaysia, New Zealand, Singapore and the UK. Annually, Cover-More provides travel insurance to more than 2.2 million travellers and manages more than 40,000 overseas emergency medical assistance cases. Cover-More consists of three businesses, travel insurance, medical assistance and employee assistance. The travel insurance business is the largest in Australia and 3 rd largest retail travel insurance specialist in the US (following the acquisition of Travelex). The medical assistance business is a valuable part of the travel insurance product offering and profitable in its own right. It is the Australian market leader in employee assistance, supporting the 10 largest Australian companies (by revenue). 3 Employee assistance provides support for employees and families through mental health issues amongst other related services and has more than 30% of the employee assistance market share in Australia. Medical assistance and employee assistance are typically grouped for reporting purposes. The figures below detail the pro-forma half year FY17 (1H17) net revenue by geography and segment, with Australia, NZ and the UK comprising 80% of net revenue. Figure 3: 1H17 net revenue by geography Figure 4: 1H17 net revenue by segment Asia 8.6% North America 11.4% Medical assistance 28.9% Australia, NZ, UK 80.0% Travel insurance 71.1% Source: Cover-More 31 December 2016 Interim Results Note: The pro-forma results primarily reflect the acquisition of Travelex as if it had happened at 1 July 2016 Medical assistance sales included, which relates to China and Australia In December 2013, Cover-More listed on the ASX with a market capitalisation of $635 million. The listing facilitated a partial sale of shares by existing shareholders, raised capital to allow the Company to acquire DTC and increase its ownership of Cover-More s Indian business from 44% to 100%, enhanced Cover-More s corporate profile, and provided access to capital markets. 3 IBISWorld 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

194 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Upon listing, existing shareholders Crescent Capital Partners and management shareholders reduced their interest from 93.4% to 17.6% of the shares on issue. The total amount raised under the offer was $521.2 million, of which $418.8 million was paid to the existing shareholders. Since IPO, Cover-More has added new clients such as Virgin Australia and IAG and expanded its distribution footprint with strong growth in the retail travel segment, notably including a partnership helloworld. Cover-More has also increased its geographical footprint expanding in India with partnerships with Yatra, GoAir and Goibibo. Following its entry into the US market in May 2016, Cover-More announced the acquisition of Travelex in September Travelex is the third largest retail travel insurance specialist in the US. The acquisition accelerates Cover-More s North American expansion strategy. However, despite the growth expectation, Cover-More s results have more recently been negatively impacted by higher underwriting costs and cost of expansion. This underwriting uncertainty, particularly in the past 12 months, has impacted the Company s share price. 7.2 Travel Insurance Cover-More s travel insurance business generates revenue by selling travel insurance policies, primarily to retail customers. Its activities comprise developing and pricing travel insurance products, managing the sales strategy (through travel agents, intermediary channels and online channels), and receiving and managing claims. Cover-More does not underwrite the policy and does not have direct claims exposure. The underwriting risk is passed on to its underwriting partners and as such Cover-More is not required to hold any regulatory capital. While it does not take direct underwriting risk, Cover-More is still subject to price risk associated with differences between underwriter costs and how Cover-More prices its policies. Changes in underwriter costs can impact Cover-More s profits if the market cannot absorb price increases without impacting volumes. 7.3 Medical and employee assistance The medical assistance business provides travel medical assistance to policy holders. The services can be categorised as follows: Medical assistance - arranging hospitalisation, medical referrals and emergency evacuation or repatriation on a global basis Travel assistance - provision of help when travelling, primarily in the form of medical assistance, but also in the event of loss of possessions and other incidents that occur when travelling. Medical and travel assistance are provided under the CustomerCare brand which provides 24/7 emergency assistance (for example, call-centre based medical advice and medical evacuations). Employee assistance is provided under the Davidson Trahaire Corpysch (DTC) brand. It provides support for employees and families through mental health issues, in addition to providing preventative checks and training to improve both mental and physical health. Both businesses are supported by a multilingual team made up of approximately 215 staff of doctors, registered nurses, psychologists and exercise physiologists, case managers and support staff KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 19 SCHEME BOOKLET 191

195 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 The business call centres handle approximately 540,000 calls annually, 400,000 calls for travel and medical cases relating to CustomerCare and 140,000 calls for employee assistance relating to DTC. 7.4 Multi-channel distribution network Cover-More operates an integrated business model focused on providing specialist services through a multi-channel distribution strategy consisting of agencies, intermediaries and directly to consumers. A summary of the distribution channels is provided below. Table 2: Cover-More s multi-channel distribution network Channel Description Travel agents Purchased in conjunction with flights, travel, accommodation etc. Intermediaries Airlines, organisations with strong retail brands or large customer bases, online travel agents Direct Call centre, website Source: Cover-More Prospectus (dated 2 December 2013) 7.5 Market differentiation Travel data and claims history As a specialist travel insurance provider Cover-More has over 30 years of traveller data and claims history which provides it with an advantage over other generalist or international insurers. Cover-More designs and prices products to target customers utilising this experience. Cover-More aims to compete on service, rather than price, with a strategic focus on the end-user experience and leveraging data that it has compiled. Multi-channel distribution network Cover-More s multi-channel distribution model has a track record of facilitating sales growth for Cover- More and its distributors and partners. Their network of partners includes: Flight Centre, helloworld, Travelscene American Express, Travellers Choice, Magellan Travel Group, Medibank, Australia Post, Malaysia Airlines and Air New Zealand. Proprietary technology platform - IMPULSE Cover-More has developed a proprietary customisation and optimisation engine called IMPULSE. It acts as a differentiator for Cover-More when bidding for new clients or trying to retain existing contracts as it is integrated into the client s platform and learns over time. Cover-More s e-commerce and optimisation teams have encouraged partners to expand the IMPULSE services KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

196 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Integrated service offering Cover-More s ability to offer customers an integrated offering of medical assistance with travel insurance is different to many other general insurers. The integrated services allow Cover-More to manage the quality of the service delivery and medical treatment to the customer and the cost outcomes for Cover- More and the underwriter. 7.6 Partnerships One of the features of Cover-More s business model is the partnerships that it has developed in key jurisdictions with the travel insurance distribution network reaching more than 25,000 agents. Cover- More provides a full white-label or co-branded product, which may be combined with its core technology (IMPULSE), support and training to create a tailored solution to each distribution partner. A profit share model is in place with certain distribution partners to create alignment between Cover-More and these distribution partners. Cover-More has an exclusive, long-term and aligned relationship with Flight Centre, dating back to Flight Centre is one of the largest travel retailing service providers in the world, and offers travel solutions across the leisure, corporate and wholesale travel sectors. They were the largest contributor to Cover-More s FY14 pro-forma EBITDA and represented approximately 26% of total EBITDA at the time of IPO in Although their contribution as a percentage of revenue has decreased over time as Cover-More has expanded with additional distribution partners and the entering of new markets, they remain the single largest revenue contributor. Importantly, in FY16, Flight Centre and Cover-More extended their partnership through to As well as continuing to cover existing markets across Australia, the US, New Zealand, India and the UK, under the new contract, Cover-More and Flight Centre will investigate other markets including Canada, China, Hong Kong, Malaysia, Singapore, United Arab Emirates, Spain, Holland, Ireland, South Africa and Mexico. 7.7 Global Direct - Zurich Insurance Group Cover-More established a new relationship with Zurich Insurance Group during FY16 to support the Global Direct business in selling its policies through the Cover-More website. This involved the roll out of consistent online commerce platforms across Australia, China, New Zealand and the UK. Management expects to continue the roll-out to additional countries during the course of FY US market In May 2016, Cover-More entered the US market through partnerships with Flight Center USA, Inc. (Flight Center USA) and Aon Affinity Travel Practice, a business group of Affinity Insurance Services, Inc. (a subsidiary of Aon plc). Travel insurance in North America is estimated to be a US$2.4 billion industry 5. The partnerships facilitated Cover-More s strategic objective of entering the US market as well 4 Cover-More Prospectus (dated 2 December 2013) 5 Finaccord data, January KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 21 SCHEME BOOKLET 193

197 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 as providing a platform to the broader North American market. 6 The Flight Center USA distribution partnership is composed of nine brands across 275 stores. The North America strategy was subsequently accelerated following the acquisition of Travelex. 7.9 Acquisitions Travelex On 27 September 2016, Cover-More announced the acquisition of 100% of Travelex for cash consideration of approximately $138 million. 7 The transaction was completed in November Travelex is the third largest retail travel insurance specialist in the US, behind Allianz and American International Group, Inc. (AIG). In 2015, Travelex insured 1.3 million travellers. It currently has licences in all 50 US states. The acquisition accelerates Cover-More s North American expansion. The acquisition also provides a broad distribution base, platform to expand into Canada and Mexico, as well as realisation of Cover- More s Follow-the-Sun strategy by creating a third global hub in the US, enabling 24/7 medical assistance. Expected synergies from the acquisition as identified by Cover-More management, 8 include: significant new revenue sources and cost synergies, including through integrating Cover-More s medical assistance business $0.5m to $1.5m in cost synergies expected to be generated in future years from removal of duplication and Cover-More USA start-up savings potential new revenue sources from new distribution partners, direct distribution, underwriting and assistance Davidson Trahaire Corpsych (DTC) Cover-More acquired DTC at the time of the IPO in December DTC provides employee assistance programs (EAPs), and related corporate psychology services to organisations in private, public, and notfor-profit sectors globally. DTC provides clients employees with mental health and wellbeing services and is a leading EAP and related service provider in Australia Underwriting agreements Cover-More does not underwrite its policies, rather its business model relies on third party insurers to underwrite the insurance risk, differentiating itself from many larger competitors. 6 Cover-More Annual Report Approximation due to working capital adjustments and foreign exchange 8 Cover-More announcement 27 September KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

198 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Until November 2016, Great Lakes Australia (a wholly owned subsidiary of the Munich Reinsurance Company (Munich Re)) had been the exclusive underwriter for Cover More s travel insurance products that were distributed in Australia, the UK and New Zealand. However, in June 2016, Great Lakes Australia provided notice that it was exiting the Australian market. Cover-More negotiated an interim agreement with Great Lakes Australia for them to continue to underwrite until September 2017, allowing Cover-More time to find a new underwriting partner. Under the terms of the agreement, Cover-More were able to give between three and six months notice to terminate the agreement once a new underwriting partner was arranged. In November 2016, Cover-More entered into an underwriting agreement with Berkshire Hathaway Specialty Insurance Company (BHSI), a subsidiary of Berkshire Hathaway, Inc. to become Cover-More s primary underwriter in Australia and New Zealand. Key terms of the agreement include: similar commercial terms to the existing Great Lakes Australia agreement, however, with greater certainty of underwriting premiums Cover-More does not share in downside risk for losses greater than an agreed target loss ratio the agreement runs for a five year term and includes a change of control provision the new agreement enables Cover-More to terminate the current underwriting agreement with Great Lakes Australia. Cover-More has not yet given notice to Great Lakes Australia to end the agreement, although it has signed an underwriting agreement with BHSI. In China, underwriting activities have been undertaken by China Continent Property & Casualty Insurance Company Limited and in Malaysia by etiqa Insurance Berhad. In India, Cover More s activities are underwritten by state owned National Insurance Company Limited. For the expansion into the US, Cover-More has a partnership with Aon Affinity Travel Practice and Berkshire Hathaway Travel Protection to support the US Direct business. To support the Global Direct business, Cover-More has partnered with Zurich. Travelex currently uses Transamerica for underwriting its policies KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 23 SCHEME BOOKLET 195

199 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February Financial performance The financial performance of Cover-More for the two years ended 30 June 2015 and 2016 and six months ended 31 December 2016 is summarised below: Table 3: Financial performance Period 12 months to 12 months to 6 months to $ million unless otherwise stated 30-Jun Jun Dec-16 1 Travel insurance Medical assistance Total net revenue Travel insurance EBITDA Medical assistance EBITDA Intersegment eliminations/unallocated EBITDA Depreciation and amortisation (12.5) (14.1) (4.8) EBIT Net interest expense (2.7) (2.8) (2.4) Significant and non-recurring items - (0.2) (0.2) PBT Tax expense (11.1) (8.8) (4.8) NPAT Statistics Revenue growth 15.8% 0.0% 7.1% Gross margin growth 10.9% (3.0%) 11.9% EBITDA growth 24.1% (14.2%) 1.8% EBIT growth 26.0% (22.8%) 21.7% Gross margin 40.8% 39.5% 40.4% EBITDA margin 23.6% 20.2% 18.8% EBIT margin 17.9% 13.8% 14.5% Source: Cover-More Annual 2016 Results and 31 December 2016 Interim Results Note: Statistics have been compared with FY16 half yearly results as per 31 December 2016 Interim Results Numbers may not cast due to rounding From FY15 to FY16, Cover-More experienced stagnant net revenue, and EBITDA decreased from $52.0 million to $44.6 million (-14.2%) as a result of: net travel insurance sales decline of 0.6% increased underwriter premium paid in Australia, particularly in the first half of FY16 depreciation of the Australian dollar against the US dollar, which impacted on claims costs increased direct and overhead costs including legal settlement, advisory fees, management change costs and international expansion costs (particularly in the US) totalling $2.1 million, causing overheads to increase by 11.5% 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

200 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 a decline in the Medical assistance segment as a result of rebalancing labour mix to meet business needs. Margins were also impacted by the Bali ash cloud. The first 6 months of FY17 have been negatively impacted by start-up costs supporting organic growth in the US and under performance in both the China Medical Assistance and the UK travel insurance operations. Between 1H16 to 1H17, pro-forma EBITDA was down 5.9% to $23.9 million. Cover-More has historically experienced seasonality of operations, with higher revenue between January and June particularly in Australia and India representing the typical promotional period for several of Cover-More s distribution partners and the release of updated pricing and flight schedules by international airlines in respect of the Northern Hemisphere summer period. Consequently, Cover-More s revenue and profit is historically weighted to the second half of the financial year Financial position A summary of Cover-More s balance sheet as at 30 June 2015, 30 June 2016 and 31 December 2016 is provided below: Table 4: Financial position Period $ million unless otherwise stated 30-Jun Jun Dec-16 Trade and other receivables Payables, deferred liabilities and provisions (43.5) (44.2) (60.3) Working capital (12.1) (4.3) (21.8) Property, plant and equipment Intangible assets Non-current receivables Deferred tax assets Non-current provisions (0.8) (1.3) (2.2) Deferred liabilities (7.3) (5.9) (6.0) Derivative financial instruments (0.4) (0.2) (0.1) Total funds employed Cash and cash equivalents Borrowings (56.1) (63.8) (143.1) Net cash / (borrowings) (32.0) (39.8) (104.3) Net assets attributable to Cover-More shareholders Statistics Shares on issue at period end (m) Net assets per share ($) Gearing ((net cash / borrowings) / net assets) 15.9% 20.0% 37.5% Source: Cover-More Annual 2016 Results and Interim Results 31 December 2016 Numbers may not cast due to rounding 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 25 SCHEME BOOKLET 197

201 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 As Cover-More outsources the underwriting of its policies, it is not required to hold any regulatory capital and as such is a capital light business. As at 31 December 2016, Cover-More has negative working capital (-$22 million) with current liabilities continuing to exceed non-cash current assets. Predominantly, Cover-More s intangible assets relate to goodwill. The majority of goodwill and identified intangible assets relates to acquisitions and restructuring undertaken at the time of the IPO. Identified intangible assets include customer contracts and relationships, capitalised software, brands and trademarks, and distributor relationships. Cover-More s intangible assets increased by $151.1 million largely due to the acquisition of Travelex. Non-current receivables includes advance payments to distributors which are subsequently amortised over the term of the agreement with the distributors. Non-current provisions includes the make good of leases. There is the potential for these make goods to be favourable as well as unfavourable. Long service leave provisions are also included in non-current provisions. To fund the $146 million acquisition costs of Travelex, Cover-More raised additional debt and equity in the 6 months to 31 December The acquisition was funded through $73.3 million raised from an institutional and retail entitlement offer, with the balance funded through the drawdown of a corporate bank debt facility of approximately $72.7 million. The funding structure results in a FY16 pro-forma net debt / EBITDA ratio of 2.0x, expected to decline as Travelex is integrated with Cover-More Debt On 14 October 2016, Cover-More amended its existing loan facilities held with Westpac Banking Corporation to increase the multi-option working capital facility from $32.5 million to $52.5 million. On 15 November 2016, Cover-More completed a further modification to the existing facilities to finance the acquisition of Travelex. The amended facilities are made up as follows: a bullet revolving term cash advance facility of $39.4 million a multi-option working capital facility of $52.5 million, and a $100.0 million bullet term facility. Included in the amendment was a syndication of a portion of the facility to another lender. The amended facilities are valid for a term of two years. On 16 November 2016, $72.8 million was drawn down from the amended loan facilities to fund the acquisition of Travelex KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

202 ABCD Cover-More Group Limited Independent Expert s Report 20 February Cash flow The cash flows for Cover-More for the two years ended 30 June 2015 and 2016 and six months ended 31 December 2016, are provided below: Table 5: Cash flows Period 12 months to 12 months to 6 months to $ million unless otherwise stated 30-Jun Jun Dec-16 Cash flows from operating activities Receipts (incl. GST) Payments (incl. GST) (176.8) (187.1) (94.6) Transaction costs relating to acquisition - - (0.6) Other revenue Income tax paid (15.1) (13.5) (5.4) Net operating cash flow Cash flows from investing activities Payments for acquisition - - (140.0) Payments for plant and equipment (1.8) (1.5) (0.9) Payments for intangible assets (4.6) (6.8) (3.2) Proceeds from sale of plant and equipment Interest received Net investing cash flow (6.2) (8.1) (144.0) Cash flows from financing activities Proceeds from issuance of shares Proceeds from borrowings Share issue transaction costs - - (2.3) Repayment of borrowings (33.2) (15.0) (12.5) Finance lease payments (0.3) (0.0) (0.0) Interest and other finance costs paid (2.5) (3.1) (5.0) Dividends paid to Shareholders (38.7) (19.7) (8.3) Net financing cash flow (30.9) (15.0) Source: Cover-More Annual 2016 Results and 31 December 2016 Interim Results Note: Numbers may not cast due to rounding Cover-More s operating cash flow decreased from $39.7 million in FY15 to $23.2 million in FY16, reflecting the decline in EBITDA and timing of payments made in respect of certain distribution arrangements KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 27 SCHEME BOOKLET 199

203 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Through the cycle, Cover-More has had high operating free cash conversion rate of between 80% and 90% before tax and capital expenditure. 9 The cash conversion is impacted by advanced payments made in respect of new distribution arrangements. Net capital expenditure increased from $6.4 million in FY15 to $8.2 million in FY16 (28.1%) largely due to: the build of MyCover-More technology platform on-boarding of new distribution partners including Flight Centre North America and India e- Commerce partners Strategy and outlook Following the appointment of a new CEO Mike Emmett in July 2016, Cover-More refreshed its strategy, moving away from a geographic focus to a model focused on industry verticals, being: Travel and Aviation, Financial Institutions, Direct, Medical Assistance and Employee Assistance. The strategy supports a global offering with common head office support and minimal local support. This is aimed at leading to greater operational leverage and lower overheads. Furthermore, the acquisition of Travelex facilitates a Follow-the-Sun strategy in the three time zones of Australia, India and the US. The short term priorities and outlook for Cover-More include: integrating the Travelex acquisition and delivering on growth opportunities in North America building out new partnerships in underwriting and distributions continued growth in Australia and overseas reduce overhead costs realign the strategy and operating model establishment of a Follow-the-Sun strategy to deliver additional scale and cost efficiencies in Medical assistance and operations arising from a presence in multiple global time-zones focus on positioning to win new aviation and travel clients (and retain existing key partners) deliver on commitments to existing partners embed technology capabilities more broadly in partners. Cover-More has highlighted that opportunities have been identified to reduce overheads and the benefits are expected to come through in the second half of FY17 and into FY Additionally, the new underwriting agreement with BHSI is expected to create stronger alignment with Cover-More through pricing of risk and policy inclusions. 9 Cover-More management 10 Cover-More announcement 10 November KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

204 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 During FY16, Cover-More also sought to reduce the risk profile of the portfolio through changing policy pricing and wording. The consequential benefit to claims costs is expected to be delivered in the second half of FY17. Cover-More announced FY17 earnings guidance on 12 December 2016 which expects to deliver EBITDA in the range of $54 million to $57 million for FY17. The range includes a contribution for part of the year from the Travelex acquisition which reached financial close on 16 November Dividends Key dividend metrics since listing in December 2013 have been provided in the table below. Table 6: Dividend metrics For the period ended 30-Jun-14 (pro-forma) 1 30-Jun Jun Dec-16 Weighted basic average number of shares (000 s) 259, , , ,679 Basic earnings per share (cents) Dividends per share - Ordinary (cents) Dividends per share - Special (cents) Dividend payout ratio - total (%) 3 67% 90% 80% 0% Proportion of dividend franked (%) 100% 100% 100% na Source: Cover-More Annual 2015 and 2016 Results and 31 December 2016 Interim Results Note 1: Weighted average number of shares in 2014 has been adjusted retrospectively to reflect the change in the number of ordinary shares as if the IPO had occurred at the beginning of 2014 Note 2: Intended Special Dividend in the event that the Scheme is implemented and approved Note 3: Dividend payout ratio does not include special dividends The number of shares on issue has increased due to shares issued under the Long-Term Incentive Plan and following the entitlement offer to help fund the Travelex acquisition in November Franking credits Cover-More s franking credit balance as at 31 December 2016 was $9.8 million. The value of franking credits depends on the ability of the Company to distribute franked dividends from available cash and the utilisation rate of the individual shareholders. The timing and quantum of future dividend distributions is uncertain. If the Scheme is approved and implemented, and the Special Dividend is declared by the Cover-More Board, Shareholders will receive a fully franked Special Dividend. Consequently, the franking credit balance would reduce to $1.6 million (excluding any franking credit adjustments subsequent to 31 December 2016) KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 29 SCHEME BOOKLET 201

205 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February Broker consensus forecasts While Cover-More has announced FY17 earnings guidance it does not disclose any longer term forecasts. To provide an indication of the expected future financial performance, we have considered brokers forecasts. Summarised below are the median consensus forecasts for Cover-More for FY17, FY18 and FY19. Table 7: Consensus broker forecast of key P&L items Period 12 months to 12 months to 12 months to $ million unless otherwise stated 30-Jun Jun Jun-19 Revenue EBITDA EBIT NPAT Revenue growth % 25.7% 16.8% 7.9% EBITDA growth % 25.5% 20.5% 11.3% EBIT growth % 26.1% 40.3% 10.2% NPAT growth % 65.2% 27.6% 7.2% Source: Bloomberg, KPMG Corporate Finance analysis Note: Based on the median of available broker forecasts EBITDA includes non-recurring items In relation to the above, we note: Cover-More is followed by six broker analysts which have provided estimates included in the consensus forecasts above the above consensus forecasts represent the latest available broker forecasts for Cover-More prior to the announcement of the Scheme and all were published after Cover-More announced its acquisition of Travelex in September 2016 broker estimates incorporate a partial period for Travelex FY17 earnings. Further details of the broker estimates are contained in Appendix 5 of this report Capital structure and ownership As at the time of the Scheme Booklet, Cover-More has the following securities on issue: 379,117,866 ordinary shares 2,001,373 performance rights over unissued ordinary shares. Ordinary shares are listed and traded on the ASX. Shareholders are entitled to receive dividends (should the directors elect to pay them) and cast one vote per share at shareholder meetings. Performance rights are over unissued ordinary shares and do not entitle the holder to voting rights KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

206 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 These performance rights form part of Cover-More s share incentive plan in place for executives of the Company. In the event of a change of control, the Long Term Incentive Plan provides the Board with the discretion to determine whether unvested awards fully vest. The Board of Cover-More has determined that, subject to the Scheme becoming Effective, that 964,145 performance rights will vest and automatically be exercised resulting in the issue of 964,145 additional shares in sufficient time to allow the relevant holders to participate in the Scheme. The remaining 1,037,228 performance rights will lapse and be cancelled for no consideration. Accordingly, the total number of shares expected to be on issue is 380,082,011 (being 379,117,866 ordinary shares and 964,145 performance rights) as at the Scheme Record Date Ordinary shareholders The following table outlines the substantial shareholders of Cover-More. Table 8: Substantial shareholder register Substantial Shareholder Number of shares Percentage of issued capital Challenger Limited 1 31,190, % JCP Investment Partners Limited 28,881, % Credit Suisse, Investment Banking and Securities Investments 28,098, % BT Investment Management Limited 2 25,357, % Total shares held by substantial shareholders 113,529, % Other shareholders 266,552, % Total shares (diluted) 380,082, % Source: ASX disclosures; KPMG Corporate Finance analysis at 14 February 2017 Note 1: Includes holdings of a number of boutique funds managed by Challenger Limited on behalf of Fidante Partners Note 2: Westpac Banking Corporation (Westpac) has disclosed in a substantial holding notice provided to Cover-More that it is an associate (as that term is defined in the Corporations Act) of BT Investment Management Limited (BTIM). Accordingly, while Westpac has provided a substantial holding notice disclosing a substantial shareholding in Cover-More, as the disclosed shareholding includes Cover-More Shares held by BTIM, Westpac is not separately identified in this table as a substantial shareholder of Cover-More. The substantial shareholders accounted for approximately 29.9% of shares on issue and are principally investment managers. The Commonwealth Bank of Australia Limited, Morgan Stanley, UBS, AustralianSuper Pty Ltd and Greencape Capital Pty Ltd ceased to be substantial shareholders following the Scheme Announcement. In some cases, nominee s holders became substantial shareholders after the date of the announcement of the Scheme and have since ceased to be substantial shareholders KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 31 SCHEME BOOKLET 203

207 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Subsequent to the announcement of the Scheme, Challenger Limited reduced its substantial holding from 14.9% to 8.2%. 11 On 14 December 2016, Credit Suisse Holdings Australia became a substantial shareholder with 6.4% of shares. They increased their holding further to 7.4% on 25 January Trading performance In assessing Cover-More s share price performance, we have: analysed price and volume performance since 19 December 2013, the date on which Cover-More was admitted to the official list of the ASX and commenced trading compared Cover-More s share price movement to the S&P/ASX 300 Index considered the volume weighted average price (VWAP) and trading liquidity of Cover-More shares for the period pre and post the announcement of the Scheme Share price and volume performance Cover-More had an IPO price of $2.00 per share when it began trading on 19 December Between listing and the beginning of January 2016, the share price has traded broadly within the range of $1.75 to $2.50. Cover-More s share price performance and the volume of shares traded since listing is provided below: 11 Percentage shareholding calculated based on diluted shares on issue and therefore may differ to ASX announcement 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

208 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Figure 5: Cover-More s share price performance Price ($) H1 FY14 on track to Prospectus forecasts Trading update highlighting difficult trading conditions Announced strong FY14 results helloworld partnership announced H1 FY15 results in line with brokers 1H16 trading update AGM with mixed results in Q1 FY16 Announced acquisition of Travelex Announced new CEO Munich Re annouces exit from Australia Zurich Scheme announced FY16 results announced BHSI agreement Volume (m) Volume Closing price Source: S&P Capital IQ Cover-More s share price initially rose following IPO as they announced strong performance tracking ahead of prospectus guidance. In June 2014, Management stated that although it expected to still achieve the original prospectus guidance, it highlighted difficult trading conditions in Australia due to a softening in the rate of growth of outbound international leisure travel volumes. Following the release of its strong FY14 result in which pro-forma EBITDA was $48.5 million, $1.2 million higher than prospectus forecasts, the share price rose again. Post September 2014, the share price was impacted by broader economic conditions in Australia, although management confirmed market expectations and highlighted the resilience of the business through its multiple channels, geographies and business operations. The fall in the share price in December 2014 was largely due to a downgrade in profits from Flight Centre, Cover-More s largest distribution partner, from further softening in consumer confidence in Australian leisure travel. Cover-More s 1H15 results, announced in February 2015, improved on the previous corresponding period despite the difficult trading environment with outbound travel demand softening and the appreciation of the US dollar. The announcement included the FY15 interim and special dividend that brought the 12 month dividend yield to 6.1% and preluded an increase in the share price which rose to a high of $2.51 (closing price) on 21 August 2015 on the release of the FY15 results. Despite largely positive FY15 results by the time of the Annual General Meeting (AGM) in November 2015, management noted margin pressure as a result of continued weakening of the Australian dollar and an increase in travel insurance purchase lead times KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 33 SCHEME BOOKLET 205

209 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Over a three week period following a trading update in February 2016, the share price fell approximately 30% as EBITDA margins continued to be impacted by rising premiums paid to Great Lakes Australia as a result of increasing claims costs due, in part, to the depreciation of the Australian dollar. Accordingly, 1H16 results were below market expectations (particularly at the EBITDA level) due to higher travel insurance underwriter payments, lower volumes in medical assistance, one-off legal costs, the impact on the medical assistance margins due to the Bali ash clouds and international expansion costs. Despite revenue growth (gross group sales +7.6%) and strong international results (gross sales in Asia +30.1%), FY16 results were below market expectations. Group EBITDA declined 14.2% to $44.6 million, impacted by higher underwriter premiums and overhead costs. Cover-More announced the appointment of a new CEO, Mike Emmett, on 3 May The share price remained depressed throughout 2016 largely as a result of the uncertainty regarding the underwriting agreement as Munich Re announced the sale of Great Lakes Australia. This uncertainty weighed on the share price and the potential upside from the Travelex transaction in September 2016 had limited impact. The announcement of BHSI as underwriter in November 2016 had minimal impact, offset by a trading update stating a slow start to FY17, with earnings expected to be weighted to the second half of FY Relative performance Cover-More is a member of various indexes, including the S&P/ASX 300 Index and S&P/ASX 300 Insurance (Industry Group). The S&P/ASX 300 Index is composed of the 300 largest companies listed on the ASX and represents approximately 70% of Australia s share market. As a subgroup, the S&P/ASX 300 Insurance (Industry Group) is made up of the largest insurance companies within the S&P/ASX 300 Index and is dominated by much larger players in the insurance industry such as QBE, Insurance Australia Group Limited, Medibank Private Limited and Suncorp Group Limited. The S&P/ASX 300 Insurance (Industry Group) has outperformed the S&P/ASX 300 Index for the period under consideration KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

210 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Figure 6: Cover-More s relative share price performance (rebased to 100 at the Company s IPO) For personal use only Index (base 100) Cover-More Group Limited S&P/ASX 300 Index S&P/ASX 300 Insurance (Industry Group) Source: Capital IQ Cover-More s performance was broadly in line with the market and the other insurers between IPO and February Since then Cover-More has underperformed, largely as a result of the depreciation in the Australian dollar and claims inflation. Cover-More is likely to have greater exposure to the depreciation in the Australian dollar than other Australian general insurers as travel insurance is a relatively small component of general insurers businesses and the majority of general insurers claims occur in Australian dollars KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 35 SCHEME BOOKLET 207

211 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February Liquidity The table below summarises the liquidity of Cover-More shares pre and post the announcement of the Scheme. Table 9: Liquidity analysis % of Price Price Price Cumulative Cumulative issued Period (low) (high) VWAP value volume capital $ $ $ $m m Period ended 9 December 2016 (pre-announcement) 1 month % 3 months % 6 months % 12 months % Period ended 14 February 2017 (post-announcement) Since announcement % Source: IRESS, Capital IQ Note: Based on closing prices Trading in Cover-More shares was moderate in the six months prior to the announcement of the Scheme, reflecting the mid-cap nature of the stock and sentiment towards the underwriter uncertainty. On announcement of the Scheme, the Cover-More share price increased, closing at $1.90 on 12 December Between the announcement of the Scheme on 9 December 2016 and 14 February 2017, Cover-More s shares have traded between $1.87 and $1.94 per Share, with a VWAP over this period of $1.90 per Share. 12 The fact that the share price has not exceeded the Scheme Consideration during this period implies the expectation by the market that a rival offer is unlikely. 12 IRESS 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

212 ABCD Cover-More Group Limited Independent Expert s Report 20 February Valuation of Cover-More 8.1 Summary We have valued 100% of the equity in Cover-More in the range of $644.7 million to $745.2 million, which corresponds to a value of $1.70 to $1.96 per Cover-More share. Our valuation assumes 100% ownership of Cover-More and therefore incorporates a control premium. Given the inclusion of a control premium, we would expect the valuation to be in excess of the value of Cover-More implied by its trading price in the absence of a takeover offer. The assessed value for Cover-More reflects the estimated market value of Cover-More s business less operating liabilities and net debt. Our valuation of Cover-More is summarised in the table below and detailed in the remainder of this section. Table 10: Valuation summary Section Value Value $m (unless otherwise stated) reference Low High Value of Cover-More Less: net debt 8.5 (104.4) (104.4) Surplus assets / (liabilities) 8.4 (0.9) (0.9) Value of equity Fully diluted shares on issue (million) Value per Cover-More share (rounded) Source: KPMG Corporate Finance analysis Note: Table may not cast due to rounding 8.2 Valuation methodology Overview Our valuation of Cover-More was prepared on the basis of 'market value'. The generally accepted definition of market value (and that applied by us in forming our opinion) is the value that should be agreed in a hypothetical transaction between a knowledgeable, willing, but not anxious buyer and a knowledgeable, willing, but not anxious seller, acting at arm s length. Market value excludes special value, which is the value over and above market value that a particular buyer, who can achieve synergistic or other benefits from the acquisition, may be prepared to pay. Our valuation has had regard to the additional value resulting from estimated corporate cost savings and synergies that would generally be available to a pool of purchasers, both financial and trade. It does not include any other strategic or operational synergies that may be unique to Zurich. Accordingly, our range of values has been prepared independent of the specific circumstances of any potential bidder KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 37 SCHEME BOOKLET 209

213 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Market value is commonly derived by applying one or more of the following valuation methodologies: the capitalisation of a sustainable level of earnings (Capitalised Earnings) the discounting of expected future cash flows to present value (DCF) the estimation of the net proceeds from an orderly realisation of assets (Net Assets). These methodologies are discussed in greater detail in Appendix 5. Ultimately, the methodology adopted is dependent on the nature of the underlying business and the availability of suitably robust information. A secondary methodology is typically adopted as a cross-check to ensure reasonableness of outcome, with the valuation conclusion ultimately being a judgement derived through an iterative process. We have also considered the trading prices for the company s shares on the ASX, by way of a cross check. For profitable businesses, methodologies such as Capitalised Earnings and DCF are commonly used as they reflect going concern values which typically incorporate some element of goodwill over and above the value of the underlying assets. For businesses that are either non-profitable, non-tradeable or asset rich, Net Assets methodology is typically adopted as there tends to be minimal goodwill, if any Selection of methodology For the valuation of Cover-More s business operations, we adopted Capitalised Earnings as our primary methodology. This was based on the following considerations: a Capitalised Earnings approach is a commonly used method for the valuation of businesses and business operations that have a long operating history and a consistent earnings trend that is sufficiently stable to be indicative of ongoing earnings potential, which is the case for Cover-More. While Cover-More does not have any pure play comparable companies, we consider there is sufficient market evidence available from which meaningful earnings multiples can be derived a DCF approach is also used in the valuation of established businesses, where long-term, detailed cash flows are available. KPMG Corporate Finance have not been provided with a detailed financial model from which an in-depth DCF analysis could be undertaken as the Company does not typically forecast beyond a 1 year budget. We have however, been provided with high level forecasts / projections for FY17, FY18 and FY19 by management, and have prepared a high level model from which to cross-check our Capitalised Earnings approach. a Net Assets approach is not considered appropriate in Cover-More s case as this method would not capture the growth potential and goodwill associated with the business including its operating platform we have also considered the trading prices for Cover-More s shares which are influenced by a number of factors. Historically, the volatility has been driven by, inter alia, foreign exchange fluctuations, sentiment towards outbound travel and uncertainty regarding the underwriting arrangement. Accordingly, considerable judgement is required in deriving conclusions on the fundamental value of a Cover-More share in the absence of a takeover offer based on an analysis of Cover-More s recent share price performance KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

214 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Ultimately, the value of the business operations of Cover-More has been determined through an iterative process, ensuring the value derived from our primary Capitalised Earnings methodology is consistent with the outcomes of our high level DCF cross-check and our analysis of Cover-More s share price performance Capitalised earnings - selection of earnings metric Application of the Capitalised Earnings approach involves the capitalisation of the earnings or cash flows of a business at a multiple that reflects the risks of the business and the future growth prospects of the income it generates. Application of this methodology requires professional judgement as to: a level of earnings or cash flows expected to be maintainable that takes into account historic and forecast operating results, adjusted for non-recurring items and other known factors likely to impact on future operating performance an appropriate capitalisation multiple that is supported by market evidence derived from comparable transactions and sharemarket prices for comparable companies, while also considering the specific characteristics of the business being valued. A Capitalised Earnings approach can be applied to a number of different earnings or cash flow measures, including, but not limited to, EBITDA, EBIT and NPAT. All are commonly used in the valuation of businesses and should provide a similar result. We consider EBITDA to be an appropriate earnings metric as it removes differences in depreciation and amortisation policies adopted by market participants in various jurisdictions and therefore provides a measure of earnings that is not distorted by the impact of non-cash items. It is common that financial companies, including insurance companies, are valued adopting an NPAT approach as interest income and expenses are core to operations. Cover-More is not a registered insurer, rather its underwriting risk is outsourced to the global insurance market. We consider it appropriate to adopt an EBITDA metric rather than NPAT Control premium considerations With regard to the multiples applied in a Capitalised Earnings approach, they are generally based on data from listed companies and recent transactions in a comparable sector, with appropriate adjustment after consideration has been given to the specific characteristics of the business being valued. The multiples derived for listed comparable companies are generally based on share prices reflective of the trades of small parcels of shares. As such, they generally reflect prices at which portfolio interests change hands. That is, there is no premium for control incorporated within such pricing. They may also be impacted by the level of liquidity in trading of the particular stock. Accordingly, when valuing a business on the basis of 100% ownership, it is appropriate to also reference the multiples achieved in recent transactions where a control premium and breadth of purchaser interest are fully reflected. Consistent with the requirements of RG 111, in valuing Cover-More we have assumed 100% ownership, and therefore included a premium for control when assessing the multiples implied by the share prices for listed comparable companies KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 39 SCHEME BOOKLET 211

215 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Observations from transaction evidence indicate that takeover premiums concentrate around a range between 20% and 35% 13 for completed takeovers depending on the individual circumstances. In transactions where it was estimated that the combined entity would be able to achieve significant synergies, the takeover premium was frequently estimated to be in excess of this range. Takeover premiums can vary significantly between individual transactions as the final price paid will reflect to varying degrees: pure control premium in respect of the acquirer s ability to utilise full control over the strategy and cash flows of the target entity the level of synergies available to all acquirers, such as the removal of costs associated with the target being a listed entity and/or costs related to duplicated head office functions the expected costs to integrate and the uncertainties associated with timing of realising the targeted synergies synergistic or special value that may be unique to a specific acquirer the nature of the bidder, i.e. financial investor versus trade participant the stake acquired in the transaction and the bidder s pre-existing shareholding in the target the stage of the market cycle and the prevailing conditions of the economy and capital markets at the time of the transaction desire (or anxiety) for the acquirer to complete the transaction whether the acquisition is competitive the extent the target company s share price already reflects a degree of takeover speculation. 8.3 Value of business operations Valuation summary As summarised in the table below, KPMG Corporate Finance has determined the enterprise value of Cover-More s business to be in the range of $750.0 million to $850.5 million. Table 11: Valuation For the period ending 30 June 2017 Section reference Value Value $m Low High Selected maintainable earnings Capitalisation multiples (incl. synergies) Rounded x 13.5x Enterprise Value Source: KPMG Corporate Finance analysis Note: Table may not cast due to rounding 13 KPMG Corporate Finance analysis based on Mergerstat data for Australian transactions completed between 2001 and 2016, comparing the closing price of the target company one day prior to the takeover announcement to the final offer price KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

216 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 The valuation of Cover-More was determined using a Capitalised Earnings approach, based on a maintainable EBITDA of $60 million to $63 million and a capitalisation multiple of EBITDA at 12.5 times to 13.5 times. The basis for each of these assumptions is discussed in the sections below. The selected EBITDA multiple range factors in a control premium, and hence the enterprise value of Cover-More s business has been determined on a controlling basis Maintainable earnings Maintainable earnings represents the level of earnings that the business can sustainably generate in the future. We consider a FY17 pro-forma EBITDA in the range of $60.0 million and $63.0 million to be a reasonable basis for determining maintainable earnings. In making this assessment, we have had regard to the following: illustrated in the figure below, is Cover-More s underlying EBITDA for FY14, FY15 and FY16 and Management s FY17 earnings guidance, and FY17 broker consensus EBITDA Figure 7: Historic and forecast EBITDA EBITDA ($m) FY14 FY15 FY16 FY17 - Company guidance FY17 - Broker median Source: Cover-More Annual Report FY15 and FY16, Company announcement 12 December 2016, broker notes Note: Company guidance is a range from $54.0 million to $57.0 million the step-up expected in FY17 EBITDA is a result of the partial year contribution of the Travelex acquisition and cost savings expected in FY17 the current median broker consensus forecast for Cover-More s FY17 EBITDA is $56.0 million with the range from $48.4 million to $57.1 million. These estimates include 7.5 months of Travelex earnings and assumes an allowance for cost savings that were implemented during the course of FY17 likewise, Management s FY17 EBITDA guidance of $54.0 million to $57.0 million, includes 7.5 months of Travelex earnings and a portion of cost savings that are expected to be achieved in the second half of FY KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 41 SCHEME BOOKLET 213

217 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 the Travelex acquisition is expected to contribute approximately $7.0 million to $8.0 million to Cover-More s FY17 EBITDA over a period of 7.5 months. On an annualised basis, this equates to approximately $12.0 million to $13.0 million (an incremental $5.0 million) for the selection of maintainable earnings, it is appropriate to adjust the partial year of Travelex earnings and costs savings to reflect a full year, as going forward this is a better reflection of Cover- More s future earnings Management s FY17 EBITDA guidance assumes costs savings from initiatives implemented during the course of FY17. Cover-More has also provided guidance of $0.5 million to $1.5 million of potential cost savings following the acquisition of Travelex. After an allowance for the partial year inclusion of cost savings and profit sharing with joint venture partners, we estimate EBITDA would be higher by an incremental $1.0 million on a pro-forma basis we illustrate below FY17 EBITDA company guidance and broker estimates on a pro-forma basis, assuming a full year of Travelex earnings (incremental $5 million) and Travelex and other cost saving initiatives ($1.0m) Table 12: FY17 Pro-forma EBITDA Pro-forma EBITDA estimates $m FY17 EBITDA FY17 pro-forma EBITDA Broker consensus (median) Company guidance 54.0 to to 63.0 Source: KPMG Corporate Finance analysis, Company announcement 12 December 2016, Broker consensus FY16 pro-forma EBITDA was $55.8 million, consisting of $44.6 million from the existing Cover- More business and $11.2 million of Travelex FY16 earnings 14 underlying EBITDA excludes the impact of one-off significant items, such as costs associated with merger and acquisition activities excluding Travelex earnings, Cover-More recorded an EBITDA of $52.0 million in FY15 before decreasing to $44.6 million in FY16 as a result of higher underwriting and overhead costs. The selected maintainable earnings of $60.0 million to $63.0 million reflects the expected growth in the Cover-More earnings (including Travelex) from FY16, although not to the earnings levels achieved in FY15 which are expected to take time. We note that we have not adjusted maintainable earnings for potential cost savings associated with being a publicly listed company and/or duplicated head office functions which are available to any acquirer of 100% of Cover-More, as these types of general synergies are commonly subsumed within a premium for control that we have incorporated within our selection of the appropriate multiple. As such, we have adopted the FY17 pro-forma EBITDA in the range of $60.0 million and $63.0 million as the basis for our valuation. 14 Company announcement dated 12 December FY16 pro-forma EBITDA of $55.8 million (including the contribution from Travelex) 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

218 ABCD Cover-More Group Limited Independent Expert s Report 20 February EBITDA multiple The multiple applied in a Capitalised Earnings methodology should reflect the return expected by an investor in the business. Returns are, inter alia, dependent on various factors including a business operational risks, growth profile, profitability, size and external environment. In selecting the multiple range to be applied, consideration is generally given to market evidence derived from listed comparable companies and recent transactions involving comparable businesses/assets, with an appropriate adjustment to reflect the specific characteristics of the business being valued. Sharemarket evidence In selecting an appropriate comparable company peer group, we have had regard to the following: Cover-More is an integrated travel insurance and medical assistance business that distributes its products through a multi-channel distribution network while not purely a broker, Cover-More also engages in further activities such as policy pricing and claims processing, differentiating itself from pure-play brokers and aligning it with the activities undertaken by insurance companies as a specialist travel insurer, Cover-More s business is highly aligned to propensity to travel and insure. The former is sensitive to foreign exchange movements and relies on customers having a level of discretionary income to spend on travel and insurance Cover-More s medical assistance business is driven by customers propensity to travel and insure Cover-More is a capital light business and does not have any regulatory holding-capital requirements as does a typical insurer. Due to the unique nature of Cover-More s business model, there are no listed, pure-play companies with the same characteristics as Cover-More. Cover-More is the only listed travel insurance and assistance provider on the ASX and abroad. As such, when determining an appropriate multiple, we considered various comparable companies and transactions that have similarities to aspects of Cover-More s business. Based on this, we have determined that domestic insurance brokers and travel service providers are the most appropriate listed companies that align with the considerations set out above. Since Cover-More also relies on the propensity for customers to insure as well as engages in some activities that insurance companies do, such as pricing and claims processing, we have included a number of domestic insurers for consideration. Finally, as Cover-More s business is increasingly reliant on revenue from its overseas markets, especially the US, we have included international insurers and travel service providers in the analysis. The multiples derived for listed comparable companies are generally based on share prices reflective of the trades of small parcels of shares. As such, they generally reflect prices at which portfolio interests change hands. That is, there is no premium for control incorporated within such pricing KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 43 SCHEME BOOKLET 215

219 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 It is important to note that before the announcement of the Scheme, Cover-More was trading at a multiple 15 of 13.5 times FY16 EBITDA and 10.8 times broker consensus FY17 EBITDA, and 10.8 times FY16 pro-forma EBITDA and 9.9 times broker consensus FY17 pro-forma EBITDA. 16 Domestic brokers We have provided a peer group of domestic brokers which possess similar characteristics to Cover-More in the table below. Table 13: Sharemarket evidence Company Country Market cap EBITDA margin EBITDA margin EBITDA growth EBITDA growth EBITDA multiple EBITDA multiple ($AUD) FY FY +1 CAGR - 4Y CAGR +3Y FY FY +1 Domestic brokers Steadfast Group Limited Australia 1,710 29% 28% 95% 7% 13.2x 13.5x AUB Group Limited Australia % 26% 9% 13% 12.2x 13.6x iselect Limited Australia % 16% (8%) 31% 15.5x 10.3x Mortgage Choice Limited Australia % 17% (1%) 6% 6.9x 9.3x Australian Finance Group Ltd Australia 279 6% 6% n/a 10% n/a 36.6x Mean % 19% 24% 13% 11.9x 11.7x Median % 17% 4% 10% 12.7x 11.9x Source: S&P Capital IQ (downloaded on 14 February 2017, data as at 10 February 2017), KPMG Corporate Finance analysis Note: Shading illustrates outlier With respect to the above, we note the following: Cover-More exhibits a slightly higher expected growth profile to the median domestic broker peer group the domestic brokers are largely insurance product distributers, similar to Cover-More s distribution activities the domestic broker peer group generate the majority of their income in Australia Cover-More also has a similar capital structure with low debt to equity and overall a capital-light balance sheet the domestic brokers are heavily reliant on advanced IT systems to match insurance products to particular types of customers. Cover-More s IMPULSE system would likely require comparable capital and operating expenditure 15 A trailing multiple is calculated by dividing current market capitalisation by EBITDA from the last financial year. It will be lower than the forward EBITDA of a growing company 16 Closing share price of $1.315 on 9 December 2016, 380,082,011 diluted shares, and net debt of $104.4 million equates to an enterprise value of $604.2 million. FY16 EBITDA of $44.6 million and FY17 broker median EBITDA of $56 million as per Appendix 4. Pro-forma FY16 EBITDA of $55.8 million and median broker consensus FY17 proforma EBITDA of $61.0 million 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

220 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 importantly, neither Cover-More nor the domestic broker peer group take on direct underwriting risk, yet they are both largely driven by individuals propensity to insure Cover-More s FY16 EBITDA multiple is comparable to the peer group, while the forward EBITDA multiple is slightly below the peer group under consideration Cover-More s FY16 and forecast FY17 EBITDA margins (based on broker consensus), both being 20.2%, are similar to the above peer group. Domestic travel and related We have provided a peer group of domestic travel and related companies which possess similar characteristics to Cover-More in the table below. Table 14: Sharemarket evidence Company Country Market cap EBITDA margin EBITDA margin EBITDA growth EBITDA growth EBITDA multiple EBITDA multiple ($AUD) FY FY +1 CAGR - 4Y CAGR +3Y FY FY +1 Domestic travel and related Flight Centre Travel Group Limited Australia 3,081 16% 15% 7% 2% 6.5x 6.6x Corporate Travel Management Limited Australia 1,761 26% 27% 41% 25% 24.7x 18.7x Webjet Limited Australia 1,126 24% 30% 16% 35% 29.1x 18.3x helloworld Limited Australia 472 8% 15% (11%) 32% 19.5x 9.7x OFX Group Limited Australia % 26% 13% 11% 17.2x 7.6x Mean 1,354 20% 22% 13% 21% 19.4x 12.2x Median 1,126 24% 26% 13% 25% 19.5x 9.7x Source: S&P Capital IQ (downloaded on 14 February 2017, data as at 10 February 2017), KPMG Corporate Finance analysis Note: Flight Centre and helloworld s net debt have been adjusted to exclude client cash from cash and cash equivalents, which increases EBITDA multiples and enterprise values to a level which better reflects the capital structure of the business. Client cash is entrusted to these entities by intending travellers or customers prior to travel and a corresponding liability is recorded while the cash is held on the client's behalf prior to being paid to principals With respect to the above, we note the following: as an ancillary product to travel, travel insurance is strongly correlated to activity in the travel sector, which is driven by propensity to travel, discretionary income and foreign exchange movements. As such, value drivers and risks of the travel services companies are considered comparable to Cover- More Flight Centre is Cover-More s largest distribution partner and helloworld is also a significant distribution partner. Cover-More sells policies as complementary products to travel products through these distribution partners, therefore factors that impact travel volumes would also impact volumes of travel insurance. Notably, Flight Centre and helloworld trade at a slightly lower EBITDA multiples than the rest of the peer group. Flight Centre also has a significantly lower future growth profile than the rest of the comparison group due to it being affected by deflationary pricing in global travel (due to the increase in discount airline carriers and the rise of cheap, alternative accommodation services 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 45 SCHEME BOOKLET 217

221 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 such as Airbnb) which is slightly offset by an increase in volume. Cover-More, on the other hand, is not adversely affected by deflationary travel pricing and an expected increase in volumes will be beneficial to Cover-More the remaining comparable companies included in the peer group relate to travel services and bookings, which travel insurance depends on in order to drive sales. OFX Group Limited, as an online international payments and foreign exchange services company listed in Australia. It generates around 50% of its revenue in Australia and New Zealand, operates in similar developed markets to Cover-More, is highly scalable, relies on its proprietary IT platform and banking partners to generate revenue and has recently expanded into the US. For these reasons it has been included in the comparison group. Domestic insurers We have provided a peer group of domestic insurers which possess similar characteristics to Cover-More in the table below. Table 15: Sharemarket evidence Company Country Market cap EBITDA margin EBITDA margin EBITDA growth EBITDA growth EBITDA multiple EBITDA multiple ($m) FY FY +1 CAGR - 4Y CAGR +3Y FY FY +1 Domestic insurers Medibank Private Limited Australia 7,739 8% 9% 27% (1%) 13.3x 12.2x NIB Holdings Limited Australia 2,084 8% 9% 11% 7% 14.2x 12.8x QBE Insurance Group Limited Australia 22,170 10% 10% 5% (1%) 15.7x 12.2x Insurance Australia Group Limited Australia 13,725 17% 17% 9% 2% 11.0x 10.9x Mean (excl. outliers) 11,430 11% 11% 13% 2% 13.6x 12.0x Mean (excl. outliers) 10,732 9% 10% 10% 0% 13.7x 12.2x Source: S&P Capital IQ (downloaded on 14 February 2017, data as at 10 February 2017), KPMG Corporate Finance analysis With respect to the above, we note the following: Cover-More differs from typical insurance companies as it does not carry direct underwriting risk or hold regulatory capital. However, it does engage in certain activities that are similar to insurance companies and which differentiate it from pure-play brokers, including policy pricing and claims processing Cover-More is not completely shielded from underwriting risk as it is still affected by policy pricing and its ability to pass on changes in policy costs to customers Cover-More, like the domestic insurance peer group above, is highly reliant on the customer s propensity to insure the domestic insurance peer group trades at similar EBITDA multiples to the domestic brokers but slightly above the domestic travel and related companies peer group 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

222 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Cover-More differs from the above comparison group on the basis that it has a higher forwardlooking growth profile to domestic insurers which on average, remain largely flat over the next 3 years the above peer group has lower margins than Cover-More. International travel and insurers We have provided a peer group of international travel and insurance companies which possess similar characteristics to Cover-More in the table below. Table 16: Sharemarket evidence Company Country Market cap EBITDA margin EBITDA margin EBITDA growth EBITDA growth EBITDA multiple EBITDA multiple ($m) FY FY +1 CAGR - 4Y CAGR +3Y FY FY +1 International and domestic insurers Tune Protect Group Berhad Malaysia % 27% 23% 13% 13.4x 10.8x Marsh & McLennan Companies, Inc. US 47,543 24% 23% 7% 7% 12.9x 12.0x Willis Towers Watson Public Limited Company US 22,005 22% 22% 43% 8% 11.8x 10.6x Arthur J. Gallagher & Co. US 12,803 16% 17% 15% 14% 14.2x 11.6x Brown & Brown, Inc. US 7,836 33% 33% 9% 5% 11.4x 11.2x Jardine Lloyd Thompson Group plc UK 3,549 20% 18% 4% n/a 12.0x n/a The Priceline Group Inc. US 105,727 41% 40% 25% 16% 22.9x 20.4x Expedia, Inc. US 23,910 15% 18% 17% 19% 16.2x 11.4x TripAdvisor, Inc. US 9,859 24% 25% 3% (0%) 20.1x 19.1x Thomas Cook Group plc UK 2,130 6% 7% 12% 7% 3.1x 2.8x Mean (excl. outliers) 26,151 22% 22% 15% 10% 13.8x 12.4x Mean (excl. outliers) 12,803 22% 22% 12% 8% 12.9x 11.5x Source: S&P Capital IQ (downloaded on 14 February 2017, data as at 10 February 2017), KPMG Corporate Finance analysis With respect to the above, we note the following: Cover-More has operations internationally, including the markets in which the above comparable companies are listed, therefore we consider the above to be an appropriate comparison set the insurance and travel companies trade broadly in line with the domestic broker and domestic insurance peer groups the above companies, particularly the international insurers, are significantly larger than Cover-More as outlined in the above analyses for the insurance and travel related companies, Cover-More is strongly aligned to individuals propensity to insure as well as to activity in the travel sector, both of which affect the international travel companies and insurers KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 47 SCHEME BOOKLET 219

223 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Transaction evidence The price paid in transactions is widely considered to represent the market value of a controlling interest in the target company. The difference between the value of a controlling interest and a minority interest (as implied by the share price) is referred to as a premium for control. The quantum of this premium will vary dependent on the specific circumstances of each transaction, including the equity share acquired, the negotiating position of the parties, competitive tension in the sales process, the availability of synergies and the extent to which a buyer would pay away these synergies to gain control of the target. As there is a shortage of comparable travel insurance transactions, we have also considered general insurers, operating in one of Cover-More s markets. The table below sets out the EBITDA multiples implied by recent domestic and international transactions that involved companies that provide services similar to those offered by Cover-More for which sufficient financial data is publicly available. Table 17: Transaction evidence Transaction EBITDA EBITDA Announcement date acquired % Target Acquirer Value multiple multiple (AUDm) LTM NTM Travel Insurance Sep 16 Travelex Insurance Services, Inc. Cover-More Group Limited 100% n/a Jul 15 World Nomads Pty Ltd NIB Holdings Limited 100% n/a Dec 14 Cover-More Group Limited IPO 82% White-label Insurance Sep 11 Firstassist Insurance Services Ltd. Cigna Corporation 100% n/a n/a Insurance Brokers May 14 Brightside Group Limited AnaCap Financial Partners 100% Sep 11 Jardine Lloyd Thompson Group JMH Investments Limited 10% Crescent Capital Partners Sep 09 Cover-More Group Limited 80% n/a n/a Management Pty Ltd. Source: Company financial statements and announcements; S&P Capital IQ; Mergermarket; KPMG Corporate Finance analysis Each of the above transactions is described in Appendix 6. While the services provided by the target companies are broadly comparable to Cover-More s business operations, in assessing the comparability of the implied multiples it is necessary to consider the particular attributes of the target companies and the specific circumstances surrounding each transaction, including that: Cover-More s business model is relatively unique in that it does not bear direct underwriting risk yet it still competes with large, diversified, domestic and international insurers that do. Furthermore, this uniqueness is supplemented by Cover-More s strong market presence despite its specialisation in travel insurance a number of the target companies are smaller with less geographical diversification than Cover-More and have slightly lower EBITDA multiples than Cover-More 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

224 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 all of the transactions were for a controlling stake, except for Jardine Lloyd Thompson Group plc, and would therefore include a control premium while the transaction LTM EBITDA for Firstassist Insurance Services Limited is not available, the LTM EV/ EBIT was 12.2 times, which suggests that the EBITDA multiple would be less similarly, while the transaction LTM EBITDA for Crescent Capital s $140 million stake in Cover- More in 2009 is not available, the LTM EBIT was 7.1 times 17, which suggests that the EBITDA multiple would be less Cover-More s acquisition of Travelex represents the most comparable transaction given the similarity in operations with Cover-More and the fact that Travelex s market of the US is one of Cover-More s main focus geographies. It should be noted, however, that Travelex only operates in the US and does not have any operations in the assistance sector. Control premium considerations When valuing Cover-More on a controlling basis using market information, it is necessary to consider an appropriate control premium to apply. We consider an appropriate control premium to be at the upper end of the 20% to 35% range (on an equity value basis) typically observed in successful takeovers in Australia. This level of control premium is justified having regard to the substantial potential for synergies and cost savings that could be achieved by an acquirer, its strategic value and existing operating platform, having regard to: the level of pure control premium considered to be appropriate in respect of the acquirer s ability to utilise full control over the strategy and cash flows of Cover-More the level of general synergies available to all likely acquirers, particularly in relation to underwriting costs, impact of insurance diversification on regulated capital requirements and other listing and overhead cost savings for acquirers with existing complementary operations in Australia and internationally, there could be potential overhead cost savings associated with co-locations, claims handling and corporate costs the number of large multinational insurers which could be potential acquirers of Cover-More and are of sufficient scale to fund such an acquisition (e.g. QBE, Allianz, Suncorp, AXA, IAG, Berkshire Hathaway) the dominant position Cover-More holds within the Australian travel insurance market and its global operating platform. There are risks associated with fully realising the benefits outlined above, the timing thereof and implementation costs (e.g. redundancy). Furthermore, achieving substantial cost savings may have a negative impact on sales (e.g. loss of customers if relationships and level of service are impacted). In addition, it is common practice not to ascribe the full value of estimated synergies in the valuation as, in a competitive bidding situation, a potential acquirer may not pay away the full benefit of synergies due to 17 Cover-More provided information 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 49 SCHEME BOOKLET 221

225 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 the risks associated with fully realising such benefits. Accordingly, we have reflected the risk adjusted potential future benefit of these cost savings and synergies available to a typical acquirer in the control premium when selecting the multiple. Selected multiple range Based on our analysis of the implied multiples of comparable companies and transactions as outlined above, we have selected a forward multiple range of 12.5 times to 13.5 times future maintainable EBITDA having regard to the following considerations: Cover-More s market leading position in travel insurance within Australia and the potential growth in Cover-More s target markets within Asia and the US growth opportunities in the US following the Travelex acquisition with the potential to offer current services with the medical assistance business, balanced against a moderate growth environment and risks of delivering on the acquisition strategy Cover-More s capital light business model and passing of underwriting risk to its underwriting partner, while still exposed to underwriting price changes Cover-More is the only listed travel insurance and assistance company. However, in light of the analysis provided above, we view the domestic travel and related companies and domestic brokers to be the most comparable to Cover-More, which had median forecast EBITDA multiples of 9.7 times and 11.9 times respectively (excluding a control premium) the broadly similar trading multiples of the domestic insurers and international travel and insurance businesses the implied trading multiple of Cover-More immediately prior to the announcement of the Scheme of 9.9 times FY17 pro-forma broker consensus EBITDA risk associated with Cover-More s expectation that a greater proportion of earnings will be delivered in the second half of FY17 than historically observed as a result of strategies to reduce overhead costs and the risk profile of the portfolio the level of earnings expected in FY17, as provided by the Company s guidance, relative to historic year the substantial synergies available to potential acquirers particularly in relation to underwriting costs and insurance diversification on regulated capital requirements, supporting the case for control premium at the higher end of the 20% to 35% range a number of the comparable transactions, all of which are smaller than Cover-More, and typically operate in less diversified markets. Given Cover-More s leading market position in Australia, partnerships with blue-chip distributors and exposure to high-growth emerging markets in Asia as well as growth prospects in the US, we would expect an appropriate EBITDA multiple for Cover- More s business operations (on a controlling basis) to be above these comparable transactions. We note in particular the recent Travelex acquisition by Cover-More was at an implied historic multiple of 11.1 times. Although forecast multiples have not been provided for the transaction, given the 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

226 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 expectations of positive growth, the forecast multiple is likely to be lower than this. We consider it reasonable that our selected multiple range is greater than this given the relatively low growth profile in the US compared to Australia and Asia and the size of the Cover-More business the selected EBITDA multiple of 12.5 times to 13.5 times is consistent with the range provided by the sharemarket evidence with the inclusion of a control premium at the high end of the range being applied to the equity component the selected EBITDA multiple of 12.5 times to 13.5 times is higher than the multiples based on the control transactions discussed above. This captures the strategic value and opportunities for cost savings for potential acquirers. In incorporating an appropriate premium for control in accordance with RG 111, we have only considered those synergies and benefits which would be available to more than one potential purchaser (or a pool of potential purchasers) of Cover-More. As such, we have not included the value of special benefits that may be unique to Zurich. Accordingly, our valuation of Cover-More has been determined without regard to the specific bidder. 8.4 Surplus assets / non-operating liabilities Surplus assets and liabilities are those assets and liabilities not required to sustain the adopted level of maintainable earnings. Non-operating liabilities have been valued at $0.9 million and comprise the contingent consideration attributable to the acquisition of Stratos Limited (Stratos). On 31 August 2016, Cover-More acquired 100% of the issued shares in Stratos, a New Zealand based employee assistance business, for consideration of $1.4 million with contingent consideration of $0.9 million Net debt Cover-More s adjusted net debt for valuation purposes is $104.4 million as set out in the table below. Table 18: Adjusted net debt $ million 31-Dec-16 Total debt Less: Cash at 31 December 2016 (38.7) Adjusted net debt Source: Cover-More 31 December 2016 Interim Results, KPMG Corporate Finance analysis We note that cash is $14.7 million higher than at 30 June 2016, and trade payables are $15.8 million higher. There is a risk that the cash balance at this level may not be sustainable in the long term despite the focus on working capital management Cover-More 31 December 2016 Interim Results 19 Cover-More 31 December 2016 Interim Results 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 51 SCHEME BOOKLET 223

227 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February Number of shares on issue Cover-More has 379,117,866 ordinary shares on issue and 2,001,373 performance rights over unissued ordinary shares. 964,145 performance rights will vest as a result of the transaction. On a fully diluted basis, the number of shares on issue is 380,082, Valuation cross-checks High level DCF We have also cross-checked our primary capitalised earnings valuation of Cover-More to that determined adopting a high level DCF analysis. The DCF methodology assumes that the underlying investors in a business have full control over the company and therefore over the distribution of its future cash flows. As a result, the value of Cover-More using the DCF method reflects a controlling value. Our high level DCF analysis indicates a per share value for Cover-More in the range of $1.69 to $1.99 (on a control basis). This range overlaps and therefore supports our valuation of Cover-More on a capitalisation of earnings basis. Further information in relation to our assumptions is detailed below. Assumptions The key assumptions adopted by KPMG Corporate Finance do not represent forecasts/projections by KPMG Corporate Finance but are intended to reflect the assumptions that could reasonably be adopted by industry participants in their pricing of a similar business to Cover-More. While KPMG Corporate Finance have not been provided with a detailed financial model from which an in-depth DCF analysis could be undertaken, since the Company does not forecast beyond 1 year, management have provided high level forecasts for the next 3 years. Some of the assumptions adopted are inherently subjective and valuation outcomes will vary based on changes in certain key assumptions. The key assumptions are: revenue our application of the high level DCF analysis reflects 3 years of forecast cash flows which is based on Cover-More s budget for FY17, upon which assumptions for growth in revenues align with Finaccord forecast growth rates for FY18 and FY19, across each of Cover-More s geographies EBITDA is estimated having regard to growth rates of each geography and the expected increases in fixed and variable costs. We have also had regard to historic margins capital expenditure is based on guidance provided by Cover-More, having regard to historical levels, excluding one-off non-recurring items tax rate income tax has been calculated by applying Cover-More s effective tax which reflects the tax rate of the geographies in which it operates changes in working capital were assumed to not be significant synergies we have included both hard and soft annual synergies having had regard to those identified by the Company that could be available to more than one acquirer. For soft synergies, such as underwriting cost savings and the impact of insurance diversification on regulated capital requirements, we have discounted the savings by 20%, given an acquirer is unlikely to pay away all 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

228 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 synergies and there is execution risk in achieving such synergies. The adjustment is net of implementation costs. For hard synergies, such as cost savings associated with being a listed company, we have assumed 100% of the costs savings and no implementation costs. Free Cash Flow to the Firm (FCFF) - we have adjusted EBITDA for depreciation and amortisation, capital expenditure, synergies and tax to derive forecast FCFF long term growth rate for the purpose of our valuation, we have assumed a long term growth rate of 5%. We considered Finaccord data, Cover-More s weighted average growth rates across geographies and long term growth in global outbound travel between 2000 and 2014 which was 4.7% 20. The growth rate also reflects that only 3 years of explicit cash flows were adopted discount rate we have applied a discount rate based on weighted average cost of capital principles of 11.5% to 12.5% (details contained in Appendix 7 of this report). The high level DCF analysis assumes that the Cover-More operates as is, with no major changes to competition within Cover-More s markets. The resultant value under our high level DCF analysis overlaps our primary per share value of Cover- More of $1.70 to $1.96 determined on a capitalisation of earnings methodology. Accordingly, the high level DCF supports our assessed valuation of Cover-More derived from the capitalised earnings methodology and therefore we consider our valuation of Cover-More to be appropriate Analysis of trading price of Cover-More shares We have also cross-checked the primary valuation methodology by analysing recent trading prices of Cover-More shares. When compared with a single external observer, the consensus view of a well traded, fully informed market is likely to be a more reliable estimate of the value of a portfolio interest in the underlying company that is assumed to exclude a premium for control. Trading prices usually incorporate the influence of all publicly available information on an entity s prospects, future earnings potential and risks. This is particularly true for shares that experience high levels of liquidity and are closely followed by a range of market analysts. Therefore, on the premise that the trading price is reflective of market value, we have added a control premium to the share price analysis and compared the outcome to our valuation determined by our primary methodology. Firstly, we have considered if there is any reason why the trading price may not be an indicator of the market value of a Cover-More share on a minority basis. To address this, we have: considered the frequency of release of material information from Cover-More to the market 20 United Nations World Tourism Organisation KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 53 SCHEME BOOKLET 225

229 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 analysed the historic trading volumes in Cover-More shares to, inter alia, consider the liquidity of the Cover-More shares. Non-public information Under ASX Listing Rules (LR 3.1 and 3.1A), Cover-More is required to keep the market informed of events and developments in a timely manner as they occur. If Cover-More becomes aware of any information that a reasonable person would expect to have a material effect on the price or value of its shares, it must inform the market of that information. Public information Cover-More has informed the market of such events and has provided regular earnings guidance in a timely manner. Most recently, Cover-More has announced: FY16 results on 19 August 2016 the acquisition of Travelex and a trading update and guidance on 27 September 2016 new underwriting agreement with BHSI and a business update on 10 November 2016 the Scheme with Zurich and earnings guidance for FY17 EBITDA on 12 December However, given that the announcement of Cover-More s most recent FY17 EBITDA guidance of $54.0 million to $57.0 million was provided with the announcement of the Scheme on 12 December 2016, it is not possible to discern the impact that the earnings guidance would have had on the share price, if any. It is unknown how the market would have reacted had it had reasonable time to interpret the earnings guidance in isolation. However, we do note that the guidance was broadly in line with broker estimates and is therefore considered unlikely to have had a significant impact. Conversely, the market did have reasonable time to react and received broker analysis in relation to the announcement of the Travelex acquisition and the signing of the new underwriting agreement with BHSI, however, there was little change to the share price. Liquidity analysis Cover-More is a sufficiently liquid stock, as illustrated in the table below. In the 3 months prior to the announcement, 29.8% of the issued share capital was traded in the market. In the 6 months prior to the announcement, almost all of the issued share capital was traded at 91.9%. In the 12 months before the announcement, over twice the amount of issued share capital had been traded at 206.9% KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

230 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Table 19: Liquidity analysis Period % of issued capital Period ended 9 December 2016 (pre-announcement) 1 month 6.2% 3 months 29.8% 6 months 91.9% 12 months 206.9% Source: IRESS, Capital IQ Based on the analysis above we consider the trading price of Cover-More to reflect the consensus view of a well traded, fully informed market and therefore a reliable estimate of the value of a portfolio interest. We note that the impact upon the share price of the revised earnings guidance is not known, and therefore the results were considered with caution and used as a high level cross-check only. Therefore, as a high level cross-check, we have added a control premium to the last closing share price prior to the announcement which resulted in the following valuation range: Table 20: High level valuation cross-check based on share price analysis Company Low High Last close share price ($) 9 December Control premium 21 20% 35% Value of Cover-More share price on a controlling basis ($) Source: IRESS, KPMG Corporate Finance analysis The implied value of a Cover-More share including a control premium is within the range derived from our primary capitalised earnings methodology ($1.70 to $1.96) at the high end and supports a position that we have not undervalued the Company. Therefore, we consider that this analysis supports our valuation of Cover-More as being appropriate. 21 KPMG Corporate Finance analysis based on Mergerstat data for Australian transactions completed between 2001 and 2016, comparing the closing price of the target company one day prior to the takeover announcement to the final offer price KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 55 SCHEME BOOKLET 227

231 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 1 KPMG Corporate Finance Disclosures Qualifications The individuals responsible for preparing this report on behalf of KPMG Corporate Finance are Joanne Lupton and Ian Jedlin. Joanne is an associate of the Institute of Chartered Accountants Australia and New Zealand, a Fellow of the Financial Services Institute of Australasia and holds a Commerce degree from the University of New South Wales. Ian is an Associate of the Institute of Chartered Accountants Australia and New Zealand, a Senior Fellow of the Financial Securities Institute of Australasia and holds a Master of Commerce from the University of New South Wales. Each has a significant number of years experience in the provision of corporate financial advice, including specific advice on valuations, mergers and acquisitions, as well as the preparation of expert reports. Disclaimers It is not intended that this report should be used or relied upon for any purpose other than KPMG Corporate Finance s opinion as to whether the Scheme is in the best interests of Shareholders. KPMG Corporate Finance expressly disclaims any liability to any Shareholder who relies or purports to rely on the report for any other purpose and to any other party who relies or purports to rely on the report for any purpose whatsoever. Other than this report, neither KPMG Corporate Finance nor the KPMG Partnership has been involved in the preparation of the Scheme Booklet or any other document prepared in respect of the Scheme. Accordingly, we take no responsibility for the content of the Scheme Booklet as a whole or other documents prepared in respect of the Scheme. We note that the forward-looking financial information prepared by the Company does not include estimates as to the potential impact of any future changes in taxation legislation in Australia. Future taxation changes are unable to be reliably determined at this time. Independence In addition to the disclosures in our Financial Services Guide, it is relevant to a consideration of our independence that, during the course of this engagement, KPMG Corporate Finance provided draft copies of this report to management of Cover-More for comment as to factual accuracy, as opposed to opinions which are the responsibility of KPMG Corporate Finance alone. Changes made to this report as a result of those reviews have not altered the opinions of KPMG Corporate Finance as stated in this report. Consent KPMG Corporate Finance consents to the inclusion of this report in the form and context in which it is included with the Scheme Booklet to be issued to the shareholders of Cover-More. Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of KPMG Corporate Finance as to the form and context in which it appears KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

232 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 2 Sources of information In preparing this report we have been provided with and considered the following sources of information: Publicly available information: Scheme Booklet and the Notice of Scheme Meeting various ASX company announcements various broker and analyst reports various press and media articles various reports published by IBISWorld Pty Ltd financial information from Bloomberg, S&P Capital IQ, IRESS, Finaccord and Connect 4. Non-public information management accounts for Cover-More for the year ended 30 June 2016 budget information for the year ended 30 June 2017 financial forecasts and business plans other confidential documents, board papers, presentations and working papers. In addition, we have had discussions and obtained information from senior management and Directors of Cover-More and its advisors KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 57 SCHEME BOOKLET 229

233 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 3 - Industry overview Travel insurance is purchased by customers to provide them with protection against specified losses, accidents or other adverse events which may occur before or during travel. Typical risks that can be covered in a travel insurance policy include accidents, baggage delays, baggage loss, civil liability, flight delays, holiday cancellations, holiday interruption, legal expenses, medical expenses and theft. 22 The travel insurance premium an individual pays is typically based on a number of factors including, the type of cover requested, destination of travel, duration of stay, the travel cost, age of traveller, commission, pre-existing medical conditions and means of travel. Many travel insurance policies also include the provision of emergency medical assistance services, such as call centres operating 24/7, and an international network of specialist health care providers. Other common travel assistance services that may be provided for within a travel insurance policy includes, breakdown recovery, care of minors, delivery of essentials, information services, medical assistance, rescue / repatriation. The emergency medical and assistance markets are connected to and dependent upon similar drivers as the travel insurance market. Market size Australia is Cover-More s largest market. The Australian market is estimated to have a total market size of $611 million Gross Written Premiums (GWP) for Over the past 4 years to 2016, GWP has grown at a compound annual growth rate (CAGR) of 4.9%, however due to an expectation of faster growth in Gross Domestic Product (GDP) per capita, the Australian market is expected to grow at a CAGR of 6.5% between 2017 and Of Cover-More s target markets North America has the largest market size at $2.4 billion, and is now a significant area of focus for Cover-More following the expansion into the US in July 2016 and acquisition of Travelex in November Growth in the US market is forecast to fall from a CAGR of 7.5% between 2011 and 2016 to 4.8% between 2017 and Finaccord data, January Finaccord data, January Finaccord data, January KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

234 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Figure 8: Travel insurance Gross Written Premiums FY16 by region 2,357 2,500 US$m 2,000 1,500 1,334 1, Australia North NZ UK India China SE Asia America Developed markets Developing markets Source: Finaccord data, January 2017 Table 21: Travel insurance Gross Written Premium CAGRs by region Australia North America NZ UK India China SE Asia % 7.5% 3.9% 3.0% 21.4% 19.9% 12.1% % 4.8% 5.4% 4.0% 20.4% 15.2% 12.2% Source: Finaccord data, January 2017 Notes: SE Asia comprises Singapore, Indonesia and Malaysia North America comprises USA and Canada The table above illustrates that whilst smaller in size by comparison to the US and UK, the developing markets in which Cover-More operates have significantly higher historic and forecast growth rates. This is supportive of Cover-More s rationale for focusing on these geographies. Industry drivers The travel insurance industry is primarily driven by growth in outbound travel volume, increasing wealth, and propensity for travellers to insure. This is in turn driven by increased disposable income, increased awareness of travel risks and increased distribution streams. Globally, increased competition between budget airlines and accommodation providers has contributed to growth in outbound travel by making travel more affordable. Australian s have a relatively high propensity to travel abroad for further distances, longer periods of time and incur higher travel expenses and are therefore more likely to take out travel insurance. Outbound travel is expected to grow more rapidly in developing markets in which Cover-More operates, including India and China, due to increasing affluence and a rising middle class KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 59 SCHEME BOOKLET 231

235 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Outbound travel Global outbound travel has increased from 421 million trips in 2000 to 805 million in 2014, representing a CAGR of 4.7%. 25 Outbound travel has experienced only one period of negative growth since 2000, which was between 2008 and 2009 (negative 0.7%) as a consequence of the Global Financial Crisis (GFC). Figure 9: Outbound travel and CAGRs for Australia, North America and Selected Asian markets Australia North America Selected Asian markets CAGR: 4.8% % % 4.5% % % Source: Finaccord Note: Shaded illustrates forecast data Selected Asian markets is composed of markets in which Cover-More operates, including Indonesia, Malaysia, China, India and Singapore The number of outbound trips for Australian residents has grown at a CAGR of 4.8% from 2011 to 2016 to 9.8 million trips. The number of trips is expected to reach 11.4 million by 2019 at a marginally faster CAGR of 5.0%. The moderate growth in Australia reflects a mature market for outbound travel. Conversely, the US is expected to experience a lower growth rate in outbound trips between 2017 and 2019 than it did for 2011 to 2016, with CAGR expected to fall from 4.5% to 3.1%. Unlike in Australia, US travellers require insurance when travelling interstate. This suggests that the US travel insurance industry is also impacted by domestic travel. The selected Asian markets which Cover-More operates in have experienced an increase in outbound travel as evidenced by the higher CAGR of 9.8% from 2011 to This has largely been driven by the growth in Indian and Chinese outbound travel, which recorded a CAGR of 9.5% and 15.6% respectively. These same Asian markets are forecast to grow at a faster rate of 11.6% between 2016 and 2019, driven by compound annual growth in India of 10.5% and more significantly 17.9% in China. The growth in the Asian markets is consistent with the broader theme of developing countries increasing their share of the total market size for travel. As these markets continue to develop and incomes increase, it is expected that outbound travel will continue to rise. 25 United Nations World Tourism Organisation KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

236 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Short-tail Travel insurance is classified as a short-tail risk product, which means that claims are usually made during the term of the policy or shortly after the policy has expired. Generally, a policy holder of travel insurance will make a claim during their travel or immediately after, as events which trigger a claim will occur in this period. In contrast, long-tail products, such as liability insurance, can remain as a liability on the insurance provider s balance sheet over long periods of time. Table 22: Insurance industry segment comparison Compulsory Third Party Insurance Private Motor Insurance Travel Insurance Claims reporting period and settlement Long-tail Short-tail Short-tail Premium payment structure Regular with yearly renewal Regular with yearly renewal Upfront and usually close to time of travel Pricing structure State government regulated / influenced Based on market pricing Based on market pricing Purchase to claim proximity and settlement Long claims can take years to settle Short claims usually settled within months Short claims usually settled within months Source: Cover-More Prospectus, 2 December 2013 Competition Travel insurance products are typically sold by large domestic and international insurers who sell a range of insurance products across different classes, such as life, car and home insurance, and who directly underwrite the insurance risk. Whilst Cover-More s business model is relatively unique in that it does not bear the underwriting risk, it competes directly with large, diversified, domestic and international insurers that do. For example, Cover- More s direct competition in the travel insurance market includes Allianz SE (Allianz), American International Group, Inc. (AIG), Chubb Limited (Chubb), QBE Insurance Group Limited (QBE), AXA SA (AXA) and SureSave Pty Ltd (SureSave). Cover-More has the leading market position in the Australian travel insurance market, with an approximate 40% market share. 26 This is approximately double the size of the second-ranked competitor, Allianz. Cover-More s dominant market share reflects the strong network of partnerships that it has developed in the travel industry, such as with Flight Centre and helloworld. Insurers typically compete based on: policy coverage and exclusions 26 Finaccord Travel Insurance and Assistance in Australia, KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 61 SCHEME BOOKLET 233

237 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 price relationships with distribution partners including exclusivity, commission or profit sharing arrangements, and technology platform and integration increasingly, the ability to offer and price travel insurance policies online directly and/or on behalf of distribution partners. Cover More s competitors in the travel medical assistance market are primarily medical assistance divisions of other large providers of travel insurance, as well as some independent operators. Some of these include AXA Assistance, Allianz Global Assistance, QBE Assist and International SOS. Competitors in the employee assistance space are primarily domestic and international specialised employee assistance service providers or health insurers. Regulation Below is a summary of the regulations in Cover-More s two largest markets, Australia and the US, as well as the two fastest growing markets, India and China. Australia The travel insurance industry in Australia is regulated by the Australian Prudential Regulation Authority (APRA) which, among other things, sets out a number of requirements with respect to solvency and capital. Travel insurance must be underwritten by a licensed general insurer, for which Cover-More has partnered previously with Munich Re and more recently with BHSI. Cover More holds two Australian Financial Services Licences which are regulated by ASIC. Under the licences, Cover More can provide general financial product advice in relation to general insurance products. Cover-More may also issue, apply for, vary and dispose of general insurance products on behalf of its retail clients. In accordance with its regulatory compliance and under the conditions of the licenses, Cover More has appointed a number of active agents and representatives (such as travel agencies) to sell travel insurance products. It is Cover-More s responsibility to monitor the activities of those active agents and representatives to ensure that the conditions of its licences are complied with at all times. Access to global reinsurance allows Cover-More to operate with a capital light approach compared to local insurers who have regulatory capital requirements with APRA and less diversification benefits than global re-insurers. US The US regulatory system for travel insurance is regulated at the State level and therefore is fragmented, with minimal uniformity between each state around licencing. This was one of the drivers behind the acquisition of Travelex which already had licences in all US States KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

238 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 There are a number of industry bodies that are looking to harmonise the licencing, such as US Travel Insurance Association (UStiA), National Association of Insurance Commissioners (NAIC) and National Conference of Insurance Legislators (NCOIL). The Limited Lines Travel Insurance Model Act (the Act), adopted by the NCOIL in 2012, aimed at reducing the burden on travel agents selling travel insurance products by creating a standardised law. The Act removed the requirement to have a licence when selling travel insurance and allows the sale of policies to travellers in other states which was previously prohibited. India The Insurance Regulatory and Development Authority (IRDA) regulates entities which carry on insurance business and intermediary business (including brokers and insurance agents) that operate or are incorporated in India. Direct and indirect foreign ownership in insurance businesses is subject to shareholding restrictions. As a licensed Corporate Agent, Cover More India is authorised to distribute travel and health insurance policies issued and underwritten by the government owned National Insurance Company Limited along with other products and assistance services. Cover-More India carries no insurance risk and is not subject to the regulations that are specific to insurers. However, Cover-More India is still regulated by IRDA as a licensed intermediary. China The Chinese travel insurance industry is regulated by the China Insurance Regulatory Commission (CIRC). CIRC regulates foreign ownership in Chinese insurance companies, licensing for foreign entities, the types of activities that they are permitted to engage in, and the geographic locations where their activities can be carried out. In addition, insurance companies and intermediaries wanting to offer insurance products online must meet CIRC s conditions and obtain approval. Cover More China has a strategic alliance with a Chinese insurance broker and an underwriting relationship with China Continent Property & Casualty Insurance Company Limited (CCIC), a state owned enterprise. This allows Cover More China to operate as a coordinator and developer of travel insurance programs, and provides assistance services and third party administration services to CCIC. All underwriting risk remains with CCIC as the product issuer and regulatory risk associated with the distribution of travel insurance lies with the broker KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 63 SCHEME BOOKLET 235

239 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 4 Broker estimates Detailed broker estimates are set out below: Table 23: Broker estimates Company Report date Revenue EBITDA EBIT NPAT FY17 FY18 FY19 FY17 FY18 FY19 FY17 FY18 FY19 FY17 FY18 FY19 Broker 1 1/01/ Broker 2 1/01/ Broker 3 12/12/ Broker 4 11/12/ Broker 5 13/11// Broker 6 28/09/ Minimum Maximum Average Median Source: Bloomberg 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

240 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 5 Valuation methodology Capitalisation of earnings An earnings based approach estimates a sustainable level of future earnings for a business ('maintainable earnings') and applies an appropriate multiple to those earnings, capitalising them into a value for the business. The earnings bases to which a multiple is commonly applied include Revenue, EBITDA, EBIT and NPAT. In considering the maintainable earnings of the business being valued, factors to be taken into account include whether the historical performance of the business reflects the expected level of future operating performance, particularly in cases of development, or when significant changes occur in the operating environment, or the underlying business is cyclical. With regard to the multiples applied in an earnings based valuation, they are generally based on data from listed companies and recent transactions in a comparable sector, but with appropriate adjustment after consideration has been given to the specific characteristics of the business being valued. The multiples derived for comparable quoted companies are generally based on security prices reflective of the trades of small parcels of shares. As such, multiples are generally reflective of the prices at which portfolio interests change hands. That is there is no premium for control incorporated within such pricing. They may also be impacted by illiquidity in trading of the particular stock. Accordingly, when valuing a business en bloc (100%) we would also reference the multiples achieved in recent mergers and acquisitions, where a control premium and breadth of purchaser interest are reflected. An earnings approach is typically used to provide a market cross-check to the conclusions reached under a theoretical discounted cash flow methodology or where the entity subject to valuation operates a mature business in a mature industry or where there is insufficient forecast data to utilise the discounted cash flow methodology. Discounted cash flow Under a discounted cash flow methodology, forecast cash flows are discounted back to the Valuation Date, generating a net present value for the cash flow stream of the business. A terminal value at the end of the explicit forecast period is then determined and that value is also discounted back to the Valuation Date to give an overall value for the business. In a discounted cash flow analysis, the forecast period should be of such a length to enable the business to achieve a stabilised level of earnings, or to be reflective of an entire operation cycle for more cyclical industries. Typically a forecast period of at least five years is required, although this can vary by industry and by sector within a given industry. The rate at which the future cash flows are discounted (the Discount Rate) should reflect not only the time value of money, but also the risk associated with the business future operations. This means that in order for a discounted cash flow to produce a sensible valuation figure, the importance of the quality of the underlying cash flow forecasts is fundamental. The Discount Rate most generally employed is the Weighted Average Cost of Capital (WACC), reflecting an optimal (as opposed to actual) financing structure, which is applied to unleveraged cash flows and results in an Enterprise Value for the business. Alternatively, for some sectors it is more 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 65 SCHEME BOOKLET 237

241 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 appropriate to apply an equity approach instead, applying a cost of equity to leveraged cash flows to determine equity value. In calculating the terminal value, regard must be had to the business potential for further growth beyond the explicit forecast period. This can be calculated using either a capitalisation of earnings methodology or the 'constant growth model', which applies an expected constant level of growth to the cash flow forecast in the last year of the forecast period and assumes such growth is achieved in perpetuity. Net assets or cost based Under a net assets or cost based approach, total value is based on the sum of the net asset value or the costs incurred in developing a business to date, plus, if appropriate, a premium to reflect the value of intangible assets not recorded on the balance sheet. Net asset value is determined by marking every asset and liability on (and off) the company s balance sheet to current market values. A premium is added, if appropriate, to the marked-to-market net asset value, reflecting the profitability, market position and the overall attractiveness of the business. The net asset value, including any premium, can be matched to the book net asset value, to give a price to net assets, which can then be compared to that of similar transactions or quoted companies. A net asset or cost based methodology is most appropriate for businesses where the value lies in the underlying assets and not the ongoing operations of the business (e.g. real estate holding companies). A net asset approach is also useful as a cross-check to assess the relative riskiness of the business (e.g. through measures such as levels of tangible asset backing). Enterprise or equity value Depending on the valuation approach selected and the treatment of the business existing debt position, the valuation range calculated will result in either an enterprise value or an equity value being determined. An enterprise value reflects the value of the whole of the business (i.e. the total assets of the business including fixed assets, working capital and goodwill/intangibles) that accrues to the providers of both debt and equity. An enterprise value will be calculated if a multiple is applied to unleveraged earnings (i.e. revenue, EBITDA, EBITA or EBIT) or unleveraged free cash flow. An equity value reflects the value that accrues to the equity holders. To compare an enterprise value to an equity value, the level of net debt must be deducted from the enterprise value. An equity value will be calculated if a multiple is applied to leveraged earnings (i.e. NPAT) or free cash flow, post debt servicing KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

242 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 6 Market Evidence Description of comparable companies A brief description of the selected comparable companies is provided below: Steadfast Group Limited Steadfast Group Limited operates as a general insurance broker network and underwriting agency in Australia and New Zealand. It is listed on the ASX with a market capitalisation of $1.6 billion on 9 December It also operates as a co-owner and consolidator of broker business and underwriting agencies, as well as other complementary businesses, including premium funding, life and reinsurance, technology, back office outsourcing, and legal practice businesses. The company operates a network of 343 insurance brokerages and 22 underwriting agencies. Steadfast Group Limited was founded in 1996 and is based in Sydney, Australia. AUB Group Limited AUB Group Limited provides insurance broking services and distribution of ancillary products in Australia and New Zealand. It is listed on the ASX with a market capitalisation of $653 million on 9 December The company offers insurance products through insurance underwriting agency businesses; and ancillary risk assessment and related solutions to insurance companies, and commercial and government clients. It provides its products and services directly to its customers, as well as through insurance brokers. The company was formerly known as Austbrokers Holdings Limited and changed its name to AUB Group Limited in November AUB Group Limited was incorporated in 1885 and is based in Sydney, Australia. iselect Limited iselect Limited provides online comparison services in Australia. It operates through three segments: Health Insurance, Life and General Insurance, and Energy and Telecommunications. It is listed on the ASX with a market capitalisation of $451 million on 9 December The company sells health, life, and car insurance policies; and offers mortgage brokerage, energy, broadband, and financial referral services. In addition, it operates in the online product comparison sector and compares private health insurance, life insurance, car insurance, broadband, energy, home loans, and personal financial products. The company offers its services under the iselect, InfoChoice, and Energy Watch brands. iselect Limited was founded in 2000 and is headquartered in Cheltenham, Australia. Mortgage Choice Limited Mortgage Choice Limited provides mortgage broking services in Australia. It is listed on the ASX with a market capitalisation of $277 million on 9 December It operates through three segments: Mortgage Choice Franchised Mortgage Broking, Help Me Choose Health Fund and Mortgage Comparison Website, and Mortgage Choice Financial Planning. The company provides assistance in determining the borrowing capacities of borrowers; assessment of a range of home loans and other products; and submission of loan applications on behalf of borrowers. It also provides car loans, credit cards, and financial planning and business lending services. In addition, the company offers life, home building and contents, car, landlord, 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 67 SCHEME BOOKLET 239

243 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 mortgage and income protection, and lenders mortgage insurance products. Mortgage Choice Limited was founded in 1992 and is headquartered in North Sydney, Australia. Australian Finance Group Ltd Australian Finance Group Ltd. provides mortgage broking services in Australia. It is listed on the ASX with a market capitalisation of $264 million on 9 December It operates in two segments, AFG Wholesale Mortgage Broking and AFG Home Loans. The company offers residential mortgages; and AFG-branded and securitized products, such as AFG Home Loans, as well as commercial loans, insurance products, equipment and leasing finance, and personal loans. The company was founded in 1994 and is headquartered in West Perth, Australia. Flight Centre Travel Group Limited Flight Centre Travel Group Limited provides travel retailing services in leisure, corporate, and wholesale travel sectors worldwide under its various brands. It is listed on the ASX with a market capitalisation of $3.3 billion on 9 December It also has a foreign currency exchange business; financial services business; and provision of fitness classes, personal training, beauty treatments, massages, and other services. Additionally, the company offers recruitment marketing, advertising, and software solutions, as well as short listing, behavioural testing, and assessment services; and sells retail bikes and accessories through its 99 Bikes store. It also offers aircraft charter and logistics consultancy services; and management and business courses for individuals and corporate clients, as well as tourism courses for individuals. As of 22 July, 2016, it had 2800 shops and businesses. The company was incorporated in 1987 and is headquartered in Brisbane, Australia. Corporate Travel Management Limited Corporate Travel Management Limited provides travel management solutions to the corporate market. It is listed on the ASX with a market capitalisation of $1.7 billion on 9 December It manages the purchase and delivery of travel services for its clients. The company offers a range of corporate travel services, such as diagnostic travel health check services and event travel management services. It also provides resource travel services consisting of bulk upload, shift management, and expense management products, as well as behaviour analysis, charter negotiation, risk alert, and emergency evacuation services. It also offers travel planning services covering flights, accommodation, car hire, overseas holiday packages, luxury travel and cruising, escorted tours, tailor-made itineraries, and travel insurance. Further, it sells airline tickets, leases properties, and provides overseas educational consultancy services. The company was founded in 1994 and is headquartered in Brisbane, Australia. Webjet Limited Webjet Limited provides online travel booking services in Australia, New Zealand, and internationally through its business to business and business to consumer segments. It is listed on the ASX with a market capitalisation of $950 million on 9 December The company enables its customers to compare, combine, and book travel flights, travel insurance, car hire, holiday package deals, and hotel accommodation. Webjet Limited is based in Melbourne, Australia KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

244 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 helloworld Limited helloworld Limited operates as a travel distribution company in Australia and internationally. It is listed on the ASX with a market capitalisation of $460 million on 9 December It sells international and domestic travel products and services, as well as operates a franchised network of travel agents. The company operates in three segments: Retail, Wholesale, and Travel Management. The company was formerly known as Jetset Travelworld Limited and changed its name to helloworld Limited in December helloworld Limited is headquartered in Sydney, Australia. OFX Group Limited OFX Group Limited provides online international payments and foreign exchange services for consumer and business clients in Australia, New Zealand, Europe, North America, and Asia. It is listed on the ASX with a market capitalisation of $432 million on 9 December The company offers international money transfer services, including single and recurring money transfer services; and foreign exchange services, including spot and forward transactions, and foreign exchange options. It offers its services under the brand names of OFX, UKForex, CanadianForex, USForex, NZForex, and ClearFX. The company was formerly known as OzForex Group Limited and changed its name to OFX Group Limited in September OFX Group Limited was founded in 1998 and is headquartered in Sydney, Australia. Medibank Private Limited Medibank Private Limited, an integrated healthcare company, provides private health insurance and health solutions in Australia and New Zealand. It is listed on the ASX with a market capitalisation of $7.6 billion on 9 December It operates through two segments, Health Insurance and Complementary Services. The Health Insurance segment offers private health insurance products. This segment also provides health insurance products to overseas visitors and overseas students. The Complementary Services segment offers health management and telehealth services to government and corporate customers, as well as distributes travel, life, and pet insurance products. The company underwrites its health insurance products under the Medibank and ahm brand names. Medibank Private Limited was founded in 1976 and is based in Docklands, Australia. nib Holdings Limited nib Holdings Limited provides health insurance services to residents, international visitors, and students in Australia, New Zealand, and internationally. It is listed on the ASX with a market capitalisation of $2.1 billion on 9 December It operates through five segments: Australian Residents Health Insurance, New Zealand Residents Health Insurance, International (Inbound) Health Insurance, World Nomads Group, and nib Options. The company offers health insurance products, life insurance, and travel insurance, as well as funeral and income protection insurance services. It also facilitates access to cosmetic and dental treatment. nib holdings limited was founded in 1952 and is headquartered in Newcastle, Australia. QBE Insurance Group Limited QBE Insurance Group Limited underwrites general insurance and reinsurance risks worldwide. It is listed on the ASX with a market capitalisation of $23.2 billion on 9 December It operates through North American Operations, European Operations, Australian & New Zealand Operations, Emerging Markets, 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 69 SCHEME BOOKLET 241

245 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 and Equator Re segments. The company offers commercial and domestic property, motor and motor casualty, agriculture, public/product liability, workers compensation, marine energy and aviation, professional indemnity, financial and credit, accident and health, and other insurance products. It also manages Lloyd s syndicates, as well as offers investment management services. The company was founded in 1886 and is headquartered in Sydney, Australia. Insurance Australia Group Limited Insurance Australia Group Limited underwrites general insurance products. It is listed on the ASX with a market capitalisation of $13.8 billion on 9 December It operates through Consumer Division (Australia), Business Division (Australia), New Zealand, Asia, and Corporate and Other segments. The company offers consumer and business insurance products, and public and products liability, as well as niche insurance, such as consumer credit, pleasure craft, boat, caravan, and travel insurance products. It also provides rural and horticultural, and personal liability and commercial liability insurance products, as well as reinsurance services. The company sells its products directly and through insurance brokers, representatives, and distribution partners. The company was formerly known as NRMA Insurance Group Limited and changed its name to Insurance Australia Group Limited in Insurance Australia Group Limited was founded in 1925 and is based in Sydney, Australia. Tune Protect Group Berhad Tune Protect Group Berhad underwrites general insurance and reinsurance in the Asia Pacific. It is listed on the Kuala Lumpur Stock Exchange with a market capitalisation of $322 million on 9 December It offers a range of online insurance products, which primarily include passenger and theft insurance products, as well as travel insurance plans. The company also provides various general insurance products, such as travel, house, medical and health, motor, dental, and personal accident and other. It also offers general and life reinsurance products. Tune Protect Group Berhad is headquartered in Kuala Lumpur, Malaysia. Marsh & McLennan Companies, Inc. Marsh & McLennan Companies, Inc., is a professional services firm, providing advice and solutions in the areas of risk, strategy, and people worldwide. It is listed on the New York Stock Exchange with a market capitalisation of $48.1 billion on 9 December It operates through two segments, Risk and Insurance Services and Consulting. Marsh & McLennan Companies, Inc. was founded in 1871 and is headquartered in New York. Willis Towers Watson Public Limited Company Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. It is listed on the Nasdaq Stock Market with a market capitalisation of $22.5 billion on 9 December The company operates through Corporate Risk and Broking, Exchange Solutions, Human Capital and Benefits and Investment, Risk, and Reinsurance. It serves multinational corporations, middle-market companies, public institutions, and individual clients. Willis Towers Watson Public Limited Company was founded in 1828 and is based in London, UK KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

246 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Arthur J. Gallagher & Co. Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage and risk management services in the United States and internationally. It is listed on the New York Stock Exchange with a market capitalisation of $12.1 billion on 9 December It operates through Brokerage, Risk Management, and Corporate. The company offers its services through a network of insurance brokers and consultants to various commercial, industrial, institutional, and governmental organisations. Arthur J. Gallagher & Co. was founded in 1927 and is headquartered in Itasca, Illinois. Brown & Brown, Inc. Brown & Brown, Inc. markets and sells insurance products and services primarily in the US, as well as in England, Bermuda, and the Cayman Islands. It is listed on the New York Stock Exchange with a market capitalisation of $8.4 billion on 9 December Its Retail segment provides property insurance relating to physical damage to property, fidelity and surety bonds, and a range of insurance products across life, accident, disability, health, hospitalization, medical, and dental. It also offers risk management and loss control surveys and analysis, consultation, and claims processing services. The National Programs segment offers professional liability and related package insurance products. It also provides outsourced product development, marketing, underwriting, actuarial, compliance, and claims and other administrative services to insurance carrier partners; and commercial and public entity-related programs, as well as underwrites flood insurance products. Its Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance products and services to retail insurance agencies. The company s Services segment offers third-party claims administration and medical utilization management services in the workers compensation and all-lines liability arenas, as well as Medicare set-aside services, Social Security disability and Medicare benefits advocacy services, and claims adjusting services. The company was founded in 1939 and is headquartered in Daytona Beach, Florida. Jardine Lloyd Thompson Group plc Jardine Lloyd Thompson Group plc provides insurance, reinsurance, employee benefits related advice, brokerage, and associated service worldwide. It is listed on the London Stock Exchange with a market capitalisation of $3.5 billion on 9 December The company s Risk and Insurance segment provides advice and consultancy services, brokerage and placement services, specialist insurance products and other services. Its Employee Benefits segment offers a range of employee benefits advice and services to companies, pension trustees, and individuals in the areas of pensions consultancy and administration, employee benefits and healthcare, investment and discretionary management of assets, life insurance, and wealth management. This segment also provides pension software to actuaries, accountants, in-house pension departments, pension scheme trustees, and third-party administrators, as well as online integrated benefits management systems to various corporate and trust-based clients. Jardine Lloyd Thompson Group plc is headquartered in London, the United Kingdom. The Priceline Group Inc. The Priceline Group Inc. provides online travel and restaurant reservation and related services. It is listed on the Nasdaq Stock Market with a market capitalisation of $103.2 billion on 9 December The company operates Booking.com, which provides online accommodation reservation services and priceline.com, which offers hotel, rental car, and airline ticket reservation services, as well as vacation 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 71 SCHEME BOOKLET 243

247 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 packages and cruises. It also operates Agoda.com, an online accommodation reservation service in the Asia-Pacific region and rentalcars.com that offers car rental reservation services. It also provides services which allow consumers to compare airline ticket, hotel reservation, and rental car reservation information and online restaurant reservation services as well as reservation management services to restaurants under the OpenTable brand name. It also provides travel insurance services. The Priceline Group Inc. is headquartered in Norwalk, Connecticut. Expedia, Inc. Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. It is listed on the Nasdaq Stock Market with a market capitalisation of $25.0 billion on 9 December It facilitates the booking of hotel rooms, airline seats, car rentals, and destination services from its travel suppliers by acting as an agent. The company serves leisure and corporate travellers, offline retail travel agents, and travel service providers. It also engages in advertising and media business. The company was founded in 1996 and is headquartered in Bellevue, Washington. TripAdvisor, Inc. TripAdvisor, Inc. operates as an online travel company. It is listed on the Nasdaq Stock Market with a market capitalisation of $9.6 billion on 9 December Its travel research platform aggregates reviews and opinions about destinations, accommodations, activities and attractions, and restaurants for consumers to plan their trips, as well as enables to book hotels, vacation rentals, flights, activities and attractions, and restaurants. The company operates its website in the US and 47 other countries. It also manages and operates 23 media brands that provide travel planning resources across the travel sector comprising. TripAdvisor, Inc. was founded in 2000 and is headquartered in Needham, Massachusetts. Thomas Cook Group plc Thomas Cook Group plc provides leisure travel services in the UK and Europe. It is listed on the London Stock Exchange with a market capitalisation of $2.3 billion on 9 December It also owns, leases, manages, or franchises 190 own-brand hotels in 16 countries as well as various partner hotels. In addition, the company operates an airline fleet of 94 aircrafts, a quality management training and consulting services business, and also offers travel and booking insurance. Further, it provides financing, tour operation, travel agency, and other travel services. The company offers its products through its website as well as other third party e-commerce platforms. Thomas Cook Group plc was founded in 1841 and is based in London, UK. Description of comparable transactions A brief description of the selected comparable transactions is provided below: On 27 September 2016, Cover-More Group announced it would acquire 100% of the shares in Travelex Insurance Services, Inc. for approximately $138 million. Travelex is the third largest retail travel insurance specialist in the US. The acquisition was funded through a combination of proceeds of approximately $73.3 million raised from the entitlement offer and $72.7 million from the debt facility. On 8 July 2015, it was announced that nib Holdings Limited agreed to acquire World Nomads Pty Ltd for $95 million. World Nomads Pty Ltd provides travel insurance internationally. Its insurance covers a range 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

248 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 of travel specific events across emergency medical, evacuation assistance, support, liability and loss. The deal was funded from surplus capital and corporate debt facilities with final price subject to movements in net asset value based on completion accounts. The company was incorporated in 1999 and is based in Sydney, Australia. On 8 May 2014, AnaCap Financial Partners Fund II, L.P. acquired Brightside Group plc for approximately 130 million. Brightside Group provides insurance brokerage services to individuals and businesses in the UK. It provides home, car, business, employer s liability, and commercial property insurance products. Brightside Group Limited was founded in 2001 and is based in Bristol, UK. On 27 September 2011, CIGNA Corporation agreed to acquire Firstassist Insurance Services Ltd from FirstAssist Services Limited for 71 million. Firstassist Insurance Services Ltd provides emergency medical assistance to leisure and business travellers. It offers a range of services, including pre-travel advice and contingency planning, medical case management, medical evacuation/repatriation, and access to security advice and assistance. The company delivers travel and medical assistance to a portfolio of travel insurers, corporate clients, and charitable organizations. The company was founded in 1998 and is based in Purley, UK. On 4 November 2011, JMH Investments Limited acquired a 10% stake of Jardine Lloyd Thompson Group plc for approximately 170 million. JMH Investments Limited held 30.35% in Jardine Lloyd Thompson Group plc prior to increasing their stake. Jardine Lloyd Thompson Group plc provides insurance, reinsurance, employee benefits related advice, brokerage, and associated service worldwide. The company was incorporated in 1982 and is headquartered in London, UK. On 30 September 2009, Crescent Capital Partners Management Pty Ltd through Crescent Capital Partners III L.P. acquired approximately 80% in Cover-More for $140 million KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 73 SCHEME BOOKLET 245

249 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 Appendix 7 Selection of discount rate Our assessed discount rate for Cover-More (applied in our high level DCF cross-check) is outlined in the table below. Table 24: Discount rate WACC Inputs Low High Notes Risk free rate 4.1% 4.1% Blended risk free rate (of the spot Australian government bond yield and long term forecast rate) Unlevered beta Based on our analysis of the comparable companies Tax rate 30.0% 30.0% Australian corporate tax rate Relevered beta Relevered beta based on the unlevered beta, tax rate and gearing assumptions Market risk premium 6.0% 6.0% Appropriate market risk premium for investments in Australia Company specific risk premium 2.0% 2.5% Forecasting risk premium Cost of equity (post-tax) 11.5% 13.1% Cost of debt (pre-tax) 6.0% 6.5% 1.9% to 2.4% margin on the base risk free rate to reflect an investment grade corporate borrower Equity to enterprise value 100.0% 90.0% Based on our analysis of the comparable companies Debt to enterprise value 0.0% 10.0% Having regard to the gearing of comparable companies WACC (post tax) 11.5% 12.2% Selected WACC 11.5% 12.5% Source: S&P Capital IQ, KPMG Corporate Finance analysis The discount rate represents an estimate of the WACC which is applied to forecast nominal unlevered after-tax cash flows. In relation to the assessed WACC rates outlined above, we note: the assessed blended WACC is applicable to all of Cover-More s operations a degree of subjectivity is involved in estimating some of the inputs outlined above. These limitations mean that any estimate of the WACC must necessarily be regarded as indicative rather than as an absolute measure. Furthermore, because the WACC is a market-determined measure, changes in market conditions over time will affect its calculation the individual variables should not be considered in isolation but rather be viewed as components appropriate for the construction of a discount rate as a whole, applicable to Cover-More. Consideration of these components in isolation may result in an inappropriate discount rate being determined KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

250 ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 The table below outlines the beta analysis of the selected comparable companies. Table 25: Beta analysis of comparable companies Beta analysis Company name Levered beta 2-year weekly Unlevered beta 2-year weekly Debt to value 2-year avg Levered beta 5-year monthly Unlevered beta 5-year monthly Debt to value 5-year avg Domestic Brokers Steadfast Group Limited % n/a n/a n/a AUB Group Limited % % iselect Limited % n/a n/a n/a Mortgage Choice Limited % % Australian Finance Group Ltd. n/a n/a n/a n/a n/a n/a Mean (Domestic Brokers ) excl. outliers % % Median (Domestic Brokers ) excl. outliers % % Domestic travel Flight Centre Travel Group Limited % % Corporate Travel Management Limited % % Webjet Limited % % helloworld Limited % % OFX Group Limited % n/a n/a n/a Mean (Domestic travel) excl. outliers % % Median (Domestic travel) excl. outliers % % Domestic Insurers Medibank Private Limited % n/a n/a n/a NIB Holdings Limited % % QBE Insurance Group Limited % % Insurance Australia Group Limited % % Mean (Domestic travel) excl. outliers % % Median (Domestic travel) excl. outliers % % International travel and insurers Tune Protect Group Berhad % n/a n/a n/a Marsh & McLennan Companies, Inc % % Willis Towers Watson Public Limited Company % % Arthur J. Gallagher & Co % % Brown & Brown, Inc % % Jardine Lloyd Thompson Group plc % % The Priceline Group Inc % % Expedia, Inc % % TripAdvisor, Inc % % Thomas Cook Group plc % % Mean (International travel and insurers) excl. outliers % % Median (International travel and insurers) excl. outliers % % Total Mean (excl. outliers) % % Total Median (excl. outliers) % % Source: S&P Capital IQ (downloaded on 14 February 2017, data as at 10 February 2017), KPMG Corporate Finance Analysis 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 75 SCHEME BOOKLET 247

251 ATTACHMENT E. INDEPENDENT EXPERT S REPORTcontinued ABCD Cover-More Group Limited Independent Expert s Report 20 February 2017 PART TWO FINANCIAL SERVICES GUIDE Dated 20 February 2017 What is a Financial Services Guide (FSG)? This FSG is designed to help you to decide whether to use any of the general financial product advice provided by KPMG Financial Advisory Services (Australia) Pty Ltd ABN , Australian Financial Services Licence Number (of which KPMG Corporate Finance is a division) (KPMG Corporate Finance) and Joanne Lupton as an authorised representative of KPMG Corporate Finance, authorised representative number and Ian Jedlin as an authorised representative of KPMG Corporate Finance, authorised representative number (Authorised Representative). This FSG includes information about: KPMG Corporate Finance and its Authorised Representative and how they can be contacted the services KPMG Corporate Finance and its Authorised Representative are authorised to provide how KPMG Corporate Finance and its Authorised Representative are paid any relevant associations or relationships of KPMG Corporate Finance and its Authorised Representative how complaints are dealt with as well as information about internal and external dispute resolution systems and how you can access them; and the compensation arrangements that KPMG Corporate Finance has in place. The distribution of this FSG by the Authorised Representative has been authorised by KPMG Corporate Finance. This FSG forms part of an Independent Expert s Report (Report) which has been prepared for inclusion in a disclosure document or, if you are offered a financial product for issue or sale, a Product Disclosure Statement (PDS). The purpose of the disclosure document or PDS is to help you make an informed decision in relation to a financial product. The contents of the disclosure document or PDS, as relevant, will include details such as the risks, benefits and costs of acquiring the particular financial product. Financial services that KPMG Corporate Finance and the Authorised Representative are authorised to provide KPMG Corporate Finance holds an Australian Financial Services Licence, which authorises it to provide, amongst other services, financial product advice for the following classes of financial products: deposit and non-cash payment products; derivatives; foreign exchange contracts; government debentures, stocks or bonds; interests in managed investment schemes including investor directed portfolio services; securities; superannuation; carbon units; Australian carbon credit units; and eligible international emissions units, to retail and wholesale clients. We provide financial product advice when engaged to prepare a report in relation to a transaction relating to one of these types of financial products. The Authorised Representative is authorised by KPMG Corporate Finance to provide financial product advice on KPMG Corporate Finance's behalf. KPMG Corporate Finance and the Authorised Representative's responsibility to you KPMG Corporate Finance has been engaged by Cover-More (Client) to provide general financial product advice in the form of a Report to be included in the Scheme Booklet (Document) prepared by Cover-More in relation to the scheme of arrangement to acquire all of the shares in Cover-More (Transaction). You have not engaged KPMG Corporate Finance or the Authorised Representative directly but have received a copy of the Report because you have been provided with a copy of the Document. Neither KPMG Corporate Finance nor the Authorised Representative are acting for any person other than the Client. KPMG Corporate Finance and the Authorised Representative are responsible and accountable to you for ensuring that there is a reasonable basis for the conclusions in the Report. General Advice As KPMG Corporate Finance has been engaged by the Client, the Report only contains general advice as it has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of the general advice in the Report having regard to your circumstances before you act on the general advice contained in the Report. You should also consider the other parts of the Document before making any decision in relation to the Transaction. Fees KPMG Corporate Finance may receive and remuneration or other benefits received by our representatives KPMG Corporate Finance charges fees for preparing reports. These fees will usually be agreed with, and paid by, the Client. Fees are agreed on either a fixed fee or a time cost basis. In this instance, the Client has agreed to pay KPMG Corporate Finance $175,000 for preparing the Report. KPMG Corporate Finance and its officers, representatives, related entities and associates will not receive any other fee or benefit in connection with the provision of the Report. KPMG Corporate Finance officers and representatives (including the Authorised Representative) receive a salary or a 2017 KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International COVER-MORE GROUP LIMITED

252 partnership distribution from KPMG s Australian professional advisory and accounting practice (the KPMG Partnership). KPMG Corporate Finance's representatives (including the Authorised Representative) are eligible for bonuses based on overall productivity. Bonuses and other remuneration and benefits are not provided directly in connection with any engagement for the provision of general financial product advice in the Report. Further details may be provided on request. Written complaints are recorded, acknowledged within 5 days and investigated. As soon as practical, and not more than 45 days after receiving the written complaint, the response to your complaint will be advised in writing. External complaints resolution process If KPMG Corporate Finance or the Authorised Representative cannot resolve your complaint to your satisfaction within 45 days, you can refer the matter to the Financial Ombudsman Service (FOS). FOS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry. Further details about FOS are available at the FOS website or by contacting them directly at: Referrals Neither KPMG Corporate Finance nor the Authorised Representative pay commissions or provide any other benefits to any person for referring customers to them in connection with a Report. Address: Associations and relationships Through a variety of corporate and trust structures KPMG Corporate Finance is controlled by and operates as part of the KPMG Partnership. KPMG Corporate Finance's directors and Authorised Representatives may be partners in the KPMG Partnership. The Authorised Representative is a partner in the KPMG Partnership. The financial product advice in the Report Compensation arrangements is provided by KPMG Corporate Finance and the Authorised Representatives and not by the KPMG Partnership. From time to time KPMG Corporate Finance, the KPMG Partnership and related entities (KPMG entities) may provide Contact Details professional services, including audit, tax and financial advisory services, to companies and issuers of financial products in the ordinary course of their businesses. KPMG entities has not provided services to the Client for which professional fees were received over the past two years. KPMG entities have provided, and continue to provide, a range of audit, tax and advisory services to the bidder for which professional fees are received. Over the past two years professional fees of $1.4m have been received. None of those services have related to the transaction or alternatives to the transaction. PO Box H67 No individual involved in the preparation of this Report holds a Australia Square substantial interest in, or is a substantial creditor of, the Client NSW 1213 or has other material financial interests in the transaction. Telephone: (02) Facsimile: (02) Complaints resolution Joanne Lupton Internal complaints resolution process Ian Jedlin If you have a complaint, please let either KPMG Corporate C/O KPMG Finance or the Authorised Representative know. Formal PO Box H67 complaints should be sent in writing to The Complaints Officer, Australia Square KPMG, PO Box H67, Australia Square, Sydney NSW If NSW 1213 you have difficulty in putting your complaint in writing, please Telephone: (02) telephone the Complaints Officer on and they Facsimile: (02) will assist you in documenting your complaint. Financial Ombudsman Service Limited, GPO Box 3, Melbourne Victoria 3001 Telephone: Facsimile: (03) info@fos.org.au. The Australian Securities and Investments Commission also has a free call infoline on which you may use to obtain information about your rights. KPMG Corporate Finance has professional indemnity insurance cover as required by the Corporations Act 2001(Cth). You may contact KPMG Corporate Finance or the Authorised Representative using the contact details: KPMG Corporate Finance A division of KPMG Financial Advisory Services (Australia) Pty Ltd Tower 3, International Towers Sydney 300 Barangaroo Avenue Sydney NSW KPMG Financial Advisory Services (Australia) Pty Ltd, an affiliate of KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. 77 SCHEME BOOKLET 249

253 ATTACHMENT F. SAMPLE PROXY FORM 250 COVER-MORE GROUP LIMITED

254 LODGE YOUR VOTE ONLINE BY MAIL Cover-More Group Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia BY FAX BY HAND Link Market Services Limited Level 12, 680 George Street, Sydney NSW 2000 For personal use only ACN ALL ENQUIRIES TO Telephone: Overseas: STEP 1 STEP 2 PROXY FORM I/We being a member(s) of Cover-More Group Limited (The Company ) and entitled to attend and vote hereby appoint: APPOINT A PROXY the Chairman of the Meeting (mark box) OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate you are appointing as your proxy *X * X or failing the person or body corporate named, or if no person or body corporate is named, the Chairman of the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the following directions or, if no directions have been given and to the extent permitted by the law, as the proxy sees fit) at the Scheme Meeting of the Company to be held at 10:00am (Sydney time) on Monday, 27 March 2017 at Harbourview Hotel, 17 Blue Street, North Sydney NSW 2060 (the Meeting) and at any postponement or adjournment of the Meeting. The Chairman of the Meeting intends to vote undirected proxies in favour of the item of business. VOTING DIRECTIONS Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the Meeting. Please read the voting instructions overleaf before marking any boxes with an T Resolutions SAMPLE 1 That, pursuant to and in accordance with section 411 of the Corporations Act, the Scheme, the terms of which are contained in and more particularly described in the Scheme Booklet (of which this Notice of Scheme Meeting forms part) is approved (with or without modification as approved by the Court). For Against Abstain* STEP 3 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. SIGNATURE OF SHAREHOLDERS THIS MUST BE COMPLETED Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company s constitution and the Corporations Act 2001 (Cth). CVO PRX1701A *CVO PRX1701A*

255 HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM YOUR NAME AND ADDRESS This is your name and address as it appears on the Company s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form. APPOINTMENT OF PROXY If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman of the Meeting as your proxy, please write the name of that individual or body corporate in Step 1. A proxy need not be a shareholder of the Company. DEFAULT TO CHAIRMAN OF THE MEETING Any directed proxies that are not voted on a poll at the Meeting will default to the Chairman of the Meeting, who is required to vote those proxies as directed. Any undirected proxies that default to the Chairman of the Meeting will be voted according to the instructions set out in this Proxy Form. VOTES ON ITEMS OF BUSINESS PROXY APPOINTMENT You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid. APPOINTMENT OF A SECOND PROXY You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company s share registry or you may copy this form and return them both together. To appoint a second proxy you must: (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and (b) return both forms together. SIGNING INSTRUCTIONS You must sign this form as follows in the spaces provided: Individual: where the holding is in one name, the holder must sign. Joint Holding: where the holding is in more than one name, either shareholder may sign. Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it. Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place. CORPORATE REPRESENTATIVES If a representative of the corporation is to attend the Meeting the appropriate Certificate of Appointment of Corporate Representative should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the Company s share registry or online at LODGEMENT OF A PROXY FORM This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 10:00am on Saturday, 25 March 2017, being not later than 48 hours before the commencement of the Meeting. Any Proxy Form received after that time will not be valid for the scheduled Meeting. Proxy Forms may be lodged using the reply paid envelope or: ONLINE Login to the Link website using the holding details as shown on the Proxy Form. Select Voting and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their Holder Identifier (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the Proxy Form). BY MOBILE DEVICE QR Code Our voting website is designed specifically for voting online. You can now lodge your proxy by scanning the QR code adjacent or enter the voting link into your mobile device. Log in using the Holder Identifier and postcode for your shareholding. To scan the code you will need a QR code reader application which can be downloaded for free on your mobile device. BY MAIL Cover-More Group Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia SAMPLE BY FAX BY HAND delivering it to Link Market Services Limited* Level George Street Sydney NSW 2000 * During business hours (Monday to Friday, 9:00am 5:00pm) IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE SCHEME OF ARRANGEMENT, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.