Comparison of Top Non-Life Insurers by Sutherland Global Services

Comparison of Top Non-Life Insurers in France, Germany, Italy & Spain December 2012

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France’s largest Non-life Group in 2011 France’s largest Non-life Group in 2011

Group

Non-life premiums (€ bn)

Market share (%)

Combined Ratio 2010 (%)

Comments

Combined Ratio 2011 (%)

Covéa (MAAF, MMA, GMF)

9.2

14.0

102.40

Groupama

8.6

13.1

103.20

96.50

Sferen (MACIF, MAIF, MATMUT)

7.6

11.6

103.5

AXA France

6.7

10.2

98.10

101.50

Generali France

4.7

7.2

101.30

98.70

Allianz France

3.3

5.0

102.70

97.90

Crédit Agricole Assurances

2.6

4.0

131.7

96.9

Groupe des Assurances du Crédit Mutuel

2.2

3.4

CNP

1.9

2.9

132.6

116.1

Aviva France*

1.2

1.8

109.8%

124.0%

• The non-life insurance market did not experience major changes in the number of companies in 2011 – Concentration remained high, with the 10 largest non-life insurance groups representing 73% of premiums collected, although this is lower than in life • A number of French insurers are attempting to grow outside of France, seeking risk diversification and faster growth through M&As – Covéa acquired UK insurer Provident Insurance in June 2011. In April 2011, the French SGAM purchased an 81% stake in Banca Popolare di Milano ‘s life operation, which controls BPM’s P/C business, BPM Assicurazioni • French insurers also see opportunities in emerging markets in Africa, given its relative proximity and common language – French insurers such as AXA, as part of a wider emerging markets strategy, are focusing on western African countries including Ghana, the Ivory Coast and Senegal, although they face competition from Moroccan insurers • The breakdown of total premiums by distribution channel remained more or less unchanged compared with previous years, as tied agents and direct mutual insurance companies continued to dominate the market, with shares in GWP written of 34% and 33%, respectively – Other major distribution channels include insurance brokers that focus on commercial lines (18% of GWP written), bancassurance (11%) and, to a lesser extent, direct insurance (2%)

*Combined Ratios given for the general insurance business of Aviva Plc Source: Fédération Française des Sociétés d’ Assurance , A.M. Best research, Company reports, News articles

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Germany – Top 20 Non-Life Insurers Germany Non-Life Top 20 Insurers, 2009-11 Gross Premiums Written (€ mn)

Comments

Gross Combined Ratio (%)

German Insurers Well Placed, but Uncertainties Remain

2009

2010

2011

2009

2010

2011

Ailianz Versicherungs-AG

9,100.3

8,943.1

8,906.5

97.9

104.2

105.4

AXA Versicherungs AG

3,258.7

3,176.4

3,544.6

98.6

105.6

103.4

R+V Allgemeine Versicherung AG

2,604.8

2,716.4

3,023.8

104.6

105.5

102.3

Ailianz Global Corporate & SpecialtyAG

2,338.7

2,408.6

2,725.4

84.3

90.5

97.2

HDI-Gerling Industrie Versicherung AG

2,523.5

2,529.9

2,720.5

107.8

100.3

109.8

ERGO Versicherung AG

1,676.4

2,643.1

2,711.5

95.8

95.3

94.4

Generali Versicherung AG

1,690.4

1,623.9

1,596.9

96.4

97.7

96.7

LVM Landwirtschftlicher Versicherungs

1,389.6

1,458.4

1,553.3

99.1

103.1

96.4

R+V Versicherung AG

1,146.7

1,371.2

1,492.4

100.1

102.4

106.6

Gothaer Allgemeine Versicherung AG

1,400.4

1,402.4

1,426.0

98.9

100.6

97.2

• Non-Life German insurers are robust, with companies anticipating a modest increase in premium in 2012, provided there are no major catastrophes for the remainder of the year, the sector should be well positioned to post an improved combined ratio – In the first half of 2012, it appears motor rate increases have been sustained, although combined ratios are expected to remain in excess of 100%, reflecting years of competitive pricing

Wuerttembergische Versicherung AG

1,304.8

1,324.1

1,379.8

91.8

98.8

92.5

Increased competition

VHV Allgemeine Versicherung AG

1,264.8

1,373.7

1,372.4

103.9

102.3

HUK-COBURG Haftpflicht-Unterstuetzungs

1,299.1

1,319.4

1,363.6

94.3

100.1

102.6

HUK-COBURG-Allgemeine Versicherung AG

1,121.8

1,169.0

1,248.5

91.4

96.3

98.1

SV SparkassenVersicherung Gebaeudevers

1,201.8

1,201.2

1,232.6

105.2

101.5

97.7

AachenMuenchener Versicherung AG

1,020.2

1,029.6

1,074.0

94.1

91.2

977.7

1,026.1

1,058.6

108.7

108.9

106.9

1,017.8

1,027.3

1,039.7

92.4

96.5

94.3

DEVK Allgemeine Versicherungs AG

896.1

951.7

995.2

101.0

100.9

98.4

Landschaftliche Brandkasse Hannover

954.0

960.5

989.1

94.6

101.4

98.1

Company

Bayerischer Versicherungsverband Versicherung Westfaelische Provinzial Versicherung

Source: Gesamtverband der Deutschen Versicherungswirtschaft (GDV), A.M. Best research, BestLink Global Statement File, News articles

• The growing use of comparison portals over the past few years has increased competition and places further downward pressure on prices – In particular aggregators are growing in popularity for personal lines such as motor, where margins are already tight. Consequently, the market share of tied agents has been reducing for these lines of business www.sutherlandglobal.com February 27, 2013

Italy’s largest Non-life Group in 2011 Italy’s largest Non-life Group in 2011

Group

Non-life premiums (€ bn)

Market share (%)

Combined Ratio 2010 (%)

Comments Combined Ratio 2011 (%)

• In 2011 market concentration decreased: the combined market share of the top five groups dropped to 63.3% in 2011 (64.5% in 2010) – If the premium income of the top ten companies is taken into consideration, concentration has fallen from 81.9% in 2010 to the current 80.9% in 2011

Generali

7.7

19.2

99.60

96.80

Fondiaria - Sai

7.0

17.3

114.8

114.1

Allianz

4.4

10.9

99.60

93.20

Unipol

4.3

10.8

102.10

95.50

Reale Mutua

2.1

5.1

100.86

98.98

AXA-UAP

1.7

4.3

97.70

97.60

Conclusion

Cattolica

1.6

4.0

97.70

97.40

• The Italian non-life market is likely to face a number of challenges, including recent legislative changes and the impact of the current Eurozone crisis

Zurigo

1.6

3.9

GAN/Groupama

1.4

3.4

100.7

96.9

Vittoria (Acutis)

0.8

2.0

97.60

97.30

• In 2012, a four-way merger involving Unipol and Fondiaria-Sai has been proposed. The two companies will merge with Premafin and Milano Assicurazioni – Some market participants believe the deal, which has regulatory approval but still carries execution risk, could lead to reduced competition, particularly for motor risks – The proposed merger is expected to crate a rival to Assicurazioni Generali

• Despite these challenges, there remain some positives for the sector, with the rating envh-onment improving in 2012 and the market expected to show an overall underwriting profit in 2013 • Government measures to tackle fraud and reduce the cost of small claims are also expected to have a positive impact on the industry

*Combined Ratios given for the general insurance business of Aviva Plc Source: Generali research & development, News articles

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Spain’s largest Non-life Group in 2011 Spain’s largest Non-life Group in 2011

Group

Non-life premiums (€ bn)

Market share (%)

Combined Ratio 2010 (%)

Comments Combined Ratio 2011 (%)

• As of December 31, 2011 there were 279 companies registered in the Administrative Registry of Insurance Entities: 188 Public Limited Companies, 34 Mutual Insurers, 55 Mutual Provident Societies 7 and two specialized Reinsurance companies • Spain’s insurance market is experiencing structural changes through merger and acquisition (M&A) activity:

MAPFRE

5.1

16.2

95.8

96.9

Mutua Madrilena

3.4

10.7

AXA

2.3

7.3

97.70

97.40

Allianz

2.0

6.4

90.3

87.9

Catalana Occidente

1.4

4.5

92.4

90.0

Generali

1.4

4.3

98.1

94.8

Zurich

1.2

3.7

97.7

97.0

• While the economy is still depressed, claims levels are expected to remain stagnant, which will encourage companies to cut rates further

Caser

1.1

3.5

Sanitas

1.1

3.5

– Companies are also well capitalized and solvency margins remain high, with the non-life market at 2.6 times the minimum regulatory requirement, although this has deteriorated from 3.4 times in 2010

Santa Lucia

1.0

3.1

Source: ICEA , A.M. Best research, FUNDACION MAPFRE, News articles

– July 2011, Mutua Madrilena purchased a 50% stake in SegurCaixa Adeslas, the non-life insurance arm of CaixaBank, making it the largest health insurer in Spain – In June 2012, Grupo Catalana Occidente and INOCSA agreed to purchase Groupama Seguros y Reaseguros, the French mutual Groupama’s Spanish subsidiary • There is excess capacity with more than 100 non-life insurers in the Spanish market, while the 10 largest companies controlled 63.2% of the market in 2011 – Competition in certain lines such as liability is aggressive, although insurers are struggling with low investment returns, the non-life market remains among the most profitable in Europe

• Although the Bancassurance sector plays an important part in the distribution of life products, it is less prevalent in the non-life sector, accounting for just 8% of distribution in 2011

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