 Hannover Re in Azerbaijan  Proportional vs. non-proportional  CAT XL Treaty  Multi-line combined per Risk / per Event XL Treaty Reinsurance Solutions for Azerbaijan

Hannover Re in Azerbaijan 3 Hannover Re Well-diversified portfolio by lines of business and regions Activities in more than 100 countries Every country with reinsurance demand is important Hannover Re since 2002 on the Azeri market Life and non-life Facultative and Treaty QS, Surplus, Risk XL‘s and CAT XL‘s treaties Property, Engineering (Construction), Marine (Hull and Cargo), Liability (General, Product, Employer‘s), Aviation Reinsurance Solutions for Azerbaijan

Why would I need reinsurance in Azerbaijan? 4  Economy is growing  Insurance is rapidly developing  Territory is exposed to natural perils  One heavy Earthquake can: easily generate a loss ratio 3,000% ruin an insurance company while completely devastating its shareholder‘s capital  Reinsurance will help you to secure the development of your business Reinsurance Solutions for Azerbaijan

Which type of reinsurance? 5 Proportional Premiums and losses are reduced by the same percentage Solvency relief Cat components can be included Cover for several lines of business is possible. Non-proportional: Low administrative costs: no bordereaux or quarterly accounts, less accounting One MDP fixed in advance Cover for several lines is possible (Property, Engineering, Liability) Combination of per Risk and per Event (single losses and accumulation of losses) in one Treaty Reinsurance Solutions for Azerbaijan

CAT XL Treaty 6  Azerbaijan exposed to EQ, flood, landslide, hailstorm The coverage is compulsory by the law Insurers face losses accumulation issue Broad scope of damages to life & health, properties, vehicles Net retained losses can ruin an insurance company  CAT XL Protection from the series of losses resulting from one nat cat event Two risks warranty with event definition (hours clause) Example: AZN 9m xs AZN 1m per Event Gross accumulated loss: AZN 5m Net loss after application of underlying reinsurance (QS / Surplus / Risk XL): AZN 3m Net loss after CAT XL: AZN 1m (AZN 2m of losses covered with CAT XL) Reinsurance Solutions for Azerbaijan

Multi-line per Risk / per Event XL Treaty 7  Combined per Risk / per Event XL Treaty economical solution: no need for two separate treaties per Risk + per Event combined one treaty + several lines + one MDP flexible structuring possible − e.g. 1st layer per Risk only, 2nd layer per Risk/per Event, 3rd layer per Event only Example: AZN 9m xs AZN 1m per Risk / per Event Total annual capacity of AZN 18m (with one reinstatement) for single losses and/or series of losses  Insurer‘s retention never exceeds AZN 1m Reinsurance Solutions for Azerbaijan

Reinsurance solutions 8  Reinsurance cover with the Annual Aggregate Deductible AZN 9m xs 1m xs AAD 1m Reinsurance costs are lower Reinsurance Solutions for Azerbaijan

Information for Reinsurer 9  Risk profiles as per each line  Territorial split of the gross and net sum insureds  Information about underlying treaties and facultative reinsurances  Premium income estimations  Largest single and nat cat losses Reinsurance Solutions for Azerbaijan

10 Thank you for your attention Yevgen Kuznyetsov Treaty Department Central and Eastern Europe Hannover Re

The information provided in this presentation does in no way whatsoever constitute legal, accounting, tax or other professional advice. While Hannover Rück SE has endeavoured to include in this presentation information it believes to be reliable, complete and up-to-date, the company does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such information. Therefore, in no case whatsoever will Hannover Rück SE and its affiliated companies or directors, officers or employees be liable to anyone for any decision made or action taken in conjunction with the information in this presentation or for any related damages. © Hannover Rück SE. All rights reserved. Hannover Re is the registered service mark of Hannover Rück SE.