1. Doha, December 2, 2012 Europa Re Value Proposition A brief outline 1 Riccardo Ciccozzi Head of Business Development

2. Agenda Context –SEE Exposure to Natural Disasters –Natural Disasters impact in SEE –Catastrophe Insurance Markets Project –Vision and Market Value preposition –Key services –Main Steps Challenges ahead 2

3. Major Natural Disasters in South East Europe 3 Source : Mitigating the Adverse Financial Effects of Natural Hazards on the Economies of South Eastern Europe A Study of Disaster Risk Financing Options South Eastern Europe Disaster Risk Mitigation and Adaptation Programme - Eugene N. Gurenko Wael Zakout The World Bank, Sustainable Development Department Europe and Central Asia Region and UN/ISDR secretariat Europe February 2008

4. Nat Cat Risk Regional Exposure Nat Cat Damage Impact Private Insurance? Europa Re Solution 4 South East Europe (SEE) is highly vulnerable to natural disasters Climate Change is expected to worsen the regions exposure Adverse impacts on governments budgets Socio-economic implications on households Adverse economic effects on business Very Low Cat Insurance Penetration Lack of Risk Awareness Market Growth Potential Strong WindFloodHeat WavesDroughtQuake

5. Europa Re - Business Model – Vision & Mission 5 A Swiss-based company owned by countries of Southeast Europe (SEE) Supported by the World Bank, EU, UNISDR, SECO and GEF Providing innovative technology-driven solutions to SEE insurers writing catastrophe and weather risk insurance products A Swiss-based company owned by countries of Southeast Europe (SEE) Supported by the World Bank, EU, UNISDR, SECO and GEF Providing innovative technology-driven solutions to SEE insurers writing catastrophe and weather risk insurance products Vision - Increase the level of catastrophe insurance penetration amongst households, small and medium enterprises (SMEs) and farmers in the SEE region Educating consumers Improving and standardize credit quality of insurance products Enabling insurers to sell weather and catastrophe risk insurance Helping governments and insurance regulators Vision - Increase the level of catastrophe insurance penetration amongst households, small and medium enterprises (SMEs) and farmers in the SEE region Educating consumers Improving and standardize credit quality of insurance products Enabling insurers to sell weather and catastrophe risk insurance Helping governments and insurance regulators Mission Europa Re Project

6. Key Services - Risk Management Market Issue: lack of high-resolution and reliable catastrophe (cat) models for SEE cat exposures ERe Solution: provide local insurers with state-of-the-art probabilistic cat modelling tools based on the latest technology offered by Market Leaders Main Benefits: High-resolution Models available at a much lower cost ERes Cat Models technology is underpinned by: –AIRs global research in catastrophe risk modelling –Country specific risk data –Unique business applications ERes Risk management systems allow insurers to accurately evaluate: –Potential losses resulting from catastrophe insured risks at any point in time; –Net retention capacity relative to available solvency. 6

7. Key Services - What will Europa Re do for Consumers Government As result: -Consumers profit and assets are better protected -Higher incentive to produce Outcome -Increased production -Increased income -Higher contribution to economy Insurance companies Direct subsidies Insurance premium subsidies Basic Insurance protection Specialized Insurance protection Europa Re Expertise on improving the subsidy scheme New user friendly and affordable products Know how Awareness Education Development of distribution channels New Parametric Insurance Products Improved market mechanism Consumers 7

8. Key Services - What can be expected from ERe products Products Simple Affordable Easily accessible Reliable Covering consumers production needs Innovative 8 Earthquake and Flood insurance for homeowners and SMEs Weather insurance products for agriculture Other as explored to fit market needs fast and simplified loss settlements Remote Sensing & Cat Modelling Technologies

9. Europa Re Parametric products 1. Precipitation 2. Temperature Main principle of parametric weather insurance: Coverage in case of unusual behavior of weather excessive precipitation drought (minimal rainfall) high heat low heat freeze 9

10. Example: Drought insurance What triggers an insurance event? when total amount of precipitation for the period is below the minimum threshold What types of thresholds? 1. minimum threshold for period 2. maximum threshold for period (based on long term average for period) What precipitation values are accepted? daily values of precipitation measured officially by Authorized National Weather Service 10

11. Pre-eventPost-Event Event timeline Geocoding at the time of underwriting Pre-event Imagery Exposure data Protocols Claims submission Assignment Evaluation in-house or send adjustors to review Phase 3 Claims settled Phase1 48-72 hrs Imagery data collection Remote Damage Assessment Phase1 Claims settled Phase 2 1-2 weeks Effectively target adjustors and claims resources In-field damage assessment Phase 2 Claims settled Phase 3 within weeks Claims Adjusting and Management Financial Management Before/After image comparison Work Management Documents I Correspondence I I Contacts I Work Management Documents I Correspondence I I Contacts I Litigation Subrogation Salvage Litigation Subrogation Salvage A new perspective for claims Event Event Monitoring & immediate notification

12. Main Sequencing Steps – starts Nov 2012 12 Platform Testing Nov 2012 to May 2013 Compatibility and proper functioning of the systems Dec 2012 to June 2013 Europa Re Accreditation Sales Certificates May 2013 on-going Europa Re Accreditation Claims Reporting Certificates June 2013 on-going Europa Re New Products Launch June 2013 to Dec 2014 Education and Promotion Starts June 2013

13. Challenges ahead Government Involvement: –To educate, regulate and incentivize Consumers resistance: –Lack of risk awareness / low trust in private insurance Insurance Industry Resistance: –Whats in it for me? But, Engage & Innovate Lessons from the Macedonian farmers 13 New Legislation and regulations shall be issued in SEE to foster private cat insurance Promotional activities shall target directly consumers in the region Local Insurers to enter into formal cooperation by June 2013 Launch of first New Products in October 2013 New Legislation and regulations shall be issued in SEE to foster private cat insurance Promotional activities shall target directly consumers in the region Local Insurers to enter into formal cooperation by June 2013 Launch of first New Products in October 2013

14. Thank you for your attention! Contact details: info@europa-re.com www.europa-re.com 14