DFV Deutsche Familienversicherung AG

Investor Presentation • Aug 12, 2021

Capital Markets Day 2021

DFV Deutsche Familienversicherung AG FRANKFURT/MAIN | 12 August 2021

Welcome to the first virtual Capital Markets Day of DFV Deutsche Familienversicherung AG

Sustainability: Less talk, more do!

Deutsche Familienversicherung: A CO² neutral insurance company

Picture of the document for Gold Standard certification

Karsten Paetzmann CFO

The strongly growing digital insurance company

Based on gross written premium (GWP); growth year-over-year LTC: Long-term care nAdL: nach Art der Lebensversicherung, calculated as life insurance nAdS: nach Art der Schadenversicherung, calculated as non-life insurance

Statement of comprehensive income

Statement of comprehensive income

€m	2020 H1	2021 H1	Delta	in %	2020
(GWP) Gross written premiums	53 7	66 7	+13 0	+24%	114 7
(NEP) earned premiums Net	28 4	34 3	9 +5	+21%	61 9
from Income capital investments	-1 9	4 0	1 +6 0	-307%	0 9
Other revenue	0 1	0 0	-0 1	-95%	0 3
benefits Insurance	-17 2	-23 6	2 -6 4	+37%	-39 5
from Expenses insurance operations	-12 8	-13 8	3 -0 9	+7%	-30 2
Other expenses	-2 5	-1 9	+0 6	-23%	-3 9
Operating income	-6 0	-1 0	+5 0	-83%	-10 6
for leases Financing expenses	0 0	0 0	+0 0	-36%	0 0
Profit before tax	-6 0	-1 0	+5 0	-83%	-10 6
Income taxes	1 9	0 3	-1 6	-84%	3 1
Profit after tax	-4 1	-0 7	+3 4	-83%	-7 4
from Unrealised gains and losses capital investments	-1 5	-0 7	+0 8	-54%	2 2
Total comprehensive income	6 -5	-1 4	2 +4	-75%	2 -5
of policies , end of period #	535 830 ,	562 869 ,			553 447 ,
Change in of policies #	21 726 ,	9 422 ,			39 343 ,
business of policies New in #	46 415 ,	41 624 ,			90 389 ,
of Churn in # policies	-24 689 ,	-32 202 ,			-51 046 ,
GWP per policy in € - annualised	200	237			207
of staff Average #	135	170			150

Actuarial interest and current interest returns

• DFV's methodology to determine the actuarial interest (' Rechnungszins') for LTC products has been subject to a special audit mandated by BaFin – the independent expert confirms DFV's methodology both for initial product calculations and for subsequent premium adjustments .
• DFV's current interest returns of the 'security assets' portfolio met the actuarial interest both in 2019 and 2020. We expect the same for 2021.

Underwriting provisions

Underwriting provisions

€m	Q4 2020	H1 2021	Delta	in %
Unearned premiums	3.3	3.1	-0.3	-8%
Actuarial provisions	70.7	77.8	+7.1	+10%
Provision for outstanding claims	14.8	15.8	+0.9	+6%
Other underwriting provisions	2.3	1.8	-0.5	-21%
Gross underwriting provisions	91.1	98.4	+7.4	+8%
Share of reinsurers in underwriting provisions	-55.9	-59.9	-4.0	+7%
Net underwriting provisions	35.2	38.5	+3.3	+9%
Share of reinsurers in %	61%	61%

According to the current ALM projection, the actuarial provisions of DFV's inforce LTC business (without new business) will increase to a level of approx. €450m.

Projection of the actuarial provisions of the inforce LTC business 2021-2051 (€m)

500

Consolidated balance sheet

Consolidated balance sheet

€m	Q4 2020	H1 2021	Delta	in %
Intangible assets	8 8	7 9	-1 0	-11%	1 Implementation of separate strategies for
Rights of for IFRS 16 property pursuant to use	1 4	1 0	-0 3	-25%	the 'security assets' and 'free assets'
Investments	135 1	177 8	+42 7	1 +32%	investment portfolios.
Receivables	4 1	5 2	+1 1	+26%	2
bank balances Current	37 8	1 1	-36 6	2 -97%	Re-allocation of funds to investments, part
Share of underwriting reinsurers in provisions	55 9	59 9	+4 0	+7%	of an initiative to implement a liquidity
receivables Tax	5 0	5 8	+0 8	+15%	management.
Other assets	2 6	1 9	-0 6	-25%
Total assets	250 6	260 6	+10 0	+4%
Gross underwriting provisions	91 1	98 4	+7 4	+8%
Other provisions	3 4	8 1	-1 6	-48%
Liabilities	3 65	70 9	+5 7	+9%
Tax liabilities	0 0	0 0	+0 0	+0%
Total debt	159 8	171 2	+11 4	+7%	3 Equity Q4 2020 €90.9m
					Consolidated profit after tax €-0.7m
Equity	90 9	89 5	-1 4	3 -2%	Unrealised gains from invest- €-0.7m ments (OCI)

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Equity H1 2021 €89.5m

Investment portfolio – overview

Investment portfolio – asset allocation master funds H1 2021

CIC 4 Collective Investment Undertakings CIC 6 Collateralised securities CIC 8 Mortgages and loans

Especially the 'free assets' portfolio of DFV contains government bonds with high coupons and relatively long duration.

Extensive share of corporate bonds in the 'security assets' portfolio with the aim to achieve stable current investment returns.

DFV's master funds do not directly invest in equities but via ETFs – a risk overlay segment for market risk has been implemented.

DFV has recently implemented a highly diversified real estate property portfolio in the 'security assets' portfolio, with the aim to create an adequate level of current investment returns to meet the actuarial interest requirements.

DFV: Asset allocation H1 2021 in total, 'free assets' portfolio and 'security assets' portfolio; real estate investments have been reallocated from CIC 4 to CIC 9 for illustration purposes EIOPA German peer group: Asset allocation of German non-life insurers in Q4 2020 according to EIOPA's Complementary Identification Code (CIC) Source: EIOPA 2021

Initiative – implement a highly diversified real estate property portfolio

Initiative – implement sustainability criteria in the investment portfolio

• DFV collaborates with MainFirst Affiliated Fund Managers as external asset manager.
• MainFirst is a signatory of the Principles of Responsible Investing (PRI).
• Specific exclusions with the objectives:
  • increased environmental awareness;
  • social fairness;
  • respect for human rights standards;
  • sustainable corporate governance.

Asset class	Consideration in the investment process (simplified)
Equities and fixed income	Defined exclusions, derived from an established joint concept of German industry associations – Bundesverband Investment und Asset Management (BVI), Deutsche Kreditwirtschaft (DK), Deutscher Derivate Verband (DDV).
Sovereigns	Elimination of investments relating to the denial of basic human rights and of citizenship, an intensified level of corruption and the denial of the climate change.
Funds	Funds need to demonstrate a high degree of accordance with the sustain ability criteria, and the product suppliers should apply such criteria themselves.
Real estate property (direct or via funds)	Focus on sustainable real estate property, especially on assets which are explicitly certified as sustainable.

Initiative – implement a sustainability reporting

Disclosure Regulation (SFDR) 1 2 3

EU Regulation 2019/2088 of November 2019

• Applies to 'Financial market participants' and 'Financial advisors'
• Corporate vs. product level
• Objective: Increase of transparency on ESG risks, 'principal adverse impacts' (PAIs) of investment decisions on sustainability factors, ESG promoting funds
• In force since 10 March 2021

DFV is currently not obliged, but already publishes voluntarily on a corporate level

Commission Draft of April 2021 to adjust the NFR Directive 2014/95/EU

• Extends the applicable circle of users, includes DFV
• Extends and standardises the non-financial reporting
• For periods commencing in 2023, the non-financial report will be part of the annual management report, to be audited

DFV will have to publish from 2023 on, but plans to voluntarily do so earlier

Taxonomy Regulation

EU Regulation 2020/852 of June 2020; Delegated Regulation on Article 8 of July 2021

• Applicable to SFDR users and to corporates publishing a nonfinancial report
• Non-financial report to include information on such economic activities which are considered sustainable
• Applies to all non-financial reports published after 1 January 2022

To be considered by DFV

Initiative – enhance the cost management processes (Opex)

Creation of a yearly/monthly cost budgeting process on a cost centre level Clear allocation of responsibility for cost, both on a C-level and cost centre level Monthly transparency on cost on a C-level and cost centre level, including cost type and creditors/suppliers Re-assessment of the corporate cost type structure according to practicability Intake of new Head of Controlling and qualified additional recruiting for the Controlling dept. Hands-on support to company stakeholders on the identification and implementation of cost saving measures Integration of the cost budgeting process into the corporate business plan for 2022 Establishment of a control loop, together with all cost centre leads Re-assessment of the cost allocation to corporate functions ('Kostenverteilung', Sec. 43(1) RechVersV) Re-assessment of the allocation of cost to products Analysis of the cost allocation relating to the actuarial basis for health insurance products ('Rechnungsgrundlage', Sec. 8 KVAV) Analysis of the cost allocation part of the calculation of non-life insurance products

Finance function in the value chain

• The unique value proposition of DFV is embedded in the digital product design and in DFV's highly digital processes including product distribution.
• All fundamental processes are controlled by DFV, contrasting the EIOPA's view of a 'challenge of a fragmented value chain' due to InsurTechs.
• DFV's finance function supports the continued high growth agenda and is being active solving any legacy issues.

Funding options and 'full-stack' approach

• Based on its solvency ratio of approx. 300% (H1 2021) DFV remains well capitalised; however, we continuously observe the market for funding options to accelerate our growth journey.
• More than half of the European InsurTech M&A deals completed in H1 2021 related to Distribution & marketing.
• Only very few InsurTechs follow the attractive, nonfragmented 'full-stack' approach comprising of the whole value chain.
• In H1 2021, only three European 'full-stack' deals were reported:
  • FR: Acheel (€29m funding, start-up)
  • DE: Element (€17m funding in H1 2021, €7m GWP in 2020, focus on white label business)
  • GR: Hellas Direct (€32m funding in H1 2021, €30m GWP in 2020, focus on Auto/Non-life)

European InsurTech M&A Deals, H1 2021

Allocation of # of deals to the value chain

GWP: Gross written premiums Source: Insurtech Insights; astorya.io; WillisTowersWatson

Summary and outlook

24% GWP growth year-over-year in H1 2021 GPW per policy again considerably increased Different from Q1 2021, the loss ratio has increased in Q2 2021 year-over-year Investment income as a profit driver Continued implementation of the restructuring programme in Q2 2021 H1 2021 operating income substantially increased Key earnings drivers for the future develop as scheduled – planning of €-4 million profit before tax for 2021 confirmed

Key earnings drivers for the future are set to create value for the shareholders

Deep Dive Claims/Benefits & IT

Marcus Wollny CIO

Claims and benefits management

Claims settlement is always easy!

The ideal case

Simple. Digital. Claims report in in 30 seconds

Claims settlement is always simple!

Automation's greatest enemy

Claims settlement is always simple!

Not all customers use the simple way

Claims reporting simple and digital

Digital claims settlement begins with the classification of documents and the extraction of data from invoices

Classfication	Data extraction
84% Dentist Operations 10% Veterinarian Claims 3% Hospital 2%

Date of treatment

• Invoice items
• Amounts
• Factors
• Deductions/ Prepayments

Claims reporting simple and digital

This is followed by claims assessment and then recording and settlement

Ø Digital processing time from receipt to message to the customer: approx. 3 minutes

Focused use of Machine Learning

Extraction and comparison with the insurance conditions

DFV digital Always a step ahead

Further development of our insurance platform

In 2021, the functional scope of our platform was significantly expanded

• Internationalisation processes implemented
• Improvement of the claims and benefits process
• Expansion to include flexible product combinations
• Adaptation of back-end systems for operation on the new infrastructure
• Implementation of new cyber security systems
• Introduction of a new risk management system

Agile further development

New features are made productive every 30 days.

IT infrastructure outsourcing

Focus on the further development and improvement of our insurance platform

In the first half of 2021, all relevant internal systems could be put into operation on the service provider's new dedicated IT infrastructure.

• Better and faster performance scaling and resilience of the infrastructure
• Flexibility in the further development / choice of future technology stacks (cloud / blockchain-based systems)
• Independence in the event of a change of company location

DFV IT Cyber Security: Secure for us and our customers

We allocate a significant amount of the IT budget to securing the digital business model

Since the beginning of the Covid 19 pandemic, the number of cyber attacks has doubled. The reason for this is also mobile working, as vulnerabilities are often expected here.

Due to the increase and the multi-faceted nature of cyber attacks, further security and monitoring mechanisms have been introduced.

The new generation of insurance

Thanks to blockchain and smart contract technologies

With the new major upgrade of Ethereum, the blockchain is now more energy efficient and faster than ever before!

• Smart Contracts are the basis for Smart Insurances
• Simple insurance with guaranteed settlement
• No claims reporting and no claims management
• Low risk due to one-off insurance
• Operated securely and in compliance with data protection laws

Blockchain using the example of ticket insurance

Fully automated claims processing thanks to integrated blockchain technology

• DFV-TicketSchutz is the next generation of insurance solutions.
• We receive the data of all insured tickets and create Smart Contracts in our blockchain.
• After the event, we send the event cooperation partner all the data of the non-validated tickets in the blockchain.
• And this is the point where the Smart Contracts regulate themselves and our client receives the refund.
• Everything is fully automated without complaint processing.

Innovative through business cooperation

Technology incubator for the insurance cover of the future

• Deutsche Familienversicherung will set up a joint venture with the high-tech start-up STTech GmbH.
• The targets of the start-up are:
  • Translating the latest AI research into real-world applications
  • Development of new technologies for the automation of claims and benefits
  • Operation and distribution of new blockchain-based insurance products
  • Establishment of new distribution channels
  • Development of new business models

Deep Dive Sales

Stephan Schinnenburg CSO

Evaluation of new business H1 2021 by sales channels

Strong H1 2021 sales results despite Covid-19

Stability through scalable online business - confirmation of all annual targets despite seasonal effects

Plan as at 31.12.2021: 30,000.0 Status as at 30.06.2021: 13,712.0

Covid-19 impacts foreign travel health insurance industry

Political restrictions and the pandemic situation lead to lower demand

Covid-19 has hit the travel industry hard.

As a result, travel has come to a partial standstill.

However, the renewed increase in bookings often leads to holiday destinations where the need for insurance cover is not considered necessary.

New business in policies in foreign travel health insurance as at 30.06.

DFV expands leading position in the pet health market

DFV-TierkrankenSchutz as a benchmark in pet insurance

• DFV has a leading position in pet health market since market entry in 2019.
• The success is the result of an innovative, aggressive market entry strategy:
  • Extensive advertising presence on television
  • Targeted online campaigns with innovative SEO & SEA management
• Despite an increase in competition and a copy of the successful strategy, DFV achieves a market share of 9% in new business in 2020.

New products

DFV-KombiSchutz – First bundled product with a flat rate

DFV-KombiSchutz serves as the basis for the global product

• DFV-KombiSchutz bundles "insurance lines" and offers the customer a flat rate for modern insurance cover:
  • Accident insurance
  • Household insurance
  • Glas insurance
  • Private liability insurance
  • Legal traffic insurance
• The ability to bundle products in combination with a flat rate forms the basis for the innovative global product.

Ideas lead to innovation: DFV-KombiSchutz becomes global product

Extension of the insurance flat rate to include a variable savings component

Global product of the first expansion stage becomes global product

Extension of the insurance flat rate with flexible savings component to include risk coverage

Expansion stage to a "lifetime insurance":

• Extension of the global product of the first expansion stage to cover biometric risks such as benefits in the event of death, long-term care or occupational disability
• All risks of life covered in one contract at any time, with individual provision and comprehensive insurance protection

Austria

Internationalisation of Europe's first listed InsurTech company

• Successful model "DFV-TierkrankenSchutz" also in Austria since 30.06.2021.
• Low obstacles thanks to passporting system in the EU.
• Only minor adjustments to conditions and calculation necessary.
• Adapt the language and get started low thresholds for further market entries.

Market entry in Austria

Expansion of sales ambitions

Own website for our Austrian customers at www.dfv.at.

Start of the success story "PetProtect" with ProSiebenSat.1 on 01.09.2021 in Austria.

Further sales cooperations with brokers and cooperations in implementation.

Cooperations & mobile first

New cooperation partners and potentials

We have delivered: Integration into eco-systems of renowned partners, thanks to unique digital enablement

• " There is probably no insurer in Germany at the moment that uses the most diverse sales channels so consistently.
• The insurtech DFV not only sells directly via its platform, but also via a large number of cooperation partners. It has managed to establish itself in the most diverse ecosystems – many start-ups that have entered the market with similarly grand plans can only dream of this broad"*

Zeitschrift für Versicherungswesen 14/2021

Use eco-systems instead of building them

Nobody searches specifically for products on insurance websites In fact, nobody uses their insurance app for fun

Know your customers world

(Google, Social, YouTube, Comparison Platforms)

Exceed customer experience expectations + +

Provide interfaces where customers use established services

(PayPal, Third-party-logins, Amazon Alexa)

User experience and customer centricity at it's best

Always a step ahead

• Google has been evaluating the speed and userfriendliness of websites with a focus on Core Web Vitals (CWV) since June 2021.
• DFV has already fulfilled all requirements since spring 2021.
• No insurer or InsurTech in Germany fulfils the Core Web Vitals assessment - only DFV* can.

CWV assessment test as of 30.06.2021*

^* The CWV assessment is based on comparative data from the pagespeed.compare website and the Chrome UX Report (June 2021). Only the values for mobile use were considered.

DFV is a pioneer in mobile first experience

Sucessfull increase of website speed

Mobile first: Customers want to access information quickly on websites – anywhere, anytime.

• A website is fast and good if it exceeds the 75% hurdle in all categories (LCP, FID, CLS).
• Even better in the future: focus on server-side improvements such as DOM Content Loaded (DCL), Time to First Byte (TTFB) and input facilitation (Autofill).

Definitions:

LCP: Largest Contentful Paint = Max. 2.5 seconds loading time for the visibility of the main element of the website FID: First Input Delay = Max. 100 milliseconds for the selection and use of search fields and buttons on websites CLS: Cumulative Layout Shift = Max. 0.1 loading distortions of elements on a website during page loading

Fastest insurance take out through mobile first ...

Unique worldwide: 80% of our website visitors via mobile searches

DFV in top position regarding online presence

• The improvement of the mobilefirst experience pays off: DFV is found more often in mobile search queries than competitors.
• 80% of our website visitors via mobile channels.
• Impressive increase in mobile visibility from 15.20 by 7.71 points compared to the previous year.

Sistrix rating of mobile searches as of 28.06.2021

Customer journey as product experience…

Increase customer retention and loyalty in a sustainably way

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Excellent performance whether digital or analogue

Customer service 24/7: Reliable and available at any time, even in the home office

Fully digital via app or portal

Analogue by telephone or letter

Outlook & Summary

Stefan M Knoll CEO

What have we promised

What we have achieved

Growth Internationalisation Flat rate product Loss development

25% average growth per year since 2019

Internationalisation: First step by entering the Austrian market

Flat rate product with the new combined insurance policy

-75% loss compared to H1 2020

* Source: GDV premium statistics, Federal Statistical Office. For FY 2020, this is a provisional value. For FY 2021, this is a forecast value.

62

Basically, there are three ways to compete in a market:

Niche	Focus	Diversification
A niche must be special and	To focus is good to get into the	Diversification corresponds
sufficient and still remain	market quickly, but dangerous	most closely to the insurance
uninteresting for the	because you become	concept
competition.	substantially vulnerable.	of risk minimisation.
We never wanted to	It was right to focus and show	The next target: to become a
be a niche insurer.	the market that we can do it.	full-range provider!

Diversification means full-range provider

Resolving double disproportionality as a growth potential

= Growth potential

6.6

63.0

9.6

Direct Broker Cooperation

1.2 1.6 0.2

Direct Broker Cooperation

28.0 32.8

9.2 10.6

48.2

43.4

However, full-range provider means checking whether the existing sales channels are sufficient

• Online and DRTV sales currently reach only about 20% of the potential target group.
• If the 12 MP rule can also be adhered to in broker and direct sales, the question arises why these sales channels should not be significantly expanded.
• Deutsche Familienversicherung has around 560,000 customers. One of the objectives of the call centre to be set up will be to provide proactive support to these customers, taking into account the existing portfolio rights.
• The company's own call centre will target around 30% of new business.

Our intention:

Significant expansion of direct sales in 2022 through the establishment of a sales call centre and gradual expansion of broker sales.

One more word about long-term care insurance

Long-term care insurance is the strongest insurance product for permanent portfolio growth.

• At the same time, long-term care represents the greatest sociopolitical challenge.
• The task now is to contrast the rising costs of long-term care with an insurance product that is permanently affordable.
• If such an insurance solution can only be constructed to produce a product that requires explanation, a sales channel must be used that has typically made explanation its principle. Therefore, the gradual expansion of the broker sales channel is one of the answers to this challenge.

Our intention:

To create a new supplementary long-term care insurance product that can be distributed in particular through brokers. Focus Money, No. 33/2021

Full-range provider means:

Provider of all insurance products typically requested by a private customer.

Business line	Status	Product targets	Sales channels
Health		 New supplementary long-term care	Online, Direct: 60% Broker: 40%
P&C		 Bicycle  Mobile Devices  Add-On Insurance	Online, Direct: 50% Broker: 50%
Life		 Risk,  funeral benefit and  Fund-linked life insurance	Online, Direct: 50% Broker: 50%

Our intention:

The focus is now on applying for authorisation as a life insurer in the short term. In parallel, the global product will be finalised.

Off topic: Sustainability

Less talk, more do!

• Sustainability is becoming the defining issue of the German economy.
• Even though Deutsche Familienversicherung can only make a small contribution to the topic of sustainability due to its business model alone, we want to take up this topic at an early stage.
• The core element is the initiative of the Social Conference Frankfurt.

Our intention:

As a premium partner, we want to contribute to solving the challenges of sustainability in a socially responsible way with this conference initiated by us.

A word about the share price development

We believe Deutsche Familienversicherung is undervalued.

• In order to be able to evaluate the share price of Deutsche Familienversicherung correctly, a distinction must be made between the company and the enterprise.
• A company is successful if money can be earned with the chosen business model as such.
• A company is successful if its value increases even without the concrete prospect of profitability – in case of doubt through speculation.

10,00 € 12,00 € 14,00 € 16,00 € 18,00 € 20,00 € 22,00 € 24,00 € 04.01.2021 19.01.2021 03.02.2021 18.02.2021 05.03.2021 20.03.2021 04.04.2021 19.04.2021 04.05.2021 19.05.2021 03.06.2021 18.06.2021 03.07.2021 18.07.2021 02.08.2021 23,00 € € 10.00 € 12.00 € 14.00 € 16.00 € 17.00 € 18.00 € 20.00 € 22.00 € 23.00 € 24.00

Share price development DFV since 01.01.2021 until 06.08.2021 and analysts' opinion

Summary

We fulfil our targets

• + 25% growth in H1 2021
• - 75% loss in H1 2021 compared to previous year
• Successful market entry in Austria
• New flat-rate product with combination insurance
• Six new cooperation partners in total
• Expert opinion required by BaFin confirms our calculated tariff for supplementary long-term care insurance in all points
• Diversification of our sales channels, establishment of a sales call centre and expansion of our broker sales force

The DFV remains exciting – Let's talk about it

01-02 September	Analysts' Conference Q NA Stifel 2021 London Cross Sector Insight Conference
06-07 September	Analysts' Conference Q NA Equity Forum German Fall Conference (Online 1on1 Summit)
20-22 September	Analysts' Conference O NA Berenberg and Goldman Sachs Tenth German Corporate Conference
20-24 September	Analysts' Conference O NA 10th Baader Investment Conference