Central Re — Annual Report 2021

Oct 29, 2021

CENTRAL REINSURANCE CORPORATION

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Central Re

Your reliable partner

Oct. 29, 2021

Disclaimer

• This document is provided by Central Reinsurance Corp. (the "Company"). Except for the numbers and information included in the Company's financial statements, the information contained in this document has not been audited or reviewed by any accountant or independent expert. The Company makes no express or implied representations or warranties as to the fairness, accuracy, completeness, or correctness of such information or opinions. This document is provided as of the date herein and will not be updated to reflect any changes hereafter. The Company, its affiliates and their representatives do not accept any responsibility or liability for any damage caused by their negligence or any other reasons, nor do they accept responsibility or liability for any loss or damages arising from the use of this document or the information contained herein or anything related to this document.

• This document may contain forward-looking statements, including but not limited to all statements that address activities, events or developments that the Company expects or anticipates to take place in the future based on the projections of the Company toward the future, and various factors and uncertainness beyond the Company's control. Therefore, the actual results may differ materially from those contained in the forward-looking statements.

• This document is not and cannot be construed as an offer to purchase or sell securities or other financial products or solicitation of an offer.

• This document may not be directly or indirectly reproduced, redistributed or forwarded to any other person and may not be published in whole or in part for any purpose.

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Outline

Industry Overview Business Overview Performance Overview Corporate Governance and CSR Future Prospect

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Introduction

Basic Information Business Scope

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Basic Information

Time Company History Central Re was established by the Ministry of October 31, 1968 Finance (MOF). July , 2000 Central Re became publicly listed company. Central Re completed its privatization process. July , 2002 Meanwhile, Evergreen Group is Central Re’s lar est shareholder. g Central Re was approved to set up Offshore January 1, 2016 Insurance Unit (OIU) in September 2015 and started doing business on January 1, 2016.

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Basic Information

• Paid up Capital ： TWD 5.904 Billion

• No. of Employee ： 145

• Address ： 12F, 53, Sec. 2, Nanjing East Rd., Taipei, Taiwan

• Credit Ratings ：

Ratin A enc Ratin Outlook g g y g A.M. Best A Stable S&P Global A Stable Taiwan Ratings twAA+ Stable

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Basic Information

 Shareholders’ Structure

As of Aug. 8, 2021

Structure	Government Agencies	Financial Institutions	Financial Institutions	Other Juridical Person	Domestic Natural Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Percentage	16.06%	0.44%		59.91%	21.94%		1.65%	100%
Market Share Year 2020 P&C Insurance Life Insurance Gross Prem. Written in Taiwan 188.11 3,163.97 Ceded Premium 57.80 23.56 Retro Share (%) 30.7 0.7 Central Re’s Premium 11.67 2.94 Market Share in Taiwan (%) 20.2 12.5 Unit：TWD Billions；%
Year 2020			P&C Insurance			Life Insurance
Gross Prem. Written in Taiwan			188.11			3,163.97
Ceded Premium			57.80			23.56
Retro Share (%)			30.7			0.7
Central Re’s Premium			11.67			2.94
Market Share in Taiwan (%)			20.2			12.5

 Market Share

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Business Scope

 Scope ： Domestic and Overseas P&C and Life Reinsurance.

 Line of Business ：

Fire, Residential earthquake, Marine Hull, Marine Cargo, Aviation, Fishing P&C Vessel, Voluntary Automobile, Compulsory Automobile Liability, Engineering and Casualty Insurance Life Life, Personal Accident and Health Insurance

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Outline

Introduction

Business Overview Performance Overview Corporate Governance and CSR Future Prospect

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Industry Overview

Market Development

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Market Trend
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Industry Overview

 Market Development ：

 Domestic Market

• There are 53 insurance companies in Taiwan, of which 27 are life insurance companies, 23 are non-life insurance companies and 3 are reinsurance companies, including Central Re, General Re (Taiwan Branch) and RGA (Taiwan Branch).

• Reinsurance is an international business. Currently, the key players in domestic market include not only Central Re, but also major global reinsurers from London, Japan, Singapore, etc.

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Industry Overview

 Global Reinsurance Market

• Due to wind events losses happened in Asia and the United States, uncertain impacts from COVID19, as well as ongoing concerns regarding climate change on future losses, reinsurance rates are considered insufficient to increase profits to a necessary level of cost of capital.

• The weakened risk-adjusted return on capital has motivated underwriters to reassess pricing and capacity allocation strategies.

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Industry Overview

 Market Trend:

• Domestic P&C

• According to Non-Life Insurance Association, mainly due to the growth in Auto insurance, overall gross premiums written has grown by 9.6% as of June 2021, compared to the same period last year. In addition, Casualty, Liability,

 Domestic Life

• Considering the future implementation of IFRS17 and ICS, the market for protection-oriented products is expected to grow.

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Outline

Introduction

Industry Overview

Performance Overview Corporate Governance and CSR Future Prospect

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Business Overview

Business Portfolio

Gross Premium Written

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Business Portfolio

Gross Premium Written By Line 2021/1-2Q

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Business Portfolio

Gross Premium Written By Region 2021/1-2Q

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Gross Premium Written

Unit ： TWD Billions

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Outline

Introduction

Industry Overview

Business Overview Performance Overview Corporate Governance and CSR Future Prospect

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Performance Overview

Operating Performance

Key Profitability Ratios Dividend Policy

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Operating Performance

Unit ： TWD hundred millions

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• Underwriting profit = Operating revenues-Net gain from investment-Operating costs-Operating expenses

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Capital Structure

Unit ： TWD Billions

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Central Re

• Equalization Reserve excludes CALI.

Total Assets

Unit ： TWD Billions

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Asset Allocation

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2021/6/30 Unit ： TWD Billions Cash & Cash 22.60 E uivalents q Equity 4.73 Fixed Income 11.92 Investment 0.45 Property Central Re

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Key Profitability Ratios

Key Profitability Ratios	Key Profitability Ratios	Key Profitability Ratios	Key Profitability Ratios	Key Profitability Ratios	Key Profitability Ratios
2018 2019 2020 2020.2Q 2021.2Q Combined Ratio (%) 94.8 95.2 94.4 89.0 89.7 ROA (%) 2.85 2.89 3.70 2.25 (Non-annualized) 2.67 (Non-annualized) ROE (%) 9.35 9.51 11.92 7.51 (Non-annualized) 8.31 (Non-annualized) Net Profit Margin (%) 7.06 6.86 8.58 10.34 11.55 EPS* (TWD) 1.78 1.87 2.57 1.54 2.09
	2018	2019	2020	**2020.2Q **	2021.2Q
Combined Ratio (%)	94.8	95.2	94.4	89.0	89.7
ROA (%)	2.85	2.89	3.70	2.25 (Non-annualized)	2.67 (Non-annualized)
ROE (%)	9.35	9.51	11.92	7.51 (Non-annualized)	8.31 (Non-annualized)
Net Profit Margin (%)	7.06	6.86	8.58	10.34	11.55
EPS* (TWD)	1.78	1.87	2.57	1.54	2.09

Note : The earnings per share has been retroactively adjusted after capital increase.

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Dividend Policy

• Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 20% of the remaining amount shall be set aside as legal reserve. Afterwards, the Company shall recognize or reverse special reserve in accordance with regulations, and undistributed earnings of the prior period. Appropriation of the remainder shall be proposed by the Board of Directors and resolved by the stockholders.

• The Company’s dividends are distributed in the form of cash dividends and stock dividends in a coordinated way, among which, the cash dividends shall account for at least 50% of the total dividends distributed.

 Past 5 years ：

Year	2017	2018	2019	2020	2021
Cash Dividends	0.5	1	0.9	0.9	1.3
Stock Dividends	0	0.5	0	0	0

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Outline

Introduction Industry Overview Business Overview Performance Overview

Future Prospect

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Performance Overview

Corporate Governance

Corporate Social Responsibility (CSR)

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Corporate Governance

Our company ranked in top 20% of listed companies in the 1st to 7th corporate governance evaluations

Early declaration of shareholders meeting information

Diversification of Board of Directors Independent board members

Convene early shareholders meeting

Set up functional committee Assessment on Board of Directors

Protect Enhancing Directors participate shareholders the function in shareholders meeting Establish contact of Board of rights and platform for shareholders interests Directors Implement Improve Hold investor conference information corporate Early announcement social of financial reports transparency Disclose relevant information responsibility

Regular board members training

CSR report with third-party verification Dedicated unit in charge of CSR affairs Dedicated unit in charge of integrity management Employee benefits and protection of human rights Response to the risks of climate Central Re change

Hold investor conference

Early announcement of financial reports

Disclose relevant information on company website Information disclosed in English 中央再保險公司

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Corporate Social Responsibility

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Ensure Implement
sustainable corporate
development governance
environment
Practicing
corporate social
responsibility
Strengthen the
Maintain disclosure on
social CSR information
welfare
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Achievements

Write CSR reports

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Monitor environmental management,
energy conservation, and carbon
Environment E
reduction
Emphasize responsible investment and
due diligence
Support government sponsored
insurance
Pay attention to climate change risks
and countermeasures
Value talent cultivation and
Social Corporate
employee benefits
S Governance G
Responsibility
Implement information security
and corporate governance
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Perform integrity management

Fulfill risk management, regulatory 中央再保險公司 compliance, and interests of shareholders

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Outline

Introduction Industry Overview Business Overview Performance Overview Corporate Governance and CSR

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Future Prospect
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Future Prospect

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Competitive Advantage
Business Strategies
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Competitive Advantage

• Favorable operating performance, with positive underwriting results and investment income

A.M. S&P  Solid domestic market Best Global position

 Extremely strong capital adequacy

• Strong and stable market position in Taiwan’s reinsurance market with a diversified underwriting portfolio

From Rating Agency

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• Strong risk-adjusted capitalization

 Appropriate enterprise risk management capability and control 中央再保險公司 mechanisms

 Diversified and prudent investment profile  Adequate enterprise risk management with strong risk controls

• Strong liquidity profile

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Future Prospect

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Implement good corporate governance

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Enhance compliance
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Business Strategies

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Devote to talent development
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Strengthen Risk Management
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Fulfill corporate social responsibilities

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Business Strategies

 Domestic Business

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Focus on better customer service

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Understand customers’ needs, provide assistance in product developments and quotation, extend the business scope

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Optimize the retrocession strategy and expand the underwriting capacity

 International business

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Keep prudent underwriting strategy (Focus on bottom line more than top line) Expanding new product lines to increase portfolio diversification Enhancing risk management for natural catastrophic risks

 Investment Business

Adhering to a sound investment strategy, we are committed to pursue a stable return to support the sustainable development of insurance business

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Contact info

 Spokesman

Caroline Cheng , President Phone ： (02) 2541-5156 Email ： CFCheng@centralre.com

 Deputy Spokesman

Catherine Chang , Vice President, Finance Division Phone ： (02) 2511-5211 #250 Email ： catherinechang@centralre.com

 Investor Relations

Miss Yang

Phone ： (02) 2500-1668 Fax ： (02) 2509-9180 Website ： http://stock.evergreen.com.tw

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Q ＆ A
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