Protector Forsikring

Quarterly Report • Aug 21, 2017

Preparing for continued growth

August 22nd 2017

Preparing for continued growth

Agenda

10.00-10:15: Coffee and snack 10.15-11.15: Company update and claims handling 11.15-11.45: Investments 11.45-12:00: Coffee and snack 12.00-12.30: IT and digitalization 12.30-13.00: UK 13.00-13.15: Summary and Q&A

Questions allowed through presentation

Management Strengthened Continuity and fresh blood

Sverre Bjerkeli (57) – Chief Executive Officer

• CEO since 2006
• Protector since 2004
• Director consumer and commercial sector Storebrand/If.
• CEO Storebrand Bank
• CEO positions at Torinno and Ementor Norge

Henrik Høye (35) – Dir. Commercial & Public NO / Project Lead UK

• Employee since 2007
• Director Public sector
• Project Manager UK
• Project Manager 2012 Denmark
• Project Manager 2011 Sweden

Hans Didring (37)– Country Manager Sweden / Responsible for Finland

• Employee since 2011.
• 6 years of experience from IF and Länsförsäkringar.
• Former Head of Broker Sales and Service at If

• Project Manager Finland

• • 20 years of asset management experience
• 10 years as Senior Portfolio Manager in Handelsbanken
• 2 years as Senior Portfolio Manager in Bankenes sikringsfond
• 7 years as Portfolio Managager in Landkreditt

Merete Christensen Bernau (51) – Dir. Change of Ownership

• Employee since 2005
• Director claims handling commercial Norway
• Director HR and Cultural development
• Experience from Storebrand/IF

Lars Ola Rambøl (50) – Director of Business Development

• Starting at Protector September 1st
• Multiple Director positions in Storebrand
• Professional IT background

Vibeke Krane (46) – CFO

• CFO since August 1st 2016
• Employee since December 1st 2015
• State Authorized Public Accountant
• 20 years of experience within finance and accounting from KPMG, EY and Telenor

Thomas Boutrup (37) – Country Manager Denmark

• Started at Protector August 1st
• Senior underwriter and Partner RiskPoint
• Account executive IF
• Team Leader, Liabilities Major, Chartis
• Risk Manager AIG Europe

Employee since 2015

Dag Marius Nereng (44) – Chief Investment Officer

Preparing for continued growth

10.15-11.15: Company update with claims handling in focus

1) Keep up the good work

• 2) Strengthen the balance sheet
• 3) Strengthen competitive position through Next Level claims handling Falcon

Our DNA

Vision The Challenger

Business Idea This will happen through unique relationships. best in class decision-making and cost effective solutions

Main targets Cost and quality leadership Profitable growth Top 3

Values Credible Open Bold Committed

5

Challenger Strategy 2020

Lets further develop our DNA – Next Level

• Don't change Strategy
• Investments are Core, manage Risk
• Strong balance sheet important
• Growth creates more value than CR
• Focus Claims Handling and top 8

Next Level Management training program, NGL and talent development Next Level

Strategy 2017-2020

Top 8 priorities

• 1. Claims Handling, great potential
• Internal quality development (RR, Breitling, CleanDesk etc.)
• 40 %/15% efficiency increase (Commercial/COI) ultimo 16 to ultimo 19
• 1. Profitable growth in Nordic
• Protakst New technical solution COI
• New billion segment opened
• 1. Insurance and Investments are twins
• 1. UK
• Manchester, London, other offices
• Segment and product mix considerations
• 1. Comeback and new profitable growth in Denmark
• Nr. 1 on quality again in 2018
• 1. Go Public Sector, New country
• IT as Innovator and Accelerator

World class staff also adding value to business units and process development

Cost leader Less than half the cost of competitors

Creating cost leadership In-house IT services

• Well defined and consistent strategy, understand value chains and competent people to implement
• "Culture eats strategy for breakfast"
• Cost advantage in the Nordics has increased the last 5 years
• Targeting 1/3 of competitors' cost ratio in UK

• Peers with comparable cost figures are industrial/corporate segment at If and Tryg

• Cost ratio of 1.1% vs 3.2% for industry (Gartner Inc.)

• No legacy, modern platform, competent people
• Developed all IT systems internally since 2003
• Insourced operation
• Well documented
• Time efficient implementation of new IT solutions

Gross expense ratio	2008	2009	2010	2011	2012	2013	2014	2015	2016
PRF	11.2 %	12.1 %	11.9 %	10.0 %	7.7 %	8.8 %	7.6 %	7.5 %	6.8 %
Gjensidige	17.0 %	17.7 %	16.5 %	16.4 %	15.5 %	15.3 %	15.0 %	15.1 %	14.2 %
Codan/Trygg-Hansa1	20.2 %	20.4 %	16.7 %	17.6 %	18.6 %	19.5 %	21.2 %	16.4 %	14.8 %
Tryg	17.1 %	17.2 %	17.0 %	16.6 %	16.4 %	15.6 %	14.6 %	15.3 %	15.7 %
Topdanmark	14.7 %	14.9 %	15.4 %	15.7 %	15.8 %	16.2 %	15.7 %	15.9 %	16.4 %
If	17.4 %	17.6 %	17.2 %	17.3 %	16.9 %	16.8 %	16.7 %	13.0 %	16.6 %
LF	21.0 %	22.0 %	22.0 %	21.0 %	21.0 %	19.0 %	19.0 %	19.0 %	19.0 %
KLP	26.7 %	29.1 %	30.4 %	26.5 %	26.4 %	26.2 %	23.1 %	21.1 %	22.8 %
Avg. ex. PRF	19.2 %	19.8 %	19.3 %	18.7 %	18.7 %	18.4 %	17.9 %	16.5 %	17.1 %

¹Numbers for Codan only before merger with Trygg-Hansa in 2015 and RSA Group Scandinavian segment in 2015

Quality leader in the Nordic market

Broker Satisfaction Surveys

• Consistently on top when brokers rank satisfaction with service and offerings. True for Norway and Sweden
• Quality leader in Denmark three years in a row. Quality setback in Denmark in 2016. Still top three on quality

9

• Voted Best trading partner in Finland (FIBA) in 2016 and Norway in 2017
• Targeting being far ahead of #2 in UK
• Easy to do business with, commercially attractive, trustworthy (USP)

Source: TNS Gallup surveys

Volume growth Strong and prudent

		п ◢
		И w.

Sustainable growth

• Profitability comes first volume growth second, but…
• Low capex entering new markets
• Reduced risk appetite in Denmark in 2017 single-digit growth expected
• Growth potential 2017 mainly in Sweden and UK further strengthening geographic diversification
• Increased 2017 growth to 22% (24% in local currency)

Revenue growth (GWP)	2008	2009	2010	2011	2012	2013	2014	2015	2016	Avg. 08-16
PRF	9.6 %	19.5 %	16.1 %	19.0 %	26.1 %	22.7 %	27.6 %	19.7 %	21.0 %	20.1 %
KLP	3.4 %	4.7 %	5.0 %	3.0 %	15.4 %	10.9 %	10.7 %	20.8 %	13.8 %	9.8 %
Gjensidige	-1.8 %	0.2 %	24.0 %	5.7 %	2.1 %	7.7 %	7.9 %	7.4 %	5.7 %	6.5 %
LF	4.2 %	2.3 %	2.2 %	3.3 %	3.2 %	3.5 %	7.4 %	5.4 %	6.0 %	4.2 %
Codan/Trygg-Hansa1	12.8 %	1.7 %	0.3 %	-0.3 %	7.2 %	-1.0 %	-0.8 %	3.5 %	7.2 %	3.4 %
Tryg	4.4 %	5.2 %	9.1 %	2.4 %	1.8 %	-4.0 %	-4.4 %	-2.7 %	-1.7 %	1.1 %
If	-0.7 %	-4.2 %	7.7 %	5.4 %	6.4 %	1.5 %	-2.8 %	-1.6 %	-2.2 %	1.1 %
Topdanmark	0.8 %	-3.1 %	-1.4 %	1.4 %	1.0 %	1.5 %	2.6 %	-2.6 %	-1.6 %	-0.2 %
Avg. ex. PRF	3.3 %	1.0 %	6.7 %	3.0 %	5.3 %	2.9 %	2.9 %	4.3 %	3.9 %	3.7 %

¹Numbers for Codan only before merger with Trygg-Hansa in 2015 and RSA Group Scandinavian segment in 2015

Profitability Back on track 2017 – Avg. CR 2005-2016: 88.3%

Key comments

• Combined ratio in 2016 of 97.0% was not satisfactory and was due to profitability issues in Denmark and cleanup in COI
• Prudent and disciplined underwriting
• Reinsurance used to reduce risk and reduce volatility
• H1 2017: 88,9%, guided 92% full year
• o Despite Grenfell Tower

Combined ratio	2008	2009	2010	2011	2012	2013	2014	2015	2016	H1'17	Avg. 08-16
Topdanmark	82.4 %	91.1 %	93.3 %	90.3 %	88.0 %	91.5 %	86.0 %	87.3 %	85.1 %	81.8 %	88.3 %
Gjensidige	94.4 %	94.8 %	95.3 %	91.9 %	85.3 %	89.2 %	86.0 %	83.7 %	83.4 %	85.0 %	89.3 %
If	91.8 %	92.1 %	92.8 %	92.0 %	89.3 %	88.1 %	87.7 %	85.4 %	84.4 %	86.5 %	89.3 %
Tryg	88.2 %	92.2 %	98.8 %	93.2 %	88.2 %	87.7 %	84.2 %	86.8 %	86.7 %	84.4 %	89.6 %
PRF	95.8 %	97.8 %	94.2 %	85.3 %	86.2 %	86.7 %	84.5 %	88.7 %	97.0 %	88.9 %	90.7 %
Codan/Trygg-Hansa1	98.5 %	100.4 %	101.8 %	102.4 %	94.3 %	95.3 %	90.4 %	94.0 %	86.2 %	81.9 %	95.1 %
LF	93.0 %	96.0 %	102.0 %	100.0 %	98.0 %	97.0 %	93.0 %	91.0 %	95.0 %	93.0 %	96.1 %
KLP	97.3 %	95.5 %	121.9 %	118.1 %	107.8 %	103.7 %	91.9 %	98.8 %	98.7 %	n/a	103.7 %
Avg. ex. PRF	92.2 %	94.6 %	100.8 %	98.3 %	92.8 %	92.3 %	88.5 %	89.6 %	88.5 %	85.4 %*	93.1 %

¹Numbers for Codan only before merger with Trygg-Hansa in 2015 and RSA Group Scandinavian segment in 2015. Numbers updated through Q2 2016 * Average excl. KLP

Strong investment result over the business cycle

Better than peers

Overview

• Risk management through; Operational routines, mandate given by board, FSA stress test quarterly, internal stress test
• Investment portfolios in Norway, incl. Protector's, have enjoyed avg. NIBOR rates of roughly 1% above STIBOR and CIBOR in the period 2010-2016
• Better investment return than peer average for eight out of nine last years
• Slightly higher market risk than peer average in early years

Return on investments	2008	2009	2010	2011	2012	2013	2014	2015	2016	H1'17	Avg. 08-16
PRF	-2.1 %	16.1 %	9.7 %	-2.3 %	8.9 %	7.0 %	5.3 %	5.3 %	7.0 %	1.7 %	6.1 %
KLP skadeforsikring	0.4 %	8.3 %	7.2 %	4.5 %	6.5 %	6.5 %	6.5 %	4.4 %	6.1 %	n/a	5.6 %
If	-3.1 %	12.4 %	7.4 %	1.8 %	6.1 %	5.0 %	4.1 %	1.5 %	2.9 %	2.4 %	4.2 %
Tryg	3.5 %	6.6 %	4.3 %	4.8 %	5.1 %	2.5 %	4.3 %	0.7 %	3.7 %	2.7 %	3.9 %
Gjensidige	-0.6 %	5.5 %	5.2 %	4.4 %	5.4 %	4.3 %	4.3 %	2.6 %	3.9 %	2.0 %	3.9 %
Codan/Trygg-Hansa1	5.6 %	5.9 %	3.5 %	3.0 %	3.9 %	-0.4 %	3.9 %	3.2 %	2.8 %	1.1 %	3.5 %
Topdanmark	-6.9 %	7.3 %	4.8 %	3.1 %	6.9 %	4.1 %	3.4 %	1.0 %	4.4 %	0.9 %	3.1 %
LF	-14.0 %	10.0 %	6.0 %	-2.0 %	5.0 %	6.1 %	6.5 %	4.5 %	5.6 %	2.5 %	3.1 %
Avg. ex. PRF	-2.2 %	8.0 %	5.5 %	2.8 %	5.6 %	4.0 %	4.7 %	2.6 %	4.2 %	1.9 %	3.9 %

¹Numbers for Codan only before merger with Trygg-Hansa in 2015 and RSA Group Scandinavian segment in 2015

Commercial Lines of Business 61% of revenues

• Corporate clients minimum size NOK 0.2m
• Standardized products; Workers Compensation, Group Life, Other Insurance, Accident, Health (2016), Property, Motor, Liability & Cargo
• Similar underwriting process in all countries; securing efficiency and quality in decision-making
• Underwriters, risk-engineers, Key Account Managers and management present in underwriting meetings

Summary Market drivers

• Cost and quality leadership
• Protector's market appetite in Nordics is > NOK 15bn
• Current market share of about 14% (Jan 1st 2017)
• Market dominated by four large players in each market with approximately 75% of the market

Public lines of business

24% of revenues

• Protector is the market leader in the Nordics
• Insuring more than 600 municipalities
• 280 Norwegian, 240 Swedish and 80 Danish clients
• Protector quotes all tenders and all product lines
• Underwriting in the Nordics centralized from Oslo
• Service and claims handling locally

Summary Market drivers

• Few players and tough market conditions
• Tender processes are governed by public procurement regulation
• Avg. tender evaluation criteria 30% quality and 70% price
• Nordic market appetite is more than NOK 2bn

Change of ownership insurance (COI) 15% of revenues

• Insurance linked to the property
• Covers substantial hidden defects for 5 years
• Houses, apartments and vacation homes
• No underwriting requirements
• Maximum claim is limited to NOK 10m
• Premium based on the property's sale price
• Unprofitable in 2016 (but profitable history to date)
• Profitability back on track 2017

The product Key market drivers

• Market situation; few players & with critical mass
• High entry barriers; Reputation, distribution access and claims handling
• Increased hit-ratio from 70% in 2008 to more than 80% in 2016
• Technical report used in 71% of house sales
• Protector receives almost 4 500 claims per year

Protector vs IF Industrial and Tryg Corporate

Closing the gap

Protector is gaining volume on the expense of our competitors – growing through:

• 1) Cost and quality leadership
• 2) Diversified product mix
• 3) Now Nr. 3 in the Nordic brokered market
• 4) 70 % of volume outside Norway*
• 5) Being market leader in several segments
• o Public sector Sweden and Denmark
• o Bus segment Sweden and Norway
• o Many other sub segments
• Still room for continued growth in the Nordics
• Soon we are passing both If and Tryg

* GWP YTD '17 ex COI

Protector vs IF Industrial and Tryg Corporate

Protector with best Combined Ratio

• Beating our competitors at a level playing field
• Same product mix
• Same broker based sales channel
• Same commission structure
• Same average size of clients
• Profitable Nordic market
• But continuously pressure on rates
  • Brokers taking care of their customers
• Protector with lowest CR
• Despite growing fast
  • Our cost advantage makes this possible

Keep up the good work

Nordic Champion Attacking UK

Keep up the good work

Profitable growth + Investments = Good results

• The last 10 years only AF Gruppen has performed better than Protector in the Norwegian stock market

• Long term investors have earned a total return of 877% over the period

• CAGR of 26% - more than 5x what you would have gotten from index investing

«Preparing for continued growth»

*Per august 9th 2018

Preparing for continued growth

10.15-11.15: Company update with claims handling in focus

1) Keep up the good work

• 2) Strengthen the balance sheet
• 3) Strengthen competitive position through Next Level claims handling Falcon

Preparing for continued growth

10.15-11.15: Company update with claims handling in focus

• 2) Strengthen the balance sheet
• 3) Strengthen competitive position through Next Level claims handling Falcon

Finished building capital

Ready to challenge

*Including Hannover Re deal (pr. 30.06.2017)

Raising capital

Tier 1 and Tier 2 successfully placed

• Debt totalling NOK 1250m has been raised since end of April '16
• NOK 500m May '16
• NOK 750m March '17
• In less than 1 year, the price Protector had to pay for Tier 2 dropped from 370 bps to 290 bps
• On the back of strong financials, high expected growth and favourable capital markets additional debt was raised end of March '17
• All of Protector's debt trade significantly above par
• A spread of 305 bps today vs 380 bps when issued (weighted average)

Protector vs RSA

Better bond terms than RSA

Transaction background

• Both RSA Insurance Group and Protector Forsikring issued Tier 1 capital ultimo March '17 in open market transactions
• RSA: 2 500m SEK
• Protector: 350m NOK
• Both are perpetual with a call option in 2022
• RSA rated A by S&P, Protector not rated

Simple comparison RSA vs Protector

Full year 2016	PRF	RSA
Cost ratio	6.8 %	15.2 %
Combined ratio ('08-'16)	90.7 %	96.2 %
Geographic diversification	43%	48%
Percentage subordinate loan of adj solvency capital *	53%	20%
Solvency Capital end Q1 '17	185%	166%
Solvency Capital 2016	163%	158%
Return On Equity (2007-2016)	24.35%	6.88%

* FactSet Numbers

Pricing implications Price development since transaction

• Both of the securities were set with the following floating

rates

RSA: STIBOR 3 month + 5,25% Protector: NIBOR 3 month + 5,00%

• Price as of 15th August
• PRF ~450 spread
• RSA ~440 spread
• The market judges Protector similar as an A rated (official) company

Balance sheet Q2 2017 Strong & growing fast

[1.000.000 NOK]	30.06.2017	30.06.2016	31.12.2016
Owner-occupied property	13,7	13,6	13,7
Financial assets*	11 398,3	8 261,5	8 537,6
Bank deposits	285,5	45,9	204,3
Other assets	2 173,8	1 372,1	1 091,7
Total assets	13 871,4	9 693,1	9 847,4
Total equity	2 317,2	2 051,3	2 268,2
Subordinated loan capital	1 241,4	648,1	645,9
Total reserves	7 282,6	5 551,4	5 148,0
Other liabilities*	3 030,1	1 442,3	1 785,3
Total equity and liabilities	13 871,4	9 693,1	9 847,4

* Financial derivatives has for informational purposes been netted in this balance sheet.

Strong capital position:

• SCR coverage ratio 177 % pr. 30.06
• SCR fully covered by Tier 1 capital only
• NOK 194m dividend paid
• Full Tier 2 utilization; some Tier 1 restricted capacity

Solvency II SCR & Capital

Composition of SCR:

• Net insurance risk 52 %
• Net market risk 39 %
• Other risks 9 %

Available SII capital:

• Assumed dividend of 40 % on YTD17 result
• Guarantee provision subtracted from own funds

Hannover Re solvency based reinsurance solution

Cushion against negative solvency changes – effective from July 1st

• Covers all lines of businesses across all jurisdictions
• Signed by both parties and started to run July 1st
• Intention of minimum 3 year duration, with annual renewals
• Minimum cession 10% maximum cession 50%. Protector decides
• Will secure Protector against sudden and unforeseen negative changes to the solvency ratio
• Price slightly above subordinated debt

Dividends on hold

No payments from 2018 suggested

• As the Board is of the opinion that the company's core markets provide good opportunities for strong profitable growth in the coming years, it believes that the company and the shareholders will benefit from reinvesting the full earnings in the company during this growth period
• Consequently, the Board will most likely not propose distribution of dividend for the fiscal year 2017 to the General Meeting in 2018.
• A strong balance sheet opens up for:
• 1. Continued strong growth (20% ROE) in UK and the Nordic market the next 3-5 years
• 1. Increase retention to a more normalized level compared to peers
• 1. Continued appetite for long tailed business
• 1. Increased investment risk when attractive
• ROE 20% still our target
• Supported by improved capital structure
• Negatively affected by lower fixed income yield

*Base scenario indicates higher growth rate than guided

Balance sheet summary

Prepared for continuous growth

Long-term financial objectives

Higher SCR target (>150)

Long term financial objectives

*Return on Solvency Capital until 2016 when reflecting changes in accounting principles from Jan. 1st 2016 where Shareholder's Equity includes security provisions **Annualized

Profitable growth + Investment return = Success

Preparing for continued growth

10.15-11.15: Company update with claims handling in focus

Keep up the good work

Strengthen the balance sheet

Strengthen competitive position through Next Level claims handling - Falcon

• Do things right
• Do right things
• Prepare in due TIME

Ambition - World Leading Claims Handling Table of Contents

• Customer quality
• Rolls-Royce
• F17
• Clean Desk
• Instant Feedback
• Claims handling cost
• Falcon 2020

Quality leadership

All criteria defined and measured in every claim

• 95 claims handlers in Protector handled approx. 80 000 claims in 2016.
• Large surveys show that five criteria are most important to customers in a claim:
• − TIME
• − Tone-of-voice
• − Professional substance
• − Correct
• − Overall judgement
• To ensure quality leadership all criteria has to be defined and measured in every claim

Customer Quality leadership

Also in claims handling

Competitor 7

Competitor 8

30

2016 2015 2014

0 10 20 30 40 50 60 70 80

55

0 20 40 60 80 100

2016 2015 2014

What is Rolls-Royce?

Reducing leakage and Recourse

Definition

Reducing leakage and Recourse

Goal

• Not picking up bills others should pay
• Creating win-win situations Client/Protector
• Target number of savings and volume

Why?

• Happy customers
• Better insurance don't suffer because of others
• Building strong culture in claims handling
• Improved profitability and competitive position

Rolls-Royce On track to NOK 400m

Formel 1 2017 (F17)

Motor claims handling Sweden

• Vision to "handle twice the amount of claims per FTE with increased quality"
• Started 2014
• Top-down vision based on top performers and external benchmarking
• Bottom-up process involving all claims handlers
• Individual efficiency performance target for all claims handlers o Monthly follow-up for all individuals throughout the period
• F17 project to structure and follow-up process-improvements
• o Activities to find improvements involving all claims handlers

F17 on track Efficiency doubled in 3 years

KPI's Motor	2012						2013 Mål 2014 FC 2014 Mål 2015 Mål 2016 Mål 2017
Vehicles #	20 04 2	44 942	75 350	75350	100 000	130 000	160000
Motor claims #	3554	8893	16700	16700	21000	27 300	35000
Motor claims #/FTE	1350	1 1 0 0	1 200	1550	1850	2 1 2 5	2400
Change Y/Y		$-19%$	9%	41%	19%	15%	13%;
Cost ratio per claim	1050	910	876	6991	603	541	493
Claims cost ratio %	11,70%	10,10%	9,70%		$7,7\%$ $-6,7\%$	6,0%	5.5%

• Efficiency on target doubled in three years
• Internal quality before target, large improvements

Clean Desk-project

No delays in Claims Handling – without compromising on quality

Company project, started in 2016

Clean Desk-standards defined on every Claims Handling-team. All Claims…

• Answered within …
• Handled within …
• Settled within …

Never compromise on quality

• Right first time, on time, every time
• Data quality

Monitored daily, reported monthly

Internal competitions part of Clean Desk-project

• E.g. "Clean Green Summer" (Summer 2017, ice cream to teams with 100 % score that week)

CleanDesk Scorecard July 2017

Clean Desk 2017 Moving towards 100 % Clean Desk

	Jan	Feb	Mar	Apr	May	Jun	Jul
Eierskifte	96	95	99	99	98	98	97
	%	%	%	%	%	%	%
Skadeoppgjør	91	98	97	98	97	98	99
	%	%	%	%	%	%	%
Prosess	%	%	%	%	%	%	%
	100	92	100	100	98	98	94
Bedrift	93	73	66	80	91	95	99
Norge	%	%	%	%	%	%	%
Person	%	%	%	%	%	%	%
	90	78	71	94	97	94	98
Auto	82	100	100	100	100	100	100
	%	%	%	%	%	%	%
Ting	100	94	91	82	93	100	100
	%	%	%	%	%	%	%
Ansvar	100	20	0	44	72	88	97
	%	%	%	%	%	%	%
Bedrift	100	98	98	94	96	98	99
Sverige	%	%	%	%	%	%	%
linje	100	100	99	100	99	100	100
1.	%	%	%	%	%	%	%
Person	%	%	%	%	%	%	%
	100	100	97	96	100	95	100
Auto	100	100	99	99	97	99	95
	%	%	%	%	%	%	%
Ting	100	98	97	98	99	100	98
	%	%	%	%	%	%	%
Ansvar	100	90	100	78	85	97	100
	%	%	%	%	%	%	%
Bedrift	100	100	92	97	95	97	99
Danmark	%	%	%	%	%	%	%

Bedrift	%	%	%	%	%	%	%
Danmark	100	100	92	97	95	97	99
Person	100	100	94	100	100	100	100
	%	%	%	%	%	%	%
linje Auto, 1.	100 %	100 %	91 %	97 %	100 %	95 %	100 %
Auto	100	100	90	96	81	90	100
	%	%	%	%	%	%	%
Ting	100	100	91	92	95	100	100
	%	%	%	%	%	%	%
Ansvar	100	100	91	100	100	100	95
	%	%	%	%	%	%	%
Totalt	98	92	88	92	95	97	98
	%	%	%	%	%	%	%

• Competitions, rewards and social gatherings motivates

Instant Feedback implementations

Enhancing customer experience

Norway
Group Life
First phone contact
Last phone contact

	Sweden
Auto
Claim settled
Person
Sick leave first contact
Sick leave last contact
	First phone contact
	Last phone contact
Property
Claim settled
Liability
Claim settled

	Denmark
Liability
	Claim settled

Protector is world leading on cost

However, behind peers in claims handling

Gross cost ratio

	2011	2012	2013	2014	2015	2016
If P&C	17,3%	16,9%	16,8%	16,7%	13,0%*	16,6%
RSA scandinavia	17,6%	18,6%	19,5%	21,2%	16,4%	14,8%
Länsförsäkringar	21,0%	21,0%	19,0%	19,0%	19,0%	19,0%
Protector	10,0%	7,7%	8,8%	7,6%	7,5%	6,8%

Protector is clearly ahead on gross cost ratio….

*Pension funds cost decrease

Claims handling cost ratio (ex. ESF)

	2011	2012	2013	2014	2015	2016
If P&C	6,2%	6,10%	6,0%	5,8%	5,8%	5,7%
RSA scandinavia	8,0%	7,6%	7,6%	6,9%	7,0%	7,0%
Länsförsäkringar estimate	8,0%	8,0%	8,0%	8,0%	8,0%	8,0%
Protector				6,9%	6,5%	7,5%*

* 8,1% incl. COI

Remember – Claims handling cost in Protector have lower overhead costs allocated than competitors (IT and Admin)

World leading claims handling 2017-2020

World Leading Claims Handling

Peregrine Falcon (Vandrefalk)

• The Peregrine falcon can reach 320 km/h, which makes it the fastest animal in the world
• The bird uses its velocity and body weight to kill its prey by smashing into it
• Under ideal conditions the Peregrine falcon can distinguish a mid-size bird from up to 8 km
• The Peregrine falcon is present on all continents except for Antarctica

Falcon 2020

Project plan

	Purpose, scope & delimitations
--	--------------------------------

• World leading claims handling
• 40% efficiency increase, halved lead time, increased customer satisfaction and improved claims cost control
• Coordination with Clean Desk, Rolls Royce, Veritas, Breitling and Ch@mpion

Objectives

Efficiency:

• Increase usability, optimize work flow
• Improve process support and integrate into Claims
• Automate all processes where humans don't add value
• Clear communication in the right channel (internet/e-mail/phone)

Internal quality

• Steer volume to partners
• Best practice and education
• Documented process control

External quality / customer satisfaction

• TIME: shorten lead time
• Tone of voice: clear and friendly
• Substance: templates
• Correctness: quality control

• All in all: the world's fastest

• Vision 2020

• Structure for target, activities & follow-up
• Benchmarking
• Requirements on projects, participants and line management

• Best practice processes

• IT-requirements

• Templates • Partners • Education

Main Risks

• Priority and focus
• Matrix leadership
• Analytical capacity

KPI's

• claims per product/FTE

• Broker satisfaction index
• Customer satisfaction
• Rolls Royce

Project organisation

• Lead Hans Didring
• PL Lars-Ola Rambøl
• DK Thomas F, Marie NB
• NO Mads SA, Alexander A
• COI Alexander A

2017-2020

• SE Mikael H, Fredrik L

Critical success factors Business unit deliverables Time line

• Employee buy-in
• Follow-up
• Discipline as a culture

48

Falcon 2020 summary

Strengthen competitive position

• Cost and quality leadership Profitable growth Top 3 in all our segments
• To ensure cost leadership claims handling is crucial
• Good basis for new ambitions
• Rolls-Royce
• Clean Desk
• F17

Customer quality

Falcon 2020: Strengthening our competitive position through efficiency improvements and further quality improvement

Falcon objective	KPI	Effect of Falcon	Competitive position increased by
Efficiency	Claims handling cost-%	Increase efficiency 25-35%	1,5-2%
Quality improvements	Claims cost and renewal rate		1,5-2%
Total			3-4%

Challenger Strategy 2020

Lets further develop our DNA – Next Level

• Don't change Strategy
• Investments are Core, manage Risk
• Strong balance sheet important
• Growth creates more value than CR
• Focus Claims Handling and top 8

Next Level Management training program, NGL and talent development Next Level

Strategy 2017-2020

Top 8 priorities

• 1. Claims Handling, great potential
• Internal quality development (RR, Breitling, CleanDesk etc.)
• 40 %/15% efficiency increase (Commercial/COI) ultimo 16 to ultimo 19
• 1. Profitable growth in Nordic
• Protakst New technical solution COI
• New billion segment opened
• 1. Insurance and Investments are twins
• 1. UK
• Manchester, London, other offices
• Segment and product mix considerations
• 1. Comeback and new profitable growth in Denmark
• Nr. 1 on quality again in 2018
• 1. Go Public Sector, New country
• IT as Innovator and Accelerator

World class staff also adding value to business units and process development

10.15-11.15: Company update with claims handling in focus

Strengthen competitive position through Next Level claims handling -

Falcon

Investments

Beautiful "float" growing rapidly

"Insurers receive premiums upfront and pay claims later. ... This collectnow, pay-later model leaves us holding large sums — money we call "float" — that will eventually go to others. Meanwhile, we get to invest this float for our benefit. ..."

HTD 2/3 of Protector's net income has come from investments

The Investment Challenger

Investment Strategy Equities

Philosophy	• Long term oriented (5 years to forever) • Patience – willing to wait for great opportunities • Concentrated portfolio (10-20 holdings) • Focus on continuous improvement of process
Type of investments	• Great companies • Strong management • Price with an implied margin of safety • Profitable growth
Main Risks	• No indexing – returns can diverge from index • Key people considerations

Sales development

The story continues

Historical sales and EPS growth development

Portfolio of great companies

Bought	Sold
Schibsted (sold Dec '15) Zooplus	B2 Holding (Target reached) AF Gruppen (Target reached) Norwegian (Other causes) Intrum (Terrible merger)

Portfolio statistics Equity portfolio vs. OSEBX end of June 2017

Key Figures	Equity Portfolio	OSEBX
Performance	121,6%	13,3%
Dividend yield	2,3%	4,1%
P/E Next 12m*	13,9	14,8
3 yr sales CAGR	27%	-2%
3 yr EPS CAGR	27,9%	-7,6%

*Factset estimates except for one company not listed where own estimates are used

• Extreme outperformance in period
• Cannot, and will not expect similar outperformance in the future
• Comfortable with periods of underperformance as long as underlying performance is good
• Goal to beat market over time

Performance – In-house managed portfolio vs. benchmarks (08.10.2014 – 30.06.2017)

Investment performance evaluated over the long term

EPS growth and performance Go hand in hand

Key comments

• Strong historic relationship between EPS growth and share performance
• Share performance has been lagging EPS development for 4 quarters
• Cheaper portfolio of great companies
• Opposite for OSEBX performing significantly better than its underlying reality
• More expensive

Protector Equity Portfolio vs OSEBX (TWR and EPS growth) from Q4'14 to H1'17

* Protector EPS graph represents today's portfolio and has not been adjusted for changes in composition **ABGSC numbers (ajd. EPS)

The Investment Challenger

Investment strategy Fixed Income

Philosophy

• Well diversified investment grade portfolio
• No currency risk
• Strive toward low turnover and volatility
• Search for pricing and rating inefficiencies in the market

Type of investments

• Sound companies
• Trustworthy management
• Price/spread with an implied margin of safety

Fixed income portfolio data

Reduced risk, A- vs BBB+ last CMD – no reaching for yield

Factor	30.06.2017
Market value (NOK m)	7 461
Yield (%)	2,3
Spread (bp)	163
Average rating	A
Duration (yrs)	0,4
Credit duration (yrs)	3,0
Internally managed % share	85 %

*Rating is a mix of official rating and own rating

Total bond portfolio comments

• Significant spread tightening
• Reduced risk in bond portfolio
• Bargain opportunities not plentiful in current market in our opinion
• Absolute minimum hurdle rate used when deciding on new high yield investments
• Currently well positioned with ample liquid investments for new investments if meeting our hurdle rate

Internally managed Fixed Income portfolio

Sector distribution development

Sector distribution comments - internally managed bond portfolio

• Well diversified portfolio
• Move towards higher rated bonds
• No exposure to oil services sector which deviates from 32% of outstanding high yield volume in Norway
• Low exposure to real estate high yield sector which deviates from 30% of outstanding high yield volume in Sweden

Mrs. Bucket

Portfolio surveillance

			12M	consumption
1,3	54	$-33%$	-70 %	3,0%

Mrs. Bucket Portfolio surveillance

Portfolio statistics

Internally managed portfolio vs. benchmark end of June 2017

Internally managed portfolio data 30.06.2017
Size NOK m	6 209
Yield	2,5%
Duration	0,4
Credit duration	3,2
Average rating	BBB+1

• Navigating in a very hot market
• Significant outperformance in the period
• Cannot, and will not expect similar outperformance in the future
• Goal to beat benchmark over time

Performance – Internally managed portfolio² vs. benchmark³ (31.03.2015 – 30.06.2017)

Investment performance evaluated over the long term

^{65 1}Average rating based on official and shadow rating

²Protector graph adjusted for the difference between NIBOR, STIBOR and CIBOR from February and March '17 when portfolios were created in Sweden and Denmark ³Benchmark bond portfolio made up by basket of cross-over funds: Storebrand Rente +, Arctic Return Class I, Carnegie Corp. Bond, Handelsbanken Høyrente, Holberg Kreditt, Pareto Høyrente, Alfred Berg Income, Eika Kreditt, Landkreditt Høyrente, Skagen Høyrente

Protector's financial underwriting process

Continuous process improvements

Non-mark	$\overline{\phantom{a}}$
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147.5	from their fundational collection in an independent of the RFS.

• Stress test to survive volatility experienced in financial crisis
• Portfolio allocation based on risk/reward considerations
• Thorough bottom-up analysis the cornerstone of our investment approach
• Dashboards and surveillance as background

Bottom-up analysis				Quarterly update		New ideas and watchlist

Market dashboard
		---

Compusoft One of our favorites

High level review – Compusoft

One of our top picks

EBIT (MEUR)

Other

• Private company, based in Norway
• Protector owns 5,8%

Note 1: Computer Aided Design Note 2: Ex. cash

• Compusoft provides design and sales tool (CAD¹ ) for multibrand kitchen and bathroom retailers. 80% of revenue is subscription based.
• Strong record as a capital light compounder (ROIC = ~100%² ), with moat and performance runway likely intact.
• Strong owner operator management and a highly customer focused organization aligned with shareholders (40%+ of employees own shares)
• Fair price for a wonderful company

Financial Underwriting Summary - Compusoft

Checklist approach to support investment evaluation

Moat and durability

Isn't a CAD¹ program a pure commodity?

Barriers to entry

• Integrating all different manufacturers product catalogues (CAD drawing, price and spec.) into system is a key competitive barrier
• High investment requirements 120 employees in Compusoft maintaining product catalogues (1000 catalogues, 11 languages)
• Shortest lead time for updating system with latest product catalogues
  • ̶ Agreements to get product catalogues from manufacturers before publishing
• Limited market size deter entry (high investment need) and limits viability of e.g. open source alternative

Support intensive

• An established and well trained support organization – very high customer satisfaction

Signs of existing moat

• Pricing power able to raise prices ahead of inflation every year
• Minimal churn to competitors
• Last 5 years annual churn to competitors have averaged ~0,4% of customer base
• 80-90% of new customers are won from competitors
  • ̶ "All" due to (1) better product catalogue quality / maintenance or (2) better support

What have driven historical performance and are those drivers intact for the future?

• Historical growth mainly by European market share gains within kitchen solutions, which constitute 70% of sales.
• Compusoft is the leading player with ~30% market share in Europe. Still untapped runway in market share gains, with many small and weak competitors bleeding customers (~50%-60% MS over time)
• Roughly flat overall addressable market historically
• Bathroom solution another future growth driver
• Compusoft have acquired a competitor within bathroom solutions and invested heavily in integrating product catalogues during the last couple of years
• Have the most comprehensive product catalogue and are rolling out bathroom solution across Europe, leveraging existing sales and support network

Margins

Growth

• Historical margin expansion driven mainly by opex leverage
• EBIT margin have increased from 21% in 2010 to 29% today
• Future margin expansion due to continued opex scalability likely leveraging already established European platform
• Management targets EBIT margin expansion to 36% in 2020

Strong founding management and an organization aligned with shareholders

Balance sheet and capital allocation	• Limited booked tangible and intangible assets. • Net cash of ~1-1,5x EBIT– • ~All earnings distributed as dividend	no change expected, but significant untapped debt capacity is a plus
Management and Organization	• All stakeholder interest aligned Strong long term oriented owner operator management. 40% of employees owns shares in the company Low employee turnover, 3% of revenue spent on employee training Organization with laser focus on customer service and satisfaction – risk service quality	shown willingness to sacrifice short term growth to not
Other FUW / Check List Items	In what way does accounting figures differ from underlying performance? What important things do we not know? Cyclicality (and where are we in the cycle)? What are the relevant base rates for this investment? List all possible behavioral and decision making biases we could face.	Why is the other side selling? Why is it cheap? Regulatory risk? Do we really understand it? Why not in the too hard basket? Macro risk factors (Housing bubble, Economic recession, higher interest rate, commodity prices etc.) Perform a pre-mortem

Probabilistic approach to forecasting

Stock Return = [Earnings Growth] + [Dividend / Share Buyback] + [Multiple Expansion / Contraction]

	Expected Returns	17,0 %	Sales Per Share	Margin	Utbytte	Reprising1	Forventet	Comment
5 year	Scenario 1 - Management meets internal budget (2020). Continued MS gains kitchen + price + successful penetration for bath	60%	13%	5%	5%	0,0 %	23%	LTM P/E of Ending 20
expected return (SMURF)	Scenario 2 - Bath solution fails to take off in new countries. Slower but continued MS gains in kitchen + price increases.	30%	7%	3%	5%	-5,6 %	9%	LTM P/E Ending 15
	Scenario 3 - Distruptive competitive shift, limited new business and high churn.	10%	-5%	-4%	3%	-12,9 %	-19%	LTM P/E Ending 10. Loss of around 65%

Sum 100% 9,4 % 3,5 % 4,8 % -3,0 % 17,0 %

Margin of safety and key investment points Key Risks

5 year expected returns (SMURF)

Key Risks and Investment points

• Margin of safety, low downside risk and high expected return
• ̶ Downside probability limited by sticky recurring revenues and strong competitive position in a small niche
• ̶ High probability of continued value accretive growth (kitchen + bath) yielding high overall expected return

• Strong owner operator management and organization aligned with shareholders

• Any change diluting importance of product catalogue database and maintenance.

• Short product life cycle increases threat of disruption.
• Loss of key management or personnel
• Consolidation and increasing bargaining power of customers.

Summary: Investments is core business

Better than peers, prepared for future

• HTD ROI better than peers o Also risk adjusted
• Insourcing Q4 2014 first phase delivered
• 7 people on board
• o 2 Portfolio Managers
• o 5 Analysts
• Financial Underwriting further developed
• Strengthened balance sheet o Opportunity and safety net

Preparing for continued growth

11.45-12.00: Coffee and snack

Preparing for continued growth 12.00-12.30: IT and digitalization

Protector has a different IT strategy

Internal Days or weeks > 1600 in 2016 500 a year 1% Insourced

Development Time to market Innovations Releases Cost ratio Operations

External Months or years ?? Monthly? 3,5% Outsourced

112

A changing world

• Algorithm
• Digitalization
• Artificial intelligence
• Automation
• Robotics

The world is changing So are we…

"Our intuition about the future is linear. But the reality of information technology is exponential, and that makes a profound difference. If I take 30 steps linearly, I get to 30. If I take 30 steps exponentially, I get to a billion."

• Ray Kurzweil

The biggest risk is not taking any risk... In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.

• Mark Zuckerberg

Innovation is moving at a scarily fast pace

• Bill Gates

Protector Back to 2003

Protector's «founding fathers», the Chairman, the CEO and the IT director all has extensive background from the IT/Insurance industry

All core insurance systems are developed in-house, it's religion

Protector Insurance Application (PIA)

Claims application (CLAIMS)

The first five years Good enough, not robust but first robot made in 2004

• Silo based development
• Highly skilled IT-professionals devolped systems idiosyncratically

• First UW robot made 2004

• First five years characterized by: «Waiting for Critical mass»

• IT operations outsourced
• Policies were made
• Claims were managed
• Development was fast and agile
• Albeit not robust

In due time

• Low IT cost

The next five years

Gradually moving towards robustness, but…

• Gradually developing an unified architecture
• New people on board
• New impulses and ways of thinking
• Insourcing of IT operations in 2013, improved quality and cost
• IT cost moving downwards, despite "no budget restrictions"
• User satisfaction and Time To Market new functionality improving from a good level
• Multiple systems and features launched
• Sweden two employees, three months
• Denmark one employee, three months
• New specialized claims handling system for COI
• Architectural "war" started and ended, change of IT management
• Gradually understanding how «incompetent» users normally are about IT
• «How can an IT person develop a solution if you cannot describe it precisely»

The "last" five years Stabilisation and standardisation

• Architecturally stabilisation
• Transformation process
• Operational and security improvements
• Cyber attacks increases
• Stable systems, SLA 99,5 % or higher
• Standardized platform (tools, comm. platform, data models and databases)
• Continuous delivery process implemented
• 500-800 releases each year «World class»
• Moving towards automatic test procedures
• Cost continues to decline

• IT + Insurance =

• Business competency more aligned with the business
• More holistic involvement in projects
• Sound, prudent and scalable IT architecture
• Launched multiple new systems and solutions, with the use of mature technology
• More system changes done last 3 years than all previous years
• Quality, Time to market and user satisfaction improves further
• Significant potential for further digitalization

«There is no such thing as IT problems, the only challenge we have is the potential lack of skills to describe what we need»

Prepared for continuous growth

Grenfell Tower Unprecedented accident – but financial impact limited

• Financial impact: Very limited due to reinsurance
• Estimated loss from own account is GBP 2,5m
• Kensington one of the most affluent areas in UK - lower frequency of fire and criminal damage
• No UW mistakes made same procedure as normal cases, but extended due to size

Risk Management

Post Grenfell Tower Tragedy

A stronger focus than ever is on Fire & Safety in UK

Thousands of people are now discussing and implementing improvements

New regulations and laws will gradually appear

Many risks will improve - but how much

Protector Risk Management post Grenfell Tower Strategy started

Internal Risk Management and Underwriting improvement Post Grenfell

Subproject & Milestones	Deadline	Status
Technical education of UW's -Training stage 1 -Training stage 2	6.7.17 Autumn
UW, current Tower Block exposure and portfolio analyses -Internal UW review -Tower Exposure (high priority locations inspected) -Tower Exposure (medium and low priority locations inspected) -First hand inspections and inspections planning -One to one meetings with customers	13.7.17 20.7.17 21.7.17 11.7.17
Underwriting procedures and portfolio analysis -Update guidelines and questionnaires -Implementation -RM library	21.7.17 2.8.17 2.8.17
Inspections; background and updated routine -Updated guidelines and evaluations -Implementation	2.8.17 6.8.17

• The first initial training sessions and reviews are all completed
• Identification of Tower Block exposure completed
• First hand inspection of high importance locations completed, medium and low priority ongoing
• One-to-one meetings with clients being conducted this week (08/08/2017 10/08/2011)
• Plan will be updated going forward

Grenfell Tower Summary

• Grenfell Tower is an unprecedented accident and human tragedy - with at least 80 people dead
• We are there to help: Projects are running, experts nominated and first pay-out decision taken
• The financial impact will be limited estimated loss of GBP 2,5m
• Protector stand firmly behind our UK operation targeting a top 3 position in the broker based market
• Copying a winning formula we will be:
• Easy to do business with
• Commercially attractive
• Trustworthy

Studies of 11 Countries over 1 year and > 1 000 pages

The basis for deciding entry in UK

Public

High scores given to:

• Markets with high cost ratios
• Markets where broker penetration is high
• Markets with little competition or in a oligopoly situation
• Markets where quality of service are assumed to be poor (difficult to measure from the outside)

The Nordics are ranked somewhat high (Protector's opinion)

Discussed with Board of directors during the process

The UK public sector, Holland and part of Belgium were assessed as strong starting points

UK public sector entry 2015/16

		Austria Belgium Germany Netherlands Poland				Switzerland		United Kingdom
		Criteria	Rating	Score	Rating	Score	Rating	Score	Rating	Score	Rating	Score	Rating	Score	Rating	Score
		1 Product Mix	2	0.40	3	0.67	3	0.67	4	0.80	4	0.73	3	0.60	5	0.93
		2 Cost ratios	3	1.07	4	1.47	3	1.20	4	1.60	4	1.60	3	1.20	4	1.60
		3.0 Market combined ratios	2	0.20	4	0.35	2	0.23	3	0.28	3	0.30	3	0.30	4	0.35
		4.0 Brokers' position	1	0.25	4	0.92	2	0.58	4	1.00	2	0.42	3	0.67	4	1.08
		5.0 Cultural challenges	1	0.05	3	0.13	4	0.18	5	0.23	2	0.10	3	0.13	4	0.20
	Total			1.97		3.53		2.85		3.90		3.15		2.89		4.17

	naliniiy	ι νιαι συν
$\overline{\mathbf{1}}$	Netherlands	3,90
$\overline{2}$	Belgium	3,88
$\overline{\mathbf{3}}$	Germany	3,79
$\overline{4}$	UK	3,60
$\overline{5}$	Denmark	3,58
$6\phantom{a}$	Norway	3,48
$\overline{7}$	Sweden	3,38
$\overline{\mathbf{8}}$	Poland	3,15
$\overline{9}$	Finland	3,12
	Switzerland	2,99

SME

Copying a Winning Formula entering new Markets

In-depth analysis through 2015

Cost leadership

Fact: 1/2 of competitors Target UK: 1/3 of competitors

• Competitors higher than Scandinavia
• Larger average clients than Scandinavia

People and culture

Quality leadership

Fact: # 1 in Scandinavia Target UK: Far ahead of # 2

• Indications of low service-level
• More resources on board from start
• Claims handling biggest challenge

People and culture

Top 3

Fact: Need to believe before entering UK: Many niche-segment

opportunities

• Required to be cost-efficient and gain expertise
• UK Public Sector will happen soon
• Big markets allows for niche picking

People and culture

Commercial sector; biggest potential, Public sector; entry point

Source illustration: Fondsfinans Research

UK database increasing rapidly

Already large database, best quality of all markets

• Significant dataset purchased from market leading broker before market entry
• Additional data collected through tender processes
• Currently approximately 1/4 of the UK market, with 10 years ground up claims history, still growing rapidly

		Property			Casualty	Fleet
Market	Sums Insured	Claim years	# Claims £ losses	Exposure	Claim years	# Claims £ losses	Exposure	Claim years	# Claims £ losses
UK	£100bn	10	• 25k claims • £180m losses	• £13bn wages • 2m empl.	10	• 350k claims • £950m losses*	260k vehicle years	6	• 70k claims • £90m losses
Norway	£50bn	8	• 5.5k claims • £170m losses	• £23bn turnover • 2.,6m empl.	7.5	• 2,7k claims • £26m losses	186k vehicle years	7	• 22k claims • £44m losses
Sweden	£90bn	6.5	• 7.5k claims • £260m losses	• £11bn turnover	8	• 5,6k claims • £21m losses	250k vehicle years	4	• 40k claims • £30m losses
Denmark	£65bn	5.5	• 45k claims • £290m losses	• £6bn wages	5	• 6k claims • £11m losses	100k Vehicle years	4.5	• 2,3k claims • £3,5m losses

*Ground up basis

Housing Associations

Risk evaluation based on Public Sector methodology – adjusted for key factors

• Large database collected (historical performance and publicly available statistics)

• 100 risk factors systemized and benchmarked

• Structured approach to flood and fire risks

ousing Associ Countri Sums Insured Hevenue Hate 2010 Average 1004293.573 4.38%F $-27B$ 222,450,000 SETXP 6.30% 1835 3.38% 652,772,494 5.32% 266 574 543 4.76% 4.56% 4.35% 223,893,700 3.445 207, 70, 200 3.22%	Costs Rate TrendEl 2010 Aver 3.245 2.03% STERE BATK 3.04%F 2,60mg A 60% 3.81% $4.22\times T$ 3.74% 2.75 0 2.47%	Profit Rate Trenda 20102 Aves 1,98% 0.920 130% 1,00% 0.79% 0.76 2 0.7351 1:02% 0.20% 0.84% 0.89% 0.78to	Maintenance Hate 2011 Avec 13 Trend a Trend 0.92% 0.93% 0.9276 0.75% 0.75% 0.66% támi Li2s 107% 0.88% 0.99% 0.93%	Total M-14- -- - - White $^{62}$ 117 20 Vide Vide 92 79 54.76 Uhita 39.4 34 Vellow 47.5 70 Vellow	1gh EducatioEIderler oung/Vulnerabilis-convic- Yes No Yes Yes No No No No. No Yes No Yes: Yes No No No Yes: Yes No No Yes Yes:	Total Live Via CarriSuppo Stallin danagem Gould NAAR: NBA. Utida NAN. USDA NAW: NAVA NAN. Vikine RAVA NAW. Velicia White NAA. White NAM,	Total Assesse Comment Live Vhite Cirer Assas for improvement, significal MA. Consistently well reviewed Green- Green Consistently good performing (2) Green Green NWA Ulkins Staff not assesed but good in 201 Green Consistently good Uhite Green Utilità Increased Care Inspectorate repd Green
	Client Information Sum Insured P Exces P Claim Y Pegior 1,000 400 1,000 195 5.00 250 425 102 500 4.25 441 250 256 221 5.000 4.25 4.59 1000 3,208 8.83 3,007 5,000 10,000 684 6.73 524 1,000 4.00 3.775 10,000 4.58 500 3.91 33 1871 5.000/200 5.68	Volume Per Year All D Capp 1 4.75 Wales 130,097 15,348 2.820 2.020 29,268 29,268 4.25 London 38 179.262 78.541 78.541 49,989 5,648 Wales $\overline{\phantom{a}}$ 4.477 4.477 171.198 7.544 TK 482 15.482	Rate LURE All Cappel LLF Frequence Average 114,750 0.67 0.59 0.08 0.03 0.03 $\sim$ t de 0.07 0.07 $\sim$ a. × 179,224 0.81 0.00 0.81 0.02 0.02 CHE 1 $\sim$ 0.00 44,341 0.02 0.01 $\sim$ $\sim$ College 0.01 0.01 $\sim$ $\sim$ 163.654 0.05 0.04 0.00 16	Ground Up Volume Per Year AIL FIC and 1 127,476 2223 411.09 32.327 585 585 455.71 5,992 26,978 2233 266.65 24.878 179.262 38 213.14 380 931 71.052 67.97 36.020 2223 49.929 5.648 18.82 63.082 2.477 2.477 95.44 8.954 23.12 175,562 8.635 196,165 15,482 2222 12,562 65.86	Above Deductible Rate LLF 21 Apple Lis Frequence Average 0.07 113,950 1111 308.31 三 0.01 453.71 0.06 33 106.66 0.001 179,224 0.81 0.83 213.14 902 ## 47.58 22 0.00 44.341 0.01 18.82 $\sim$ 100 117 95.44 \$6,927 3.00 ## 23.12 EE 65.96 n m	Willis AAL . 37.918 0.09 Green 22.893 0.10 212,453 0.00 477 1242 Green 57,328 0.02 10,840 White 0.07 12,483 Yellow 36.542 0.17 380.931 Yellow 61039 0.02 46,550 White 0.02 49.477 88.314 Green 0.01 4,650 Green 2.729 0.01 White 4.954 201165 0.01 16,893 Whitle 1379 0.01 Green 12,562 White	Rate Claims Hs T Location Topport Goode reserve Defents Total To Com Yellow Yellow Green lNo c Tellow Yellow Yellow Yellow Cellons A ve Green White I White Yellow Green A go White Yellow Yellow Yellow Vellone Clair White Green Green Green White Yellow Yellow Yellow Yellow Yellow White Good Yellow White Green White Yellow White White White A go Green White White Green Clar White White White Iz-due White Vallon White White Green rellow White INok White fellow White White Green First White White ellow White Green With
El Renewald Month lierd ORLAZO 08042057 37012018 190703017 606/2017 08040917 3006/2017 30/182017 3006/2017 01042017 300702017 300702017 2904/2017 0704/2017 08070997 607010 1007205 maxxi Windows	Excess B Rented D [Million] 5.000 1500 2500 5.000 1,000 1000 500 5.000 1,000 2.500 250 500 2.500 2500 1000 10,000 250 250 dillo:	Sum insured - Clain TAIL 3,007 10314 7.42 8.75 914.5 7.95 7.42 7.95 1514.1 5.00 5.82 548.6 5.92 4.00 5.92 652.8 13.10 442 505.1 8.92 19.97 246.6 5.16 34.95 33.81 223.9 500 11.62 207.7 975 71.36 10.06 116.9 4.90 10.48 10.48 106.4 13.61 71.67 4.93 63.7 12.82 3.68 12.92 2,293.0 9.58 20.84 20.57 400.1 5% 4.75. 16.73 6845 6.73 5.43 284.5 283 M.89 3,208.1 4.59 3.99 9.86 100.00 $-0.551$ SALIDAY 100.00 -	Frequency per GBP Billion - adj. Deductible 0.22 111 2.99 0.66 4.14 185 126 145 0.91 182 2.28 173 0.35 7.63 0.22 0.67 10.89 3.11 157 0.79 15.22 共向 3.58 179 5.36 0.89 0.49 699 4.94 148 5.24 175 Ŀġ 5.83 4.27 4.32 0.53 474 4.21 0.43 3.47 3.72 4.96 150 5.78 0.18 0.48 - Mit diefer en can-	Share of claims by claim type (volume) Fire & Fire & Floods Excel Storm Gthew Impa 780 85% arte. 7874 œ 37%) щE ZН 8% ane 700 93% 95% 57% ER. 430 .	Wans Tong 350 Sarger DELMARIN Email Deal Mudoo Build boat. Deal Sevill Bandi Invit Wed Ware forget Module Marine 759 Seat 0% Wans Renge	Assessmerit Their Subs Size Claim Prope Rese DonAs PubS Flood Tota white: allow White While White White Winde White white. white. Cellican White. afcfa winiw 'allow White: White White which White Whate whate. White: Allicane white ellosa Vellow l'Yellow Will front Whate White White Collins White White Pate Wington elicas Wilde White White white Wirls Winster White white Winite white White White. White et1mu Winite JNA Wilcom ellow. White White White WELCOM - White Cellow all not WEIGHT white. White ellow Yellow White	White White White White White William White fello White White Uwhats

Motor Fleet UW Public Sector

Cost advantage is key, avoid the wrong (red) risks

• Statistical exercise, get the facts right
• Extensive risk management information evaluated
• Cost leadership leads to increased market share

Frequenc		Claims	Frequency		Claims	Frequency	Avg. Claim Capped	Claims	Frequency	Avg. Claim Cap
Prg next period	heiright from	next period	next period		boitag fxant	hext period	next period	hoine tree		Frg next period
17.5%	1,676	144		1,332	116	14.1%	1,662	66	8.0%	3,379
41.4%	933			445	16	7.5%	2,603		4.5%	4,077
15.9%	1,500		15.9%	1,305	46	15.2%	1,366		9.2%	2,242
42.1%	1,414	20	42.1%	630		10.4%	2,365		6.5%	3,418
24.4%	1,096		24.4%	487		8.8	1,360		4.5	2,667
		Pr	Avg. Claim Capped		Avg. Claim Capped Prg next period 17.5% 41.4%					Prg next period

Market situation in UK is similar to Nordics

Estimated figures per Q2 2017

The challenger's location in UK Close to the brokers

• UK (non-life) insurance market is big:
• Commercial: ~ £6bn
• Public incl Housing: £600m
• Manchester; a good hub
• High density of brokers
• 2 nd largest insurance hub in the UK
• Access to skilled workforce lower cost than London
• Cheaper office space
• Manchester cannot serve all of UK
• London
• Scotland
• Potentially south ex London
• Timing is important
• Key personell capacity to open a new office
• Proximity to brokers with the best business

UK – Operational development

Controlled growth in a market with many opportunities

• 20 people on board

• A good mix of experience and quickly developing talents
• New recruitment phase started April 2017 double in 18 months
• Very good growth £17m on board, 3 segments delivering
• Public sector: ~£9m
• Commercial sector: ~£5m
• Housing Associations: ~£3m
• Main focus in H2
• Insourcing of claims handling
• High market activity commercial sector (JLT, Marsh, Aon)
• Housing Associations Continued Profitable Growth and improved value chain
• Ogden Discount rate change learn, take advantage of opportunities
• Organizational development
• Position Protector as # 1 in quality survey

Volume estimates UK

Volume full year 2016 Estimate 2017 Preliminary estimate 2018

Volume 25 MNOK 150 - 200 MNOK 400 – 500 MNOK Ahead of schedule

UK summary

• Prepared for 2 years (2014 and 2015)
• Tested the market (2016)
• 16 people on board volume arriving 2017
• Grenfell Tower Freak accident
• o Will not change our strategy
• o Protector brand already well known
  • Brokers
  • Public sector
• Strong potential in housing and public sector very strong in commercial sector long term
• Will hire 20 people the next 18 months

Our DNA

Vision The Challenger

Business Idea This will happen through unique relationships. best in class decision-making and cost effective solutions

Main targets Cost and quality leadership Profitable growth Top 3

Values Credible Open Bold Committed

100

Summary and Q&A

Preparing for continued growth

• Keep up the good work
• Balance sheet strengthened improved structure
• Volume guiding increased
• SCR target increased and dividend policy changed

• Strategy 2020 and top 8

• Claims handling is number 1 Falcon

• Investments is core business
• It's not about digitalisation
• o People, processes and digitalisation
• UK ahead of Schedule
• People, culture and management development is everything