Talanx AG

Annual Report • Apr 17, 2013

Talanx Capital Markets Day Hannover, 17 April 2013

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Ulrich Wallin

Dr. Thomas Noth

Dr. Immo Querner

CFO

21 years experience, 17 years with Talanx

CIO

29 years experience, 5 years with Talanx

Reinsurance

31 years experience, 31 years with Talanx

Talanx's management team

20 years experience, 3 years with Talanx

Dr. Heinz-Peter Roß

Retail Germany

19 years experience, 4 years with Talanx

Talanx – the new kid on the block

Where are we coming from? 1

Overview History V.a.G.

• HDI V.a.G. is a mutual insurance company and majority-owner of the holding company Talanx AG
• Around 1900, a fast-growing German industry saw the need for a more efficient way to receive third-party liability insurance cover
• On 8 December 1903, 176 companies and 6 employers liability insurance associations founded the "Haftpflichtverband der deutschen Eisen- und Stahlindustrie" ("liability association of the German steel industry")
• The organisational setup reflects the historic roots of HDI, an association of important companies of the German industry that offers mutual insurance cover
• Approx. 0.8m members of HDI V.a.G.

1903	Foundation as 'Haftpflichtverband der deutschen Eisen- und Stahlindustrie' in Frankfurt
1919	Relocation to Hannover
1953	Companies of all industry sectors are able to contract insurance with HDI V.a.G.
1966	Foundation of Hannover Rück versicherungs AG
1991	Diversification into life insurance
1994	IPO of Hannover Rückversicherung AG
1998	Renaming of HDI Beteiligungs AG to Talanx AG
2001	Start transfer of insurance business from HDI V.a.G. to individual entities
2006	Acquisition of Gerling insurance group by Talanx AG

1 Where are we coming from?

Members of HDI V.a.G. Relationship HDI V.a.G. – Talanx AG

• HDI V.a.G. is a mutual insurance company and majorityowner of the holding company Talanx AG; commitment to remain long-term majority shareholder post IPO
• Alignment of interests of HDI V.a.G. and Talanx Group through
• Providing efficient and reliable insurance to mutual members at market rates, often syndicate-based
• Same decision makers: Mr Haas, Dr Hinsch, Dr Querner
• HDI V.a.G. has no other investments besides Talanx and is interested to further strengthen and enable Talanx to provide stable insurance capacity to industrial clients
• Talanx and HDI V.a.G. committed to capital market oriented dividend policy
• No financial liabilities on mutual level (existing €110m subordinated bond placed with Talanx Group companies will terminate mid 2013)
• Very limited business relations / intercompany contracts between HDI V.a.G. and Talanx

Strong and reliable anchor shareholder with aligned interests

Where are we coming from? – in topline growth 1

GWP by segment 2002 and 2012 (€bn)1,2

¹ Share of segments in total GWP calculated before consolidation

² Calculated based total GWP adjusted fore respective stake in HannoverRe

Talanx's business portfolio on a strive for better diversification

Where are we coming from? – in global presence 1

Location overview primary insurance 2000 and 2013

Where do we stand today? – our corporate identity 2

Our Vision

Talanx is the leading global B2B insurance group.

Our Mission

Optimised cooperation between our divisions enables us to take advantage of promising opportunities wherever they arise on the global insurance markets – to the benefit of all our stakeholders.

Our Story

A leading German insurer with a unique global growth story and an excellent risk / return profile.

Where do we stand today? – our size versus peers 2

Top 10 German insurers Top 10 European insurers

German insurers by global GWP (2012, €bn) European insurers by global GWP (2012, €bn)

¹ Cumulated individual financial statements ⁴ Gross premiums earned ² Figure of 2011 ⁵ Figure of 2010

11

³ Without discontinued operations in 2011 Source: SNL Financial, annual reports

Third-largest German insurance group with leading position in Europe and strong roots in Germany

Where do we stand today? – our portfolio of brands 2

Talanx is an integrated international insurance group, anchored in Germany, running a multi-brand approach

Where do we stand today? – our divisions 2

¹ Combined ranking based on 2012 data of Polish regulator as per local GAAP

² According to Siscorp based on local GAAP

³ Based on A.M. Best ranking (September 2012)

⁴ Based on S&P ranking by average RoE 2002-2010 and also number 1 by average RoE as per KPMG 2012

Integrated insurance group with leading market positions in all segments

Where do we stand today? – our corporate functions 2

Operating segments
Industrial Lines	Retail Germany	Retail International	Reinsurance

Talanx's operating segments are supported by five specialised service functions

Where do we stand today? – in regulatory capital 2

• Talanx has extensive experience in innovative capital management
• As of 31 December 2012, available funds include €1.7bn of subordinated debt²
• Goodwill of €1,152m as of 31 December 2012 (relative to shareholders' equity excl. minorities of €7.5bn)
• Successful issue of €500m new hybrid in April 2012 to partially refinance callable bonds (2014/15)

¹ Talanx Group based on the solvency of HDI V.a.G. (HDI V.a.G. is the relevant legal entity for the calculation of group solvency from a regulatory perspective) ² €1.7bn of the Group's total subordinated debt (€3.1bn) are eligible for Solvency I capital (after accounting for minority interest and capped by regulatory thresholds)

Solid solvency and high-quality capital with relatively low goodwill supporting optimal balance sheet strength

Where do we stand today? – in ratings capital 2

Current financial strength ratings			S&P rating of Talanx Primary Group
		Standard & Poor's		A. M. Best				Financial Strength Rating: A+ (Stable)
	Grade	Outlook	Grade	Outlook
Talanx Group1			A	Stable		Competitive Position		ERM x			Accounting x
						Strong x		Strong x			Good x
Talanx Primary Group2	A+	Stable				Operating		Investments			Capitalisation
						performance		x			x
Hannover Re subgroup3	AA–	Stable	A+	Stable		Strong x		Very Strong x			Strong x
							Liquidity x			Financial Flexibility
							Strong x			Strong x

¹ The designation used by A. M. Best for the Group is "Talanx AG and its leading non-life direct insurance operation and its leading life insurance operation" ² This rating applies to the core members of Talanx Primary Group (the subgroup of primary insurers in Talanx Group); see description on the right side

³ This rating applies to Hannover Re and its major core companies. The Hannover Re subgroup corresponds to the Talanx Group Reinsurance segment

Financial strength underpinned by S&P and A.M. Best ratings

16 Talanx – Capital Markets Day, Hannover, 17 April 2013

Where do we stand today? – in capital and performance 2

Capital structure (€bn) Summary of FY 2012

€m, IFRS	FY 2012	FY2011	Change
Gross written premium	26,659	23,682	+13 %
Net premium earned	21,999	19,456	+13 %
Net underwriting result	(1,433)	(1,690)	+15 %
Net investment income	3,795	3,262	+16 %
Operating result (EBIT)	1,760	1,238	+42 %
Net income after minorities	630	515	+22 %
Key ratios	FY 2012	FY 2011	Change
Combined ratio non-life insurance and reinsurance	96.4%	101.0%	-4.7%pts
Return on investment	4.3%	4.0%	0.3%pts

Based on solid capitalization and strong performance good upside potential

3

I

What is special about us? – B2B competence as key differentiator

¹ Distribution via B2B channels (IFAs/brokers and bancassurance) in percent of total APE 2011

² Samples of clients/partners

Superior service of corporate relationships lies at heart of our value proposition

3

What is special about us? – B2B competence allows business integration across all divisions

Enhanced business activity and efficiency through close cooperation and best-practice approach across all segments

What is special about us? – Sophisticated underwriter with low gearing to market risk 3

¹ Figures show risk categorisation, in terms of solvency capital requirements, of the Talanx Group after minorities, after tax, post diversification effects as of 2011 2 Includes premium and reserve risk (non-life), net NatCat and counterparty default risk

³ Refers to the combined effects from market developments on assets and liabilities

⁴ Solvency capital requirement and capital adequacy ratio for 99.5% VaR, after minorities, group view

Market risk sensitivity (limited to less than 50% of solvency capital requirement) is deliberately low

Talanx Group net income development + Net profit – Net loss + – + + Talanx Group and predecessors net income Talanx Group net income¹ (€m) ® 2 2 116 185 338 472 245 394 477 183 485 216 520 630 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

¹ Net income of Talanx after minorities, after tax based on restated figures as shown in annual reports;

2001–2003 according to US GAAP, 2004–2011 according to IFRS

² Adjusted on the basis of IAS 8

I

Source: Annual reports of Talanx Group and Hannover Re Group

Robust cycle resilience due to diversification of segments

What is special about us? – Attractive risk-return profile 3

Note: Calculation based on respective accounting standards used in respective years. Accounting standards may have changed over periods analysed

Median RoE and standard deviation of RoE 2001 – 2011 of selected European insurance groups; R+V 2001 – 2010, Groupama 2001 – 2010, Covea 2005 – 2010

Minority interests only given in 2010 and 2011, no adjustment for variable interest entities

Source: Based on data of "Benchmarking of selected insurance companies" analysis by KPMG AG as of 27 April 2012

Sustainable earnings development due to prudent risk management approach

4

I

How to move forward? – Overall Group strategy

Focus of the Group is on long-term increase in value by sustainable and profitable growth and vigorous implementation of our B2B-expertise
Profit target	Capital management	Risk management	Growth target	Human resource policy
RoE1>  TOP20 European insurers  RoE1risk-free interest rate2 +750bps	 Fulfill S&P "AA" capital requirement  Efficient use of available financing instruments	 Generate positive annual earnings with a probability of 90%  Sufficient capital to withstand at least an aggregated 3,000-year shock  Investment risk <50%	 50% of primary GWP from foreign operations  Selective profitable growth in Retail Germany and Reinsurance	 Continuous development and promotion of own workforce  Individual responsibility and entrepreneurial spirit

1 In accordance with IFRS

² Risk-free rate is defined as the 5-year rolling average of the 10-year German government bond yield

Group and divisional strategies define goals and actions to be taken

leads to

How to move forward? – Entrepreneurial culture across the Group ⁴

Central steering combined with decentralized responsibilities… ...strong entrepreneurial spirit

• Talanx Group centralised management, controlling, services and back-office functions
• Principle: central strategic leadership combined with decentralised / local management responsibility
• Individual business units have strong responsibility for delivering results within the guidelines of the group-wide performance management

• International units are managed locally by local country managers

• Empowerment of individual managers

• Freedom to pursue new ventures within group guidelines
• Strong can-do attitude supporting group development and making use of market expertise
• Entrepreneurial pursuit of new opportunities building on traditional strengths of the group (B2B, B2B2C business)

Strong entrepreneurial culture across the Group to unlock full earnings potential

How to move forward? – Sources for growth 4

Industrial Lines	 Growth through globalisation  Increase retention
Retail Germany	 Elimination of cost disadvantages  Intelligent products and B2B focus
Retail International	 Focus on emerging markets (LatAM / CEE)  Consolidation and integration of acquisitions
Reinsurance	 Efficient cycle management  Expansion into emerging markets

Communicated outlook for Talanx Group 2013 5

Gross Written Premium	≥ +4%
• Industrial Lines • Retail Germany • Retail International • Non-Life Reinsurance • Life and Health Reinsurance	~ +4-6% flat ~ +17-20% ~ +3-5% ~ +5-7%
Return on investment	~ 3.5%
Group net income	> €650m
Return on equity	> 9%
Dividend payout ratio	35-45% target range

Targets are subject to no major losses exceeding budget (cat), no turbulences on capital markets (capital), and no material currency fluctuations (currency).

Mid-term target matrix 5

Segments	Key figures	Strategic targets
	Return on equity	≥ 750 bps above risk free1
Group	Group net income growth	~ 10%
	Dividend payout ratio	35 - 45%
	Return on investment2	≥ 3.5%
Industrial Lines	Gross premium growth3	3 - 5%
	Combined ratio	≤ 96%
	EBIT margin4	≥ 10%
	Retention rate	60 - 65%
	Gross premium growth	≥ 0%
Retail Germany	Combined ratio (non-life)	≤ 97%
	New business margin (life)	≥ 2%
	EBIT margin4	≥ 4.5%
Retail International	Gross premium growth3	≥ 10%
	Combined ratio (non-life)	≤ 96%
	Value of New Business (VNB) growth	5 - 10%
	EBIT margin4	≥ 5%
Non-life reinsurance	Gross premium growth	3 - 5%
	Combined ratio	≤ 96%
	EBIT margin4	≥ 10%
Life & health reinsurance	Gross premium growth3	5 - 7%
	Value of New Business (VNB) growth	≥ 10%
	EBIT margin4 financing and longevity business	≥ 2%
	EBIT margin4 mortality and health business	≥ 6%

¹ Risk-free rate is defined as the 5-year rolling average of the 10-year German government bond yield

² Derived from actual asset duration. Currently ~ 6.5 years, therefore the minimum return is the 13-year average of 13-year German government bond yield. Annually rolling

³ Organic growth only; currency neutral

⁴ EBIT/net premium earned

27

Note: growth targets are on p.a. basis

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Industrial Lines – Overview

Key figures

1 Share in 2012 group GWP	2012 geographic split (GWP)	Key financials (€m)	2009	2010	2011	2012
17%	49% 51%	Gross written premium	3,077	3,076	3,138	3,572
		Net premium earned	1,405	1,413	1,375	1,608
		Net underwriting result	134	(57)	155	79
		Net investment income	240	231	204	247
83%		Operating result (EBIT)	335	185	321	259
	International Germany	Combined ratio (net)2 in %	90.5	104.1	88.6	95.1

Highlights

29

• A leading provider of industrial insurance capacity in Germany
• Long standing and close relationships with European blue chips and major German "Mittelstand" companies
• Highly experienced and long-term consistent management team
• Lead insurer of choice and highly experienced leader of international programmes
• Track record of 15 years successfully building an international network
• Attractive cost structure
• High profitability over the cycle

¹ Based on total GWP adjusted for 50.2% share in Hannover Re 2 Including income from interest on deposits

Talanx is a leading European industrial lines insurer with global ambitions

Industrial Lines – Management team

Chairman of the management board

29 years of experience 29 years with Talanx

• Liability insurance
• Financial lines
• Multinational clients

28 years of experience 2 years with Talanx

• Property and engineering insurance
• Loss prevention
• Transport

17 years of experience 17 years with Talanx

• Motor insurance
• Industry clients

36 years of experience 36 years with Talanx

Jens Wohlthat

30

International clients

International operations

35 years of experience 33 years with Talanx

CFO

• Finance
• Risk management
• Investments
• Controlling

30 years of experience 18 years with Talanx

Aviation

• Group accident insurance
• IT demand and control service

29 years of experience 29 years with Talanx

Transport, Aviation and group accident insurance

34 years of experience 14 years with Talanx

Strong and dedicated team with long-standing industry expertise

Industrial Lines – Strategy

Industrial Lines – Market entry barriers

Talanx's competitive edge from competence and full service offering

Industrial Lines – Syndicate leader of choice

HDI-Gerling participates in 2,746 International Programs and is sole lead insurer / syndicate lead insurer in 2,171 programs.

as of December 2012

Syndicate leaderships 2012

Talanx's expertise is widely acknowledged by the market, underpinned by high share of leadership mandates

Talanx – Capital Markets Day, Hannover, 17 April 2013

Industrial Lines – Product offering

• Talanx's Industrial Lines offers the full product spectrum to its clients
• Market leader in liability lines in Germany, which is an anchor product for most corporate clients and has highest customer loyalty and switching costs
• Market leader, in motor fleet business voted "best insurer" each year since 2009
• Special strength in transport-related lines such as cargo and marine insurance and engineering insurance worldwide
• Leading market positions in the German Aviation, Engineering and Marine insurance business
• Most diverse product range and experience in Accident products
• Innovative insurance solutions e.g. climate risk insurance or dread disease insurance

Market leading expertise with full product offering

Industrial Lines – Client and geographical reach

¹ Based on consolidated premiums

35

² Split based on location of insured company. International programmes of German companies are therefore allocated to Germany

Leading market position in key European markets

Industrial Lines – Franchise overview

Well established relationships with main players in targeted segments

Industrial Lines – Penetration among European blue chips

Target clients	Target client penetration
Companies listed in Euro Stoxx 50	# of target clients	Country specific market penetration1

¹With respect to target companies within Euro Stoxx 50

Among Euro Stoxx 50 companies, Talanx targets non-financials and has relationships with 34 out of 38 target clients

Industrial Lines – Penetration of target companies

Relationships with DAX 30 companies

27x lead insurer¹ , thereof 18x in liability or property line

Lead insurer in liability or property line

¹ Lead insurer at least in one line

Industrial Lines has lead mandates with most German DAX companies

Industrial Lines – Penetration in target industries

Various clients in selected target industries

Automotive OEMs1	Automotive suppliers	Pharmaceutical companies	Chemical companies
Aston Martin	Benteler	AstraZeneca	Air Liquide
BMW	Bosch	Bayer	Akzo Nobel
Daimler	Continental	Boehringer	BASF
Fiat	Faurecia	GlaxoSmithKline	DSM
Jaguar	Magneti Marelli	Merck	Evonik
MAN	Mahle	Novartis	Ineos
Porsche	Michelin	Novo Nordisk	Johnson Matthey
PSA	Schaeffler	Nycomed	Linde
Renault / Nissan	Valeo	Roche	Lyondell Basell
Volkswagen	ZF Group	Sanofi-Aventis	Solvay
10/10 lead insurer2	7/10 lead insurer2 3/10 syndicate member	9/10 lead insurer2 1/10 syndicate member	6/10 lead insurer2 4/10 syndicate member

Lead insurer in other lines of business Syndicate member Lead insurer in liability or property line

¹ Original Equipment Manufacturers ² Syndicate leader at least in one line Note: ranked in alphabetical order

Talanx Industrial Lines has high penetration as a lead insurer in its chosen target industries

Industrial Lines – Quality of customer relationship

Longstanding partnerships with key blue chip clients

Industrial Lines – Distribution channels

1 "Industry" and "Multinationals" customer segments only; €1.8bn total; figures according to local GAAP

Brokers	In-house brokers
AON	BASF
Ecclesia	Bayer
Gebrüder Krose	BMW
Leue & Nill	Boehringer Ingelheim
L. Funk & Söhne	Deutsche Bahn
Marsh	Evonik
Martens & Prahl	Lufthansa
SÜDVERS	Siemens
VSMA	ThyssenKrupp
Willis	Volkswagen

Note: ranked in alphabetical order

Established relationships with leading brokers and agents

Industrial Lines – Domestic branch network

Branch network "Industry" & "Multinationals" in Germany

Unlike its competitors, Talanx has an extensive local presence in Germany, facilitating proximity and easy access from and to customers

Industrial Lines – International network

On-going expansion of global Industrial Lines network

Industrial Lines – International franchise

Global network (GWP 2012 in €m)¹

Subsidiaries of Talanx entities / JVs

Branches
France	251	Czech Republic3	13
Switzerland	182	Canada3	10
UK	135	Denmark4	10
Italy	85	Hungary2	7
Australia	44	Slovakia2	6
Norway	43	Ireland	3
Hong Kong	37	Singapore3	2
Japan	37	Bahrain5	-
Greece	20

Figures according to local GAAP

¹ Closing in December 2012

² Premiums included in Austria

• ³ Establishment and start of business was in 2012
• ⁴Premiums included in the Netherlands
• ⁵ Founded in 2011; start of business was in 2012

Focus on Europe with expanding global network

Industrial Lines – International franchise (continued)

RSA Network partners of HDI-Gerling Welt Service AG

Fast growing own international network makes RSA fronting redundant

Industrial Lines – International franchise (continued)

Figures in chart represent number of respective countries

Industrial Lines' strategic target to become a global player is underpinned by strong international growth

Industrial Lines – Developing international network

GWP International by region

Total GWP 2012: €1.9bn

GWP development of international business (€m)

Successful implementation of global growth strategy

Industrial Lines – Future growth concept

Industrial Lines – Growth through globalisation

Growth outside Europe		Growth in Europe
Organic  Make use of virtual branches through selective use of Existing industrial underwriters units retail  Only major risks based on local conditions – no cannibalisation with retail  Acquisition of facultative Target reinsurance business through countries excl. existing units existing industrial locations  Establishment of new branches	Target regions  Latin America: attractive region for - Growth markets - Large multinationals - Raw materials exporters  South/East Asia incl. India: selective markets with industrial potential and sufficient size	 Focus on selective expansion of industrial business in Europe  Growth strategy is customized to framework and conditions of each European country  Measures for further growth are continued development of local business, the participation
Anorganic		in international programs and focused penetration of defined customer
 Active search for suitable acquisition objects Acquisitions  Acquisition of "pure" industrial carriers or mixed with retail units	 Arabian Peninsula: highly attractive due to large volume construction projects as well as public and private investments in the expansion of the infrastructure	segments  Growth in Europe additionally compromises of opportunistic acquisitions

International markets likely to exceed German domestic business volume in due course

Industrial Lines – Placement of an international insurance programme

Competence to underwrite and execute international programmes efficiently and compliant

Industrial Lines – Underwriting

Underwriting process

Evaluation of insurance documents

Evaluation through responsible departments (foreign subsidiaries in case of foreign clients)

Actuarial and risk assessment

Evaluation of premiums calculation, contract conditions and claims statistics in coordination with responsible departments

Internal consulting

Case-related involvement of executive board, branch heads or department heads based on existing authorisations

Preparation / denial of offer

Loss prevention and risk selection services are core supporting elements of the underwriting and claims settlement

Loss prevention and risk selection

Industrial Lines – Risk Engineering in technical insurance

Professional post-underwriting risk engineering Risk Engineering at Power Plants

• Monitoring of typical risk exposure for loss prevention
• Establish risk transparency for insurer, customer und broker
• Better knowledge on risk and on risk control leads to risk reduction and lower loss ratios, bringing up a competitive advantage
• Professional risk engineering is typically a syndicate leader's job
• Solvency II will increase the necessity of having a professional risk engineering team

Industrial Lines – Strategic increase of retention

Strategic increase of retention ratio to 60-65%

Industrial Lines – Solid financial performance

Notes

Peers consist of Allianz Global Corp. & Specialty, Axa Corporate Solutions, AIG General Insurance / Chartis, FM Global, XL Insurance,

Zurich Global Corporate and predecessors

¹ 2002-2011 average

² HDI Industrie AG, HDI-Gerling Industrie AG 2002-2010 incl. GKA (industrial lines) in 2002-2006

In Industrial Lines, Talanx has consistently delivered low combined ratios with low volatility over the cycle

Group Business

Industrial Lines – Momentum by business line

Industrial Lines
	Volume	Profitability
Property + Engineering
Liability
Motor
Marine
Accident
Aviation		/

Industrial Lines expects both, growth and increasing profitability

Industrial Lines – In a nutshell

A leading, well respected insurer with extraordinary strong bonds with its German blue-chip and Mittelstand clients

Recognition as a leading European industrial lines insurer

Strong growth especially internationally

Proprietary global network is key success factor

Ideally positioned to grow with clients

High number of lead mandates allowing for attractive profitability levels

Sophisticated underwriting, risk management and claims handling skills executed in an effective, hands-on management style

Attractive cost structure

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Retail International – Overview

Key figures

Highlights

• In 2012 Retail International was active in 15 countries outside Germany with a focus on Latin America (LatAm) and CEE
• P&C: strong growth with focus on growth driver motor insurance
• Life: significant growth potential with focus on risk business
• Strong organic growth pattern with organic GWP growth 2012 of 8% y/y in focus regions LatAm and CEE (LatAm: 14%; CEE: 5%)
• Disciplined M&A track record
• Export of the successful bancassurance model

¹Based on total GWP adjusted for 50.2% stake in Hannover Re

² CEE/CIS including Turkey and Russia; LatAm including Mexico; Western Europe including Italy, Austria, Liechtenstein and Luxembourg

³ EBIT 2010 after income allowance from Talanx AG (before income allowance: EBIT 2010 = €-41m)

Retail International – Management team

Torsten Leue

Chairman of the management board

20 years of experience in insurance

Matthias Maak

• Business development Latin America
• Brand management
• Best practice

58

More than 30 years of experience in international insurance business

Strong and experienced management team reflecting focus on target regions

Retail International – Strategy

Talanx – Capital Markets Day, Hannover, 17 April 2013 59

Retail International – In LatAm rank 13, in CEE rank 4

Foreign investor ranking, LatAm/CEE

LatAm	Rank	Group	2011 GWP in € m	CEE	Rank	Group	2011 GWP in € m
	1	Mapfre	7,333		1	VIG	4,626
	2	Zurich	4,675		2	Allianz	4,200
	3	MetLife	3,429		3	Generali	3,938
	4	Liberty Mututal	2,691		4		2,799
	5	CNP	2,399		5	KBC Group	1,589
	6	Allianz	1,986		6	AXA	1,500
	7	HSBC	1,794		7	MetLife	1,259
	8	MCS	1,682		8	Uniqa	1,240
	9	Generali	1,640		9	Groupama	1,088
	10	AXA	1,621		10	Ergo	1,071
		…			11	ING	1,000
	13		1,044
		…			13		756
	15		969
		…

Source: Talanx internal analysis of annual reports

2011 "pro-forma" GWP numbers adjusted for 2012 acquisitions

Retail International – Strategic alliance with Meiji Yasuda

¹ Share of Meiji Yasuda 33.46%

61

² Current Meiji Yasuda shareholding of 25.00% in Warta, to go down to 24.26% with the targeted merger of life entities

• Mutual insurance company headquartered in Tokyo and formed in 2004 by the merger of Meiji Life Insurance and Yasuda Mutual Life
• Second largest life insurance company in Japan³ , operating in Asia, Europe and North America
• Assets of JPY 29.7 trillion (~ €270bn⁴ ) and premiums of JPY 5.2 trillion (~ €47bn⁴ ) as of 31 March 2012
• Cooperation with Talanx:
• Long-term strategic agreement (min. 15 years) as co-financial investor for common growth opportunities in focus regions LatAm and CEE
• Two out of six seats in supervisory board of Talanx International

³ According to ranking by premium income of Japanese life insurance association as of March 2012

⁴ Converted at exchange rate of JPY/EUR 109.8 as of 31 March 2012

Long term strategic alliance to invest jointly in growth markets

Talanx – Capital Markets Day, Hannover, 17 April 2013

Retail International – Emerging markets presence

Source: Swiss Re Sigma (3/2012)

Note: selected countries, grey shading indicates Retail International presence

¹ LatAm insurance market defined as LatAm and the Caribbean incl. Mexico; total GWP of \$154.3bn as of 2011

² CEE insurance market defined as CEE and Turkey excluding Russia; total GWP of \$59.4bn as of 2011

Presence in largest markets provides access to majority of regions' premiums and profit pools

Retail International – LatAm and CEE core markets

Market trends and drivers in core markets

		Brazil	Mexico	Poland	Turkey
 Largest insurance market in  Second largest insurance LatAm with 51% of region's market in LatAm with 14% GWP1 of region's GWP1  Low non-life insurance  Low non-life insurance Insurance penetration (1.5% of GDP in penetration (1.1% of GDP 2011)1 in 2011)1 markets  High growth expected,  Growth in GWP fuelled by especially in motor due to GDP growth (3.5% p.a. growing middle class wealth 2011-2016E)		 Largest insurance market in CEE with 32% of region's GWP1  Low overall insurance penetration (3.7% of GDP in 2011)1  High expected GDP growth of resilient economy drive further demand for insurance products	 Second largest insurance market in CEE with 17% of region's GWP1  Low overall insurance penetration (1.3% GDP in 2011)1
vers	 Growth in non-life GWP in  Growth primarily driven by line with market 2011-2012 motor  Leverage superior business  Acquisition of wth model Metropolitana Gro  Large sales network incl. (mainly non-life) bancassurance with HSBC and large broker network		 Anorganic growth via acqui sitions of Warta and Europa  Second largest insurer after acquisitions  Market share incl. acquisi tions increased from 17.6% in 2011 to 20.2% in 2012	 Economy continues to drive GWP growth  Above-market growth in non-life GWP (38% vs. 18% of market from 2011 to 2012)  Strong growth in non-motor (GWP +62%)
Key dri	bility Profita	 Ability to manage profitability through superior underwriting and sales management  Good investment result due to high interest rate environment	 Superior underwriting model transferred from Brazil (best practice approach)	 Softening cycle in motor: expected decrease of average market prices  Balanced portfolio  Post-merger integration of Warta on track  Combined ratio Warta around 95%	 End of soft cycle in motor with market-wide price increases in 2012  Clean-up project "Push for Profit" (mainly MTPL)  Re-pricing MTPL (increase average premium +41%)  Diversification: increase of non motor portfolio share to 31%

¹ Based on Swiss Re Sigma (3/2012)

63

Well positioned for sustainable profitable growth in LatAm and CEE

Retail International – Segment breakdown

Total GWP 2012: €3.3bn Total GWP 2012: €1.1bn Total GWP 2012: €1.4bn Retail International GWP split GWP growth 2012 of 88% y/y in local currency (86% in €) Well-balanced portfolio of non-life and life insurance GWP growth 2012 of 20% y/y in local currency (12% in €) Focus on non-life No focus on regulated pension schemes and health Personal risk 6% Savings without guarantee 10% Savings with guarantee 13% 34% 24% 42% P&C (Motor) P&C (Non-motor) Life 78% 20% 2% P&C (Motor) P&C (Non-motor) Life 50% 21% 29% P&C (Motor) P&C (Non-motor) Life LatAm CEE International portfolio weighted towards non-life

Retail International – Building on core markets

Retail International – Positioning in core markets

Retail International – Focused international presence

Retail International – Brazil

Key financials of selected Retail International markets – Brazil

• Present since 1979 starting with industrial business
• Nationwide presence (65 branches, ~14,000 brokers)
• Bancassurance agreement with HSBC (2005)
• Superior operational model
• Combined ratio 2012 around 98%
• EBIT 2012 €37m

Combined ratio development

¹ CAGR 2009-12 in local currency: 17.4%

Proven success story for building a long-term profitable business

Retail International – Brazil: superior technical platform for intermediaries

Overview Key facts

• Behavioural underwriting approach
• 100% of ~14,000 brokers on line
• More than 9.6 m quotations in 2012
• Improved conversion ratio of ~15%
• Online monitoring of quotation and conversion performance
• Online updating of quotation and conversion projections

Nationwide coverage Number of quotations and contracts

Efficient online sales tool boosts GWP growth in Brazil

Retail International – Mexico

Key financials of selected Retail International markets – Mexico

¹ Sale of life portfolio expected to be completed in Q4 2013

² Acquisition closed in Jan-12; purchase price €77m;

legal merger as of 1 January 2013

³ CAGR 2010-2012 in local currency: 44.5%

GWP development (€m)

Combined ratio development

Potential for a success story similar to Brazil – Implementation in progress

Retail International – Turkey

Key financials of selected Retail International markets – Turkey

Combined ratio² development

¹ CAGR 2009-12 in local currency: 32.2%

² Only HDI/TR non-life (excl. CiV Hayat)

71

Building up sustainable platform in large and fast growing market

Retail International – HDI Turkey: "Push for Profit" project

HDI Sigorta business case: combined ratios 2012/2013 (IFRS)

Interim target for 2013

Combined  GWP growth in  Segmentation  Broker share  Cost savings  Increase of average non-motor of claims increased from about €2m premium MTPL Ratio 2012 (IFRS) +62% 5% to 12% +41% (IFRS) with  Partnering with  Clean-up of  Behavioral pricing repair shops  Increase of non- "Push for unprofitable implementation motor portfolio Profit" agents share by 5%pts to	Diversi 1 fication	2 Claims	3 Sales	4 Costs	5 Pricing	Combined
	31%					Ratio 2013

¹ Combined ratio (IFRS) for total non-life

² Before recognition of investment income and other non-technical results.

Source: HDI Sigorta business case "Push for Profit", Oliver Wyman analysis

Retail International – Poland

Key financials of selected Retail International markets – Poland

² CAGR 2009-12 in local currency: 54.0%

3 Incl. Warta (six months) and Europa (seven months)

4 Includes effect of initial consolidation of Warta and Europa

Combined ratio development

Low combined ratios of Warta and Europe improve Retail International's combined ratio

Retail International – Acquisitions in Poland

Total GWP market share, Poland 2012 (incl. deposit premiums)

Now #2 Polish Insurance Group Poland is the largest market in CEE

1 talanx pro-forma share in 2011: 17.6% 2 Including HDI-Gerling Poland Life Source: KNF, based on local GAAP

³ Defined as CEE including Turkey, excluding Russia: total GWP of US\$57.1bn in 2012

Source: estimate based on Swiss Re Sigma (3/2012)

Warta integration project "BEST" (BE Stronger Together) in implementation phase

Post-merger integration much faster than expected

Retail International – Warta: strong EBIT growth

• Purchase price Warta €770m¹ for 100% (closing 1 July 2012: NAV: €473m)
• Negative initial consolidation effects (mainly from write-off of intangible assets) of ~€27m until 2015E
• Total integration costs of €40m (75% digested by 2013)
• Annual cost synergies² at a run-rate of ~€30m as from 2016 at the latest
• Combined ratio expected around 95% in 2013

¹ Not including €72m NAV adjustment as per closing

² Not including capital and revenue synergies

Low double-digit EBIT growth rate in the mid-term after 2013

Retail International – Warta: re-branding

Re-branding as highlight of post-merger integration and start of implementation

• Re-branding was carried out simultaneously throughout the country
• 1,600 agencies and 500 vehicles rebranded by end-2012
• 1.2 m leaflets and 33,500 posters
• Presence in 4 main TV channels / commercials with 132 m hits in the internet
• Key results:

77

• Significant increase of brand awareness from 66% to 78%
• Purchase intent of life and non-life products up to 15-17%

Successful re-branding while preserving brand equity

Retail International – In a nutshell

Focused on growth markets: LatAm and CEE

Leading market positions in the main markets in these regions (Brazil, Mexico, Poland and Turkey)

2012: strong organic growth with further improved Combined Ratio, well below 100%

Leverage group B2B expertise (bancassurance)

Track record of disciplined M&A (bilateral processes preferred)

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Retail Germany – Overview

Key figures

Highlights

80

• Leading positions in German Life and P&C
• Excellent customer access through innovative distribution strategy
• B2B focussed specialised distribution channels
• Unrivalled client access in German bancassurance
• Specialist know-how and market leader in employee affinity business
• Superior access to leading brokers

¹ Based on total GWP adjusted for 50.2% share in Hannover Re

2 Including interest income on funds withheld and contract deposits

Retail Germany – Management team

Dr. Heinz-Peter Roß

• Chairman of the management board
• Since 2009 with HDI Leben/Talanx

• 2002 2009: board member of AXA responsible for German private clients business

• Sales (CSO)

• Since 2010 with HDI Leben/Talanx
• Various sales positions in AXA, Deutsche Bank, db-leben/Deutscher Herold and Debeka

Gerhard Frieg

• Product management & marketing
• Since 2010 with HDI Leben/Talanx
• Over 20 years with MLP thereof 15 years as board member e.g. responsible for product purchase
• Jörn Stapelfeld Operations (COO) Since 2010 with HDI Leben/Talanx Various positions in Generali/Volksfürsorge, e.g. CEO Generali Lebensversicherung, Deputy CEO Generali Versicherung Ulrich Rosenbaum Risk Management (CRO) Since 1985 with Talanx Group Positions in PB Versicherungen, TARGO Versicherungen, neue leben Iris Klunk Bancassurance Since 1997 with Talanx Group Positions in TARGO and PB Versicherungen, Magyar Posta, neue leben, Talanx Deutschland Bancassurance Barbara Riebeling Finance (CFO) Since 1988 with Talanx Group Positions in TARGO Versicherungen and Credit Life

Strong leadership team based on internal professionals and recent hires with a proven execution track-record

Talanx – Capital Markets Day, Hannover, 17 April 2013

Retail Germany – Division breakdown

Retail Germany – Business mix & market positions

49% 19% 17% 9% 6% Motor Casualty Property Accident Others P&C GWP by line (2012) Life GWP by line (2012) Total: €1,530m

Business mix (P&C vs. life) Retail Germany market positions

Market position in the German primary insurance market measured in GWP 2011

	Life (€bn)		P&C (€bn)
1	Allianz	15.7		1	Allianz	8.9
2	Generali	10.8		2	R+V	4.1
3	ERGO	5.7		3	HUK-Coburg	3.4
4	R+V	5.6		4	Generali	3.0
5		5.2		5	ERGO	2.7
6	AXA	4.5		6	AXA	2.3
7	Zurich	3.9		7	Zurich	2.2
8	Debeka	3.4		8	VKB	1.9
9	VKB	2.5		9	LVM	1.7
10	Nürnberger	2.3		10	1	1.5

Source: GDV and own analysis

¹ GWP threshold of €5m for inclusion in Retail Germany (>€5m included in Industrial Lines)

Leading market positions and a well diversified business mix

Retail Germany – Distribution channels

¹ P&C APE defined as annualised premium of newly concluded contracts (excl. substitutes, premium adjustments and continuation of free of premium contracts)

Life distribution dominated by bancassurance, P&C by own distribution and brokers

Retail Germany – Life portfolio overview

Source: GDV, annual reports

85

Retail Germany compares well with peers in the profitability of newly written German life business

Retail Germany – Life: guarantees and yields

sources²

Investment result	Risk result (after reinsurance)	Cost and other result	Gross surplus3
€54.5m	€79.6m	€12.0m	€146.0m
€91.3m	€41.9m	€(14.0)m	€119.2m
€75.6m	€30.7m	€9.7m	€116.0m
€75.2m	€250.0m	€(76.1)m	€249.1m

¹ Based on total policy reserves 2012 ² Local GAAP

86

³ Gross surplus before profit split with banking partner at Targo Lebensversicherung AG ⁴ Weighted average of TARGO Leben, PB Leben, neue leben und HDI Leben

Solid buffer to withstand the challenges of a longer-lasting low interest rate environment

Retail Germany – Life: de-risking measures to secure guaranteed rates

Selected measures implemented

Reduction of profit participation – Future decisions will remain sensitive to achievable investment yields

Healthy ZZR – Reserves based on a 3.5% interest rate and thus higher than regulatorily required

Swaption Bonds – Ensure high yields without depletion of the company's equity through derivatives; bought on strategic high level with all receiver bonds fixed on low level

Pre-Purchases – Lead to an extension of maturity and duration and thus improving current investment income in future years; regulatory limits fully exploited for HDI Lebensversicherung and neue leben

Cash Flow Matching – Approximate matching of liquid cash flows of assets and liabilities to optimise ALM

In addition to measures above, internal scenario analysis supports resilience for Retail Germany's traditional life business

Pro-active approach additionally strengthens Talanx's German life business

Retail Germany – Product innovations in Life

Selected product innovations

EGO

• Disability insurance with individual and risk-adequate classifications (7 risk groups)
• Streamlined application process making use of enhanced IT systems
• Increased competitiveness due to adequate pricing

TwoTrust

• Unit-linked life insurance with customisable premium guarantee, automatic increase of guarantee, ability to switch and lock-in
• Choice between 'Rendite Plus' and 'Multi Asset' investment portfolios

Product leadership in life fostered by continuous product innovations

Retail Germany – Bancassurance business model

Bancassurance by Talanx

Long-term agreements without cross-shareholdings in banks

Retail Germany – Bancassurance cooperation with savings banks

neue leben
Willkommen Zukunft

Bancassurance partnerships with largest German Savings Banks

Rank1	"Sparkasse"	Partnership	Total Assets (in € '000s)	Branches
1	Hamburger Sparkasse		39.466.736	196
2	Sparkasse KölnBonn		29.615.567	150
3	Kreissparkasse Köln		25.206.112	215
4	Frankfurter Sparkasse		17.872.310	84
…
6	Sparkasse Hannover		12.845.262	114
7	Stadtsparkasse Düsseldorf		12.123.113	71
8	Nassauische Sparkasse		11.930.800	225
…
10	Die Sparkasse Bremen AG		10.703.519	86
11	Sparkasse Pforzheim Calw		10.538.422	156
…
13	Sparkasse Aachen		9.856.762	101
14	Kreissparkasse Ludwigsburg		9.666.459	118
15	Mittelbrandenburgische Sparkasse		9.659.157	147
Shareholder in neue leben or Pensionskasse Non-exclusive partner

• Talanx has a partnership with 12 of the Top 15 savings banks; in total Talanx works together with more than 100 savings banks throughout Germany
• 8 of these (non)-exclusive partners are also minority shareholders in neue leben
• Following the acquisition of neue leben, Talanx has systematically
• improved cooperation with existing minority shareholders
• signed up additional savings banks as non-exclusive partners
• For non-exclusive partners neue leben's products complement and partly replace products from traditional savings bank partner insurers

¹ Ranked by total assets as of 2011 based on ranking of DSGV (German savings banking association)

Talanx is able to grow in the saturated German market based on superior distribution access and product offering

Retail Germany – Bancassurance best practice and blueprint

4.8 4.7 4.6 5.0 5.2 5.1 5.0 5.0 2009 2010 2011 2012 Talanx Bancassurance Market Degree of automation (2012) Development admin cost ratio³ (%) Development acquisition cost ratio³ (%) Degree of automation in policy registration on Retail Germany level¹ Share of direct policy insurance Bancassurance: highly efficient and profitable distribution channel 4 1.6 1.5 1.5 1.3 2.7 2.4 2.4 2.4 2009 2010 2011 2012 41.3% 84.5²% ¹ Based on bancassurance entities ² TARGO Versicherung 3 In percent of new premium sum insured ⁴ Based on GDV market figures

High degree of automation (straight through processing) and integration with banks leads to cost ratios significantly below market

Retail Germany – Restructuring programs

¹ Based on 2009 cost base; pre-tax savings, before policyholder attribution

Mid-term cost saving potential of ~€245m¹

Retail Germany – Status WIR: ahead of original plan

Source: Business Case Cost Programme; without investment costs and protection from dismissal

WIR program implementation on track to deliver total ~€140m run-rate saving p.a. by 2016 (before taxes and policyholders' share). Annual savings of €84m realised until 2012

Retail Germany – Cooperation with Daimler (overview)

60.9 65.4 73.1 79.6 2009 2010 2011 2012 Total GWP: €62m Mercedes-Benz car insurance Leasing: exclusive bundling product (leasing and insurance) Rental model: car rental contract for employees of Daimler AG; including insurance Employees: Mercedes-Benz motor insurance with special conditions ~55% Automotive Employees Insurance program at Mercedes-Benz² €m Total OEM cooperation GWP 41% 28% 17% 14% Rental model Mercedes-Benz car insurance Leasing Employees

Main themes of the cooperation

• Integration of new technologies into insurance business model (e.g. telematic, driving assistance, security systems)
• Daimler aims to reduce insurance partners Talanx to expand cooperation internationally
• Further integration into Talanx units (exp. Industrial lines)

Example:

• Since 1 January 2010, HDI and Mercedes-Benz maintain a cooperation for optimal claim settlement
• Care & Drive aims at mitigating conflicts during the settlement process (between customers, workshops and insurers, especially regarding the evaluation of the damage event) and providing transparent and quick processes to increase customer satisfaction

¹ Motor insurance in the business segment Automotive

² Motor insurance in the business segment Automotive and employees

OEM cooperation: an innovative solution to increasingly complex and difficult markets

Retail Germany – Employee affinity business

New in 2012

95

Comments

• Employee affinity business important pillar of Retail Germany
• More than 1.3 million contracts from relationships with DAX 30 companies accounting for two thirds of Talanx's total employee affinity contracts – Continental and Beiersdorf have been added recently to DAX client list
• Cost advantages through close collaboration with other divisions and IT
• Additional growth by further leveraging Industrial Lines customer contacts – potential identified and roll-out plan put in place
• Products include e.g. corporate pensions and disability insurance in life and motor, accident, legal expense and household insurance in P&C

Retail Germany actively markets its products to Industrial Lines' core customer base: German blue chips and Mittelstand companies

Retail Germany – Employee affinity business

HDI Lebensversicherung AG and HDI Pensionskasse AG

Comments

P&C

• With a volume of €275m employee affinity business has a 19.5% share of Retail Germany (€1,412m)
• 74% of the total employee affinity business is generated with the TOP 10 relationships (among them eight DAX companies)
• Penetration rate¹ of the TOP 10 relationships amounts to 41.4%, cross-selling-rate is at 13%² , goal is to increase this ratios significantly

Life

• In 2012 new business amounts to €205m net sum of premiums³ which corresponds to an increase of 6.8% (2010: 5.6%)
• TOP 10 business relationships contribute 55.5% of new business volume of total employee affinity new business
• Focus on consolidation of sales channels and crossselling to generate growth

¹ # of current customers in % of total potential customers (sum of active employees, retired employees, relatives)

² Customers that have a motor and another P&C contract with Talanx

³ Annual premium times duration

Close business relationship with DAX 30 companies ensures significant contribution in life and non-life business

Retail Germany – "HDI Full Service Package"

¹ umbrella solution = difference coverage

Retail Germany – Innovative mobile sales approach

• Mobile solutions offer a new way in targeting clients and developing markets
• Core competencies of Retail Germany as an insurance expert are linked with the telecommunications expertise from Deutsche Telekom
• Thus an excess value for Deutsche Telekom (product, claims handling) and Retail Germany (contract management, encashment and sales via App) is created
• Solution is based on a Deutsche Telekom platform offering "one time insurances" via App access

Optimal involvement of core competences of the sales partner

Retail Germany – Growth areas

	Life	P&C
Leverage existing franchise/ expertise	 Bancassurance  Corporate pension business  Affinity business	 Automotive  Affinity business
Profitable market segments	 Disability insurance ("EGO"): strong increase of new business since re-launch in 2009  Unit-linked ("Two Trust"): strong position in unit-linked in Germany for regular premium products	 Products for specialised professions (e.g. medical, technical science, accountants, tax advisors, lawyers): build on leading market positions with medical professionals and accountants/tax advisors/lawyers
	Focus on profitable & innovative growth niches	Focus on profitable growth in a competitive market

Building on actual strengths lays the foundation for future growth

100

Retail Germany – Strategy

Expansion of market share with a view to improving profitability

Elimination of cost disadvantages

Establishing clear and simple organisational structures

Closer client focus

Retail Germany – Momentum by business line

Retail Germany
		Volume	Profitability
Products life	Traditional life1		/
	Unit-linked1		/
	Credit Protection
	Term life
	Occupational disability
Products P&C	Motor
	Casualty
	Property
	Accident

¹ Positive / negative profitability depends on risk carrier

Retail Germany – In a nutshell

Top 10 German retail insurance provider

Leading market position in bancassurance and employee affinity business

Strong relationships with leading brokers

Restructuring program WIR ahead of schedule

Strong B2B capabilities: new cooperation with SwissLife Select as well as closer cooperation with Daimler via insurance program

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner

IT restructuring – Talanx Systeme

Talanx Systeme provides the full range of IT services for Talanx's German primary insurance carriers and group functions

Competitive IT organisation 1

• Realisation of significant cost cutting and optimisation measures through the TOP programme
• The service-oriented alignment of the IT organisation will be enhanced in a staggered process

Modernisation of application environment 2

• With the programmes ZBB / ZBB plus, BASE and Gomera, Talanx IT makes a decisive contribution towards the on-going industrialisation of the Talanx Group
• New divisional requirements on and essential segment related projects will be implemented through these programmes

Optimisation of IT operations 3

• The value creation will be standardised and automated (industrialisation)
• The service quality, stability and performance of IT operations will be improved

The evolution of Talanx IT to become a competitive advantage will be achieved through multistage and sustainable Change Programmes

In order to reduce the cost gap, Talanx Systeme implements sustainable optimisation measures in all IT components

Talanx application landscape to be completely modernized

	Targets	Content	Status
"Zielbebau ung plus" (target IT landscape) – non-life	 Reduction of complexity and redundancy of the IT landscape to adapt faster to changing requirements  Higher level of automation and group wide data consistency	 Standardised policy manage ment system (SAP)  Fully integrated workflow management system  Standardised cash manage ment system (SAP)	 Main target systems (e.g. SAP Policy Manage ment) up and running  Adjustments to cover new functional requirements
Kolumbus/ GOMERA life	 Data migration into new IT system  Enhancement of data quality  Realisation of cost synergies	 Transfer of insurance data sets including required clean ups / corrections  Analysis of potential mergers of tariffs  Organisation of legacy portfolio run-off	 Successful migration of major legacy systems  Further systems consolidation initialized
BASE (=Banc assurance Simple and Excellent)	 Optimization of bancassurance processes and systems  Business enhancements and reduction of it-complexity	 Standardisation of back office processes  System consolidation (e.g. policy management)	 Project set-up  Implementation of TaSys Solutions in analysis

Further efficiency enhancements through additional IT projects

Reliance on standard software to ensure compatibility of systems and to increase overall IT-efficiency

Talanx applies an advanced IT-sourcing strategy allowing flexible vertical integration and relies on established strategic partners

Young, modern software inventory and highly variable infrastructure costs

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Reinsurance – Overview

Key figures

Highlights

• Strong market positioning Third-largest global reinsurer
• Top rating (S&P: AA-; A.M. Best: A+) ensures attractive new business
• Consistently among the most profitable reinsurers globally
• Cost leader
• Strong growth track record
• Strong risk management both qualitative and quantitative
• Conservative investment policy
• Very good diversification (across business lines life / non-life as well as geographically)
• Lower volatility due to improved diversification
• Strong cash generation

¹ Based on total GWP adjusted for 50.2% share in Hannover Re

2 Incl. expenses on funds withheld and contract deposits

Hannover Re is one of the largest and most profitable reinsurers globally

Reinsurance – Management team

Ulrich Wallin

• Chairman of the management board
• Group risk management
• Auditing
• Human resources
• Corporate communications
• Corporate development
• Business opportunity management
• Controlling

Non-Life Reinsurance: catastrophe business, facultative business, global non-life treaty reinsurance

Life and health reinsurance: Africa, Asia, Australia/New Zealand, Latin America, Western and South Europe

Jürgen Gräber

Coordination of worldwide non-life reinsurance and specialty reinsurance

Life and health reinsurance: North America, Northern, Central and Eastern Europe, UK and Ireland; longevity solutions

Group legal services, compliance; run-off solutions; non-life reinsurance: Germany, North America

Asset management; facility management; finance and accounting; information technology

Top management with superior reinsurance and capital markets expertise

Reinsurance – Strategy

Strategy: overview

We seek to strengthen and further expand our position as a leading, globally operating reinsurer, delivering profits above the sector average

Our growth and profitability targets

• IVC: based on our Economic Capital Model (ECM), we aim to achieve a profit in excess of the cost of capital
• Minimum return on equity (RoE) of 750 basis points (bps) above "risk free"¹
• One of the most profitable reinsurers worldwide
• Increase the IFRS post-tax profit as well as the value of the company including dividends by doubledigit margins every year
• Premium growth on a long-term basis above market-average
• Share price to outperform weighted Global Reinsurance Index over a 3-year rolling period

¹ Risk-free rate is defined as the 5-year rolling average of the 10-year German government bond yield

Our overriding target: expand our position and deliver profits above the sector average

Reinsurance – Ranking by GWP and RoE

Premium ranking by GWP 2011 (in US\$bn)¹

Reinsurers by avg. RoE (2008-2012)³

¹ Reinsurance or reported reinsurance activities

² Reinsurance only

³ Ranking consists of Top 10 of Global Reinsurance Index (GloRe) with more than 50% reinsurance business

Hannover Re: market leadership by profitability

246

28.0%

2.8%

-2.7%

6.5%

15.2%

10.9%

31.4%

16.1%

19.0%

11.7%

Reinsurance – Portfolio overview

Non-life reinsurance

Total GWP 2012: €7,717m Growth GWP 2012 vs. 2011: +13.1%

Reinsurance – Portfolio overview

Life and health reinsurance

Total GWP 2012: €6,058m Growth GWP 2012 vs. 2011: +14.9%

Reinsurance – Geographical reach

Reinsurance – Profitability

Hannover Re defends no. 1 position in RoE ranking

	2008		2009		2010		2011		2012		2008 –	2012
Company	RoE	Rank	RoE	Rank	RoE	Rank	RoE	Rank	RoE	Rank	Ø RoE	Rank
Hannover Re	(4.1 %)	9	22.4 %	3	18.2 %	1	12.8%	1	15.6%	3	13.0 %	1
Peer 9, Bermuda, non-life	(0.4 %)	7	24.4%	2	18.1 %	2	(2.4 %)	8	15.9 %	2	11.1 %	2
Peer 8, US, life and health	6.5 %	2	12.6%	5	12.9 %	3	10.1 %	2	9.9 %	8	10.4 %	3
Peer 5, Bermuda, composite	1.1 %	5	25.9%	1	11.5 %	4	(7.6 %)	10	16.9 %	1	9.6 %	4
Peer 7, France, composite	8.9%	1	10.2%	7	10.1 %	6	7.5%	4	9.1 %	9	9 2 %	5
Peer 1, Germany, composite	6.5 %	3	11.8%	6	10.7%	5	3.1 %	6	12.6 %	7	8.9 %	6
Peer 4, US, non-life	4.8 %	4	9.9 %	8	7.1 %	8	4.9 %	5	15.2%	4	8.4 %	7
Peer 6, Bermuda, non-life	(0.4 %)	6	14.6%	4	9.9 %	7	(1.3%)	7	12.9 %	6	7.1 %	8
Peer 2, Switzerland, composite	(3.3 %)	8	2.3%	10	3.6 %	10	9.6 %	3	13.2 %	5	5.1 %	9
Peer 3, US, non-life	(31.8%)	10	2.7%	9	5.8 %	9	(4.4 %)	9	5.8 %	10	(4.4 %)	10

Source: data based on company data, own calculation

List shows the Top 10 of the Global Reinsurance index (GloRe) with more than 50% reinsurance business

Aim to be among the top 3 reinsurers also achieved for 2012

Reinsurance – Cost leadership further strengthened

¹ Administrative expenses + other technical expense (in % of net premium earned)

Decreasing administrative expense ratio aided by top line growth

Reinsurance – Major losses since 2003

Natural catastrophes and other major losses in excess of €10m gross (until 31 Dec 2011: in excess of €5m gross)

2003 – 2006 adjusted to new segmentation

Reinsurance – Major losses 2012

Catastrophe losses1 in €m	Date	Gross	Net
Earthquake Italy	20 May	44.2	44.1
Earthquake Italy	29 May	22.4	22.4
Draught USA	July	56.5	43.3
Typhoon "Haikui", Taiwan	2 Aug	13.3	13.3
Hurricane "Isaac", USA	24 - 31 Aug	13.1	6.8
Hurricane "Sandy", USA	24 Oct - 1 Nov	340.9	257.5
6 Natural catastrophes		490.4	387.4
Costa Concordia	13 Jan	132.7	53.3
1 Fire claim		10.4	10.4
2 Marine claims		28.4	26.7
10 Major losses		661.9	477.8

¹ Natural catastrophes and other major losses in excess of €10m gross

Hurricane "Sandy" dominates large loss list

Reinsurance – Strategic agenda and initiatives

Reinsurance strategic agenda

Goals	Measurement of success
Value creation per share of at least 10%	Book value growth per share and dividend per share
Increase business volume in excess of the market average	Premium growth in comparison to peer group
Achieve a profit in excess of the cost of capital based on internal economic capital model	IVC > 0
Achieve a return on equity according to IFRS of at least 750 bps above the risk-free interest rate	Return on equity
Continuously pay an attractive dividend to shareholders	Continuous dividend yield above peers

Key growth initiatives

Non-Life	 Efficient cycle-management  Expansion into emerging markets  Central underwriting combined with local capabilities
Life	 Expand senior citizen products in developed markets  Expansion into US risk protection market  Increase local presence in Asian growth markets

Expand position as a leading and successful reinsurer

Reinsurance – Continuous improvement in value per share

EBIT increased by 67% in 2012

Record earnings per share in 2012

Highest book value per share ever as at 31 Dec 2012

¹ 2001-2003 US GAAP, from 2004 IFRS, 2009 figures restated Source: Hannover Re annual report

Successful track-record with a record-year 2012

Reinsurance – Targets achieved

Business group	Key figures	Strategic targets	2012
Group	Return on investment1	≥3.5%	✓ 4.1%
	Return on equity	≥10%2	✓ 15.6%
	Earnings per share growth (y/y)	≥10%	✓ 41.6%
	Value creation per share3	≥10%	✓ 26.9%
Non-life reinsurance	Gross premium growth4	3% – 5%	✓ 13.1%
	Combined ratio5	≤98%	✓ 95.8%
	EBIT margin6	≥10%	✓ 15.9%
Life and health	xRoCA7	≥2%	✓ 5.2%
reinsurance	Gross premium growth8	5% – 7%	✓ 14.9%
	Value of New Business (VNB) growth	≥10%	n.a.
	EBIT margin6 financing and longevity business	≥2	✓ 2.7%
	EBIT margin6 mortality and morbidity business	≥6%	✓ 7.1%
	xRoCA7	≥5%	2.4%

¹ Excl. inflation swap and ModCo ² Risk-free rate is defined as the 5-year rolling average of the 10-year German government bond yield

³ Growth of book value + paid dividends ⁴

5 Incl. expected net major losses of €560m. ⁶ EBIT/net premium earned

⁷ Excess return on the allocated economic capital ⁸ Organic growth only

In average throughout the cycle

Reinsurance – Outlook 2013

Gross written premium (GWP)	~+5%
Non life reinsurance1   Life and health reinsurance1 2	~+3% – +5% ~+5% – +7%
Return on investment3 4	~+3.4%
Group net income3	~€800m
Dividend pay-out ratio5	35% – 40%

¹ At unchanged f/x rates

² Organic growth

³ Subject to no major distortions in capital markets and/or major losses in 2013 not exceeding ~€625m.

⁴ Excluding effects from inflation swaps

⁵ Related to group net income according to IFRS

Reinsurance – Momentum by geography and business line

		Lines of business	Volume	Profitability
	Target markets	North America1
		Germany1		/
	Specialty markets	Marine (incl. energy)
		Aviation
e n-lif		Credit, surety & political risks
o N		Structured R/I & ILS		/
		UK, London market & direct		/
	Global R/I	Global treaty		/
		Global cat XL
		Global facultative
h alt	Financial solutions	Financial Solutions
e H d	Risk solutions	Longevity
n a e		Mortality
Lif		Morbidity

¹ All lines of business except those stated separately

Reinsurance – In a nutshell

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Disclosure timeline 2013 – Reports & conferences

Questions which the Talanx CFO would raise as an analyst

1	How have you organised your institutional investment management process?
2	What should we know about the third-party business of TAM?
3	How does your investment portfolio look like?
4	Which return on investment can be achieved?
5	How to best re-invest assets?
6	How do you manage your capital base and optimise your funding costs?
7	Which run-off result can reasonably be expected?
8	Do you face any impact from IAS19 adjustments? If any, which?

1

Investment Manager – Unique group integration supporting superior B2B customer access model

Talanx Asset Management (TAM) – Overview

• Core business: asset management services for the entire Talanx Group (incl. Hannover Re) for investments (capital markets, money markets, real estate and alternative assets) including all relevant administration services (SAA, TAA, risk management, middle- & back office) – €84.1bn investments under own management per year-end 2012
• Third-party business (private clients and institutions investors) based on existing product range and service know-how, exploiting economies of scale – €9.7bn of funds per year-end 2012

Talanx Asset Management offers the full range of asset management services for the entire Talanx Group and for third-party clients

1

Investment Manager – Unique group integration supporting superior B2B customer access model (cont'd)

Talanx Asset Management (TAM) for Talanx Group

• While operating insurance carriers are responsible for strategic asset allocation, TAM supports strategy development and implements tactical asset allocation and portfolio management
• Investment strategy is the result of a permanent interaction of TAM and the operating entities
• TAM is fully compliant with Solvency II requirements and has a high sentiment on quality standards of risk management and control processes: TAM is certified through SAS 70/ISAE 3402 Report since 2010
• Fees to group companies are based on fair market pricing

Asset allocation process in close cooperation between TAM and the operating insurance carriers

Third-party business 2

Business volume AmpegaGerling Overview third-party business

Mutual funds	60 funds thereof 44 White Label	€3.4bn
Special funds	38 funds	€6.3bn
Wealth management	12 mandates	€4.1bn
	Total volume	€13.8bn
	Thereof
	third-party
Retail clients		€3.3bn
Institutional clients		€2.8bn
	Total volume (44%)	€6.1bn

Third-party offering based on existing product and service expertise

Profitable growth with the aim to diversify distribution

Focused acquisition of assets to increase revenue base, product portfolio and access to distribution channels

Enhancement of (qualitative) administrative competence

Business segments	Retail clients	Institutional clients
Customers/ markets	Focus on existing internal and external distribution channels	Small / mid-sized insurers, funds of funds, pension funds, banks
Market postioning	Service offering according to core competencies Outsourcing of functions not relevant for Talanx group (e.g. stock picking)	Niche player, offering outsourcing services for insurers' asset management
Products	Focus on fixed income and funds of funds, as well as administration of third-party mutual funds	Special funds and administrative services
Products	Proprietary distribution channels of Talanx insurance entities, banks with open architecture, wealth manager, funds of funds, White Label	Direct approach (also in cooperation with Hannover Re), participation in tenders

TAM successfully levers its platform and capacity for third-party business

Third-party business – Cooperation with C-Quadrat 2

Highly profitable business partnership and investment

3

Investment Portfolio – Breakdown of Talanx's investment portfolio

1 Includes government and semi-government entities part of which are guaranteed by the Federal Republic of Germany, other EU countries or German federal states

Conservative investment style unaltered

Total 2012: €84.1bn (investments under own management)

Benchmarking assets in L&R category1,2 IFRS Category

¹ Loans and receivables in % of total investments

² Peers group consists of Allianz, Axa, Generali, Munich RE, Zurich

Investment Portfolio – Unrealised capital gains 3

Unrealised capital gains and losses as of 31 December 2012 (€m)

Δ market value vs. book value

Talanx's off-balance sheet reserves stand at above €4.3bn end of December 2012

Investment Portfolio – Unrealised capital gains vs. peers 3

Off-balance sheet unrealised capital gains in % of shareholders' equity1,2

¹ Off-balance sheet unrealised gains include the components as shown on the previous page

² Peer group consists of Allianz, Axa, Generali, Munich RE, Zurich

High share of unrealised capital gains outside P&L and balance sheet

Investment Portfolio – Geographic exposure 3

€m		Government bonds	Corporate bonds
GIIPS exposure (31 Dec 2012)	Sovereign	Semi sovereign	Fi na nc ia l	C or po ra te	C ov er ed	O th er	Total
Greece	4	-	-	-	-	-	5
Ireland	235	-	14	29	162	188	628
Italy	647	-	420	279	961	-	2,307
Portugal	26	-	-	1	8	-	35
Spain	88	254	90	231	522	-	1,185
Total	1,000	254	524	540	1,653	188	4,159

Total: €967m (amortized cost), €1,000m (fair value)

Majority of investments in Germany and other highly rated economies

Investment Portfolio – Exposure to banks 3

Note: bank exposure contains unsecured as well as covered bonds

Dominance of highly rated euro-denominated bonds in Talanx's bank bond portfolio

Investment Portfolio – Low valuation risks 3

Benchmarking Level 3 assets Comments ¹

• IFRS 7 requires financial instruments that are recognised at fair value to be assigned to a three-level fair-value hierarchy
• Level 3 uses input data which is not based on observable market data
• At year-end 2012, Talanx allocated 4% of financial assets measured at fair value to this category. This compares with 37% at Level 1 (unadjusted quoted prices for identical assets and liabilities in active markets) and 59% at Level 2 (measurement using inputs that are based on observable market data and are not allocated to Level 1)
• The low share of Level 3 assets relative to other categories in the fair value hierarchy as well as to peers underlines the transparency of Talanx's balance sheet

¹ Level 3 assets divided by TNAV incl. min excl. goodwill and other intangible assets (other than intangibles stemming from insurance activities) ² Peers group consists of Allianz, Axa, Generali, Munich RE, Zurich

Conservative investment portfolio with low share of Level 3 assets

Investment Portfolio – Gearing to risky assets 3

¹ Calculated as exposure to risky asset classes in % of shareholders' equity (excluding minorities; goodwill / other intangibles assets have not been deducted)

² Rating profile of corporate bonds not announced

3 Includes structured assets such as US ABS, MBS, etc.

Peer group consist of Allianz, AXA, Generali, Munich RE, Zurich

Investment Portfolio – Asset-Liability-Management 3

Preliminary duration match of bond portfolio and technical reserves 2012 (years)

Talanx employs a conservative duration matching approach

Investment Portfolio – Asset-Liability-Management 3

Economic Balance sheet (stylised)		Comments
Assets	Liabilities	 TERM (Talanx Entreprise Risk Management) - consistent and "economic" definition of effective duration:
	MCEV	TR A - Tax - MCEV
Assets	Tax	= i i i i TR = technical reserves A = assets i = interest rate i = very small increase of interest rate
	Technical Reserves	This reflects inter alia  Management rules as implemented in the certified CFO Forum compliant MCEV calculation  Burden sharing with the fiscal authorities
		 Market consistent representation of the asset duration

Effective duration also basis for the day-to-day high frequency ALM radar screen

Return on investment – Low volatility in investment yields 4

¹ Median total investment result 2008 – 2012; for consistency, total investment return is calculated incl. interest on deposits from reinsurance

² Peer group consists of,AXA, Generali, Munich RE, Zurich

Talanx compares well with peers on investment return and volatility

Model and Strategy II Industrial Lines III Retail International IV Retail Germany ^V IT Restructuring VI Reinsurance Financials, VII Investments & Capital VIII Concluding Remarks

Return on investment – Composition of investment yield 4

Total investment yield Talanx Group Comments

€m	2011	2012
Ordinary investment yield	4.0%	4.0%
thereof current investment yield from interest	3.7%	3.7%
thereof profit/loss from shares in associated companies	n.m.	0.0%
Realised net gains on investments	0.4%	0.5%
Write-ups/write-downs on investments	(0.2)%	(0.1)%
Unrealised net gains/losses on investments	0.0%	0.2%
Investment expenses	(0.2)%	(0.2)%
Total yield on investments under own management	4.0%	4.3%
Yield on investment contracts	n.m.	0.5%
Yield on funds withheld and contract deposits	2.7%	2.6%
Total investment yield	3.8%	4.1%

• In 2012, Talanx achieved a return on investments under own management of 4.3%
• Ordinary investment income makes up the majority share. In 2012, it contributed 4.0%pts to the overall return on investment
• Both realised as well as unrealised capital gains also contributed visibly to the 2012 return on investment
• We largely refrain from such extraordinary contribution in our return on investment outlook of ~3.5% in 2013

Ordinary investment income key driving force of Talanx's return on investment

Re-investment of assets – Current yields 5

Re-investment yields by segments Comments

	2012
Industrial Lines	3.7%
Retail International	5.9%
Retail Germany	3.3%
Non-life	3.3%
Life	3.3%

• In 2012, Talanx has achieved re-investment yields of well above 3% in all its primary insurance divisions
• This has not been accompanied by higher risktaking. In the course of 2012, the share of bonds with a rating of "A" or better has only slightly decreased from 86% to 83%
• International growth pays off, in particular for Retail International, which operates in regions with a more favourable interest rate and yield environment
• Investment opportunities in alternative assets such as infrastructure help improving the yield and the risk-return profile of new investments

Solid re-investment yields in a challenging interest rate environment

5

Re-investment of assets –

Opportunities in infrastructure investments

	Volume	Timing	Yield p.a.1
Amprion	€109m	2011 (25-year-contract)	~7% p.a.
IVG caverns	€55m	2013 (25-year-contract)	~5.4% p.a.
Enovos	€40m	2012 (25-year-contract)	~12% p.a.

Infrastructure assets still represent less than 1% of investments under own management, but are an increasingly important addition to our investment portfolio.

Generally, investments in infrastructure assets can be conducted as multi-asset / fund-of-funds investments, or single-asset investments

Top 3 current infrastructure investments Investment criteria for infrastructure assets

Criteria	Characteristics of infrastructure investments
Long-term, stable cash flows	Long-term concessions, regulated pricing, low price elasticity
Low volatility	Monopolistic structures, high barriers to entry
Inflation protection	Proceeds linked to CPI
Diversification	Low correlation with fixed income, stocks and real estate

Risk-averse investment approach: typically, indirect investments to leverage fund management expertise in this area, to avoid liability and reputational risks and to achieve good diversification.

In case of direct investment opportunities, we prefer co-investments to lever the experience of sector experts.

¹ Targeted yield

Infrastructure investments provide portfolio diversification at attractive yields

Re-investment of assets – Case Study: IVG Kavernenfonds II

5

for gas, oil, etc. to balance extraction /  Established manager of caverns since 40  Attractive seed portfolio of core demand differences years infrastructure assets of supply.  Independent owner of caverns in  1 oil & 6 gas caverns in northern These natural or man made Germany Germany capacities represent a cost efficient way for  Established key team since 6 years (avg.)  Single country & sector & asset category mass storage of energy sources.  Exclusive technical cavern know-how  100% pre-let  Exclusive pool of cavern users / tenants  Top tenants Exemplary illustration of cavern capacity  Lease term for oil cavern = 10 years Track record  Lease term for gas cavern >29 years 1,000m  Unlimited fund term (>25 years) 5 billion IVG-owned properties &  € develops  Technical asset life of caverns ca. 100	and enhance security underground
years  € 15.4 billion institutional & private funds 750m  € 1.1 billion caverns  No leverage (LTV 0%)	840 m
IVG Kavernenfonds I  € 800 million equity; € 1.5 billion gross 500m assets	365 m
 58 existing caverns & 12 under development 250m

Attractive investment backed by extensive internal due diligence on top of external investment advise

Capital / liquidity management – Overview 6

• One central function for capital and liquidity management
• Secure a comfortable level of liquidity at Talanx AG
• Active capital and liquidity management
• Know-how centre for capital market instruments
• Central steering of all capital markets processes in the group
• Financing of group companies at-arms-lengths
• Cost reduction in consequence of concentration of all bank relations in one function
• FX / interest rate hedging
• Investment of liquidity buffers

Realisation of efficiency and scale effects through central state-of-the-art treasury function

Capital / liquidity management – Recent market funding 6

¹ Conversion of the Tier 1 Meiji Yasuda bond

152

"Merton-rich" capital market funding established by liquid traded instruments in major market segments

Case study: successful liability management exercise 6

Capital / liquidity management – Bonds' maturity profile 6

Maturity profiles of subordinated liabilities

External bonds¹ Total subordinated liabilities

¹ Outstanding, publicly held volume of external bonds (as of 31/03/2013, €m); excluding Hannover Re

2 "HDI-Industrie" refers to HDI-Gerling Industrie Versicherung AG, "Talanx Finanz" refers to Talanx Finanz (Luxemburg) S.A., "HDI-Leben" refers to HDI-Gerling Lebensversicherung AG

Long-term funding structure

Capital / liquidity management – Capital structure 6

⁵ Peer group consist of Allianz, AXA, Baloise, Generali, Mapfre, Munich RE,

Reasonable, but no excessive use of debt leverage

Talanx – Capital Markets Day, Hannover, 17 April 2013

Capital / liquidity management – Capital structure (cont'd) 6

7

Reserving policy – Run-off results strength in primary insurance

Primary insurance segments

					Ʃ378

Positive run-off result in primary insurance from 9 out of 10 business years

Reserving policy – Run-off results strength in re-insurance 7

Non-life reinsurance segments

					Ʃ322

In 2012, the group posted a positive run-off result in its non-life reinsurance division of €322m

Highly positive run-off result with different time pattern

8

Pension accounting – Recognition of actuarial gains and losses (IAS 19)

Effects on equity (€m) Comments

The effects shown below have a (net) negative impact on Talanx's Solvency I margin of 9%. Solvency I ratio was 225% as of 2012 and would have been reduced by the effects shown below to 216%

For additional information please refer to pp. 142/143 in the Annual Report 2012

Limited impact from IAS19 amendments

• In June 2011 the IASB published amendments to IAS 19 (Employee Benefits) which were ratified by the EU on 5 June 2012
• The key amendment is the abolishment of the "corridor method": future actuarial gains and losses must now be accounted for fully under "Other Comprehensive Income" in shareholders' equity
• Moreover, calculation of the net interest income from so-called plan assets will be determined based on the discount rate rather than on the expected rate of return; past service cost is recognised immediately
• In terms of partial retirement benefit obligations, additions are no longer to be accumulated in full upon the completion of the contract, but proportionately over the working period of the recipient

Content

I	Group Business Model and Strategy	Herbert K. Haas
II	Industrial Lines	Dr. Christian Hinsch
III	Retail International	Torsten Leue
IV	Retail Germany	Dr. Heinz-Peter Roß
V	IT Restructuring	Dr. Thomas Noth
VI	Reinsurance	Ulrich Wallin
VII	Financials, Investments & Capital	Dr. Immo Querner
VIII	Concluding Remarks	Herbert K. Haas

Talanx credentials in summary

EXCELLENCE

• B2B expertise as USP
• Strong integration of all divisions
• Focus on underwriting

SOUNDNESS

• Strong solvency ratios
• State-of-the-art capital management
• TERM in final BaFin application process

GROWTH

• Strategy for Industrial Lines, Retail International and Re
• Focus on growth regions
• Intelligent combination of organic and bolt-on

PROFITABILITY

• Top-line growth from presence in growth markets
• Efficiency gains in Germany and cost synergies in Poland and Mexico
• Strategic increase of retention rate

Mid-term target matrix

Segments	Key figures	Strategic targets
	Return on equity	≥ 750 bps above risk free1
Group	Group net income growth	~ 10%
	Dividend payout ratio	35 - 45%
	Return on investment2	≥ 3.5%
Industrial Lines	Gross premium growth3	3 - 5%
	Combined ratio	≤ 96%
	EBIT margin4	≥ 10%
	Retention rate	60 - 65%
Retail Germany	Gross premium growth	≥ 0%
	Combined ratio (non-life)	≤ 97%
	New business margin (life)	≥ 2%
	EBIT margin4	≥ 4.5%
Retail International	Gross premium growth3	≥ 10%
	Combined ratio (non-life)	≤ 96%
	Value of New Business (VNB) growth	5 - 10%
	EBIT margin4	≥ 5%
Non-life reinsurance	Gross premium growth	3 - 5%
	Combined ratio	≤ 96%
	EBIT margin4	≥ 10%
	Gross premium growth3	5 - 7%
Life & health reinsurance	Value of New Business (VNB) growth	≥ 10%
	EBIT margin4 financing and longevity business	≥ 2%
	EBIT margin4 mortality and health business	≥ 6%

¹ Risk-free rate is defined as the 5-year rolling average of the 10-year German government bond yield

² Derived from actual asset duration. Currently ~ 6.5 years, therefore the minimum return is the 13-year average of 13-year German government bond yield. Annually rolling

³ Organic growth only; currency neutral

⁴ EBIT/net premium earned

162

Note: growth targets are on p.a. basis

Disclaimer

This presentation contains forward-looking statements which are based on certain assumptions, expectations and opinions of the management of Talanx AG (the "Company") or cited from third-party sources. These statements are, therefore, subject to certain known or unknown risks and uncertainties. A variety of factors, many of which are beyond the Company's control, affect the Company's business activities, business strategy, results, performance and achievements. Should one or more of these factors or risks or uncertainties materialize, actual results, performance or achievements of the Company may vary materially from those expressed or implied as being expected, anticipated, intended, planned, believed, sought, estimated or projected.in the relevant forward-looking statement.

The Company does not guarantee that the assumptions underlying such forward-looking statements are free from errors nor does the Company accept any responsibility for the the actual occurrence of the forecasted developments. The Company neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.

Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate.Presentations of the company usually contain supplemental financial measures (e.g., return on investment, return on equity, gross/net combined ratios, solvency ratios) which the Company believes to be useful performance measures but which are not recognised as measures under International Financial Reporting Standards, as adopted by the European Union ("IFRS"). Therefore, such measures should be viewed as supplemental to, but not as substitute for, balance sheet, statement of income or cash flow statement data determined in accordance with IFRS. Since not all companies define such measures in the same way, the respective measures may not be comparable to similarly-titled measures used by other companies. This presentation is dated as of 17 April 2013. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This material is being delivered in conjunction with an oral presentation by the Company and should not be taken out of context.