Talanx AG

Investor Presentation • Jun 26, 2013

Talanx Risk Management WorkshopLondon, 26 June 2013

Dr. Immo Querner, CFO Dr. Gerhard Stahl, CRO

Agenda

Registration and Coffee

I	A h d i i l t t- p p r o a c a n o r g a n s a o n a s e u p	Q D I r. m m o u e r n e r
I I	C M E V k l t t r e p o r e r e s s : y u	D G h d S h l t r. e r a r a
I I I	S C R h d l d k l t t t r e p o r : m e o o o g y a n e y r e s u s	D G h d S h l t r. e r a r a
L u n	h B k c r e a
I V	O i l i i A L M / C d i V A R t t t p e r a o n a s a o n : r e	Q D I r. m m o e r n e r u
V	S & P E R M i d B F i r e e a n a n p r o c e s s v w	G S D h d h l t r. e r a r a
V I	Q & A f i o r o p e n s s u e s

Today's speakers

Dr. Immo Querner

Immo Querner became the CFO of Talanx AG in 2006 following Talanx's acquisition of Gerling Group. He holds a university degree in engineering (Dipl.-Ing.) from Berlin Technical University (TU Berlin) as well as a Master of Philosophy from the University of St. Andrews in Scotland. In addition, he holds a doctoral degree in economics from TU Berlin.

He has started his post-university career as a management consultant at McKinsey & Company, working onprojects in various European countries, such as Germany, Switzerland, Italy, Belgium and France. In 1996, he joined the Gerling Credit Insurance Group to head the Strategy/Participations/ Outward Reinsurance department. He became the CFO of Gerling Group in 2002 and held this position until the acquisition by Talanx. Immo Querner represents Talanx at the European Insurance CFO Forum ("CFO Forum").

Dr. Gerhard Stahl

Gerhard Stahl holds the position of the Chief Risk Officer in Talanx since 2011 and heads the Group RiskManagement of the Talanx Group. After having studied mathematics, he joined the Federal Financial Supervisory Authority (BaFin) from 1995 to 2007. During this time he headed the Risk Modelling Group (QRM), the unit of the BaFin that is in charge for on-site inspections of risk management models.

Furthermore he contributes very much to the implementation of Basel II and Solvency II within regulatoryworking groups. In 2007 he joined Talanx as Deputy Chief Risk Officer. He holds an honorary doctor degree(Dr. rer. pol. h. c.) from the University of Bamberg for his scientific contributions to financial risk management. From 2008 to 2009 he was adjunct professor at the University of Ulm. Since 2010 he is adjunct professor at the Leibniz University of Hannover.

Key essentials

Talanx Risk Management set-up to reflect entrepreneurial spirit of the Group

Commitment to act in the interest of shareholders

Dedication to focus on underwriting risk

MCEV slightly up in 2012 despite the challenging economical environment

Internal model with robust and promising results

4Talanx Risk Management Workshop, London, 26 June 2013

Agenda

Registration and Coffee

I	A h d i i l t t- p p r o a c a n o r g a n s a o n a s e p u	Q D I r. m m o e r n e r u
I I	C M E V k l t t r e p o r e r e s s : y u	G S D h d h l t r. e r a r a
I I I	S C R h d l d k l t t t r e p o r m e o o o g a n e r e s s : y y u	G S D h d h l t r. e r a r a
L u n	h B k c r e a
I V	O i l i i A L M / C d i V A R t t t p e r a o n a s a o n : r e	Q D I r. m m o e r n e r u
V	S & P E R M i d B F i r e e a n a n p r o c e s s v w	G S D h d h l t r. e r a r a
V I	Q & A f i o r o p e n s s e s u

Essentials

Talanx Risk Management set-up to reflect entrepreneurial spirit of the Group

Legal entity philosophy most adequate to comply with legal and factual restrictions and requirements

Enabling managers to optimize profitability on their respective business level

Side conditions of business are intrinsicly deducted from Talanx's business model

Dedication to focus on underwriting risk

Risk management targets integral part of Group Strategy

p lo in in lue by in b le d -te ta ng rm cr ea se va s us a an f i b le h d ig im lem io f o B B- ise ta t ta t 2 t p ro g ro w an v or ou s p en n o ur ex p er
P f i t t t r o a r g e	C i l t a p a t m a n a g e m e n	R i k t s m a n a g e m e n	G h t t t r o a r g e w	H m a n r e s o r c e u u i l p o c y
1> Ro E ∅ T O P 2 0 Eu ins ro p ea n ur er s 1≥ Ro E is k- fre r e 2 in te t r te re s a 0 bp 7 5 + s	Fu l f i l l S & P "A A " i l re ire ta t ca p q u me n E f f ic ien f t u se o f i la b le ina ing av a nc ins tru ts me n	Ge i ive te t ne ra p os l e ing an nu a ar n s f i h a ba b i l i t ty p ro o w 9 0 % Su f f ic ien i l t c ta to ap i hs d t ta w n lea t t a a s n d 3, 0 0 0- te ag g re g a ho k ea r s c y Inv is k tm t r es en 5 0 % ma x.	f p im 5 0 % o r ar y G W P fro fo ig m re n ion t op er a s Se f lec ive i b le t ta p ro h in Re i l t ta g row Ge d rm an y an Re ins ur an ce	Co inu t n ou s de lop d t a ve me n n f o ion t p ro mo o wn k fo wo r rce In d iv i du l a i b i l i d ty re sp on s an ia l tre en p re ne ur ir i t sp

Source: Talanx Group Strategy as presented on the Capital Markets Day, 17 April 2013

Talanx's risk management targets reflect commitment to shareholders' interest

Talanx Risk Management Workshop, London, 26 June 2013

IV S&P ERM review

Entrepreneurial culture: Talanx's roots and ambition

Central steering combined with decentralized responsibilities…

• 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

leads to...strong entrepreneurial spirit

• 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)

Source: Capital Markets Day, 17 April 2013

Strong entrepreneurial culture across the Group to unlock full earnings potential

IV S&P ERM review

Comparable concept from three perspectives

Equity evaluated as difference between market value of assets and liabilities

For economic capital: adjustments are necessary, Talanx defines SNA:= shareholders' net assets (=A)

Three key questions for any risk manager:

Target function to maximize:

$$
A_i = \max(0; U_i - l_i)
$$

with:

• Ai = shareholders' net asset value of entity i
• Ui = enterprise value of entityi
• = leverage/liabilities of entity^{i l i}

Key questions:

• 1. How much risk to take?
• –risk tolerance and limits
• 2. What kind of risk?
• –risk categories
• 3. Who can take it?
• –allocation of risks, capital and authority

10

Target to maximize shareholder value under side conditions to be set by risk management

IV S&P ERM review

1. How much risk to take? – Target definition (I)

P(At+1≤0)<0.03%

• Talanx's risk management limits are based on a capacity to withstand a 3000-year shock to its businessTalanx'srisk limits are based on
• As a consequence, Talanx bases its internal model on a 99.97% confidence level (roughly equivalent to a "AA" rating in the Standard & Poor's Capital Model) which is significantly more strict than the 99.5% confidence level (~200-year default probability) as required under Solvency IIIn other words, Talanx bases its internal model on a 99.97% confidence level (roughly "AA"Standard capital model) which is significantly stricter than the 99.5% confidence level (~200year default probability) as required under Solvency II
• Why to voluntarily comply with stricter rules?Why voluntarily comply with stricter
• • B2B focus with a dominance of professional, institutional clientsB2B -
• Dedication to sustainably create value for shareholdersDedication to create value for

11

Business-model compliant definition of risk appetite

1. How much risk to take? – Target definition (II)

$$
P(A^_{t+1} - A^_{t} < 0) \le 10\%
$$

• Talanx is dedicated to limit the risk of an IFRS loss to 1 in 10 years
• Despite various industry and financial market burdens, the Group has been profitable in each single year since 2001

Net income of Talanx after minorities, after tax based on restated figures as shown in annual reports;2001–2003 according to US GAAP, 2004–2012 according to IFRS2Adjusted on the basis of IAS 8

*IFRS EquitySource: Capital Markets Day, 17 April 2013

Limitation of annual loss risk pre-condition for steady business development and capability to continuously pay out dividends

IV S&P ERM review

Vand BaFin process

2. What kind of risk? – Target definition

Market risk≤ ⁵⁰ %

• Talanx intends to limit the exposure to market risk to a maximum of 50%. In other words, the majority of risk exposure in which investors may invest is targeted to be underwriting risk
• The target level is derived from Merton- and Coase-based considerations on whether insurances are superior vehicles to manage investments – or, whether they are not
• Empirical evidence also underlines that low risk exposures in asset management have turned into the most value-accretive business strategy over the cycle

Target: a provider of underwriting risk rather than a "derivative" on the financial market

2. What kind of risk? – "Dos and Don'ts"

Assumption of an entrepreneurial risk in return for payment U

• insurance risk V
• investment market risks M
• operational risks

Significant external markets

• sales market
• investment
• equity capital A
• passive reinsurance
• labour market

Coase's test for value creation from a shareholder perspective

Does the (internally market-remotely organized) insurance undertaking, with its products/its production process, use capital resources in a way superior (or at least not inferior) to a direct access to the other external markets?

Are the frictional costs (e.g. controlling, administration, taxes, principal agent considerations) of internalising outsourced businesses more than offset by "synergies"?

Coase-considerations trigger decisions on make or buy, and make or avoid

15

IV S&P ERM review

2. What kind of risk? – Merton also helps! ("Diversification hurts!")

max(0; ) i ^{i i A}=U−l

Simplified Merton model. Minimal value of "0" signals the Merton option, or limited liability putoption, not to inject any further capital into an over-indebted enterprise

$$
A_i = \max(0; V_i + M_i - l_i)
$$

Enterpreneurial risk U reflects the sum of max(underwriting (V) and market (M) risk

$$
Max [0; V + M - l] \leq Max [0; V - l^] + Max [M - l + l^]
$$

\n
$$
\frac{[V + M - l] + [(V + M - l]]}{2} \leq \frac{[V - l^] + [(V - l^] + [M - l + l^] + [(M - l + l^]]}{2}
$$

\n
$$
[(V + M - l]] \leq |[V - l^] + [(M - l + l^]]
$$

\n
$$
Q.e.d. |a+b| \leq |a| + |b|
$$

Please refer to R.C. Merton, Theory of Rational Option Pricing, Bell Journal of Economics and Management Science 4 No. 1, 1973, pp. 141-183

IV S&P ERM review

2. What kind of risk? – some empirical evidence

Talanx Risk Management Workshop, London, 26 June 2013

2. What kind of risk? – Talanx positioning in hard numbers

Risk components of Talanx Group¹

(as of 31 December 2012, €m)

Figures show risk categorisation of the Talanx Group after minorities, after tax, post diversification effects as of 2012. Solvency capital requirement determined according to 99.5% security level, economic view, after minorities

Market risk well below the defined limit of 50%

IV S&P ERM review

2. What kind of risk? – impact on Talanx share

All numbers are historical beta figures. Period for beta calculation: 4 January – 31 May 2013. The peer group contains Allianz, Aviva, Axa, CNP, Generali, Munich Re, Prudential, Swiss Re and Zurich. Source: Bloomberg

Talanx €500 2042-NC-2022 8.367%:0.739 vs. iBOXX SUB (Jun 2012 - May 2013)

• Over the first five months of the year, the beta of the Talanx share was lower than for any of its peers
• The calculation excludes Q4 2012 to avoid distortions from the IPO
• In other words, the sensitivity of the share's returns to market returns, or market risk, was lowest: when the Stoxx 600 Insurance index moved 1% the Talanx share only moved by 0.42% in parallel
• A low-elasticity to market movements can also be observed for the €500m hybrid issue launched in April 2012

Lowest beta among Top 10 European insurers

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VAR

IV S&P ERM review

3. Who can take it? – decentralised entrepreneurship

"Capitalistic" mathematics

• Pure definition of capital, i.e. no subordinate debt
• Maximising (shareholder-)risk-adjusted return/capital
• Considering not only policyholder protecting – and business-essential - tail loss limits (below 0.03%), but also "operation/dividend-relevant" loss risks to be limited to 10%
• Limiting "sub-accretive" uses of capital, i.e. market risk to 50%

Entrepreneurial set up

• As much Schumpeter as possible yet as much central risk management oversight as necessary
• Swiss Solveny Test-like legal entity approach defining and limiting entity specific local and corporate out-of-bounds limits
• Co-operative risk management organisation with central risk management staff (e.g. policy, aggregation, path-identical Monte Carlo event sets), central gatekeepers (e.g. asset mangement, outward reinsurance), and capable (consistent) decentral risk management hubs

19

"Schumpeter in the box": risk management intended to reflect decentralised entrepreneurship

3. Who can take it? – anatomy of the Group (I)

Dedication to shareholder value approach on Group as well as on legal entity level

Talanx Risk Management Workshop, London, 26 June 2013

3. Who can take it? – anatomy of the Group (II)

The legal form (stock corporation) is characterized by three basic principles

Group

Liability is limited to the company's assets which privileges the controlling shareholder; the company's management is obliged to take this into account

Solo undertakings

The company's management bears the responsibility for the business and needs to take into account the minority shareholders in its decisions

Separation of insurance lines

Legal and regulatory requirements as starting point on how to set up risk management.Responsibility to pay claims falls to solo-entities in the first place, not to the Group

IV S&P ERM review

3. Who can take it? – anatomy of the Group (III)

• Create a sufficiently large number of groupwide identical scenarios for all relevant risk factors – describing the world for one year whereby groupwideriskfactors must be modelled pathwideidentical
• Revalue the assets and liabilities for each risk factor scenario at the end of the first year
• including all options and guarantees
• which in most cases requires a stochastic valuation and thus leads to a nested stochastic calculation
• Aggregate the SNAs ("at-equity consolidation")

Comments

All other approaches are shortcuts for this approach

Source: TowersWatson (Group Models by Tigran Kalberer, Michael Thomas & Michael Klüttgens)

There is also diversification in SST-like models!Diversification is more an outgoing result rather than an ingoing assumption

3. Who can take it? – anatomy of the Group (IV)

The existence of the Group has an impact on individual legal entities

• Participations
• Internal counterparty default risk on internal capital and risk transfer instruments (CRTIs)
• Group effects must be considered

Simple question: how do we represent solo-entities & group interactions?

• Define a group: a set of (at least two) legal entities bound by some type of ownership or control arrangement
• Who owns whom? - structure of ownership
• Which type of capital has been transferred between group members?
• Which risks are transferred between which group members? - risk transfer instruments: guarantees, reinsurance contracts etc.

Explicit interactions between legal entities both by means of ownership and by legally binding capitalor risk transfer instruments

Allows us to reason about solo-entity risk factors and group interactions

Source: TowersWatson (Group Models by Tigran Kalberer, Michael Thomas & Michael Klüttgens)

Talanx Risk Management bases on the legal entity approach

3. Who can take it? – Organisational set-up on Group level

On Group level, Talanx Risk Management employs 34 highly qualified specialists

Agenda

SCR report: methodology and key resultsS&P ERM review and BaFin processQ&A for open issuesApproach and organisational set-upMCEV report: key resultsLunch BreakOperationalisation: ALM/Credit VARIIIIIIVVVIDr. Gerhard StahlRegistration and Coffee

Essentials

MCEV slightly up in 2012 despite the challenging economic environment

MCEV model has been further improved and fine-tuned

Acquisitions in foreign retail business positively contribute to the MCEV

Interest rate sensitivity further reduced by hedges closed in 2013

IV S&P ERM review

Changes in methodology and market environment

Economic assumptions [currency EUR] - 2012

Yield curve extrapolation with Smith-Wilson method:

• Ultimative forward rate (UFR) 4.2%
• Extrapolation entry point 20 years, UFR reached after maturity of 60 years
• Extrapolation parameter 0.2

Illiquidity premium:

• Basis illiquidity premium of 44 bps calibrated in line with QIS5 methodology (50/40 formula)
• Usage: 100% annuities, 75% traditional, 0% unit linked without guaranties
• Illiquidity premium of 29 bps (74 bps in 2011) applied to primary insurance, due to composition of portfolio
• No illiquidity premium applied for reinsurance

Assumptions of Talanx are comparable with peers

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VARIV S&P ERM review ^V and BaFin process VI Q&A for open issues

Talanx MCEV 2012

	Pr im ar	in Re in su ra nc e su ra nc e y		Ta lan x		C ha ng e
	2 0 1 2	2 0 1 1	2 0 1 2	2 0 1 1	2 0 1 2	2 0 1 1	C ha ng e
	€m	€m	€m	€m	€m	€m	%
Ne lu ( N A V ) t a t v ss e a e	1, 0 7 2. 1	7 9 4. 0	5 0 3. 6	5 6 4. 7	1, 5 7 5. 6	1, 3 5 8. 7	1 6. 0
Pr lue f fu f i t v tu ts es en a o re p ro ( in iva len ) ta ty t ce r eq u	9 0 9. 7	1, 0 4 8. 6	1, 3 4 4. 7	1, 2 4 0. 6	2, 2 5 4. 4	2, 2 8 9. 2	-1 5
F ina ia l o ion d g t te nc p s a n ua ra n es ( F O Gs )	-7 0 5. 7	-6 7 9. 0	-7 9	-6 9	-7 1 3. 7	-6 8 5. 8	-4 1
Co f r i du l n -h dg b le is ks t o s es a on e ea r ( Co R N H R )	-1 2 4. 0	-6 7. 4	-2 1 4. 9	-2 0 8. 4	-3 3 8. 9	-2 7 5. 8	-2 2. 9
Co f r ire d c i l ( Co R C ) t o ta s eq u ap	-3 3. 7	-6 3. 7	1. 6 -5	-4 9. 9	-8 2 5.	-1 1 3. 6	2 0 5.
Lo k hr h a d o he d j t t tm ts o ou g n r a us en	7 4. 3	-2 3. 0	-3 9. 4	-3 7. 1	3 4. 9	-6 0. 1	1 5 8. 1
Va lu in -fo ( V I F ) e rc e	1 2 0. 6	5. 2 1 4	1, 0 3 0, 9	9 3 8. 4	5 5 1, 1 1.	5 1, 1 3. 8	-0 2
C f in i ies M E V te t a r m or	1, 1 9 2. 6	1, 0 0 9. 4	1, 5 3 4. 5	1, 5 0 3. 1	2, 7 2 7. 1	2, 5 1 2. 5	8. 5

Note: All values are displayed after minorities.

MCEV of €2.7bn reflects life business of primary insurance and reinsurance

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VARIV S&P ERM review

Vand BaFin process

Movement of Embedded Value

Movement of Embedded Value (€m)

MCEV slightly up in 2012 despite the challenging economic environment

Talanx Risk Management Workshop, London, 26 June 2013

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VAR

IV S&P ERM review ^V and BaFin process VI Q&A for open issues

Analysis of Change

	Pri ma	ins ry ura	nce	Re ins ura nce		Ta lan x
	C1 FS +R	2 VIF	To tal	FS +R C	VIF	To tal	To tal
	€m	€m	€m	€m	€m	€m	€m
Op ing MC EV en	794 .0	215 .4	1, 009 .4	564 .7	938 .4	1, 503 .1	2, 512 .5
Ca ital inje ctio p n	-	-	-	-0.0	-	-0.0	-0.0
Div ide nd nts pay me	-66 .7	-	-66 .7	-	-	-	-66 .7
Ch e in cha rat ang cu rre ncy ex nge es	-	-	-	-3.2	-0.5	-3.7	-3.7
Oth imp lica tion er s	-	-	-	-	-	-	-
Ad jus ted ing ark sis et c ten t op en m on bed ded lue ( MC EV ) em va	727 .3	215 .4	942 .7	561 .5	937 .9	1, 499 .4	2, 442 .1
Ne w b usi alu nes s v e	-2.2	67. 7	65. 4	-64 .1	217 .9	153 .8	219 .2
Exp ed exi stin bus ine trib utio ect g ss con n (re fere e) rat nce	-	142 .4	142 .4	9.0	37. 1	46. 1	188 .5
Exp ect ed exi stin bus ine trib utio g ss con n ( of r efe ) in e rate xce ss ren ce	-	28. 1	28. 1	9.6	-	9.6	37. 7
Tra nsf fro m V IF a nd RC FS to ers	118 .3	-11 8.3	-	90. 2	-90 .2	0.0	0.0
Exp erie rian nce va ce	27. 8	-21 .3	6.4	-66 .7	-23 .0	-89 .7	-83 .3
Ass tion ch um p ang es	-	133 .8	133 .8	-93 .4	-48 .2	-14 1.6	-7.7
Oth atin aria er o per g v nce	26. 0	-67 .2	-93 .2	1.5	-12 .8	-11 .3	-10 4.5
MC Op tin EV rni era g ea ngs	117 .9	165 .1	283 .0	-11 3.9	80. 9	-33 .0	250 .0
Eco ic v aria nom nce s	-2.7	-18 5.0	-18 7.6	160 .2	7.0	167 .2	-20 .4
Oth ting rian er non op era va ce	-3.4	-86 .8	-90 .2	-0.0	5.2	5.2	-85 .0
To tal MC EV rni ea ngs	111 .8	-10 6.6	5.2	46. 2	93. 0	139 .3	144 .5
Clo sin dju stm ent g a s	233 .0	11. 7	244 .7	-10 4.2	-	-10 4.2	140 .5
Ca ital inj ect ion p	239 .6	11. 7	251 .3	-76 .9	-	-76 .9	174 .4
Div ide nd nts pay me	-6.6	0.0	-6.6	-27 .3	-	-27 .3	-33 .9
Clo MC sin EV aft min ori ties g er	1, 072 .1	120 .6	1, 192 .6	503 .6	1, 030 .9	1, 534 .5	2, 727 .1

Comments

Primary segment:

• Development of MCEV impacted by an unfavourable economic environment
• Negative impact overcompensated by the new activities, changes to assumptions in light of actual experience, reduction of risk, and the value of new business
• Impact from acquisitions of €132m³

Reinsurance segment:

• High return on MCEV by excellent value of new business, positive experiences on investment return as well as higher NAV and VIF due to downward shift of yield curve
• New business value mainly from the US, Bermudian and Irish business

FS = free surplus, RC = required capital, ² VIF = value-in-force, ³ net effect mainly from the acquisitions of Warta and TU Europa and the disposal of Aspecta Liechtenstein

MCEV slightly up in 2012 despite the challenging economic environment

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VARIV S&P ERM review ^V and BaFin process VI Q&A for open issues

New business

	Pri	ins ma ry ura nce		Re ins ura nce		Ta lan x
	201 2	201 1	201 2	201 1	201 2	201 1	Ch ang e
	€m	€m	€m	€m	€m	€m	%
Pro fit/L Ne w b usi oss on nes s	-2.2	-4.5	-64 .1	-82 .6	-66 .4	-87 .1	23. 8
ts ( t) Pre t va lue of futu rofi tain ty e iva len sen re p cer qu	100 .7	104 .7	246 .0	245 .2	346 .6	349 .9	-0.9
Fin ial tion nd s ( FO Gs ) tee anc op s a gua ran	-18 .1	-29 .0	0.0	0.0	-18 .1	-29 .0	37. 4
Co f re sid ual n-h edg eab le r isks ( Co RN HR ) st o no	-11 .7	-5. 1	-18 .8	-31 .1	-30 .5	-36 .2	15. 7
Co f re ired ital ( Co RC ) st o qu ca p	-2.2	-1.2	-5.5	-10 .7	-7.7	-11 .9	35. 1
Loo k th h a nd oth dju stm ent rou g er a s	-1.0	-6.4	-3.7	-4.7	-4.7	-11 .0	8 57.
fte Ne w b usi alu ino riti nes s v e a r m es	65. 4	58. 5	153 .8	116 .2	219 .2	174 .6	25. 5
	%	%	%	%	%	%	%
Ne w b usi in nes s m arg	1.6 8	1.5 1	5.8 2	3.2 8	3.3 5	2.3 5	42. 5

Values exclude the NBV of the new acquisitions in Poland.

Comments

Primary segment:

• Slight increase in new business value
• Decrease of FOGs for Retail Germany, partly offset by an increase in the CoRNHR due to refinements in the model
• Moderate increase in new business margins due to lower guaranteed interest rates in Germany

Reinsurance segment:

• Significant increase in new business value mainly caused by innovative structured Yearly Renewable Term transactions and Mortality Solutions business underwritten by the US, Bermudian and Irish subsidiaries
• Increase in new business margins for domestic operations and foreign operations by the US, Bermudian and Irish subsidiaries

Increase of Talanx's new business value by 25.5%

MCEV sensitivity analysis

	Pr im in ar y su ra nc e 2 0 1 2	Re in su ra nc e 2 0 1 2	Ta lan x 2 0 1 2
	€m	€m	€m
C M E V f ino i ies te t a r m r	1, 1 9 2. 6	1, 5 3 4. 5	2, 7 2 7. 1
	%	%	%
/ ( ) Mo l i Mo b i d i 5 % i ta ty ty ty r r no n- an nu +	-3 5	-3 3. 4	-2 0. 3
Mo l i / Mo b i d i % ( i ) ta ty ty -5 ty r r no n- an nu	3. 3	3 6. 0	2 1. 7
Mo l i % ( i ) ta ty 5 ty r + an nu	3. 1	3. 6	3. 4
( ) Mo l i -5 % i ta ty ty r an nu	-3 3	-3 8	-3 6
La 1 0 % te p se ra +	-1 3	-1 2. 3	-7 5
La -1 0 % te p se ra	1. 4	8. 3	5. 3
Ma in 1 0 % te na nc e e xp en se s +	-9 2	-3 2	8 -5
Ma in 1 0 % te na nc e e xp en se s -	8. 9	2. 9	5. 5
Y ie l d c 1 % urv e +	3 2. 4	-7 5	1 0. 0
Y ie l d c 1 % urv e -	-7 5. 3	9. 0	-2 7. 8
Sw ion im l ie d v la i l i ies t t t 2 5 % ap p o +	-1 6. 5	-0 3	-7 4
Eq i d lue 1 0 % ty ty u an p ro p er va +	4. 9	0. 1	2. 2
Eq i d lue ty ty 1 0 % u an p ro p er va -	-5 2	-0 1	-2 3
Eq i ion la i l i ies 2 % ty t t t 5 u op vo +	3. 8	0. 0	1. 6

Diversification effect between primary and reinsurance, namely in interest rate sensitivity

IV S&P ERM review

Vand BaFin process

VI Q&A for open issues

New Business Value sensitivity analysis

	im in Pr ar su ra nc e y 2 0 1 2	in Re su ra nc e 2 0 1 2	Ta lan x 2 0 1 2
	€m	€m	€m
Ne Bu ine Va lue ( N B V ) f ino i ies te t w s ss a r m r	6 5. 4	1 5 3. 8	2 1 9. 2
	%	%	%
/ Mo l i Mo b i d i % ( i ) ta ty ty 5 ty r r + no n- an nu	-9 0	-2 7. 5	-2 2. 0
Mo l i / Mo b i d i ( i ) ta ty ty -5 % ty r r no n- an nu	6. 5	2 6. 7	2 0. 7
Mo l i ( i ) ta ty 5 % ty r + an nu	2. 5	1. 1	1. 5
( ) Mo l i -5 % i ta ty ty r an nu	-3 0	-1 2	-1 7
La te 1 0 % p se ra +	-6 7	-7 4	-7 2
La -1 0 % te p se ra	0 5.	6. 0	5. 7
Ma in te 1 0 % na nc e e xp en se s +	-1 6. 7	-3 2	-7 3
Ma in 1 0 % te na nc e e xp en se s -	1 2. 7	3. 6	6. 3
Y ie l d c 1 % urv e +	4 3. 1	-9 2	6. 4
Y ie l d c 1 % urv e -	-9 6. 9	9. 7	-2 0. 0
Sw ion im l ie d v la i l i ies 2 5 % t t t ap p o +	-1 7. 6	0. 0	-5 3
Eq i d lue 1 0 % ty ty u an p ro p er va +	4. 4	0. 0	1. 3
Eq i d lue 1 0 % ty ty an p ro p er va u -	-5 2	0. 0	-1 6
Eq i ion la i l i ies ty t t t 2 5 % op vo + u	4. 1	0. 0	1. 2

Diversification effect on interest rate sensitivity also in NBV between primary and reinsurance

Effective duration concept

Talanx employs a conservative duration matching approach

Talanx Risk Management Workshop, London, 26 June 2013

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VARIV S&P ERM review ^V and BaFin process VI Q&A for open issues

Effective duration concept

E i b l h ( l i d ) t t c o n o m c a a n c e s e e s s e y		C t o m m e n s
A t s s e s	L i b i l i i t a e s	( ) T E R M T l E i R i k M t t a a n n e r p r s e s a n a g e m e n x - i d "e i " d f i i i f t t t c o n s s e n a n c o n o m c e n o n o f f i d i t t e e c v e u r a o n :
	M C E V	T R A T M C E V ∆ ∆ t ∆ ∆ s s e s a x = - -
	T a x	i i i i ∆ ∆ ∆ ∆ T R h i l t e c n c a r e s e r v e s =
		i = i t t t n e r e s r a e
A t s s e s		f i = l l i i ∆ t t t e r s m a n c r e a s e o n e r e s r a e v y
		T h i f l i l i t t s r e e c s n e r a a
	T h i l R e c n c a e s e rv e s	M l i l d i h t t t a n a g e m e n r e s a s m p e m e n e n e u i f i d C F O F l i M C E V t t c e r e o r u m c o m p a n l l i t c a c a o n u
		B d h i i h h f i l h i i t t t t u r e n s a r n g w e s c a a u o r e s
		M k i i f h t t t t t t t a r e c o n s s e n r e p r e s e n a o n o e a s s e d i t r a o n u

Source: Capital Markets Day, 17 April 2013

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

Please also see Section IV on the application of ALM/Credit VARs

Hedging measures taken in 2013 have further reduced interest rate sensitivity by 17%

Agenda

SCR report: methodology and key resultsS&P ERM review and BaFin processQ&A for open issuesApproach and organisational set-upMCEV report: key resultsLunch BreakOperationalisation: ALM/Credit VARIIIIIIVVVIDr. Gerhard StahlRegistration and Coffee

Preliminary remarks

As of the reporting date 31 December 2012, Talanx performed a group internal model run (TERM* 2012)

The results presented in the following are taken from the Group model TERM 2012 based on the first validation

The Group results referring to the forecast distribution (e.g. solvency capital requirement or correlation) are derived from a semi-parametric model

This semi-parametric model allows for a straightforward aggregation of results calculated by solo entities via correlation matrices which reflect the experience of former model runs

* TERM = Talanx Enterprise Risk Model

IV S&P ERM review

Vand BaFin process

TERM – Talanx's Reporting Views

HGI

TxD

• only risk carriers are considered, stand alone, based on solo delivery
• Hannover Re considered as stand alone group
• no Talanx / HDI-Group

41

Tax according to economic reality (Solo level)

HGI = HDI-Gerling Industrie Versicherung AG, TxD = Talanx Deutschland AG, TINT = Talanx International AG, HR = Hannover Rückversicherung AG

The Economic View is the main reporting view of Talanx

TINT HR

II MCEV report: key results SCR report: methodology and key results III Operationalisation: ALM/Credit VAR

IV S&P ERM review

V

and BaFin process

economic view, after minorities

Approach and organisational set-up

Talanx Risk Management Workshop, London, 26 June 2013

economic view, after minorities

Talanx Risk Management Workshop, London, 26 June 2013

Solvency capital requirements (SCR) by division and segments

• High diversification effect of 40% among primary divisions
• The Group benefits from a diversification effect of 22% between primary insurance and reinsurance
• This corresponds to an absolute amount of €0.5bn
• At a 99.97% security level, the SCR amounts to €3,371m resulting in a capital adequacy ratio of 196%

Solvency capital requirement; determined according to 99.5% security level, economic view, after minorities

Solvency capital requirement split into components and segments

Figures show risk categorisation of the Talanx Group after minorities, after tax, post diversification effects as of 2012. Solvency capital requirement determined according to 99.5% security level, economic view, after minorities

High diversification between primary insurance and reinsurance in non-life risk

Diversification benefits

Talanx Group profits from high diversification between divisions; especially Reinsurance shows a low correlation with other divisions

Result history 2010 – 2012 (Economic View: after minorities, no LLPO)

Comments

• Own funds increase significantly from €5.6bn (31 Dec 2011) to €6.6bn end-2012
• Change in own funds from 2011 to 2012 largely due to the Talanx IPO, the Polish acquisitions and the increase in equity capital in Reinsurance
• Diversification effect increases vs. last year

Increase in CAR mainly results from rise in own funds; SCR robust over time

47

Sensitivity of Solvency Capital Ratios (I): effect frominclusion of subordinated liabilities into Own Funds

Inclusion of subordinated liabilities

• In the Economic View, subordinated liablities are not included in own funds
• Subordinated liabilities would lead to an increase in own funds of roughly €2bn
• Inclusion of subordinated liabilities leads to an increase in the capital adequacy ratio of more than 100% to 456%
• Consideration of subordinated liabilities has no influence on solvency capital requirements

Talanx Economic View is conservative in not including subordinated liabilities

Sensitivity of Solvency Capital Ratios (II): effect from regulatory availability constraints on CAR (haircut)

Solvency capital requirement; determined according to 99.5% security level, regulatory view, before minorities

Talanx CAR at comfortable level even after haircut

IV S&P ERM review

Vand BaFin process

VI Q&A for open issues

Sensitivity of Solvency Capital Ratios (III): effect fromdifferent SCR definitions

	S C R	C A R
O F d V A R w n u n s -	1. 8	3 7 7 %
E d l V A R t x p e c e v a u e –	1. 9	3 1 % 5

Regulatory uncertainty concerning the procedure to apply. Talanx chooses the more conservative approach

Which model adjustments are in the pipeline

Improvements for future model runs:

• Inclusion of Warta based on an internal model
• Ability to perform model runs sub-annually within the next two years:
• – superior application of the internal model within the enterprise risk management
• –improving the fulfillment of USE-test requirements
• Adjustments of market volatilities in a conservative manner

Constant improvements of models and processes

Benefits of the internal model as a steering tool

• The benefits are the higher, the better "economic reality" is captured
• More realistic view of the Group by applying the Economic View. For regulatory purposes some adjustments have to be made
• Standard approaches would lead to misallocation of risk budgets:
• an internal model features more realistic diversification effects
• risk from NatCat is not appropriately captured by standard approaches
• The model is interlinked with the planning process

HGI = HDI-Gerling Industrie Versicherung AG, TxD = Talanx Deutschland AG, TINT = Talanx International AG, HR = Hannover Rückversicherung AG

Core business of an insurer is risk, therefore state-of-the-art risk models should be applied

	C i l A d R i ( S l I ) t t a p a e q u a c y a o o v e n c y	C i l A d R i ( S l I I ) t t a p a e q u a c y a o o v e n c y
2	1	2
0	9	7
1	9	7
1	%	%
2	2	3
0	2	5
1	5	1
2	%	%

Internal models capture the risk situation more appropriately

To which extent do regulators limit potential capital savings relative to standard models?

Currently, insurers do not face dramatic constraints relative to standard models, however…

… due to regulatory uncertainty it is not yet finally clarified which limitations result from the haircut

… standard methods are based on some non-conservative asssumptions (e.g. non-defaultable government bonds)

Eventually, non-conservative assumptions do not reflect the economic common sense and can therefore not be seen as a limitation

No significant limitations in comparison to standard models

Agenda

VI

SCR report: methodology and key resultsS&P ERM review and BaFin processApproach and organisational set-upMCEV report: key resultsLunch BreakOperationalisation: ALM/Credit VARIIIIIIVVDr. Immo QuernerRegistration and Coffee

Q&A for open issues

Essentials

Analysis and steering of asset management decisions in the context of ALM management and corporate/credit risk positioning

Intra-year tool: dedication to analyse and steer continuously during the whole year

Allowing for a frequent, fast and robust assessment

Safe-guarding the shareholders' net assets continuously throughout the year

Operationalisation of TERM, SCR, MCEV etc.

• 1. Asking essentially the same question "what does it mean for my economic risk position?" but particularly when it comes to Asset Management
• more frequent
• faster ("pre-trade")
• much more disaggregated
• scalable
• easily "limitable"
• robust operational IT-environment
• 1. The two main asset management levers are
• horizontal matching, in particular duration/convexity matching
• exposure to credit/corporate risk

Solution for the ALM challenge: ALM VAR

• ALM VAR is calculated as VAR of a long short portfolio consisting of
• long positions in all assets under management
• short positions in liability positions, where each cash flow corresponds to a (MCEV-consistent) liability position
• Modeling of long short portfolios combines benefits of
• Standard asset management models (Sungard APT©) which take into account detailed cash flow information and a large set of risk factors at a position level and
• Consistent modeling of the impact of different risk factors on market value of assets and liabilities
• Stand-alone interest rate risk of an existing duration/convexity gap between assets and liabilities is separated by an additional interest-only ALM VAR, where spreads an other risk factors are faded out

Establishing a day-to-day proven concept

60

ALM VAR: Highlights

• Simulation based on the ALM VAR incorporates not only parallel shifts of the yield curve but also twists, butterflies, etc.
• ALM VAR incorporates cash flow structures of assets and liabilities, so different cash flow structures having same duration lead to different risk profiles:

Duration of cash flow structure 1 = Duration of cash flow structure 2butValue-at-Risk of cash flow structure 1 <> Value-at-Risk of cash flow structure 2

IV S&P ERM review

Vand BaFin process

Operationalisation of credit risk

"market consitent", i.e. spread implied ("PIT") and/or rating consistent ("TTC")

2 more conservative approach in comparison to the EIOPA Proposal for the Solvency II standard approachPD = probability of default

LGD = loss-given default

Vand BaFin process

VI Q&A for open issues

Portfolio credit risk monitoringRecognition of potential critical concentrations

Instruments

• Credit- and concentration risk are aggregated to risk numbers Expected Loss and Credit VAR
• 1. Expected Loss: credit risk provision
• 2. Credit VAR:

potential portfolio credit risk"with a probability of 99.5% the loss from credit risk doesn't exceed the Credit VAR" on the basis of "Moodys/KMV©"

Benefit for Asset Manager

• Analysis of Key Risks
• 1. Which single obligors are responsible for potential high portfolio losses?
• 1. In which industries / countries / products are high concentrations?
• Unwanted risk are identified and can be avoided
• Stresstests simulate portfolio losses in extreme situations
• Threshold and escalation process

Robust implementation of the basis of standard industry tools

Bringing all together in a Portfolio Loss Distribution

Typical loss pattern of credit risk portfolios

Simulation: portfolio with identical expected loss, but different portfolio risk

Possibility to define various Credit VAR Scenarios / Stress testing (e.g.)

I d e a	f " M i d l t e a s u r n g u n a m e n a " d i i k t c r e r s	" M i k i l i d t- e a s u r n g m a r e m p e " d i i k t c r e r s
P t a r a m e e r	E i i l d f l t m p r c a a v e r a g e e a u b b i l i i d i i t t t p r o a e s a n r a n s o n ( ) b d i t t r a e s a s e o n r a n g s	M k i l i d d f l t- t a r e m p e e a u b b i l i i d d i t p r o a e s a n y n a m c ( i i b d t t t r a n s o n r a e s a s e o n ) d i d d l i l i t t t c r e s p r e a s a n o a v y
U s a g e	P f l i / i t o r o o s s u e r l i i i d i t t m a o n a n e c o n o m c i l h i t c a p a c s o n u	E l i a r y w a r n n g m e a s u r e

Objective:

• credit risk measurement on external ratings is relative stable
• supplementary scenarios (e.g. market-implied probability of defaults (PD)) allow for early reactions to potential deterioration of credit quality

Controlling the risks of the markets ...

... integrated investment and risk management process

f i P l t o r o o M t a n a g e m e n	i i L t m l t c o n r o s	i R k s l t c o n r o s	R i t e p o r n g
R i k M t s a n a g e m e n E h k t a n e c e c s o n x- l l l i i i l d i t a m s n c u n g i t t n v e s m e n h h l d t r e s o s M i h k t t t e e n g e m a r e i t r e q u r e m e n s	M i i h t t o n o r n g e k i t t m a r e r e q u r e m e n s E h k f t x- p o s c e c s o i t t n v e s m e n h h l d t r e s o s	f M i i l l t o n o r n g o a i i f i i k t s g n c a n r s s L i i f t t m s y s e m o r i i f i i k t e v e r y s g n c a n r s C i t t a r r y n g o u s r e s s f l l t t e s s o r a i i f i i k t s g n c a n r s s ( i l, b t t e x c e p o n a u = ) l i b l t p a s e e e n s u v T k i i t t a n g n o a c c o n u i k i t t r s c o n c e n r a o n	I d i t m m e a e l i h t t t e s c a a o n o e B d h i i l t o a r e n c r c a w f i i i k t n o r m a o n o n a r s i i t t s u a o n R l i t t e g u a r r e p o r n g o h B d h i k t t e o a r o n e r s i i d h t t s a o n, a e r e n c e u l i i d t t o m s a n o n i f t q u e s o n s o h d l t m e o o o g y Q l i k t t a r e r r s r e p o r u y h S i t t o e u p e r v s o r y B d o a r

Risk profile derived from investment strategy

Fully implemented in day-to-day routine processes

Limiting and managing day-to-day risk

Segmental limits …

• 1. Top-down limits for ALM-Risks
• holistic in % of AuM
• sublimit for pure interest rate ALM risk for German life insurers % of AuM
• 1. Top-down limits for credit risks
• portfolio limit in % of AuM
• issuer limit in % of AuM
• 1. Consistent with TERM
• logic/structure/drivers
• concrete numbers

… and opportunities

• 1. More decentral empowerment, i.e. no micro-management bossing around with "uneconomic" micro limits
• 1. Managing "off-sets"(Is Slovenia a better portfolio addition than Schaeffler?)
• 1. Incentive "to get the biggest bang for the buck" (no incentive to waste riskcapacity on concentration risk)
• 1. Swift evaluation of complicated structures

Risk management allowing for entrepreneurial spirit: "Freedom within boundaries"

Agenda

Registration and Coffee

I	A h d i i l t t- p p r o a c a n o r g a n s a o n a s e p u	Q D I r. m m o e r n e r u
I I	C M E V k l t t r e p o r e r e s s : y u	G S D h d h l t r. e r a r a
I I I	S C R h d l d k l t t t r e p o r m e o o o g a n e r e s s : y y u	G S D h d h l t r. e r a r a
L n u	h B k c r e a
I V	O / C i l i i A L M d i V A R t t t p e r a o n a s a o n r e :	Q D I r. m m o e r n e r u
V	S & P E R M i d B F i r e e a n a n p r o c e s s v w	G S D h d h l t r. e r a r a
V I	Q & A f i o r o p e n s s e s u

Model landscape of TERM

Co-movements of risk factors

• The Talanx applies the following input models:
• –Economic Scenario Generator (ESG)
• –Global Event Set (GES) – Scenarios for natural catastrophes
• –Reinsurance default
• –Operational risk
• Biometric risks
• Reinsurance default and GES risk categories are assumed to be independent
• Reinsurance default and ESG are dependent
• The business model defines the interaction between risk categories, e. g. interest rates and inflation, both influence the asset and liability side. No further assumptions about correlations of business lines, etc. are explicitelymade
• The question of correlation across solo entities is answered by the comovements of risk drivers

• The validation of correlation is achieved by backtesting SCR results at solo, division and group level as well. The results over four-year-experience have shown no evidence against our diversification benefits. Furthermore correlations within an input model are valid

• An empirical analysis has shown that model risk related to our entities approachis less compared to those approaches based on risk categories

• Our main drivers are risks related to GES and ESG, where we apply standardcalibrations from the provider. Hence we do not manipulate these implicit correlations and use these models as the market in general will do. Hence no particular Talanx induced bias will come into play
• The correlations in GEMS (GEMS® Economic Scenario Calculator) are validated by an internal validation process
• GES is validated by Hannover Re
• Compared to the validation of co-movements of entities our approach has the advantage that sufficient time series are available in order to judge the validity of co-movements of risk drivers

Correlations of risk drivers are validated;the model risk in solo-entity approach is smaller than that based on risk categories

Talanx Primary Group rating confirmed under new S&P methodology

"We regard TPG's enterprise risk management (ERM) and management and governance practices as neutral for the ratings. However, our view of TPG'sERM as strong contributes to our more favorable anchor assessment and reflects our favourable view of the group's riskmanagement culture, risk controls, and strategic and emerging risk management of this expanding organization."

"We assess TPG's capital and earnings as very strong. In 2012, TPG's capital adequacy was within our range for the 'AA' rating level. In our base case, we anticipate that TPG will maintain this level of capitalization in 2013-2015."

*) Insurance Industry And Country Risk AssessmentSource: Standard & Poor´s, Rating Report, 12 June 2013

73

Assessment of Talanx Primary Group's ERM in detail

C t a e g o r y	A t s s e s s m e n T l a a n x i P G r m a r y r o u p
R i k t s m a n a g e m e n l t c r e u u	"s " t r o n g
R i k l t s c o n r o s : C d i i k t r e r s M k i k t a r e r s A L M / C U d i i i k ( P ) t n e r r n g r s w R i i k e s e r v n g r s N C i k t t a a r s R i e n s r a n c e u	"s " t r o n g "s " t r o n g "s " t r o n g "a d " t e q a e u "s " t r o n g "s " t r o n g "s " t r o n g
E i R i k m e r g n g s M t a n a g e m e n	"s " t r o n g
G 's R i k d l r o u p s m o e ( ) T E R M	"s " t r o n g
S i R i k t t r a e g c s M t a n a g e m e n	"s " t r o n g
E i R i k t n e r p r s e s M ( E R M ) t a n a g e m e n	"s " t r o n g

Enterprise Risk Management: Further Progress Made And Now Viewed As Strong

"We now consider TPG's ERM to be strong following the recent developments toward a harmonized ERM framework at group level. We think it is unlikely that TPG will experience losses that are in excess of its risk tolerance. ERM is of very high importance to the rating on TPG, which operates in complex and potentially volatile business lines and is highly exposed to the competitive German insurance market. The major factors supporting our overall ERM assessment are the group's strong risk management culture, strong risk controls for the main risks, strong risk models, and strong strategic risk management."

Source: Standard & Poor´s, Rating Report, 28 September 2012

74

Talanx Risk Management Workshop, London, 26 June 2013

The Level III Review analyses in detail the Insurer's Economic Capital Model

76

Chances fromthe ERM Level III Review

Comments

• The ERM Level III Review by Standard & Poor's assesses whether an Economic Capital Model is robust and reliable and whether it is fully integrated in the decision-making process of a group
• If Standard & Poor's comes to a positive assessment, credit might be given for the internal model
• The outcome could be a reduced capital requirement in the Standard & Poor's capital model, the weighting would be conducted via the "M-Factor"

ERM Level III assessment of Standard & Poor's could trigger capital saving for the Group

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 allcompanies 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 26 June 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.