Hans Petter Madsen

Managing director

21 August 2015

DNB Insurance

Agenda

DNB Insurance business area

DNBs competitive advantage

Growth versus profitability

Development in the competitive environment

Impact of new technology

DNB Insurance business area

DNB Insurance AS

P&C Personal lines

Premium portfolio NOK 2 billions

DNB Life Insurance AS

Workmen compensation and group life

Individual Life and disability

Premium portfolio NOK 1.2 billions

DNB runs the insurance business area as one unit, disregarding the formal company structure

• Focus on products with similar risk structure, one management team.

• Organized in the Product division in the DNB Group

DNBs competitive advantage

Branches Customer centre eBusiness

Financial advisors Customer service

and Interactive Web Open pages Logged in

Insurance

advisor Mobile

5 000 000 100 000 50 000 3 000 75 000

Our strategy is being a quality provider based on the DNB Group’s customer flow

Awarded by Aftenposten, Dagbladet and Norsk Familieøkonomi!

Growth versus profitability

• Substantial improvement in pre-tax profit

since 2009

• Portfolio premium increased by MNOK

1,229 since 2009

• # Customers 214,500 as of June 2015

• Reduction in “Academic-portfolio”

portfolio by MNOK 92 (19.4%) since

year-end.

2009 2010 2011 2012 2013 2014 1H 2015

Pre-tax profit -100 -178 31 203 240 242 94

-200

-100

0

100

200

300

Pre-tax profit

2008 2009 2010 2011 2012 2013 201430/06/2015

Portfolio premium 743 978 1173 1486 1656 1816 1996 1972

0

500

1000

1500

2000

2500

Portfolio premium

How will DNB adapt to lower income from financial portfolio?

DNB distributes mainly

short tailed products, which

causes lower impact on

reduction in interest rates

than the P&C market in

general

To compensate for 1%

decrease in interest rate,

combined ratio has to

improve by 1%.

Low risk profile in the

investment portfolio,

continuously under

consideration

Solvency II

SCR MCR Solvency I

Solvency capital 823 712 594

Capital requirement 549 249 287

Solvency margin 274 463 307

Capital in % of

requirement

150 % 286 % 207 %

• DNB participated in the SII test reporting in week 22

• The reports show no dramatic reduction in solvency margin from SI to SII.

• Still uncertainty with regards to regulatory issues, such as:

• Calculated tax on capital requirements

• Inclusion of guarantee reserve in solvency capital

• Tax related to dissolution of security reserves

Growth versus profitability

-

5

10

15

20

25

30

35

2008 2009 2010 2011 2012 2013 2014 2015*

If Gjensidige

Tryg Sparebank 1

Other companies

Market share-loss for the largest companies ... and DNB with the most significant growth

-

1

2

3

4

5

6

2008 2009 2010 2011 2012 2013 2014 2015*

DNB Storebrand Codan

Eika Frende

*as of 2nd. quarter 2015

Price development and market concentration

0.00

0.05

0.10

0.15

0.20

0.25

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Q2-08 Q2-09 Q2-10 Q2-11 Q2-12 Q2-13 Q2-14 Q2-15

Growth average premium [y/y] Herfindahl–Hirschman Index

• Decline in market

concentration(HH-index)

• Under 15% indicates an

unconcentrated market

• Decrease in price growth

Motor

Development in the competitive environment - motor

10

15

20

25

30

Bancassurance

40

50

60

70

80

"The big three"

- 1 2 3 4 5 6

"Membership insurance"

-

5

10

15

“Price focus”

% %

% %

Willingness to invest in sophisticated prices • Historical data

• Investment in analytical tools

• Capacity of highly trained actuaries

• Investment in external data

Illustrative example

Why DNB will not flatten out in the near future

SMB, Corporate

LCI

Private banking

Autolease

Health

Loan insurance

DNB Forsikring,

personal lines DNB Forsikring,

personal lines

Future potential

Digitalization

14 000 000