The Executive Partnership Program

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This brochure summarizes the key provisions of the Liberty Mutual Executive Partnership Program (2016 Executive Partnership Plan and Executive Partnership Deferred Compensation Plan). The terms “Liberty Mutual Insurance,” “Liberty Mutual,” “Liberty” and “Company” mean Liberty Mutual Group Inc. and its subsidiaries and affiliates. The term “EPP Program” means the plan in which you either participate or are eligible to participate.

The Executive Partnership Program (EPP Program) is an important part of the total compensation program at Liberty Mutual. Our total compensation program includes a variety of executive compensation plans, benefits and perquisites, as described on myLiberty Executive Center. Liberty Mutual reviews the plans on an ongoing basis to make sure we are competitive with our industry peers.

Our success begins with you

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Understanding Your EPP ProgramThrough its executive total compensation program, Liberty Mutual Insurance is committed to rewarding contributions that enhance our overall profitability and growth. The Executive Partnership Program (EPP Program) rewards participating executives for working together to improve the Company’s overall long-term performance.

The EPP Program offers key executives the opportunity to share in the Company’s value creation and long-term success and rewards participants with Executive Partnership Unit (EPU) grants, which are valued based on the Company’s financial performance.

Plan EligibilityAs recommended by the CEO and approved by the Compensation Committee of the Board of Directors.

Award EligibilityTo receive an EPP grant for any given plan year, you must achieve an individual performance rating within or above the “Meets Expectations” category on the Performance Rating Scale.

Award Amount

If you have been awarded an EPP Program grant, you will receive your annual grant notification in April.

Awards are granted on April 1 each year and are subject to the terms and conditions specified in the Plan Documents and by the Compensation Committee. The number of EPUs granted each year is based on plan limits, competitive pay practices and your organizational level. (The formula for valuing EPUs appears on page 3.) In addition, if you are not eligible for the full plan year, the amount of your award will be prorated based on the percentage of time you are eligible.

The EPP Program has two component plans and two types of EPUs. The two component plans are the Liberty Mutual Group Inc. 2016 Executive Partnership Plan (EPP) and the Liberty Mutual Group Inc. Executive Partnership Deferred Compensation Plan (EPDCP). The two types of EPUs are Appreciation Units (AUs) and Restricted Units (RUs). AUs are issued under EPP, while RUs are issued under EPDCP.*

This brochure explains how the EPP Program works. Take the time to learn about this important part of your total rewards at Liberty. The more you know about the Program, the better you will understand the value it provides.

*Executives who are also participants in the grandfathered pre-2005 Executive Partnership Plan may have funds available for redemption under that plan. If you have any questions about redeeming your account, contact Executive Compensation.

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Executive Partnership Units (EPUs)The EPP Program rewards certain Liberty Mutual Insurance executives with a form of long-term compensation called Executive Partnership Unit (EPU) grants. Grants are made in the form of Appreciation Units (AUs) and Restricted Units (RUs), as described below. The value of an EPU is determined by the Company’s financial performance.

Appreciation Units (AUs) An AU is awarded at the EPU value in effect on the date of the grant. After satisfying the vesting requirement, you have a right to any appreciation in value over time.

If there is an increase in value, the vested AU is available for redemption, subject to plan provisions. For example, if you receive an EPU grant of 100 AUs valued at $40 each, and the value of the EPU has increased to $50 when you redeem AUs for payment, you will be paid $1,000 (100 AUs x $10 increase in value), less applicable tax withholding amounts. If AUs have increased in value, they are considered “in the money.” If they have decreased in value, they are “underwater.”

Restricted Units (RUs) An RU is awarded at the EPU value in effect on the date of the grant. After satisfying the vesting requirement, subject to your deferral election and plan provisions, you have a right to the full current value of RUs upon payment.

For example, if you receive an EPU grant of 100 RUs valued at $40, and the value of the EPU has increased to $50 when you redeem RUs for payment, you will receive $5,000 (100 RUs x $50), less applicable tax withholding amounts.

myLiberty Executive CenterEach April, you will be able to view your annual EPP Program grant award online. Visit www.myLibertyExecutiveCenter.com for information about your executive compensation, benefits, perquisites and more.

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EPU Valuation EPU value is intended to ref lect changes in Liberty’s overall value and is updated annually based on the prior year’s financial performance. Liberty’s EPU valuation formula begins with the Company’s Generally Accepted Accounting Principles (GAAP) Book Value, less Accumulated Other Comprehensive Income (AOCI), and the result is divided by the number of Total Units.

EPU GRANT AWARD EXAMPLE

Assumptions: � Target Value = $10,000 (your salary x Target Percent)

� EPU Value = $100

� Yield (the Black-Scholes option pricing valuation of an AU as a percentage of the underlying EPU value)

AU RU

Target Value x 80%EPU Value x 30% Yield

( $10,000 x 80% )$100 x 30%

Target Value x 20%EPU Value

( $10,000 x 20% )$100

267 AUs 20 RUs

Approximate AU:RU Ratio = 13:1

EPU Valuation Formula Book ValueThe total amount of our Policyholders’ Equity as listed in the Consolidated Balance Sheets.

AOCIAlso listed in the Policyholders’ Equity section.

Total UnitsThe number of units available for the grant, which is currently set to 157,851,603.

Book Value – AOCI Total Units

= EPU Value

EPU Grant DeterminationThe example to the right shows how an EPU grant is determined. First, a target value is established for the award. Then, the target value is converted to a number of AUs and RUs.

Note: The Compensation Committee of the Board of Directors may, in its sole discretion and upon the recommendation of the CEO, amend the valuation formula at any time. The CEO has discretion to amend how target value is determined. You will be notified of any changes to the formula.

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EPU Vesting You vest in EPUs (both AUs and RUs) at a rate of 25 percent per year (provided you are employed by the Company on April 1 of each year), so that you are 100 percent vested in your award after you complete four years of service after the grant date, as shown in the chart below. Special vesting rules may apply after retirement. (See Unvested EPUs on page 8 for more details.)

The following table shows how the vesting schedule works.

PERCENT VESTED

Year of Grant 2018 2019 2020 2021 2022 2023 2024

2017 25% 50% 75% 100%

2018 25% 50% 75% 100%

2019 25% 50% 75% 100%

2020 25% 50% 75% 100%

First Anniversary

25%

50%

75%

100%

Second Anniversary

Third Anniversary

Fourth Anniversary

APRIL 1 ANNIVERSARY DATE

CU

MU

LATI

VE

VES

TIN

G P

ERC

ENT

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EPU Redemption Process

How to Redeem AUs Once your AUs are vested, you can redeem them during any annual redemption window (from April 1 through June 30). AUs must be redeemed by the earlier of the last year of each grant term (10 years from the date of grant unless otherwise specified) or seven years following retirement. AUs not redeemed by their expiration year are automatically redeemed based on their value following the redemption window. There are three steps in the process:

� Complete the portion of your annual EPP Redemption Election Form indicating the number of AUs you would like to redeem, and return the full statement to Executive Compensation. Be sure to keep a copy for your records.

� Executive Compensation will confirm that you are vested in these AUs and that they are eligible for redemption.

� You will receive payment for your redeemed AUs (less applicable tax withholding) typically by July 31 following the close of the annual redemption window.

You redeem AUs only during the annual redemption window, even if you are retired from Liberty. (See Retirement Planning on page 8 for more information.)

How to Redeem RUsRUs will be processed according to your payment elections (as described in Making RU Payment Elections below) and will be paid annually, typically by August 31. Changes to your RU payment elections are subject to federal tax rules. (See Making Changes to RU Payment Elections to the right for more details.)

Participants in the United Kingdom, Hong Kong, Brazil and Colombia are subject to additional restrictions on redemption. (See your grant acceptance forms or contact Executive Compensation for more information.)

Making RU Payment ElectionsDuring each annual redemption window, you will be asked to indicate your payment election for the following year’s RU grant. (If you are a newly eligible participant, your first grant payment will be defaulted to the Lump Sum on Fixed Future Date election. You may change this payment election, subject to applicable federal tax rules.) You can indicate whether you would like to receive a lump sum or calculated installments.

� Lump Sum on Fixed Future Date: If you defer payment to a fixed date, that date must be at least five years from June 30 of the grant year, and the amount must be paid in a lump sum. For example, the 2017 grant must be deferred to a date on or after June 30, 2022.

� Lump Sum After Retirement: You may choose to be paid in a lump sum after retirement.

� Calculated Installments After Retirement: You may choose to receive annual installments over two to 15 years.

You may also make the following elections for any vested RUs you have:

� Transfer vested RUs into investment options.

� Reallocate existing investment balances.

Investment elections take effect on July 1 of the year in which you make the investment election change. (See RU Investment Options on page 6 for more information.)

Making Changes to RU Payment Elections

You can change the payment election for a prior year’s grant online at Your Total Rewards. All changes are subject to the following federal tax rules:

� Except for payments made on account of your death, the new payment election must be deferred for a period of at least five years from the date the payment would have been made otherwise (or, in the case of installment payments, five years from the date the first installment was scheduled to be paid).

Note: The Executive Partnership Plan allows the Company to redeem vested AUs at any time and for any reason at the Company’s sole discretion.

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� You must make any election change no less than 12 months before the date the payment is scheduled to be paid (or, in the case of installment payments, 12 months before the first payment is to be paid). For example, if your fixed future date deferral is scheduled to be paid as soon as possible after June 30, 2018, and you decide to change the payment date, your completed election form must be received by June 30, 2017. In this case, the earliest fixed future date payment you could choose would be June 30, 2023 (five years after the original June 30, 2018, fixed date election).

� Any change will not take effect until 12 months after the date on which Executive Compensation receives and approves your new election form.

� Any change to the payment form must not accelerate payment except as allowed under federal tax rules.

RU Investment Options During the annual redemption window (from April 1 through June 30), you may elect to allocate all or part of the value of your vested RUs into the investment options listed below. You choose how you want to allocate your contributions among the available investment options, which ref lect the asset classes in the Company’s surplus investment portfolio. While the Company may add or remove investment options at any time, here are the current investment options available, as well as the percentage you may allocate to each asset class:

ASSET CLASS OPTION 1: Personalized

Investment Allocation

OPTION 2:Pre-Mix Portfolio

Foreign Public Equities Up to 5% 5%

Private Equities Up to 10% 10%

High-Yield Bonds Up to 15% 15%

Domestic Public Equities (S&P 500) Up to 30% 30%

General Fixed Income From 40% to 100% 40%

Investment results are notional and calculated quarterly. If you allocate your vested RUs among the investment options, you will receive quarterly statements showing the value of your account, reflecting gains or losses based on your allocations and investment option performance.

As an unfunded plan, your EPDCP RUs are credited as bookkeeping entries to your plan accounts and are paid from the general assets of the Company at the time they are redeemed. Participants are general creditors of the Company.

Once you elect to transfer RUs to investment options, the units will no longer be tied to the EPU value and may not be transferred back into EPUs. However, your payment elections will remain in effect. If you do not allocate your vested RUs into any of the investment accounts, your RUs will continue to appreciate or depreciate with the value of the unit price.

Changing RU ElectionsYou can change a retirement lump-sum or installment payment election only once. You can change fixed date deferral elections multiple times, but each change must push the payment date out an additional five years.

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Naming a BeneficiaryWhen you receive your first EPP Program grant, you will be asked to name a beneficiary to receive the total accumulated value of your EPUs in the event of your death. Payments are made to beneficiaries in a single lump sum except for grants awarded prior to 2012, which are paid based on each grant year’s deferral election. If your beneficiary dies before you, payments are made to your estate. You can change your beneficiary election at any time online through Your Total Rewards.

Although you may designate a beneficiary to receive the proceeds of your EPUs in the event of your death, each grant is personal and no rights granted by the plan are transferable. This means that you cannot assign or pledge your benefits payable under the plans, nor can they be attached in any way.

EPU Tax TreatmentThe tax treatment of AUs and RUs differs, based on federal tax rules.*

AU Tax TreatmentUnder current federal tax rules, AUs are not subject to taxes until you redeem them. When you redeem your AUs, the proceeds are subject to FICA tax (Social Security and Medicare taxes) and federal, state and local income taxes.

RU Tax Treatment RUs are subject to FICA tax as they vest, when they are paid out as units or when you transfer them to investment options (regardless of whether they are eligible for redemption). This means that once an RU grant is 25 percent vested, the vested portion of the grant is subject to FICA tax. In addition, if you transfer vested RUs to the investment options, any gain since vesting will also be subject to FICA tax. Applicable FICA tax is withheld from your last nine paychecks of the year.

If you do not transfer vested RUs to the investment options, any gain after vesting will be subject to FICA tax at redemption. RUs are also subject to federal, state and local taxes upon redemption.

*If you are an international participant, each year you will receive a country-specific tax summary describing your annual taxation obligation.

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Retirement PlanningBefore you retire from Liberty, it is important to understand how your EPUs may be affected based on their vesting status. In general, you are eligible to retire if you are age 55 or older and have at least five years of continuous employment since your most recent employment date. If you do not retire voluntarily, the treatment of AUs and RUs may be different.

Vested EPUs

AU RedemptionsYou must redeem all vested AUs by the earlier of the last year of each grant term (10 years from date of grant unless otherwise specified) or seven years following retirement. AUs not redeemed by their expiration year are automatically redeemed based on their value following the redemption window. Continued vesting and redemption election opportunity requires voluntary retirement. (See How to Redeem AUs on page 5 for more information.)

RU RedemptionsIf you deferred your RUs to retirement, you will receive a lump sum or installment payment per your election. All RUs deferred to a fixed future date beyond retirement will also be paid in a lump sum. In both cases, if you retire by June 30, you will receive your payment by August 31 of that year. If you retire after June 30, you will receive your payment by August 31 of the following year. (See Making Changes to RU Payment Elections on page 5 for details about redeferred grants.)

All vested RUs must be transferred into investment options no later than the fifth annual redemption window following the year in which you retire. If you are still holding RUs as of this deadline, they will automatically be transferred into the Fixed Income Fund.

Unvested EPUsAfter you retire, you continue to vest in any unvested EPUs, provided you voluntarily terminated employment with the Company’s consent, executed a Post Employment Restriction Agreement (a non-compete, non-solicit, non-disparagement agreement) and continue to meet the requirements of that agreement during retirement.

� If you sign the agreement, you can delay redeeming your AUs until the earlier of seven years following retirement or 10 years from the date of the grant. Your vested RUs will continue to be paid according to your payment elections.

� If you do not sign the agreement, you will forfeit all unvested EPUs. In addition, your vested AUs will be fully paid to you within 60 days after the quarter end following your termination of employment. Your vested RUs will be paid as soon as administratively practicable after the next redemption window following your termination of employment.

In the event of death, disability or retirement, any grant during the calendar year of the event will be prorated based on an earned percentage. The prorated grant will be equal to 25 percent times the number of completed calendar quarters of active employment during the year of the event.

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Your EPP Program ResourcesYou will receive EPP Program information each March or April. You can review your EPP Program grant history online through Your Total Rewards.

If you have any questions about EPP Program participation, please contact Executive Compensation.

SummaryThe EPP Program is designed to reward superior performance for certain eligible executive and management employees who make a substantial commitment to Liberty’s success over the long term and who deliver exceptional results. The Program reinforces Liberty’s pay-for-performance philosophy by providing the opportunity for key individuals to share financially in the Company’s success over time.

This summary is intended to familiarize employees with various aspects of the Executive Partnership Program (EPP Program). While every effort was made to provide accurate information, the possibility of an error exists. If there is a discrepancy between this summary and the Plan Documents, the latter will apply.

Liberty Mutual reserves complete discretion to select those individuals who are eligible to participate in the EPP Program, their effective dates of participation and their dates of termination of participation.

All grants determined under the EPP Program are subject to approval by the Chief Executive Officer of Liberty Mutual Group Inc. and the Compensation Committee of the Board of Directors of Liberty Mutual Holding Company Inc.

The plans are subject to amendment or termination by the Company at any time.

The EPP Program summary should not be regarded as an indicator of an employment contract between you and Liberty Mutual. It does not change the at-will nature of your employment relationship with Liberty Mutual.

If You Leave the Company for a Reason Other Than RetirementIf you leave the Company, your EPUs will be affected depending on their vesting status and the reason you leave:

� Death — If you die while you are an active employee, you automatically vest 100 percent in all outstanding EPUs after proration (described on page 8).

� Disability — If you become permanently and totally disabled while you are an active employee, the Compensation Committee and the CEO may grant accelerated vesting of your outstanding EPUs after proration (described on page 8).

� Other Reasons — If you leave the Company for any reason other than retirement, death or disability, you forfeit all unvested EPUs. If you are terminated for cause or the Company later determines that cause existed at the time of termination, you also forfeit vested EPUs. Any remaining vested AUs and RUs will be redeemed in accordance with plan provisions as soon as administratively practicable. Any previous RU deferral elections you made will no longer be in effect.

EPP Program March 2017