Global Risk, Profitability, and Growth Metrics. Insurance Risk Study Eleventh Edition. Companion volume to Global Insurance Market Opportunities

Transcription

1 Aon Benfield Insurance Risk Study Eleventh Edition Global Risk, Profitability, and Growth Metrics Companion volume to Global Insurance Market Opportunities Risk. Reinsurance. Human Resources.

2 Contents Introduction....1 Global Premium, Capital, Profitability, and Opportunity...2 Geographic Opportunities....5 Global Risk Parameters....8 US Risk Parameters Macroeconomic, Demographic, and Social Indicators Global Correlation Between Lines Sources and Notes Contacts About the Study Rating agencies, regulators, and investors today are demanding that insurers provide detailed assessments of their risk tolerance and quantify the adequacy of their economic capital. To complete such assessments requires a credible baseline for underwriting volatility. The Global Insurance Market Opportunities report provides our clients with an objective and data-driven set of underwriting volatility benchmarks by line of business and country as well as correlations by line and country. These benchmarks are a valuable resource to CROs, actuaries, and other economic capital modeling professionals who seek reliable parameters for their models. Modern portfolio theory for assets teaches that increasing the number of stocks in a portfolio will diversify and reduce the portfolio s risk, but will not eliminate risk completely; the systemic market risk remains. This is illustrated in the left chart below. In the same way, insurers can reduce underwriting volatility by increasing account volume, but they cannot reduce their volatility to zero. A certain level of systemic insurance risk will always remain, due to factors such as the underwriting cycle, macroeconomic trends, legal changes and weather (right chart below). This study calculates this systemic risk by line of business and country. The Naïve Model on the right chart shows the relationship between risk and volume using a Poisson assumption for claim count a textbook actuarial approach. The study clearly shows that this assumption does not fit with empirical data for any line of business in any country. It will underestimate underwriting risk if used in an ERM model. Asset portfolio risk Insurance portfolio risk Portfolio risk Portfolio Risk Insurance risk Systemic Market Risk Systemic Insurance Risk Naïve Model Number of stocks Premium Volume

3 Introduction The 2016 edition of Global Insurance Market Opportunities reports on our current risk environment, in addition to the ability and willingness of insurers and capital providers to address the risks we face today. As in previous editions, we pay close attention to the critical role of data and analytics in bridging the gap between risk and capital to create viable insurance market solutions. This year, however, we build on that story and pay greater attention to the forces of innovation and disruption that now confront the industry. The study, now in its 11th year, has evolved from its beginnings as a quantification study for enterprise risk management. We now take an expansive view of issues related to global risk to encompass global growth, emerging risks, operational challenges, and this year, how our industry can best capture the opportunities from innovation and defend against the threats of disruption. Analytics remains at the core of everything we do. The Global Insurance Market Opportunities study continues to provide the insurance industry s leading set of risk parameters for modeling and benchmarking underwriting risk and global profitability. While the main study focuses on the opportunities, this companion volume explains the numbers including the critical metrics and parameters that insurers can use to advance their decision making in areas ranging from growth strategy to performance benchmarking, risk tolerance, and capital management. All parameters are produced using a consistent methodology that we have employed since the first edition of the study. This volume begins with a review of insurance industry performance globally: premium and capital levels, areas of growth, and profitability. Since the 8th edition, industry combined ratios are calculated across the top 50 countries. Beginning with the Country Opportunity Index on page 5, we turn from numerical highlights to strategic considerations that identify the countries showing an attractive mix of growth and profitability with limited political risk. Page 9 focuses on risk parameters that can be used to model underwriting volatility and insurance capital. Using the Study Beyond risk modeling, we can provide our clients with very granular, customized market intelligence to create business plans that are realistic, fact-based, and achievable. With a global fact base and broad access to local market practitioners, we are equipped to provide insight across a spectrum of lines, products, and geographies. Inpoint, the consulting division of Aon, helps insurers and reinsurers address these challenges, from sizing market opportunities to identifying distribution channel dynamics, assessing competitor behavior, and understanding what it takes to compete and win. Our approach leverages Aon s USD 350 million annual investment in analytics, data, and modeling to help our clients grow profitably. Please enjoy the articles in the accompanying Global Insurance Market Opportunities study, available from thoughtleadership.aonbenfield.com. All of our work at Aon is motivated by client questions. We continue to be grateful to clients who have invited us to share in the task of helping them analyze their most complex business problems. Dynamic and interactive working groups always lead to innovative, and often unexpected, solutions. If you have questions or suggestions for items we could explore in future editions, please contact us through your local Aon Benfield broker or one of the contacts listed on the last page. Aon Benfield 1

4 Global Premium, Capital, Profitability, and Opportunity Globally, property casualty business again produced an underwriting profit in 2015 with a combined ratio of 98.6 percent, a slight deterioration from last year s 97.0 percent combined ratio. The Americas averaged a 97.9 percent combined ratio, while Europe averaged 96.3 percent and Asia Pacific was highest at percent. In 21 of the top 50 markets, combined ratios were below 95 percent, and 12 countries were below 90 percent, compared to 27 and 6 countries last year. Furthermore, 12 countries showed five-year premium growth in excess of 10 percent, led by very strong growth in China. The overall global combined ratio result, and the variation in results by country, demonstrate there are many desirable areas for profitable growth in the market today. At year-end 2015, global insurance premium stands at an alltime high of USD 5.1 trillion, an increase of 1.8 percent over the prior year. Property-casualty premium increased 0.6 percent, life and health premiums by 2.5 percent, while reinsurance premiums decreased by 2.9 percent. Global insurance premium and capital, USD trillions Premium Capital Property & Casualty Life & Health Reinsurance Total Global capital increased 3.2 percent year on year to USD 4.3 trillion. Property casualty insurance capital increased 3.3 percent. Reinsurance capital decreased slightly, as we discuss at greater length in Aon Benfield s Reinsurance Market Outlook. Property casualty penetration is 2.0 percent of GDP based on 50 of the largest countries, up from 1.9 percent last year. Motor insurance accounts for 47 percent of propertycasualty premium, while property accounts for 32 percent and liability 21 percent. This mix of business is nearly unchanged from last year. Motor insurance is also the fastest growing line of business, with 4.2 percent annual growth over the last five years, driven by strong growth in China, Brazil, Argentina, Venezuela, and Saudi Arabia. Property is growing at an annual rate of 3.5 percent, and liability at 2.7 percent. Global premium for motor Motor: 7.2% annual growth USD Billions Global premium for property Property: 4.9% annual growth USD Billions Global premium for liability Liability: 6.6% annual growth USD Billions Insurance Risk Study

5 Global Premium, Capital, Profitability, and Opportunity Global P&C gross written premium and growth rates by product line Premium by product line Five-year average annual growth rate Motor: USD 666 billion U.S. 35% Brazil Canada Rest of Americas China 13% Motor: 7.2% annual growth globally 35% 30% 25% Middle East & Africa Rest of Europe Rest of Euro Area Property: USD 454 billion U.S. 44% Middle East & Africa Rest of Europe Brazil Rest of Euro Area Liability: USD 302 billion U.S. 49% Brazil Japan South Korea Rest of APAC France 4% Germany U.K. Canada Rest of Americas China 4% Japan South Korea U.K. Rest of APAC France 4% Germany Canada Rest of Americas China 4% Japan South Korea Rest of APAC France 3% Germany 20% 15% 10% 5% 0% -5% Property: 4.9% annual growth globally 35% 30% 25% 20% 15% 10% 5% 0% -5% U.S. U.S. Brazil Brazil Canada Rest of Americas China Japan South Korea Rest of APAC Canada Rest of Americas China Japan South Korea Rest of APAC Liability: 6.6% annual growth globally 35% 30% 25% 20% 15% 10% France France Germany Germany U.K. Rest of Euro Area U.K. Rest of Euro Area Rest of Europe Middle East & Africa Rest of Europe Middle East & Africa Middle East & Africa Rest of Europe U.K. Rest of Euro Area Notes: All statistics are the latest available. Motor includes all motor insurance coverages. Property includes construction, engineering, marine, aviation, and transit insurance as well as property. Liability includes general liability, workers compensation, surety, bonds, credit, and miscellaneous coverages. 5% 0% -5% U.S. Brazil Canada Rest of Americas China Japan South Korea Rest of APAC France Germany U.K. Rest of Euro Area Rest of Europe Middle East & Africa Aon Benfield 3

6 Global Premium, Capital, Profitability, and Opportunity Top 50 P&C markets ranked by gross written premium by region Americas P&C GWP (USD M) Premium/ GDP Ratio Annualized Premium Growth Cumulative Net Loss Ratio Cumulative Net Expense Ratio Cumulative Net Combined Ratio 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr US 578, % 4.9% 4.7% 4.9% 70.9% 71.5% 73.2% 27.2% 27.3% 27.3% 98.1% 98.8% 100.4% Canada 41, % 3.4% 4.6% 6.4% 66.6% 67.0% 68.9% 29.7% 29.5% 29.1% 96.3% 96.5% 98.0% Brazil 20, % 4.6% 12.1% 12.1% 54.6% 53.0% 53.3% 34.5% 34.0% 34.0% 89.1% 87.0% 87.2% Mexico 13, % 42.7% 38.3% 36.1% 67.0% 70.9% 69.3% 38.4% 36.6% 37.1% 105.4% 107.5% 106.4% Argentina 12, % 79.9% 51.6% 41.8% 62.1% 60.8% 61.7% 34.2% 35.6% 34.8% 96.3% 96.4% 96.5% Venezuela 10, % 13.5% 7.7% 9.8% 57.3% 57.3% 59.7% 37.2% 34.8% 33.6% 94.5% 92.1% 93.2% Colombia 3, % 13.9% 9.5% 11.2% 60.2% 61.0% 60.7% 50.2% 48.9% 48.4% 110.4% 109.9% 109.1% Chile 3, % 10.8% 7.3% 10.5% 51.2% 51.8% 51.8% 40.8% 43.0% 42.6% 92.0% 94.8% 94.4% Ecuador 1, % 17.1% 14.9% 16.2% 54.4% 55.3% 54.3% 34.6% 35.2% 34.6% 89.0% 90.5% 88.9% Subtotal 685, % 7.2% 6.6% 6.6% 69.7% 70.1% 71.7% 28.2% 28.3% 28.2% 97.9% 98.4% 99.9% Europe, Middle East & Africa Germany 74, % 3.5% 3.6% 2.9% 72.0% 74.1% 74.5% 25.5% 25.0% 25.4% 97.5% 99.1% 99.9% UK 66, % -1.7% 0.3% 1.3% 61.8% 62.9% 64.9% 36.3% 35.4% 34.6% 98.1% 98.3% 99.5% France 63, % 1.3% 1.0% 0.8% 76.1% 75.3% 75.2% 23.4% 23.8% 24.2% 99.5% 99.2% 99.4% Italy 36, % -3.4% -4.1% -2.6% 69.3% 69.1% 71.6% 24.9% 24.5% 24.2% 94.2% 93.6% 95.7% Spain 24, % 2.8% -0.5% -0.9% 70.9% 71.3% 71.5% 20.6% 21.3% 21.1% 91.6% 92.6% 92.6% Netherlands 14, % -6.9% -3.2% -2.6% 87.5% 87.0% 86.6% 13.4% 12.6% 12.9% 100.9% 99.6% 99.5% Switzerland 14, % 0.2% -0.2% 1.2% 68.6% 66.9% 68.7% 27.0% 28.4% 27.7% 95.6% 95.3% 96.3% Russia 12, % 3.7% 8.4% 11.8% 64.7% 61.4% 62.9% 21.7% 27.9% 27.0% 86.4% 89.4% 89.9% Belgium 11, % 1.5% 2.4% 2.9% 67.9% 67.1% 68.8% 29.0% 28.5% 28.3% 96.9% 95.6% 97.1% Austria 9, % 5.3% 5.1% 4.3% 70.2% 70.7% 72.2% 15.1% 14.3% 15.1% 85.3% 85.0% 87.3% Norway 8, % 6.6% 8.0% 7.7% 57.6% 59.6% 60.5% 30.2% 28.9% 26.6% 87.8% 88.5% 87.1% South Africa 8, % 2.1% 1.8% 2.4% 69.3% 69.9% 70.3% 30.1% 27.9% 27.5% 99.5% 97.8% 97.8% Turkey 8, % 4.0% 3.5% 2.1% 71.7% 72.6% 73.1% 17.8% 18.4% 18.0% 89.5% 91.1% 91.1% Denmark 7, % 20.2% 15.2% 17.7% 75.6% 75.4% 75.9% 29.0% 26.8% 27.4% 104.6% 102.2% 103.3% Sweden 7, % -1.4% 3.2% 3.1% 73.3% 72.2% 74.9% 15.6% 17.0% 17.1% 89.0% 89.3% 92.0% Poland 7, % -1.6% 0.6% 4.2% 66.1% 63.5% 65.7% 29.5% 30.3% 30.8% 95.7% 93.9% 96.5% Finland 4, % 25.3% 12.0% 6.6% 81.0% 77.6% 79.9% 20.6% 20.4% 20.5% 101.6% 98.0% 100.4% Israel 4, % 10.3% 6.0% 4.3% 72.8% 73.3% 74.8% 28.8% 29.8% 30.7% 101.6% 103.1% 105.5% Czech Republic 3, % -0.5% -2.7% -2.7% 69.6% 73.1% 72.1% 23.0% 27.2% 25.1% 92.6% 100.3% 97.1% Portugal 3, % 4.6% -1.3% 0.7% 81.2% 74.6% 73.7% 21.6% 22.4% 21.1% 102.8% 97.0% 94.8% Saudi Arabia 3, % 20.5% 20.7% 17.0% 82.2% 85.1% 80.7% 13.7% 14.4% 16.2% 95.8% 99.4% 96.9% U.A.E. 3, % 5.6% 4.0% 1.7% 62.2% 62.6% 62.9% 32.6% 30.5% 29.9% 94.8% 93.2% 92.8% Ireland 3, % 3.8% -1.7% -2.9% 66.6% 72.0% 71.9% 30.4% 30.3% 29.8% 97.0% 102.3% 101.7% Greece 2, % -11.0% -4.9% -6.8% 55.6% 53.9% 55.7% 36.6% 39.1% 39.4% 92.2% 93.0% 95.1% Romania 1, % 4.0% 5.6% 6.2% 59.9% 58.9% 60.5% 34.3% 34.0% 34.0% 94.3% 92.9% 94.5% Morocco 1, % -1.7% 4.5% 3.8% 50.1% 50.2% 48.7% 30.9% 37.0% 36.2% 81.0% 87.1% 84.9% Nigeria 1, % -4.3% 4.4% 4.7% 67.8% 67.1% 66.3% 37.3% 37.3% 37.4% 105.1% 104.4% 103.7% Luxembourg % -0.7% -23.7% -16.3% 72.8% 74.2% 73.5% 43.6% 54.2% 48.9% 116.4% 128.4% 122.5% Bulgaria % -0.1% 0.4% -1.2% 55.3% 54.5% 54.8% 34.0% 33.8% 35.9% 89.3% 88.4% 90.7% Subtotal 412, % 1.7% 1.8% 2.0% 71.1% 71.3% 72.2% 25.2% 25.4% 25.1% 96.3% 96.7% 97.3% Asia Pacific China 117, % 15.8% 16.0% 20.2% 63.0% 63.0% 63.5% 32.8% 32.6% 32.4% 95.8% 95.6% 95.9% Japan 78, % 3.2% 4.3% 3.1% 75.7% 71.2% 71.5% 33.9% 33.3% 33.7% 109.7% 104.5% 105.2% Australia 29, % 2.6% 3.7% 6.6% 74.3% 66.7% 69.1% 27.6% 27.8% 27.5% 101.9% 94.4% 96.6% S. Korea 16, % 7.8% 3.7% 3.4% 80.5% 79.6% 78.8% 23.3% 23.6% 23.4% 103.8% 103.2% 102.2% India 9, % 6.9% 12.7% 16.6% 88.8% 84.3% 86.6% 28.9% 28.8% 29.6% 117.7% 113.0% 116.2% Thailand 5, % 0.9% 4.5% 9.7% 71.0% 69.4% 68.3% 36.3% 34.6% 35.2% 107.3% 104.1% 103.5% Malaysia 3, % 2.6% 5.0% 6.2% 62.4% 59.5% 61.4% 26.3% 27.6% 27.5% 88.7% 87.1% 88.9% Taiwan 4, % 4.5% 4.5% 5.2% 59.0% 57.4% 57.8% 37.1% 37.4% 37.6% 96.1% 94.8% 95.4% New Zealand 3, % 0.1% 6.0% 7.9% 98.5% 68.8% 83.3% 33.5% 34.9% 35.0% 132.0% 103.6% 118.2% Indonesia 3, % 19.9% 16.4% 14.6% 52.5% 53.0% 53.8% 32.8% 32.6% 32.9% 85.3% 85.6% 86.8% Hong Kong 2, % 3.0% 7.9% 6.4% 60.6% 60.8% 60.2% 33.1% 32.6% 33.0% 93.7% 93.4% 93.2% Singapore 2, % 1.3% 2.4% 3.8% 48.0% 51.1% 52.8% 36.6% 34.8% 34.3% 84.6% 85.9% 87.1% Subtotal 278, % 9.0% 9.6% 11.6% 72.4% 69.8% 70.4% 30.8% 30.5% 30.6% 103.1% 100.3% 101.0% Grand Total 1,376, % 5.9% 5.7% 6.3% 70.9% 70.5% 71.6% 27.7% 27.6% 27.5% 98.6% 98.1% 99.1% 4 Insurance Risk Study

7 Geographic Opportunities Aon Benfield created the Country Opportunity Index to identify countries with a desirable mix of profitability, growth potential, and a relatively stable political environment. The table below displays the 50 property casualty markets ranked by this Index and divided into quartiles. Aon Benfield Country Opportunity Index Nine of the 12 countries in Quartile 1 were also in the top quartile last year, and eight have been in Quartile 1 for all four years of this Index. Asian countries dominate the top positions, but Quartile 1 also includes countries in Latin America, Scandinavia, Africa, and the Middle East. Last year, Malaysia was tied with Indonesia and Singapore for the top position this year, the country claims the number one ranking. All three of these countries have shown low combined ratios, healthy premium and GDP growth, and a stable political environment. Sweden, Mexico, and China entered the top quartile this year Sweden and Mexico on improved growth metrics, and China on improvements in its combined ratio. Brazil, Australia, and the United Arab Emirates fell out of the top quartile this year. Note that the US, Japan, and most of Western Europe are in Quartiles 3 and 4. This Index suggests that to achieve strong insurance growth, it is best for insurers to look beyond the developed economies. Quartile 1 5yr Cumulative Net Combined Ratio 5yr Annualized Premium Growth Real GDP 5yr Growth Population 5yr Annualized Growth Political Risk Assessment 1 Malaysia** 88.9% 6.2% 7.2% 1.6% Medium Low 2 Indonesia** 86.8% 14.6% 6.8% 1.4% Medium 2 Singapore** 87.1% 3.8% 4.5% 1.5% Low 4 Sweden 91.1% 2.1% 3.6% 1.1% Low 5 Ecuador** 88.9% 16.2% 3.3% 1.6% Medium High 5 Chile** 94.4% 10.5% 4.5% 1.1% Medium Low 5 Mexico 93.2% 9.8% 4.0% 2.1% Medium 5 South Africa* 87.1% 7.7% 3.0% 1.6% Medium 5 Norway** 87.3% 4.3% 3.1% 1.1% Low 5 Nigeria** 84.9% 3.8% 5.7% 2.8% High 11 China 95.9% 20.2% 9.1% 0.5% Medium 11 Saudi Arabia** 96.9% 17.0% 4.7% 2.4% Medium Quartile 2 11 Brazil 87.2% 12.1% 0.8% 0.9% Medium 11 Australia 96.6% 6.6% 4.1% 1.6% Low 11 Hong Kong 93.2% 6.4% 3.8% 0.7% Low 11 Morocco 94.5% 6.2% 5.3% 1.0% Medium 11 U.A.E. 94.8% 0.7% 6.0% 3.0% Medium Low 18 Russia 89.9% 11.8% 2.7% 0.5% Medium High 18 Denmark 92.0% 3.1% 2.2% 0.4% Low 20 India 116.2% 16.6% 8.1% 1.6% Medium 20 Canada 98.0% 6.4% 3.3% 1.1% Low 20 Luxembourg 103.7% 4.7% 4.5% 2.1% Low 20 Switzerland 96.3% 1.2% 2.8% 1.2% Low 24 Turkey 103.3% 17.7% 4.8% 1.1% Medium 24 Colombia 109.1% 11.2% 5.2% 1.1% Medium Quartile 3 24 New Zealand 118.2% 7.9% 4.3% 1.3% Low 24 Taiwan 95.4% 5.2% 3.5% 0.3% Medium Low 24 Israel 105.5% 4.3% 4.6% 1.9% Medium Low 24 Poland 96.5% 4.2% 4.3% 0.0% Medium Low 30 Venezuela 96.5% 41.8% -0.9% 1.6% Very High 30 U.S % 4.9% 3.6% 0.8% Low 30 Germany 99.9% 2.9% 2.6% 0.6% Low 30 Bulgaria 90.7% -1.2% 3.5% -0.6% Medium 34 Finland 100.4% 6.6% 1.1% 0.4% Low 34 Czech Republic 92.8% 1.7% 2.9% 0.1% Medium Low 34 Spain 92.6% -0.9% 1.9% -0.2% Medium 37 Argentina 106.4% 36.1% 2.3% 1.4% High Quartile 4 37 South Korea 102.2% 3.4% 4.2% 0.4% Medium Low 37 Belgium 97.1% 2.9% 2.2% 0.8% Medium Low 37 Austria 97.8% 2.4% 2.1% 0.4% Low 37 U.K. 99.5% 1.3% 3.5% 0.7% Medium Low 37 Italy 95.7% -2.6% 0.7% 0.6% Medium 43 Thailand 103.5% 9.7% 6.2% 0.4% Medium High 43 France 99.4% 0.8% 2.1% 0.5% Medium Low 43 Netherlands 99.5% -2.6% 2.1% 0.4% Low 43 Ireland 101.7% -2.9% 5.7% 0.4% Medium 47 Greece 95.1% -6.8% -0.9% -0.6% High 48 Japan 105.2% 3.1% 2.2% -0.2% Medium Low 48 Portugal 97.1% -2.7% 1.1% -0.3% Medium 50 Romania 122.5% -16.3% 4.5% -1.5% Medium High *Indicates top quartile performer in **Indicates top quartile performer in each year since Index methodology explained in Sources and Notes. Aon Benfield 5

8 Geographic Opportunities Growth Markets and Out/Underperformers To determine expansion opportunities we examined premium growth and loss ratio performance by country across motor, property, and liability lines of business as well as premium growth and combined ratio performance by country for all lines. The quadrant plots below identify countries as either low growth or high growth, and as either out performers or under performers. To measure performance, the first three quadrant plots use loss ratio for each line of business while the right-most plot shows combined ratio for all lines of business. Each plot also provides the gross written premium size, in USD millions, of each country. For all quadrant plots, growth is determined based on fiveyear annualized premium growth. Countries with values greater than 7.5 percent are classified as high growth. Loss ratio and combined ratio performance is determined based on five-year cumulative loss ratio and five-year net cumulative combined ratio, respectively. Each country s loss ratio performance is compared against its income level peers, using a USD 30,000 GDP per capita split between high income and low income countries; whereas, combined ratio performance is compared against the global combined ratio. Countries with five-year loss ratios lower than the average of their income peers, or combined ratios below the global combined ratio, are classified as outperformers. Motor Loss ratio performance Out performers Property Loss ratio performance Out performers Low growth Austria 3,475 Denmark 2,846 Greece 1,639 Japan 46,901 New Zealand 1,103 Nigeria 259 Norway 3,129 Singapore 934 Switzerland 6,374 U.S. 230,457 Australia 10,483 Belgium 4,662 Bulgaria 666 Canada 18,574 Czech Republic 1,611 Finland 2,156 France 26,402 Germany 32,590 Ireland 1,582 Israel 2,401 Italy 23,348 Luxembourg 535 Malaysia 2,073 Morocco 1,084 Netherlands 5,218 Poland 4,226 Portugal 1,667 Romania 659 S. Korea 12,678 Spain 10,702 Sweden 3,392 Taiwan 2,461 U.A.E. 1,385 U.K. 23,429 Under performers Brazil 12,446 China 89,834 Colombia 1,664 Ecuador 638 Hong Kong 507 Indonesia 1,072 Mexico 4,778 South Africa 3,869 Thailand 3,522 Venezuela 9,120 Argentina 5,997 Chile 1,042 India 5,927 Russia 6,819 Saudi Arabia 2,140 Turkey 4,519 High growth Low growth Austria 3,300 Belgium 3,654 Bulgaria 214 Greece 683 Hong Kong 794 Malaysia 1,404 Morocco 314 Nigeria 638 Romania 186 Singapore 754 Switzerland 4,847 Taiwan 1,146 U.A.E. 1,111 U.K. 24,244 U.S. 200,646 Australia 9,347 Czech Republic 967 Denmark 4,088 Finland 1,501 France 27,331 Germany 25,282 Ireland 1,136 Italy 7,323 Japan 17,912 Netherlands 5,460 Norway 4,365 Poland 1,815 Portugal 998 S. Korea 2,411 Spain 8,761 Sweden 4,502 Under performers Brazil 6,078 Canada 16,223 Chile 1,689 Colombia 1,211 Ecuador 815 India 2,249 Luxembourg 372 Mexico 2,968 Russia 4,126 Saudi Arabia 1,267 South Africa 3,806 Turkey 2,892 Venezuela 1,765 Argentina 1,946 China 16,601 Indonesia 1,805 Israel 1,181 New Zealand 2,025 Thailand 1,472 High growth 6 Insurance Risk Study

9 Geographic Opportunities Twenty countries are high growth, loss ratio outperformers in at least one line of business. Of these twenty countries, five appear in each of the lines of business analyzed as high growth out performers: Brazil, Colombia, Ecuador, Mexico, and Venezuela. Intriguingly, all five outperformers this year are Latin American candidates. If we compare these countries on the basis of overall combined ratio, four of the five are outperformers globally. The exception is Colombia, which underperforms its peers with a five-year net combined ratio of percent, driven by an expense ratio of nearly 50 percent. In addition to the four outperforming countries mentioned above, six additional countries outperform the global averages for both growth and profitability. China, for instance, outperforms for both motor and liability insurance, and its five-year combined ratio of 95.9 percent is better than both the global average and the average among its Asia-Pacific peers. See the Top 50 P&C Markets table for more details on page 4. Using combined ratio in addition to loss history allows us to further analyze and target high growth opportunities. Liability Loss ratio performance Out performers All Lines Combined ratio performance Out performers Low growth Bulgaria 34 Canada 6,529 Hong Kong 1,432 Japan 14,160 Malaysia 419 Netherlands 4,250 Nigeria 263 Romania 70 Singapore 807 South Africa 991 Switzerland 3,331 Taiwan 430 U.A.E. 1,222 U.S. 147,128 Austria 1,657 Belgium 3,384 Czech Republic 995 Denmark 873 Finland 1,375 France 10,216 Germany 16,570 Greece 360 Ireland 848 Israel 779 Italy 5,447 Luxembourg 160 Morocco 463 Norway 1,614 Portugal 1,053 S. Korea 1,856 Spain 5,438 Thailand 285 U.K. 18,619 Australia 9,487 Brazil 1,585 China 10,916 Colombia 910 Ecuador 359 India 1,781 Indonesia 959 Mexico 2,575 New Zealand 412 Poland 1,302 Russia 1,386 Saudi Arabia 288 Turkey 457 Venezuela 1,722 Argentina 5,599 Chile 683 Sweden 248 High growth Low growth Australia 29,317 Austria 8,432 Belgium 11,700 Bulgaria 914 Canada 41,326 Czech Republic 3,573 Denmark 7,807 Greece 2,682 Hong Kong 2,733 Italy 36,117 Malaysia 3,897 Morocco 1,861 Nigeria 1,160 Norway 9,108 Poland 7,342 Portugal 3,718 Singapore 2,494 Spain 24,902 Sweden 8,143 Switzerland 14,551 Taiwan 4,038 U.A.E. 3,718 Finland 4,684 France 63,949 Germany 74,442 Ireland 3,565 Israel 4,360 Japan 78,972 Luxembourg 1,067 Netherlands 14,927 Romania 916 S. Korea 16,945 U.K. 66,292 U.S. 578,231 Brazil 20,108 Chile 3,414 China 117,351 Ecuador 1,812 Indonesia 3,836 Mexico 10,321 Russia 12,330 Saudi Arabia 3,707 South Africa 8,666 Venezuela 12,607 Argentina 13,541 Colombia 3,786 India 9,956 New Zealand 3,539 Thailand 5,280 Turkey 7,869 High growth Under performers Under performers Aon Benfield 7

10 Global Risk Parameters The insurance business is always a tradeoff of assuming risk in exchange for potential presumed return. We now turn to the risk side of the risk and return equation. Measuring the volatility and correlation of risk has long been the hallmark of the study. The 2016 edition of the Study quantifies the systemic risk by line for 41 countries worldwide. By systemic risk, or volatility, we mean the coefficient of variation of loss ratio for a large book of business. Coefficient of variation (CV) is a commonly used normalized measure of risk defined as the standard deviation divided by the mean. Systemic risk typically comes from non-diversifiable risk sources such as changing market rate adequacy, unknown prospective frequency and severity trends, weather-related losses, legal reforms and court decisions, the level of economic activity and other macroeconomic factors. It also includes the risk to smaller and specialty lines of business caused by a lack of credible data. For many lines of business systemic risk is the major component of underwriting volatility. The systemic risk factors for major lines by region appear on the facing page. Detailed charts comparing motor and property risk by country appear below. The factors measure the volatility of gross loss ratios. If gross loss ratios are not available the net loss ratio is used. Coefficient of variation of gross loss ratio by country Motor Property Thailand Chile Taiwan El Salvador Japan Switzerland France Germany Malaysia Austria Netherlands Bolivia South Korea Brazil Israel Argentina Ecuador Peru Mexico China Italy U.K. Dominican Republic Uruguay Denmark Canada Vietnam India Pakistan Turkey South Africa Honduras U.S. Colombia Venezuela Panama Singapore Indonesia Nicaragua Hong Kong Philippines 3% 3% 3% 5% 6% 7% 8% 8% 9% 9% 9% 9% 9% 10% 10% 11% 11% 11% 11% 12% 13% 13% 13% 13% 14% 14% 14% 14% 16% 16% 16% 18% 18% 18% 20% 20% 22% 26% 27% 38% 45% Israel Denmark Netherlands South Africa Austria Germany Italy Canada U.K. France Switzerland China Uruguay India Japan Malaysia El Salvador Turkey U.S. Pakistan Panama Bolivia South Korea Vietnam Dominican Republic Honduras Colombia Nicaragua Venezuela Ecuador Hong Kong Indonesia Argentina Brazil Taiwan Peru Singapore Philippines Chile Mexico Thailand 9% Europe, Middle East & Africa 11% Asia Pacific 13% Americas 16% 17% 18% 19% 21% 21% 21% 24% 27% 28% 29% 30% 34% 37% 39% 41% 43% 43% 43% 44% 45% 46% 50% 51% 61% 63% 67% 68% 68% 76% 78% 83% 85% 87% 88% 98% 107% 108% 8 countries were removed from the study this year due to a lack of new statutory data with which to update the analysis: Australia, Czech Republic, Greece, Hungary, Poland, Romania, Slovakia, and Spain. 8 Insurance Risk Study

11 Global Risk Parameters Coefficient of variation of loss ratio for major lines by country Motor Motor Personal Motor Commercial Property Property Personal Property Commercial General Liability Accident & Health Marine, Aviation & Transit Workers Compensation Credit Fidelity & Surety Americas Argentina 11% 76% 84% 92% 196% Bolivia 9% 43% 12% 44% 102% Brazil 10% 78% 86% 93% 37% 96% Canada 14% 21% 17% 33% 37% 39% 61% 69% 101% Chile 3% 98% 69% 43% 69% 52% Colombia 18% 51% 58% 40% 41% 70% 64% Dominican Republic 13% 46% 49% 207% Ecuador 11% 67% 100% 59% 69% 96% El Salvador 5% 37% 16% 152% Honduras 18% 50% 12% 106% Mexico 11% 108% 60% 49% Nicaragua 27% 61% 68% 172% Panama 20% 43% 24% 150% Peru 11% 85% 60% 19% 24% 135% 89% 104% Uruguay 13% 28% 21% 302% U.S. 18% 14% 23% 41% 44% 35% 38% 47% 37% 26% 63% Venezuela 20% 63% 11% 151% Asia Pacific China 12% 27% 48% 26% 13% 18% 21% 39% Hong Kong 38% 68% 81% 21% 63% 69% India 14% 29% 8% 28% Indonesia 26% 68% 125% 44% 79% 100% 128% Japan 6% 30% 12% 9% 17% 11% Malaysia 9% 34% 94% 38% 27% 104% Pakistan 16% 43% 49% Philippines 45% 88% 85% 96% 136% Singapore 22% 87% 35% 52% 26% South Korea 9% 44% 23% 60% 179% Taiwan 3% 3% 83% 45% 16% 66% 79% Thailand 3% 109% 121% 14% 27% Vietnam 14% 45% 165% 50% 39% 42% Europe, Middle East & Africa Austria 9% 17% 13% 48% 19% 11% 28% 41% Denmark 14% 11% 13% 11% 18% 15% 24% 36% France 8% 21% 27% 16% 30% 23% 37% 90% Germany 8% 18% 19% 31% 25% 21% 17% 46% Israel 10% 9% 20% Italy 13% 19% 24% 19% 42% 21% 67% Netherlands 9% 13% 28% 56% 30% 37% South Africa 16% 16% 59% 47% 39% Switzerland 7% 24% 16% 9% 46% 85% Turkey 16% 16% 39% 39% 43% 16% 48% 58% 102% U.K. 13% 13% 16% 21% 22% 25% 30% 15% 47% Aon Benfield 9

12 US Risk Parameters For the US risk parameters of the Study, we use data from 20 years of NAIC annual statements for 2,799 individual groups and companies. Our database covers all 22 Schedule P lines of business and contains over 5 million records of individual company observations from accident years The chart below shows the loss ratio volatility for each Schedule P line, with and without the effect of the underwriting cycle. The underwriting cycle effect is removed by normalizing loss ratios by accident year prior to computing volatility. This adjustment decomposes loss ratio volatility into its loss and premium components. Coefficient of variation of gross loss ratio ( ) Private Passenger Auto 13% 14% Auto Physical Damage 16% 17% No Underwriting Cycle Risk All Risk Commercial Auto 18% 23% Workers' Compensation 19% 26% Commercial Multi Peril 33% 33% Medical PL - Occurrence 29% 35% Warranty 30% 36% Other Liability - Occurrence 26% 37% Special Liability 28% 37% Other Liability - Claims-Made 27% 39% Medical PL - Claims-Made 29% 42% Homeowners 36% 44% Products Liability - Occurrence 44% 47% Other 37% 48% Fidelity and Surety 45% 63% International 22% 68% Reinsurance - Liability Reinsurance - Financial Reinsurance - Property Special Property 39% 44% 53% 54% 70% 80% 84% 85% Products Liability - Claims-Made Financial Guaranty 41% 90% 93% 159% The underwriting cycle acts simultaneously across many lines of business, driving correlation between the results of different lines and amplifying the effect of underwriting risk to primary insurers and reinsurers. Our analysis demonstrates that the cycle increases volatility substantially for all major commercial lines, as shown in the table. For example, the underwriting volatility of reinsurance liability increases by 60 percent and commercial auto liability by 32 percent. Personal lines are more formula-rated and thus show a lower cycle effect, with private passenger auto volatility only increasing by 11 percent because of the cycle. See page 58 of the 2015 Global Insurance Market Opportunities Study for a detailed description of how the underwriting cycle input is calculated. US underwriting cycle impact on volatility Line of Business Impact Reinsurance Liability 60% Other Liability Claims Made 46% Other Liability Occurrence 44% Medical PL Claims Made 41% Workers Compensation 38% Special Liability 33% Commercial Auto 32% Commercial Multi Peril 22% Homeowners 22% Private Passenger Auto 11% 10 Insurance Risk Study

13 Macroeconomic, Demographic, and Social Indicators Country GDP PPP, USD billions GDP 5yr real growth Population millions Population 5yr annualized growth GDP Per Capita PPP, USD Government consumption as % of GDP Actual individual consumption as % of GDP General government debt as % of GDP New foreign direct investment USD billions Inflation rate Unemployment rate Corporate tax rate Political risk assessment Aon terrorism risk assessment World Bank relative ease of doing business Argentina % % 22, % 74.4% n/a % 7.8% 35.0% High Medium More difficult Australia 1, % % 48, % 57.5% 19.5% % 5.9% 30.0% Low Low Easiest Austria % % 48, % 56.5% 47.5% % 6.2% 25.0% Low Negligible Easiest Belgium % % 44, % 56.9% 65.2% % 8.3% 34.0% Medium Low Low Easiest Brazil 3, % % 15, % 59.8% 42.9% % 9.2% 34.0% Medium Medium More difficult Bulgaria % % 19, % 60.9% 1.5% % 8.6% 10.0% Medium Low Easiest Canada 1, % % 46, % 55.7% 27.5% % 7.3% 26.5% Low Low Easiest Chile % % 23, % 62.0% -1.1% % 6.8% 24.0% Medium Low Medium Easiest China 20, % % 15, % 37.4% n/a % 4.1% 25.0% Medium Medium Easier Colombia % % 14, % 64.9% 42.2% % 9.8% 25.0% Medium High Easier Czech Republic % % 32, % 50.5% n/a % 4.7% 19.0% Medium Low Negligible Easiest Denmark % % 46, % 47.2% 9.3% % 6.0% 22.0% Low Low Easiest Ecuador % % 10, % 61.4% n/a % 5.7% 22.0% Medium High Medium More difficult Finland % % 41, % 58.4% -42.5% % 9.3% 20.0% Low Negligible Easiest France 2, % % 41, % 56.8% 90.5% % 10.1% 33.3% Medium Low Medium Easiest Germany 3, % % 47, % 54.9% 46.7% % 4.6% 29.7% Low Low Easiest Greece % % 26, % 71.3% 72.1% % 25.0% 29.0% High Medium Easier Hong Kong % % 58, % 58.0% n/a % 3.2% 16.5% Low Low Easier India 8, % % 6, % 60.8% n/a % 0.0% 34.6% Medium High More difficult Indonesia 3, % % 11, % 53.9% n/a % 5.9% 25.0% Medium High More difficult Ireland % % 58, % 37.2% 71.6% % 8.3% 12.5% Medium Low Easiest Israel % % 34, % 58.9% 62.6% % 5.3% 25.0% Medium Low High Easier Italy 2, % % 36, % 59.8% 111.8% % 11.4% 31.4% Medium Low Easiest Japan 4, % % 38, % 59.9% 129.6% % 3.3% 32.3% Medium Low Low Easiest Luxembourg % % 100, % 44.0% n/a % 6.4% 29.2% Low Negligible Easier Malaysia % % 27, % 54.6% n/a % 3.2% 24.0% Medium Low Low Easiest Mexico 2, % % 17, % 63.6% 48.6% % 4.0% 30.0% Medium Medium Easiest Morocco % % 8, % 56.3% 63.8% % 9.7% 31.0% Medium Low Easier Netherlands % % 50, % 44.1% 35.4% % 6.4% 25.0% Low Low Easiest New Zealand % % 36, % 59.9% 7.4% % 5.9% 28.0% Low Negligible Easiest Nigeria 1, % % 6, % 71.3% 12.8% % n/a 30.0% High Severe Most difficult Norway % % 69, % 34.5% % % 4.6% 25.0% Low Low Easiest Poland 1, % % 27, % 61.8% 26.1% % 6.9% 19.0% Medium Low Low Easiest Portugal % % 28, % 65.6% 120.9% % 11.6% 21.0% Medium Low Easiest Romania % % 21, % 59.4% n/a % 6.4% 16.0% Medium High Low Easiest Russia 3, % % 25, % 59.4% n/a % 6.5% 20.0% Medium High Medium Easier Saudi Arabia 1, % % 53, % 33.5% -31.0% % n/a 20.0% Medium High Easier Singapore % % 86, % 34.0% n/a % 2.0% 17.0% Low Negligible Easiest South Africa % % 13, % 61.9% 46.2% % 26.1% 28.0% Medium Low Easier South Korea 1, % % 37, % 79.8% 35.3% % 3.5% 24.2% Medium Low Low Easier Spain 1, % % 36, % 56.9% 66.2% % 19.7% 25.0% Medium Low Easiest Sweden % % 49, % 50.3% -15.6% % 6.8% 22.0% Low Negligible Easiest Switzerland % % 59, % 49.1% 23.8% % 3.5% 0.0% Low Negligible Easiest Taiwan 1, % % 47, % 58.0% 36.4% n/a -0.3% 3.8% 17.0% Medium Low Low Most difficult Thailand 1, % % 16, % 61.1% n/a % 0.8% 20.0% Medium High High Easier Turkey 1, % % 21, % 60.0% 21.9% % 10.8% 20.0% Medium High Easier U.A.E % % 67, % 73.2% % % 0.0% 55.0% Medium Low Low Easiest U.K. 2, % % 42, % 63.4% 80.6% % 5.0% 20.0% Medium Low Low Easiest U.S. 18, % % 57, % 71.7% 82.2% % 4.9% 40.0% Low Low Easiest Venezuela % % 15, % 94.8% n/a % 17.4% 0.0% Very High High Most difficult Aon Benfield 11

14 Global Correlation Between Lines Correlation between lines of business is central to a realistic assessment of aggregate portfolio risk, and in fact becomes increasingly significant for larger companies where there is little idiosyncratic risk to mask correlation. Most modeling exercises are carried out at the product or business unit level and then aggregated to the company level. In many applications, the results are more sensitive to the correlation and dependency assumptions made when aggregating results than to all the detailed assumptions made at the business unit level. The Study determines correlations between lines within each country. Correlation between lines is computed by examining the results from larger companies that write pairs of lines in the same country. Aon Benfield Analytics has correlation tables for most countries readily available and can produce custom analyses of correlation for many insurance markets globally upon request. As examples, tables for the US, UK, Colombia, and China appear below. US Homeowners Private Passenger Auto Commercial Multi Peril Commercial Auto Workers Compensation Other Liability - Occurrence Medical PL - Claims Made Other Liability - Claims-Made Products Liability - Occurrence Homeowners 4% 28% 11% -7% 4% 5% 0% 16% Private Passenger Auto 4% 13% 23% 42% 21% 29% 22% 24% Commercial Multi Peril 28% 13% 52% 29% 51% 53% 45% 39% Commercial Auto 11% 23% 52% 54% 60% 68% 43% 65% Workers Compensation -7% 42% 29% 54% 48% 56% 52% 52% Other Liability Occurrence 4% 21% 51% 60% 48% 74% 56% 59% Medical PL Claims Made 5% 29% 53% 68% 56% 74% 69% 69% Other Liability Claims-Made 0% 22% 45% 43% 52% 56% 69% 28% Products Liability Occurrence 16% 24% 39% 65% 52% 59% 69% 28% UK Accident & Health Commercial Lines Liability Commercial Motor Commercial Property Financial Loss Household & Domestic Private motor Accident & Health 41% 11% -28% 69% 41% 21% Commercial Lines Liability 41% 14% -27% 56% 33% 33% Commercial Motor 11% 14% -1% -11% 65% 47% Commercial Property -28% -27% -1% -9% -14% 14% Financial Loss 69% 56% -11% -9% 35% 34% Household & Domestic 41% 33% 65% -14% 35% 26% Private motor 21% 33% 47% 14% 34% 26% 12 Insurance Risk Study

15 Global Correlation Between Lines Colombia Accident & Health Crop & Animal Fidelity & Surety General Liability Marine, Aviation & Transit Motor Property Special Liability Special Property Surety Accident & Health 22% 1% 22% 40% 4% 30% 18% 13% 25% Crop & Animal 22% 3% 14% 30% 2% 42% 12% 11% 1% Fidelity & Surety 1% 3% 40% 11% -5% 29% 10% 21% 18% General Liability 22% 14% 40% 43% -7% 36% 17% 18% 16% Marine, Aviation & Transit 40% 30% 11% 43% 8% 54% 35% 26% 45% Motor 4% 2% -5% -7% 8% 8% 8% 17% 12% Property 30% 42% 29% 36% 54% 8% 31% 24% 43% Special Liability 18% 12% 10% 17% 35% 8% 31% 13% 38% Special Property 13% 11% 21% 18% 26% 17% 24% 13% 14% Surety 25% 1% 18% 16% 45% 12% 43% 38% 14% China Accident & Health Agriculture Credit Engineering Financial Guaranty General Liability Marine, Aviation & Transit Motor Other Property Special Risks Accident & Health 39% 15% 9% 34% 11% 18% 26% 25% 20% -6% Agriculture 39% 42% 12% 12% 32% 9% 9% 15% 27% -36% Credit 15% 42% 6% 1% 7% 5% 14% 11% 14% -19% Engineering 9% 12% 6% 16% 20% 13% 39% 34% 13% -9% Financial Guaranty 34% 12% 1% 16% 20% -2% -3% 38% 22% 12% General Liability 11% 32% 7% 20% 20% 22% 16% 26% 13% -13% Marine, Aviation & Transit 18% 9% 5% 13% -2% 22% 26% 23% 3% -7% Motor 26% 9% 14% 39% -3% 16% 26% 39% 23% -14% Other 25% 15% 11% 34% 38% 26% 23% 39% 36% -49% Property 20% 27% 14% 13% 22% 13% 3% 23% 36% 12% Special Risks -6% -36% -19% -9% 12% -13% -7% -14% -49% 12% Correlation is a measure of association between two random quantities. It varies between -1 and +1, with +1 indicating a perfect increasing linear relationship and -1 a perfect decreasing relationship. The closer the coefficient is to either +1 or -1 the stronger the linear association between the two variables. A value of 0 indicates no linear relationship whatsoever. All correlations in the Study are estimated using the Pearson sample correlation coefficient. In each table the correlations shown in bold are statistically different from zero at the 95 percent confidence interval. Aon Benfield 13

16 Sources and Notes Global Premium, Capital, Profitability & Opportunity Sources: A.M. Best, Axco Insurance Information Services, IMF World Economic Outlook Database April 2015 Edition, SNL Financial, Standard & Poor s, World Bank Notes: Premium amounts stated in USD are converted to USD by Axco. Growth rates are calculated in original currency and exclude currency exchange fluctuation. Country Opportunity Index Calculation: For each combined ratio, growth and political risk statistic, countries were ranked and segmented into quartiles. A score of 1 to 4 was assigned to each metric based on quartile. Opportunity Index Score = one-third multiplied by combined ratio score plus two-thirds multiplied by average of premium, GDP and population growth and political scores. Ties were broken by premium growth. Growth Markets and Out/Underperformers Premium and growth calculated using Axco data. Loss ratios for motor, property and liability lines also calculated using Axco. All lines loss, expense, and combined ratios are calculated using A.M. Best s Statement File Global and are based on the net results of the largest 25 writers for a given country (where available). Global Risk Parameters and US Risk Parameters Sources: ANIA (Italy), Association of Vietnam Insurers, BaFin (Germany), Banco Central del Uruguay, Bank Negara Malaysia, CADOAR (Dominican Republic), Cámara de Aseguradores de Venezuela, Comisión Nacional de Bancos y Seguros de Honduras, Comisión Nacional de Seguros y Fianzas (Mexico), Danish FSA (Denmark), DNB (Netherlands), Ernst & Young Annual Statements (Israel), Finma (Switzerland), FMA (Austria), FSA (UK), HKOCI (Hong Kong), (Indonesia), Insurance Commission (Philippines), IRDA Handbook on Indian Insurance Statistics, Korea Financial Supervisory Service, Monetary Authority of Singapore, MSA Research Inc. (Canada), Quest Data Report (South Africa), SNL Financial (US), Superintendencia de Banca y Seguros (Peru), Superintendencia de Bancos y Otras Instituciones Financieras de Nicaragua, Superintendencia de Bancos y Seguros (Ecuador), Superintendencia de Pensiones de El Salvador, Superintendencia de Pensiones, Valores y Seguros (Bolivia), Superintendencia de Seguros de la Nación (Argentina), Superintendencia de Seguros Privados (Brazil), Superintendencia de Seguros y Reaseguros de Panama, Superintendencia de Valores y Seguros de Chile, Superintendencia Financiera de Colombia, Taiwan Insurance Institution, The Statistics of Japanese Non-Life Insurance Business, Undersecretariat of Treasury (Turkey), China Insurance Yearbooks, and annual financial statements Macroeconomic, Demographic, and Social Indicators Sources: Aon Political Risk Map 2015, Aon Terrorism & Political Violence Map 2015, Axco Insurance Information Services, Bloomberg, IMF World Economic Outlook Database April 2015 Edition, KPMG, Penn World Table Version 8.1, World Bank Notes: Table GDP (PPP) is GDP in local currency adjusted using purchasing power parity (PPP) exchange rate into US dollars. The PPP exchange rate is the rate at which the currency of one country would need to be converted in order to purchase the same amount of goods and services in another country. Global Correlation Between Lines Sources: FSA (UK), SNL Financial (US), Superintendencia Financiera de Colombia, and China Insurance Yearbook 14 Insurance Risk Study

17 Contacts For more information on the Global Insurance Market Opportunities study or our analytic capabilities, please contact your local Aon Benfield broker or: Paul Mang Global Chief Executive Officer of Analytics Aon Benfield Tracy Hatlestad Global Chief Operating Officer of Analytics Aon Benfield Greg Heerde Head of Analytics & Inpoint, Americas Aon Benfield George Attard Head of Analytics, International Aon Benfield John Moore Chairman of International Analytics Aon Benfield +44 (0) Kelly Superczynski Head of Analytics, EMEA Aon Benfield About Aon Benfield Aon Benfield, a division of Aon plc (NYSE: AON), is the world s leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com. Aon Benfield Inc All rights reserved. This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. This analysis is based upon information from sources we consider to be reliable, however Aon Benfield Inc. does not warrant the accuracy of the data or calculations herein. The content of this document is made available on an as is basis, without warranty of any kind. Aon Benfield Inc. disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Members of Aon Benfield Analytics will be pleased to consult on any specific situations and to provide further information regarding the matters.

18 About Aon Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 69,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit: Aon plc All rights reserved. The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. GDM19914 Risk. Reinsurance. Human Resources.