Romanian Insurance Market 2017

The Romanian insurance market in Romania continued its growth trend in 2017, the local
industry totaling RON 9.7 billion (EUR 2.1 billion), 3.5% more than in the previous year.

"A change in the trends during previous years is the strengthening of the life insurance
segment, which last year registered a significant increase of 21% compared to 2016. If
between 2012 - 2014 the activity of life insurance was declining in terms of volume of gross
written premiums, starting 2015 this segment has increased again, and in 2017 the evolution
of the insurance sector was due to the life insurance segment", as FSA - the Financial
Supervision Authority announced in a statement.

Per business lines, non-life GWP amounted about RON 7.7 billion (EUR 1.7 billion), down
by 0.3% y-o-y. Of the total non-life GWP, the highest shares are held by classes A10 - Civil
liability for the use of land vehicles (39.38% of total market, 50% of non-life GWP), A3 -
Land vehicles, excluding railway rolling stock (19.52% of total or about a quarter of non-life
GWP), A8 - Fire and natural disasters (10.35% of total, or 13% of non-life segment). In 2017,
the share of these three classes was 88% of total gross written premiums for non-life
insurance business. It is worth to mention that the total value of insurance premiums
subscribed for MTPL insurances reached RON 3.7 billion, the rest to the total of the A10 class
(3.82 billion lei) representing the Carrier's insurance for cargo and RCA underwritten to the
territory of other EU Member States on the basis of the freedom to provide services. The
combined ratio calculated for Class A10 (RCA) was of 99.46% in 2017.

In case of life insurance sector, the value of GWP increased by 21% in 2017 compared to the
previous year, reaching about RON 2 billion (EUR 442 million). Of the total gross written
premiums for life insurance, the highest shares are held by C1 - life insurance, annuities and
supplementary life insurance, and C3 - Life insurance and annuities related to investment
funds, which together account for 96% of the total gross written premiums for life insurance.

The own funds eligible to cover the solvency capital requirement were at the end of 2017 at a
value of RON 5.15 billion, up by 12% as compared to 2016. According to FSA, the Solvency
Capital Requirement (SCR) and the MCR (Minimum Capital Requirement) rates at the
market level were above par at the end of 2017 for the first time after the Solvency II regime's
requirements were implemented. Also, both the SCR rate and the MCR rate at the market
level increased at the end of 2017 as compared to the end of 2016. The SCR rate at the market
level increased by 6% and the MCR rate at the market level increased by 12%.

The FSA figures showed that during 2017, the local brokerage companies mediated about
63.41% of total GWP, which means a decrease by 2.77 percentage points compared to the
intermediation degree recorded in the similar period of 2016.

Swiss investors Max Rossler (majority shareholder in construction company Implenia and
shareholder in several other insurance companies) will take control of City Insurance, one of
the top Romanian players in TPL (third party liability) car insurance.
The insurance market in Romania is very concentrated. During the first half of 2017, 88% of
the total gross written premiums were covered by 10 of the 31 insurance companies active as
at 30/06/2017 in the insurance/reinsurance business.

Table 3. Companies with the highest volumes of gross written premiums and their share in the
total market (non-life and life insurance)

Company Total market share

1 CITY INSURANCE S.A. 13.20%

2 ALLIANZ - TIRIAC ASIGURARI S.A. 12.72%
3 EUROINS ROMANIA ASIGURARE REASIGURARE S.A. 12.28%
4 OMNIASIG VIG 10.15%
5 ASIROM VIENNA INSURANCE GROUP S.A. 9.34%
Total (1-5) 57.70%
6 GROUPAMA ASIGURARI S.A. 9.14%
7 NN ASIGURARI DE VIATA SA 7.12%
8 GENERALI ROMANIA ASIGURARE REASIGURARE S.A. 6.48%
9 UNIQA ASIGURARI S.A. 4.04%
10 BCR ASIGURARI DE VIATA VIENNA INSURANCE GROUP S.A. 3.87%
Total (1-10) 88.35%
Other companies 11.65%
TOTAL 100%

Gross premiums written reported for non- life insurance

During the first half of 2017, the total volume of gross premiums written for non-life
insurance was
Lei 3,972,468,844, recording a growth by 2% as compared to the first half of the previous
year.
The top 10 insurance companies to have underwritten premiums relating to non-life insurance
amounted to a cumulated value of Lei 3,835,511,546, i.e. 97% of the total line of business.

Table 4. Ranking of insurance companies according to the gross premiums written for non-life
insurance during the first half of 2017

Company Total market share

1 CITY INSURANCE S.A. 16.75%

2 EUROINS ROMANIA ASIGURARE REASIGURARE S.A. 15.59%
3 ALLIANZ - TIRIAC ASIGURARI S.A. 14.30%
4 OMNIASIG VIG 12.89%
5 GROUPAMA ASIGURARI S.A. 11.17%
Total (1-5) 70.71%
6 ASIROM VIENNA INSURANCE GROUP S.A. 10.22%
7 GENERALI ROMANIA ASIGURARE REASIGURARE S.A. 7.36%
8 UNIQA ASIGURARI S.A. 5.13%
9 POOL-UL DE ASIGURARE P.A.I.D. 1.75%
10 GOTHAER ASIGURARI - REASIGURARI S.A. 1.39%
Total (1-10) 96.55%
Other companies 3.45%
TOTAL 100.00

Of the total gross premiums written for non-life insurance, the largest shares are held by
classes A10
Motor third party liability for use of land vehicles, A3 Land vehicles, exclusively railway
rolling stock,
A8 Insurance against fire and other natural disasters (for other assets than those which can be
insured via classes A3-A7).

During the first half of 2017, the share of these three classes was 88% of the total gross
premiums written for non-life insurance:

 Class A10 – Motor third party liability for use of land vehicles with a volume of gross
premiums written of Lei 2,105,340,326, i.e. 53% of the total underwritings for non-life
insurance recorded a decrease by 2% during the first half of 2017, as compared to the same
period of 2016;

 Class A3 – land vehicles, exclusively railway rolling stock, with a volume of gross
premiums
written of Lei 892,985,251, i.e. 22% of the total underwritings for non-life insurance recorded
an increase by 7% during the first half of 2017, as compared to the same period of 2016;

 Class A8 – Insurance against fire and other natural disasters (for other assets than those
which can be insured via classes A3-A7), with a volume of gross premiums written of Lei
492,250,145, i.e. 12% of the total underwritings for non-life insurance, recorded an increase
by 6% during the first half of 2017, as compared to the same period of 2016.

Gross premiums written for life insurance

The gross premiums written by insurance companies with respect to life insurance recorded
an
increase by 36% during the first half of 2017, as compared to the same period of last year.
A high concentration level was maintained in 2017 too, so 10 companies held a share of 95%
of the
volume of total premiums written in this segment, with total underwritings amounting to Lei
1,021,860,314.

Table 6.Ranking of insurance companies according to gross premiums written for life
insurance in 2017

Company Market share

1 NN ASIGURARI DE VIATA SA 33.53%

2 BCR ASIGURARI DE VIATA VIENNA INSURANCE GROUP S.A. 18.21%
TOTAL (1-2) 51.74%
3 EUROLIFE ERB ASIGURARI DE VIATA S.A. 8.50%
4 ERGO ASIGURARI DE VIATA S.A. 7.03%
5 ALLIANZ - TIRIAC ASIGURARI S.A. 6.88%
6 BRD ASIGURARI DE VIATA S.A. 6.45%
7 ASIROM VIENNA INSURANCE GROUP S.A. 6.10%
8 GENERALI ROMANIA ASIGURARE REASIGURARE S.A. 3.21%
9 SIGNAL IDUNA ASIGURARE REASIGURARE S.A. 2.90%
10 UNIQA ASIGURARI DE VIATA SA 2.58%
TOTAL (1-10) 95.40%
Other companies 4.60%
TOTAL 100.00

Of the total gross premiums written for life insurance, the highest shares are held by class C1
Life
insurance, annuities and additional life insurances and respectively class C3 Life insurance
and
annuities, relating to investment funds reaching together an aggregate 94% of the total gross
premiums written for life insurance.

The following conclusions can be reached from the dynamics analysis:

o Class C1 – Life insurance, annuities and additional life insurance accounts for 64% of
the total underwritings for life insurance; it recorded an increase by 28% during the
first half of 2017, as compared to the same period of last year;
o Class C3 – Life insurance and annuities related to investment funds accounts for 30%
of the total underwritings for life insurance; it recorded an increase by 51% during the
first half of 2017, as compared to the same period of last year;

Gross claims paid for non-life insurance

Taken together, gross claims paid by 10 insurance companies accounted for 98% of the total
gross
claims paid for the non-life insurance segment.

Table 12. Insurance companies having reported the highest volume of gross claims paid for
non-life insurance

Company Market share (%)

1 CITY INSURANCE S.A. 15.15%
2 EUROINS ROMANIA ASIGURARE REASIGURARE S.A. 14.95%
3 OMNIASIG VIG (former BCR ASIGURARI VIG) 14.43%
4 ASIROM VIENNA INSURANCE GROUP S.A. 13.80%
TOTAL (1-4) 58.33%
5 ALLIANZ - TIRIAC ASIGURARI S.A. 12.15%
6 GROUPAMA ASIGURARI S.A. 11.45%
7 UNIQA ASIGURARI S.A. 7.99%
8 GENERALI ROMANIA ASIGURARE REASIGURARE S.A. 6.10%
9 GOTHAER ASIGURARI - REASIGURARI S.A. 1.25%
10 EXIM ROMANIA S.A. 0.91%
TOTAL (1-10) 98.20%
Other companies 1.80%
TOTAL 100%

There may be 2 smaller insurance companies for sale:

ABC Asigurari
Romanian private capital : construction companies (Hidroconstructia 58%, Iridex 20%,…..
private individuals) .Victoria Dumitru – General Director, Mircea Hristofor-Chairman,
Gabriela Tentzea-Deputy General Director, George Gabriel Sandu – Deputy General Director.
24 offices in Romania (national coverage). General insurance business (almost all categories),
focus on domestic business.

abc.asigreasig@abcasigurari.ro

Total assets 43.68 M RON , Revenues 39,86 M RON, Gross Profit 0.78 M RON, Solvability
Ratio 157%. Attached 2016 mini-audit report.

CertAsig

CertAsig is a Romanian insurance company, based in Bucharest and active in Romania,

Turkey and Bulgaria. The company has branches in Constanta and Cluj, local offices in
Suceava and Ramnicu Valcea, a liaison office in Istanbul (Turkey), an office in Prague (Czech
Republic) and a branch in Sofia (Bulgaria).

CertAsig is a solid and respected company, thanks to its specialised professional insurance
products, to the high level of expertise of its team and its fast and fair claims processing
procedure.

Experience in corporate and commercial insurance, international expertise and pragmatic

underwriting approach, adapted to each of the markets they operate in, are strong advantages,
highly valued by both broker partners and by clients.

The CertAsig portfolio is secured by A-rated reinsurance agreements underwritten by some of

the strongest names in reinsurance, including Lloyd’s Syndicates, Hannover Re, Sirius, Trust
Re, Partner Re, XL Catlin, Swiss Re, Axis Re, Polish Re.

The company’s majority shareholder is Royalton Capital Investors II (89%), a private equity
investment fund based in Luxemburg, active in Romania, Poland, Slovakia, Turkey, Slovenia,
Lithuania and the Czech Republic. The main investors of Royalton Capital Investors II
include Alpha Associates, the European Bank for Reconstruction and Development (EBRD)
and the European Investment Fund (EIF). The rest of 11% hold by senior management.

Summary (as per www.certasig.ro ):

 One of only a few independent insurance companies in Romania
 Solvency II compliant
 A profitable business with gross written premium volumes increasing from 0.7 mil
EUR in 2007 to 13.5 mil EUR in 2016
 More than 98% of business originates through insurance brokers
 Well balanced portfolio focusing on liability, contractual bonds, engineeering, cargo &
marine hull. Also strong in auto third party liability, not in life insurance
 62% of our portfolio comes from Romania, 10% from Bulgaria and 28% from the
Turkish marine insurance market.
 Three regional offices in main Romanian cities, in addition to Bucharest Headquarter
 International offices in Istanbul and Sofia
 Over 5.000 companies insured their factories, buildings, equipment, merchandise,
employees, contracts or ongoing business with CertAsig. More than 98% of insured
companies choose CertAsig’s products through insurance brokers.

James Grindley, CEO james.grindley@certasig.ro

Ivan Vohlmuth, Chairman
Maria Rangelova, Deputy CEO

All figures in ,000 RON

Certasig Insurance SRL

Balance Sheet 2012 2013 2014 2015 2016

Total fixed assets N/A N/A N/A N/A N/A

Total current assets 1.575 715 162 695 2.267
Inventories N/A N/A N/A N/A N/A
Cash & Bank 1.575 715 162 695 2.267
Accounts Receivable N/A N/A N/A N/A N/A
Total Capital 1.575 701 160 642 2.223
Subscribed Equity 1.000 1.000 1.000 N/A 1.000
Provisions N/A N/A N/A N/A N/A
Total Debt N/A 14 2 53 44

Profit & Loss 2012 2013 2014 2015 2016

Turnover 2.419 1.614 969 4.781 9.836

Total Revenues 2.456 1.634 969 4.781 9.836
Total Expenses 2.785 2.459 1.482 4.157 7.961
Gross Profit -329 -825 -513 624 1.875
Net Profit -371 -874 -541 481 1.581
Employees N/A N/A N/A N/A N/A

Certasig Services SRL

Balance Sheet 2012 2013 2014 2015 2016

Total fixed assets 4.831 4.207 3.584 2.961 2.338

Total current assets 186.876 226.637 254.352 276.419 163.383
Inventories N/A N/A N/A N/A N/A
Cash & Bank 38.176 3.674 36.504 51.646 1.273
Accounts Receivable 148.700 222.963 217.848 224.773 162.110
Total Capital N/A N/A N/A N/A N/A
Subscribed Equity 200 200 200 N/A 200
Provisions N/A N/A N/A N/A N/A
Total Debt 1.369.592 2.017.685 2.089.951 2.199.242 2.117.405

Profit & Loss 2012 2013 2014 2015 2016

Turnover 171.094 174.078 156.751 137.898 N/A

Total Revenues 199.695 244.378 201.189 202.971 28
Total Expenses 766.084 847.425 241.350 286.319 2.699
Gross Profit -566.389 -603.047 -40.161 -83.348 -31.819
Net Profit -566.389 -608.955 -45.174 -87.847 -31.822
Employees N/A N/A N/A N/A N/A