Growth Agenda for the Insurance Industry The Eureko Point of View

1. Final version Growth Agenda for the Insurance IndustryThe Eureko Point of View Gerard van OlphenMember of the Executive BoardEureko, The Netherlands International Insurance Society43rd Annual Seminar“Redefining the Industry: Regulation, Risk & Global Strategy“Berlin, July 8-11, 2007

2. Key figures Notes: All financials are statutory. Return on adjusted equity is excluding goodwill and other equity instruments (preference shares and tier-1 capital securities)

3. Market position (Netherlands) Delta Lloyd ING Eureko Fortis Allianz Delta Lloyd SNS Reaal Eureko Fortis ING Delta Lloyd Eureko VGZ CZ Menzis Zwitser-leven DeltaLloyd Eureko ING Aegon Mn Services Cordares Eureko ABP PGGM Eureko ING Fortis Aegon Goudse Arbo Unie Eureko ArboNed Maetis KLM

4. The Netherlands Europe Existing business “Efficiency game” Operational Excellence New business (incl. M&A) Strategy 

5. Where could growth come from? • Business lines • Focus on fast growing customer groups with traditional business using price or service levels as a point of entry • New business lines, i.e. privatisation of formerly public ‘markets’ • Regional diversification • Focus on fast(er) growing regions (developing markets) • Local solutions • New distribution models • Meeting the customer ‘at the right time / spot’ • Let customers do the job • Scope of value propositions • New combinations of existing components • Adding new components

6. Business lines • Existing business • Using price as a point of entry • Lowering claimsratio’s by selection and / or differentiation (ex ante or ex post). • Differentiate in pricing according to risk profiles to gain access to price sensitive clients. • Cost efficiency. There is a lot is to be gained, with us and with you (some 25%?). • Using services as a point of entry • The obvious approach: manage the claims services network (if you have the power). • A non obvious approach: Use trust towards clients as a competitive edge. It can be done without ruining the claimsratio. And it brings quite some new clients as well as cross sell. • Fast growing customer groups • The obvious example: elderly people. • Less obvious: self employment people (>20%), i.e. in the service industry (~70% of GDP). • New business • In mature markets the government steps back in taking the risk for future earning capacity (pensions, social security). This will bring new markets to the insurance industry. Demands special capabilities in the public/private market (as this is a stepwise development).

7. Regional diversification • Focus on fast(er) growing regions • All of us probably once made the traditional analysis • Look for countries where: • Saturation and/or concentration in the insurance sector is below average • GDP is expected to grow fast • Combine these and huge opportunities come up. • This is a very partial approach as • Low saturation is the result of a countries culture, which changes only very slowly. • High growth rate still don’t imply huge markets (where the starting point is almost zero). • Extreme: there is not even a word for insurance nor does the concept of insurance exist in quite some countries (as we found out when looking at micro insurance in India). • Local solutions • There is no McDonald solution to be exported to all countries with growth opportunities. It comes up to find specific solutions that fill up a market imperfection in a specific market. • Point of entry can be either (advanced products within) a business line or a less developed distribution line, for example bancassurance or direct writing.

8. New distribution models • Meeting the customer ‘at the right time / spot’ • First thing is on meeting the customer at all. Compare the banking sector in mature markets, where face-to-face contacts with clients have diminished with over 95 percent in a ten year period. Something like this will happen in the insurance industry, implying a huge pressure on distribution channels like tied agents and brokers. • We have to go out there and look for the clients at the ‘moments of truth’, like: • Selling a car insurance that comes as a package with bying a car. • Selling residential insurance and risk insurance (compensating for a fall back in income) packaged with a mortgage. • Etcetera …… • Allow customers easy access at the time they want (open up for telephone and Internet as a medium for service and selling) • Let customers do the job • There is a fundamental change going on in customer interaction. Internet based technology allows customers to enter into our systems and they love it! We must provide for this. First movers will gain access to an active client base, who allow insight in their preferences. • Needs trust from consumers in financial institutions

9. Scope of value propositions • New combinations of existing components • As large parts of the insurance industry become retail products with low added value we must create new combinations that bring value for clients (and willingness to pay for this), like: • Combining health insurance and (future) income insurance, creating fast access to healthcare services to minimise the ‘down time’ of labour and / or earning capacity. • Combining credit facilities, asset management and mortgages with risk insurance of any type (not just insurance, but second generation all finance). • Adding new components • Huge creativity can come up reinventing our business from the customers perspective. One needs to rethink what brings value to customers (what would the ask if they would put some effort in finding out what they should ask for). Some examples: • Insurance for salt water flooding in a river delta like the Netherlands. • A service agreement that guarantees clients access to transportation they appreciate (either their own car, public transportation or a rental). • Housing facilities including access to ‘care and cure’ whenever needed, as this comes with health insurance already. • Etcetera ……

10. Epilogue • Growth may come from the traditional approaches like …… • Enforcing existing business • New business lines • New customer groups • Regional diversification • …… but this will be limited anyhow • The breakthrough must come from …… • New distribution models • Widening the scope of our value propositions • ……. and more specific: the combination of these two • The real poser: Are you ready for this?