Employee Benefits – current situation and new opportunities for Employers

1. Employee Benefits – current situation and new opportunities for Employers ZAO “ALICO Insurance Company Alexander Lazarev, Vice-President AmCham Annual HR Conference September 2009 | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

2. «Our new identity is the decisive step towards independence. It reflects our business vision – modern, open and client-oriented.» • Simon Smith, Alico Strategic Development Director American Life Insurance Company – AlicoWhy rebranding? • Mark the new stage in Company development • Form new image for all Alico subsidiaries and affiliates worldwide • Serve as symbolic representation of Alico future separation from AIG and evocative of its heritage as a global insurer that has enjoyed tremendous success throughout its history, with a significant presence in every region across the globe | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

3. «Alico is a strong brand with a proud heritage. Since its inception in 1921, Alico has built a reputation for delivering market-leading products and services to our customers.» • Rodney O. Martin, Jr., • Alico Chairman and • Chief Executive officer. American Life Insurance Company Worldwide • One of the world largest insurance companies • Operations in 54 countries • 19 mln. individuals insured • 89 subsidiaries • 11,000 employees and 38,000 agents • 1,700 brokers / independent financial consultants • USD 89 billion assets | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

4. Situation requires attention and here comes the crisis… Current situation with Employee Benefits • Insurance benefits are not that excitingcompared to material ones (company car, mobile phone etc.) • No new insurance benefits were introduced recently, pension plans’ acceptance is slow • Voluntary Medical Insurance remains the most popular and demanded insurance benefit • Customers’ interest to Life and A&H programs is from moderate to low • Existing insurance benefits are more or less similar in each company • Lack of differentiation in insurance benefits – missed momentum in competition | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

5. Customers views on insurance benefits – Alico market survey results Multinational companies Russian companies | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

6. Are the «anti-crisis» solutions really motivating? • Companies are trying to provide «symmetrical» answer to the crisis, even those who did not suffer • Companies introduce strategies of savings • Introduction of new «anti-crisis» market offerings including ones in insurance benefits • Consumers/employees do not like to admit internal limitations • Crisis theme irritates consumers/employees • Ipsos Russia marketing research has identified the following opinions of the Muscovites with regard to the financial conditions of their families: Ipsos Russia | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

7. Motivation is required to provide retention despite the crisis • Candidates have to be attracted • Insurance benefits are to be focused at bigger risk protection of such category of employees • Necessity in co-financing of insurance benefits or introduction of deferred benefits as the most cost-effective solutions • The lack of qualified personnel continues to exist despite the layoffs • Companies compete for good specialists • During financial instability the middle class suffers the most and is the most unprotected • Frozen or decreased budgets for EB, even if the company did not suffer • Demand to be insured increases Market conditions – impact on insurance benefitsObservations Conclusions | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

8. Voluntary Life and Personal Accident insurance at the workplace • Covers the risks of loss of Life, Personal Accident and Critical Illness • Target audience – blue collars, base and middle management, technical personnel • Improves employees’ protection and complements Voluntary Medical Insurance • Can be provided to the family members of employees • Does not require financing from the Employer • Insurance Company takes care of the information support and promotion of the program | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

9. Interesting and fresh motivational tool at no expense to the Employer Why voluntary insurance at the workplace? • Significantly reduces the possibility of employees or their families claiming financial aid to the Employer as a result of an accident, illness • Claims are directed to and paid by the Insurance Company • At no expense to the Employer • Announced and perceived as a new benefit • Good opportunity to remind the employees on the benefits package overall with the help of the Insurance Company • Corporate rates for individual policies – employees and relatives • Comfortable conditions to start the policy – at the workplace • Comfortable payment conditions for employees – salary deduction based on application | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

10. Deferred Bonus savings program • Defined Contribution savings plan with regular Employer contributions and payment of the full amount of savings to the employee at the end of specified period, usually 5 years • Target audience – white collars, upper management, key specialists • Contribution is usually set as a percentage of salary in the amount 5-10% of total wages • Amounts of savings are under full control of the Employer until the day of payment | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

11. New motivational instrument for core employees – attractive alternative for unstable times Why Deferred Bonus savings program? • Main objective is retention – paid only if the employee continues employment • Reasonable expense to the Employer, paid on the regular basis, i.e. monthly • Can be positioned as an alternative to stock options particularly when markets are down • Announced and perceived as a new benefit, the objective is clearly communicated • Life of the participant can be insured in the amount of savings – in case of the insured event the family receives the insurance benefit while savings might be returned to the Employer or also paid to the family | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009

12. Contact information: • Alexander Lazarev • Vice-President • ZAO «ALICO Insurance Company» • Bld. 1, 76 Butyrskaya street • Moscow, 127015, RUSSIA • Т. +7 (495) 937-5995 • F. +7 (495) 937-5999 • М. +7 (985) 922-5910 • www.alico.ru • www.alico.com | New EB opportunities for Employers by Alico | AmCham Annual HR Conference | September 2009