Cert Asig and Marine Underwriting in Turkish Market

Cert. Asig and Marine Underwriting in Turkish Market James Grindley - CEO Istanbul, 28 th March 2011

Who is Cert. Asig? • Cert. Asig is a specialist, non-life insurance company licensed by the Romanian Insurance Supervisory Commission (CSA) • Ultimate investors include: European Bank for Reconstruction & Development (EBRD) & European Investment Fund (EIF) • Our business model is to work primarily with insurance brokers and to target corporate SME clients • Cert. Asig focuses on ‘more technical’ and specialist insurance products • Avoid chasing market share – a common strategy of ‘top 10’ insurers in Romania • Romania is our core market but expansion to other CEE countries will be considered carefully - Turkey is already an important market for marine • Cert. Asig team includes 45 insurance professionals with 6 offices – the team is dedicated to brokers and clients • Cert. Asig intends to obtain a rating from a market-respected rating agency 2

Shareholder structure • Majority owner (92%) of Cert. Asig is European private equity fund Royalton Capital Investors II (“RCI II”), managed by Royalton Partners • Main investors in RCI II are: • • European Bank for Reconstruction & Development (EBRD) European Investment Fund (EIF) Various pension funds & other banks Cert. Asig Management 3

Specialist products v. Commercial & Industrial Property Insurance (All Risks with optional Business Interruption) v. Construction, Plant & Machinery Insurance v. Motor CASCO Insurance v. Electrical Equipment Insurance v. Contractors All Risks (CAR) v. Bond Insurance v. General Third Party Liability, Employer’s Liability Professional Liabilities v. Goods in transit / cargo v. Marine Insurance (ships, vessels, hull& machinery, Protection & Indemnity) v. General Aviation Insurance (private jets, helicopters) v. Medical mal-practice v. Event insurance v. Health Insurance v. Personal Accident Insurance v. Household insurance (buildings, contents & liabilities) 4

Evolution of portfolio by Gross Written Premium 5

Marine Insurance is a broker-driven market § Ship-owners and managers generally use specialist brokers to obtain insurance § Marine insurance brokers earn commissions between 15% to 25% of Gross Written Premium § Leading insurers for Turkish market include: § Turkish insurers § Lloyd’s Syndicates & London market § Russian & European insurers 6

Marine products and underwriting criteria for Turkey Products v Hull and Machinery for blue and brown water vessels v Protection and Indemnity for small and medium vessel (big oil tankers excluded) v Builder’s risks v Ship repairers’ liability v Pleasure crafts v Port authority / operator liability v Cargo / fine art v Specie and cash in transit v Cargo liability (CMR) Marine Business Underwriting Criteria v All vessels underwritten on a case-by-case basis; underwriting authority is never delegated v Bucharest and Constanta offices are active in selling marine business v Background / experience of operator, skipper (yacht insurance), shipyard, ship repairer, are checked before quoting v Core target business is CEE, Turkey, Black Sea-domiciled managers / operators / owners but all European managed vessels considered v Pre-entry condition survey is required for vessels older than 10 years, rendered by underwriters’ agreed surveyors v Loss record for previous 3 -5 years is required and checked; tighter terms and conditions or cover refused for business with high loss record v Terms and conditions used are similar to London wordings v Terms are calculated using benchmark London market indications, facultative reinsurance terms regularly obtained for comparison v Restrictive terms offered for over age vessels , Cl. 280 FPA ucb, Cl. 284 or Cl. 289 at underwriters’ discretion or higher additional machinery deductibles imposed v Fast response to brokers, usually same day – significant differentiator in the market v English law and jurisdiction is preferred; however local jurisdiction of original assured could be accepted v Cert. Asig is a quoting market with at least 80% of business underwritten 100%.

Reinsurance Key points Security v Marine Reinsurance Programme is underwritten by: Lloyd’s, Hannover Re, Flagstone Re & other reinsurers with rating of A- or better Marine Hull, Protection & Indemnity, Cargo & General Aviation v Non-proportional excess of loss treaty v Capacity up to USD 10, 000 (USD 9, 750, 000 xs USD 250, 000) 8 Reinsurance

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