ERGO: regulatory compliance to kick-start digital hybrid

1. ERGO Belgium Regulatory compliance to kick-start digital/hybrid Johan Camp Head of Markets & Strategy 20/10/2016

2. 2 Company profile ERGO is part of Munich Re ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity Munich Re • One of the largest risk-carriers in the world • More than a century of international experience • Listed on the DAX 30 / EURO STOXX 50 indices Reinsurance Health insurance Primary insurance Asset Management • Income (2014): €48bn • Profit (2014): €3,2bn • 43.000 employees ERGO is one of the major insurance groups in Germany and Europe. Worldwide, the Group is represented in over 30 countries and concentrates on Europe and Asia. ERGO offers a comprehensive spectrum of insurance, provision and services. In 2015, ERGO recorded a premium income of € 18 billion and rendered benefits to customers of € 17 billion. ERGO Germany ERGO International ERGO Digital Ventures

3. 3 ERGO Insurance Life insurer in Belgium and Luxembourg ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) Key figures (2014) • Total Premium: €575 million • Capital insured: €8,9 billion • More than 800.000 customers • 338 employees • Market share in pension savings (3rd pillar) of 18% • Strong growth track in mature market Exclusive network (tied agents) • +/- 700 independent advisors and +/- 300 agencies • € 415 million Brokers & partnerships • 571 brokers & divers partnerships • € 160 million

4. 4ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 )

5. 5 Regulatory environment: a paradise for consultants ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) 2016 20182014 30 April, 2014 Twin Peaks II Enforced 10 October, 2014 Government agreement In progress 29 Dec, 2014 PRIIPs2 In progress Basic text: 2 Jul, 2014 MiFID II1 /MiFIR In progress Step wise implementation Local states are required to implement EU regulations but can in many cases (BE!) gold-plate or front-run it Q2, 2016 31 Dec, 2016 Implementing: Dec, 2015 Adoption by companies: 3 Jan, 2017 Q2, 2017 Q4, 2017 1. Markets in Financial Instruments Directive/ Regulation 2. Packaged Retail and Insurance based Investment Products 3. Insurance Distribution Directive Today Q2, 2016 Data Protection regulation In design 2016 IDD3 /IMD2 Finalised

7. 7 More thorough analysis of the legislation ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) Transparency and information sharing • Creation of standard sheet of information (KID1) • Details to include: Type of product, investment horizon risk, breakdown of costs (direct indirect, including distribution) • KID must be visibly different from other documents (i.e. recognizable symbol) Client profiling Remuneration and training • Information regarding charges must include the cost of advice (fee) • If products are bundled, clients must be informed if they can be bought separately • Intermediaries and direct sellers must identify conflicts and disclose the existence of conflicts where required • Firms must take the necessary steps to classify clients • Three risk profiles: retail, professional, or eligible counterparty • Professionals can be asked to be treated as retail to increase their protection level • When selling without advice, commissions must be designed in clients best interest • Commission ban on banking products when providing advice • Introducing an "insurance product information document" (IPID) for NL • Details to include: type, coverage, insured sums and exclusions. The sheet will not include information about the costs and expenses • Disclosure of the nature of incentives • All insurance distributors should act ‘honestly, fairly and professionally' • Compulsory customer fit analysis • Depending on which risk group the client falls under, they can only be sold certain products • Commission ban left to countries • Increasing staff training requirement (15 hours of continuous training/year and tougher admission requirements) • In the KID, the type of customer this product is geared to must be specified i.e. ability to bear investment losses, investment horizon Product and channel scope • Investment products (products that do not offer investment opportunities and deposits solely exposed to interest rates are excluded, including B21) • Applies to firms who provide "investment services to third parties and/or the performance of one or more investment activities"3 • All insurance products (L+NL) and channels • The 2002 IMD only applied to brokers and other intermediaries for all products PRIIPs MiFID II/MiFIR IDD/IMD 2

11. 11ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) 1. conversation 3. Financial education 2. Needs analysis 1 4. MIFID questionnaire 2 8. Subscription form 3 5. Determine Risk Profile 6. Determine product & covers 7. Provide product docs 10. Scan ID (front & back) + address of residence 9. Medical questionnaire 4 11. Fill in Sepa Direct Debit 5 12. Mail forms to back office 15. Send contract to customer 14. Print contract & Gen. T&C 16. Scan & file documents 13. Type over into system Starting point

12. 12ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) We want to strengthen our sales approach and jump into the digital era • More clients • Increased retention • More stability & control • More solutions • Less paper • Future-proof platform Objective

13. 13 Benefits to and contribution of multiple departments is essential. ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 )

14. 14 Paperless process ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) 1. conversation 5. Mail all docs to customer + automated transfer to BO 3. Needs analysis Financial education MIFID questionnaire Determine risk profile Product & covers Product docs Subscribe Medical questionnaire SEPA Direct debit 2. Read eID 6. Mail final contract to customer 4. Electronic signature iConsult

16. 16 my Future development: service (hybrid) customer in an omni- channel setting ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) Sales agent Customer Administration New Business Changes Claims & Benefits CORE – FRONT END Customer 360° view Back office system(s) Digital Customer Records

17. 17 Increase customer centricity through big data (analytics) ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 ) Business opportunity Business value B I G D A T A

19. 19 Connectivity & omni-channel Number of physical interactions will reduce, but this also means the importance of a ‘good’ personal interaction increases! ERGO Belgium | Operational Excellence Forum – Using changes in regulation to kick-start digitization (12/5/2016 )

ERGO: regulatory compliance to kick-start digital hybrid

Comarch

ERGO: regulatory compliance to kick-start digital hybrid