Credit investor update

November 2018

Zurich Insurance Group © Zurich GROUP GROUP UPDATE Our proposition Our proposition investorsto November November 2018 A HIGHLY STABLEAND A CASHHIGHLY GENERATIVE BUSINESS MODEL global global business and A balanced Providing security to debt investors and sustainable and growing dividends for equity investors equity for dividends growing and sustainable and investors debt to security Providing diverse capital levels Industry leading , BY: SUPPORTED sheet managed and conservatively Stable, consistent balance re through enhance returns with scope Consistent growth - deployment Credit Credit investor update capital to 2 © Zurich GROUP GROUP UPDATE One of few genuinely global insurers November November 2018 3 2 1 FY USD 46bn USD 33bn to ‘AA’ rating (1 in 2000 year event), estimated as of Q3 134% 216% USD 3.0bn USD USD 315bn USD 63bn to the Farmers asattorney Exchanges its subsidiary of owned ainterestInc., wholly in theFarmers Farmers ownership Exchanges. has Group, no Insurance Group Zurich BOP persplits The ratioatyear the full is FINMA ap filedto isits withand subject (FINMA). Financial Supervisory Authority SwissMarket The Swiss - 17 17 KEY FACTS 3.8bn Zurich Economic Capital (Z SST regulatory solvency ratio Solvency Test (SST) Test (SST) Solvency business market market cap shareholders’ equity total revenues business operating profit (BOP) net income attributable to shareholders (NIAS) total total group and unit linked investments and region region and ratio is forratio the full year 2017. It is exclude Group Reinsurance, Group Functions and OperationsNon and and Functions Group Reinsurance, exclude Group - in - fact and receivesand feesfactits for ofFarmers Farmers services. BOP Management consists - ECM) ratio calibrated 1 calculated based on the Group’s internal model, which is subject to the review and approval of the Group’s regulator, the to regulator, theis reviewof the subject approval Group’s and internal thewhich based Group’smodel, on calculated - 18 BOP BY - Core Businesses. Core BUSINESS 34% 11% 25% 7% 38% pro 28% val. AND 57% Services and Farmers and Services Re. th e Group, provides administrativeprovides andmanagement e Group, services REGION 2 Latin America Asia Pacific Farmers (incl. America North Europe Farmers Life CasualtyProperty & Credit Credit investor update 3 3 ) 3 © Zurich GROUP GROUP UPDATE Genuinely global franchise with distinct capabilities November November 2018 4 3 2 1 Source: See See page 3 on footnote 3. #1 in Life, individual life.#6 ingroup Pro Estimate Top 3 Top - forma for the acquisition of the QBE operationsof the America,for QBE in Latin OnePath Life the acquisitionforma in Australiaand multinational multinational corporations Axco cross insurer to based on annual reports and investor presentationsand reports annual based on , Company presentations,(2017local statisticsand reports available), Company most recentZuri , Strategicor Financial, Insight, SNL - border 2 LATIN LATIN AMERICA NORTH AMERICA #4 insurance company overall company insurance #2 #5 through #7 in crop insurance crop in in commercial commercial insurance in in US personal US personal lines in . Farmers Exchanges Farmers 3 1 #3 Global Travel Insurer#3GlobalTravel EMEA #4 Adira insurance company overall company insurance #6 #10 #7 #5 #8 #2 Insurance in Indonesia. Insurance in P&C, in P&C, in P&C, in P&C, in P&C, in in P&C, in P&C, #2 #13 #12 #6 #3 #2 in life in life in life in life in life in life in ch ch internal data . ASIAPACIFIC #6 #12 #10 #5 #4 Credit Credit investor update in P&C in P&C, in in P&C in in P&C, in P&C, in P&C 3 #3 #9 in life in life life in 3,4 4 © Zurich GROUP GROUP UPDATE Strong capital position and cash generation November November 2018 3 2 1 Cash HIGHLY CASH VERY STRONG FINANCIAL STRENGTH Other includes model and assumption changes and capital and movements. changes assumption and Other model includes Q3 The fullapproval. yearto is its and subject is filedFINMA ratio with Market (FINMA). Financial Supervisory Authority Testasratio ofJanuary 1, (SST) The Swiss Solvency - - remittance(USDbn) 18 Z 0.6 FY 3.9 1.5 0.9 1.7 - - 15 0.5 ECM reflects midpoint estimatean reflectswithmidpoint of+/ margin ECM error GENERATIVE - 1.1 0.8 FY 2.0 2.8 - 16 0.1 0.4 A+ (Superior) / outlook ‘stable’ outlook / A+ (Superior) ‘stable’ Aa3 outlook / AA - / outlook ‘stable’ outlook / - 0.2 FY 1.2 1.1 2.5 3.7 - 17 - 0.9 2018 Non Operations & Functions Group Farmers Life CasualtyProperty & is calculated based on the Group’s internal model, which is subject to the review and approval regulator,the review approval the Group’s and to is of subjectmodel, isinternal calculated the Group’swhich based on - Core Businesses Core - 5ppts. SST SST and Z STRONG CAPITAL POSITION Indicative Z Indicative 100% 150% 200% 250% 132% FY - 17 - ECM ratio ratio ECM - ECM ratio development ratio ECM Business SST profit 7% 114% 185% FY - 12 (%) Z Insurance - ECM 1 - risk 1% 127% 217% FY - 13 Market - risk 1% 122% 196% FY (%) - 14 change Market 3% 121% 189% FY - 15 Dividend Dividend Credit Credit investor update accrual - 5% 125% 204% FY - 16 Other 1% 132% 216% FY - 17 3 HY 135% Q3 Swi 134% - 18 - 18e ss 2 5 © Zurich GROUP GROUP UPDATE 2017 November November 2018 2 1 Business Operating Operating Business Profitaftertax losses excluding unrealized gains and equity, on return ROE BOPAT target increased forbe ~50bps toby - 2019 Financial targets OnePath Cash remittances in excess of USD 9.5bn over 2017 BOPAT Life acquisition which is expected to close in November 2018in November is toclose expected release(see Life news11,which of December acquisition 2017 USD USD 1.5bn in net savings by 2019 compared to the 2015 ROE 1 2 in excess in excess of 12% and increasing, despite higher equity base Z - ECM target ratio of 100 . - 120% - 2019 period baseline Credit Credit investor update ). 6 © Zurich GROUP GROUP UPDATE Well on November November 2018 3 2 1 EXPENSE SAVINGS CUMULATIVE NET BOPAT ROE BOPAT BOPAT Q3 the UKgains BOP tax to capital the rel change and indexation through recognized relatedrestructuringcharges tothe Group’s Business - 18 12.1% Z FY ROE target to be increased by ~50bps for OnePath Life acquisition on completion of transaction (as announced on December 11, December on (asROE announced transactiontarget increased for of be ~50bps OnePath Life completion to by on acquisition - ECM reflects midpoint estimatean reflectswithmidpoint of+/ margin ECM error Operating Operating Profitaftertax excluding unrealized gains and equity, on return - 17 Achieved Target (%) track to 2015 1 12.3% HY - (USDm) 18 achieve all2017 > Target 12.0% ~300 2016 2 Z - - ECM 5ppts . RATIO Q3 134% 100% - 18e - ~700 losses 2017 3 2019 (%) . FY - 17 adjusted Target range ~USD 900m ~USD as ofHY targets 100% 120% for the impact of the hurricanes Harvey, Irmathe Maria, impactHarvey, ofthe and for hurricanes - 18 ~1,100 2018 ief . (USD CUMULATIVE CASH REMITTANCES 201 bn 7). FY ) - 17 &FY >7.0 3.7 - 18e Credit Credit investor update 1,500 2019 2017 - 2019 Target > 9.5 7 © Zurich GROUP GROUP UPDATE Continued delivery across all businesses November November 2018 3 2 1 P&C LIKE RATIO COMBINED In certainprovides non Group, interestin the Farmers Farmers ownership Exchanges. has no Group Zurich Insurance foronly. Provided informational purposes Continuing operations only, only, discontinued excludes operations Continuing local - FOR HY FY FY - - - 18 17 16 currency - Cat LIKE GWP GROWTH GWP LIKE - 99.5% 65.2% 32.4% HY - 3% 2.9% 1.0% - 17 . ER (%) AY LR LR ex AY - claims administrative andmanagement claims to theservices Farmers as attorney Exchanges its (%) 2 - cat 64.5% 32.5% 97.5% HY - 3.0% 2.5% - 18 0% PYD 1% operations (21 operations LIFE HY BOP GROWTH st Century Century - 18 and Corporate and UL, protection UL, Life &PensionLife APE SHARE OF APE NON outside HY (%) - 17 of California and 84% +17% - TRADITIONAL TRADITIONAL PRODUCTS Hawaii, BusinessHawaii, HY - 18 - in Insurance Independent Agents, Independent Insurance - fact and r and fact Gr eceives feesits for services. oup, Inc., a wholly owned subsidiary of the subsidiary owned a Inc., wholly oup, FARMERS GWP GWP COMBINED GROWTH GROWTH Catastrophes 104.9% 10.5% 94.4% HY HY 9,775 RATIO RATIO (CR) - - EXCHANGES 17 17 (USDm) and and other 3 Credit Credit investor update (%) CR excl. catastrophes excl. CR +5% businesses). 1 10,233 91.8% 98.3% HY HY 6.6% - - 18 18 8 © Zurich GROUP GROUP UPDATE 2018 updated outlook November November 2018 2 1 Restructuring charges are chargesbe to 2017 in similar and outsidebetween of BOP to expected split proportions BOP Restructuring See footnote Other Farmers Life P&C 3 on slideon 3 .           Effective tax rate of aroundof 26 rate tax Effective costs restructuring in 500m USD with savings cost net in 400m USD achieve to Expected 750 USD of the range be in to expected loss Operationsand Functions Group 1% to 8% from share quota in reduction reflecting decline to expected BOPRe Farmers 7% below slightly margin premium earned gross Managed Exchanges Farmers in expected growth Steady double Low year prior the versus be stable to expected gainsexcluding incomeInvestment 95 indicated the towards move to ratio Combined stable broadly be to NEP expected - digit growth in BOP compared to prior year to prior compared BOPin growth digit - 27% . 1 GWP - 96% range by 2019 range 96% Credit Credit investor update - 800m 2 9 © Zurich STRATEGIC STRATEGIC UPDATE A new strategy fit for purpose, November November 2018 – Innovate put better able to serve our customers and respond Simplify investing for the benefit of our customers will guide all that we do. our quality of service and the experience of Focus on the customer: to give us even more of a leading edge over our competitors. now the customer : : We aim to become a more agile and more responsive organization, We and inthefuture prioritize prioritize at at the center of everything we do. innovation We focus our significant investments on improving – in products, services and customer care our to customers. customers. A laser focus on their their needs. We Credit Credit investor update strive strive to 10 © Zurich STRATEGIC STRATEGIC UPDATE C Key businesses strengthened while exiting non November November 2018 1 businesses businesses exited Further focus with non delivered Innovative customer solutions capabilities further increased Cover strengthened Leadership in Latin America Refers 3 rolling to ustomer focus improved improved ustomer focus with tangible results - More’s More’s global footprint and - months periods (i.e., periodsmonths Q2 - core - 18 Q4 discretevs. - 17 discrete). Compulsory TPL Compulsory Endsleigh portfolioLife CUSTOMER FOCUS YIELDING POSITIVE RESULTS IN RETAIL NET NET PROMOTER SCORE - HY core activities; - 18 FY vs. +12 +6 +4 +4 +2 - 17 ( ppts ) Credit Credit investor update CUSTOMER RETENTION CUSTOMER HY - 18 FY vs. +0.8 - +1.2 +0.5 +0.6 0.7 - 17 ( 1 ppts ) 11 © Zurich STRATEGIC STRATEGIC UPDATE November November 2018 interactions, increase service offerings and digitize core processes We are leveraging new technologies to redesign customer OF THE CUSTOMER STRENGTHENING OUR KNOWLEDGE    underwriting decision making Advanced analytics sales and customize propositions Artificial intelligence to improve segmentation Strengthened customer analytics to augment to optimize SERVICE OFFERINGS NEW CAPABILITIES AND BROADER    in Switzerland Insurance Entrepreneur On demand insurance Medical assistance Employee assistance, Travel and aviation, for for SMEs CUSTOMER EXPERIENCE REINVENTING THE    Contextual offers Behavior processing One - Credit Credit investor update touch - based pricing claims 12 © Zurich STRATEGIC STRATEGIC UPDATE new bank and affinity partnerships We continue togrow our access to customers through November November 2018 IN BANCASSURANCE WE ARE BUILDING ON OUR SUCCESSFUL RECORD 2002 2008 ACCESS TO 2011 OVER 100 2017 MILLION CUSTOMERS AND GROWING WE CONTINUE TO BUILD OUT OUR AFFINITY PARTNERSHIPS • expansion of product Furtheroffering • • goods programfor and purchased servicesReward • of high cars and end SUVssportsAuto manufacturer • • Europe’s ~1m ~1m policies ~10m Italy Deal signed in ~ Accessto ~30m customers Deal 240,000 240,000 signed in Germany, signed in Austria, active clients in Italy Italy in active clients largest frequent flyerfrequent largest new cars delivered new cars per delivered per month through month per Credit Credit investor update program year ~ Switzerland 1,000 1,000 points of points – sale 13 © Zurich STRATEGIC STRATEGIC UPDATE core core portfolios and returned in 2017 ~USD 3.8bn to shareholders We havestrengthened our businesses, extracted capital from non November November 2018 2 1 CAPITAL ACTIONS MAIN DIVESTMENTS AND New South WalesSouth New D.A. = Distribution agreement. P.T.= D.A. transfer.Distribution = Portfolio 2018 2017 Sale of P&C business in Middle East Sale business inMiddle of P&C Sale of NSW CTP Sale of NSW Sale of Sale Life of a Singapore portfolio Sale Sale of of anindividual Reinsurance book of a closed annuity Reinsurance Sale business inTaiwanof P&C Compulsory Compulsory of a Endsleigh workplace MedMal Third 1 run legacy portfolio legacy pensions and savings savings and pensions - Party motor liability. Party motor off Life riskLife portfolio business MAIN ACQUISITIONS 2018 2017 Adira EuroAmerica Travel Universal Travel Ace/ QBE Box Bright OnePath CharteredStandard Cover Latam - Insurance More/ Halo More/ (ANZ Life) Life) (ANZ TYPE OF M&A/D.A. M&A/P.T. DEAL M&A M&A M&A M&A D.A. M&A 2 2 2 P&C Retail Life RetailLife P&C Retail P&C cars Connected RetailLife RetailLife P&C Retail BUSINESS - - - Protection Travel Travel STRATEGIC RATIONALE Skills Credit Credit investor update Distribution - Scale 14 © Zurich STRATEGIC STRATEGIC UPDATE geographies Diversifying our Asian November November 2018 2 1 FOOTPRINT AND GWP CONTRIBUTION As of FY As P&C only. 8% for 5.4bn - 17, for P&C and Life combined (incl. insurance deposits) and adjustedand for deposits) insurance (incl. 17, Lifecombined P&C and for Established GWP 8% 2% (USD) 4 2 % 2% 1 5 4 % 7% 1 9 % 3% footprint, with increased scale in our key COVER HONG KONG SINGAPORE AUSTRALIA INDONESIA P&C and Life P&C and Life P&C and Life P&C and Life P&C and Life P&C and MALAYSIA JAPAN CHINA - MORE P&C P&C Adira • • • • • • • • • • • • • • • Insurance and OnePath Life Insurance and acquisition. A A global travel Invest in tied agency and expand distribution opportunities with Life, Grow and develop protection proposition in line with demographics strong distribution partners with Multi Local operations service Established Capture Multi Service corporate customers Subsidiary Niche delivering innovative Largest direct retailbusiness in Group and Significant commercial business ANZ with distribution agreements with ANZ and IOOF Leading position in P&C P&C and Takaful offerings available to customers - - channel distribution for P&C while Life products mainly distributed through agency, channel and multi L ife operations targeting shopfront IFA distribution and direct synergies in commercial Shanghai Shanghai and and assistance from I ndividual protection and with branch offices in Beijing and Guangdong business hub for One Zurich composite model to improve customer experience - corporate line strategyin P&C for local operations and international L provider based in ife afteracquisition of Macquarie Life and One Path Life from Bank Bank customers through tailored motor Danamon Asia Pacific large and and Life Australia and operating proprietary brands contributor to and and Adira Finance propositions Asia Pacific profit focused on Credit Credit investor update banks banks expansion and and affinity partners 15 Investment and Capital Management © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT and sustainable excess returns ALM November November 2018 1 ASSET ALLOCATION FY Fixed investments Fixed income - 17 total - Group focused strategy delivering consistent Real estate Mortgages Fixed income investments 79% 3% 7% of USD 5% 5% 2% Cash Private equity funds, Hedge Equities 208bn ASSET QUALITY FY - 17 G roup debt investments 25% A AA AAA 17% 1% 4% grade Non Non BBB of USD - - 25% investment rated 27% 163bn DURATION Assets 8.7 1 Life 9.6 Liabilities Credit Credit investor update 4.5 P&C 4.3 17 © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT and Proven balance sheet flexibility through leverage 1 November November 2018 GROUP CAPITAL Capital Senior debt Senior Structure coverage at 2014 76% 13% 12% shown using accounting view. accounting using shown Subordinated Debt Subordinated STRUCTURE 2015 76% 14% 11% 1 AA Shareholders Equity levels 2016 73% 17% 10% 2017 75% 16% 9% MOODY’S LEVERAGE & Earnings =Aaat coverage 8 leverage Financial = Aaat 15 24.3% 2014 9.5 - 12x - 30% 24.1% 2015 6.7 COVERAGE 26.4% 2016 9.2 Credit Credit investor update 23.7% 2017 9.3 18 © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT Low cost of November November 2018 2 1 Source: Bloomberg Source: CONSISTENT FINANCIAL STRENGTH CDS SPREAD AMONG BEST OF PEERS Maturity profile based on firstbasedcall on profileMaturity AA 5yEUR sub CDS. CDS. sub 5yEUR AA A+ 200 400 600 A A - Jan 0 - 2006 - 10 2007 Jan S&P - 2008 11 Jan 2009 - 12 Moody’s Zurich 2010 Jan risk, strong ratings 2011 - 13 date 2012 Jan for Axa - 14 subordinated debt debt subordinated 2013 Jan 2014 - 15 Generali 2015 Jan ( bps - 16 2016 ) 1 and maturityand datedebt for senior Jan 2017 - 17 Allianz 2018 Jan - 18 2019 Jan and balanced maturity profile Aa3 Aa2 A3 A2 A1 - 19 . Source: Bloomberg Source: USD SUBORDINATED BALANCED REFINANCING NEEDS 100 200 300 400 500 0.0 0.5 1.0 1.5 2.0 2.5 Jan - 2019 16 0.5 1.0 1.5 Senior 2020 0.3 Jul 2021 - 0.3 0.7 16 0.4 ZURNVX 4.25%ZURNVX 45 NC25 5.625%ZURNVX 46 NC26 Subordinated 2022 1.6 0.6 2.2 Jan CREDIT SPREADS 2023 1.2 0.5 1.7 - 17 2024 0.9 Jul 2025 0.3 - 17 ( 2026 1.9 0.2 2.0 USD ZURNVX 5.125%ZURNVX 48 NC28 2027 Jan bn Credit Credit investor update (bps - 18 ) 2 2028 1.0 0.8 1.8 ) Jul - 18 2038 0.2 Jan - 19 19 © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT Managing our risks conservatively to AA financial strength 3 2 1 November November 2018 GROUP Includes Other Operating Businesses and Non Otherand Includes OperatingBusinesses Q3 Supervisory Authority (FINMA). Only toOnly year is its the fulland subject approval. ratiofiled(FINMA). is Authority FINMA withSupervisory review app and to theis subject Test isinternal calculated ratio thewhich (SST) Group’s basedmodel, The Swiss on Solvency Z SST - 100% 120% 140% 100% 125% 150% 175% 200% 225% 250% ECM - 18 60% 80% 1 Zurich Economic Capital Model (Z Capital Model Economic Zurich FY FY - - SOLVENCY 10 10 119% 223% 103% FY FY 183% - 11 - 11 114% FY 185% FY - 12 - 12 127% FY - 13 217% FY - 13 - ECM) reflects midpoint estimatean error reflects with marginmidpoint +/ of ECM) 122% FY - 14 - 196% FY Core Businesses. Core - 14 121% FY - 15 189% FY 125% FY - 15 - 16 204% FY FY 132% - - 16 17 e Q3 134% 216% FY - 18e - 17 2 Target r ange RBC SPLIT - 5ppts. 35% 7% (%) 5% 26% 4% 3% 10% 2 8% 4% ro val of the Group’s regulator, the Swiss Financial val Financial the Swiss regulator,Group’s Marketof the 46% 53% Other Farmers Life CasualtyProperty & riskBusiness Operational risk insuranceLife risk catastropheriskNatural reservingPremium and risk credit riskReinsurance Marketrisk 3 Credit Credit investor update 20 © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT Solvency ratios November November 2018 3 2 1 Z - Credit Spreads (CS) include mortgages and and mortgages include Credit Spreads (CS) The impact of the changes to the required capital is approximated and takes into account Market Insuranceto the risks. requiredisand and The impactof the approximated capital changes takesaccount into calibrated at 99.0% Shortfall.Expected Sensitivities are best estimate andlinear, i.e. prevailing at on vary themarket timewill depending conditions ECM IMPACT CS excl. excl. CS +100Euro sovereign bps Credit +100spreads bps Actual value value asActual ofFY USD appreciation +10% appreciation USD Interestrate +100 bps Interestrate 1,2 Equities +20% Equities - 100 bps - 20% - 17 3 3 resilient to market movements including/excluding including/excluding Euro sovereign spreads.Euro sovereign Z 116% 121% 121% 128% 132% 135% 136% 136% - ECM sensitivity is net of profit sharing with policyholders. policyholders. sharingnet withsensitivity ofprofit isECM SST IMPACT CS excl. excl. CS +100Euro sovereign bps . Z Credit +100spreads bps Actual value value asActual ofFY USD appreciation +10% appreciation USD - ECM is calibrated atis calibrated99.95%ECM Value at is Riskan (equivalent rating); SST to ‘AA’ Interestrate +100 bps Interestrate 1,2 Equities +20% Equities - 100 bps - 20% - 17 3 3 Credit Credit investor update 189% 195% 197% 209% 216% 221% 222% 223% 21 © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT capital capital management policy We havea clear and transparent dividend policy and aclear November November 2018 CAPITAL MANAGEMENT POLICY 100% 120% 90% >140% <90% - - - 100% 120% 140% 100% 120% 120% 140% - - Within tolerance level level Within tolerance temporary basison Target range considered actions Mitigating required actions Mitigating Below tolerance level, Below required action (Z - ECM, %) M&A CRITERIA      Execution simplicity is key Acquisitions to be beneficial to Group and risk appetite Fit to Group strategy (geography, customer, product mix) ROI of >10 Benefits comparison of capital return (incl. buy accretive to Financed from internal resources and % shareholders Credit Credit investor update immediately immediately targets - backs) vs. 22 © Zurich INVESTMENT AND CAPITAL CAPITAL INVESTMENT AND MANAGEMENT Repackaging structure November November 2018   BACKGROUND     STRUCTURAL OVERVIEW different different ( repackaging vehicles Many capital markets to tap a international Swiss borrower allows vehicle international repackaging investors. Using a by without tax whi carry 35% Swiss securities Under Swiss a Switzerland wouldwithholding tax borrower issued resident legislation by in Zurich the on the coupongross to pay a structure Vehicle Repack Zurich suchallows Using Notes Zurich The the Notes the Secured underlying pass returns risk and on through Notes Zurich are secured over the whichthe Notes Vehicle, Secured Repack issued by Investors hold Notes the Repack The Zurich Vehicle by are held Swiss issuers make use of this repackaging structure when issuing internationally. Zurich has so far raised Swiss has so far raised subord issuers Zurich senior make and internationally. use structure repackaging of this when issuing Notes Aquarius , Cloverie , Argentum and Willow). Argentum and Notes Zurich Notes Secured Repack Vehicle Investors Zurich Proceeds Proceeds neg ch Credit Credit investor update ative tax ative consequences. may not be recoverable may recoverable not be ina ted debt debt four ted via

“Pass-through”

Interest / Principal Interest / Principal 23 © Zurich APPENDIX Z November November 2018 1 PRIMARY DIFFERENCES - Regarding Swiss Solvency ratioTest slideSolvency seeon 3 footnote Swiss(SST) Regarding EQUIVALENCE RISK MEASURE RISK ECM and SSTare more conservative than - TYPES COVERED impact on ratio on impact onerous Most – REQUIRED applied toapplied the entire Group of equivalence, ZECM concept No • • • • • • • VaR 99.95% (~AA) Z - Reinsurance Credit Risk Reinsurance Operational Risk Risk Business Liability Life Risk Risk NatCat ReservePremium and Risk investment credit) MarketRisk (including ECM CAPITAL . • • • • • • • ES 99% (~BBB) SST Receivables Credit Risk Credit Risk Reinsurance BusinessLife Risk Liability Life Risk Risk NatCat Premium, Reserve UPRRisk and investment credit) MarketRisk (including 1 Solvency II countries. Not applicable forapplicable Zurich Not countries. Possibility to use forlocal regimes subsidiaries in equivalent third Allstate Chubb AIG - Harvey 17 17 NET IMPACT FROM SIGNIFICANT CAT business. 0.4 0.5 Irma 0.6 0.7 0.7 3 0.9 Maria 1.9 Mexico EQ Mexico 3.0 U.S. P&C market share Other 1.9 0.5 0.7 3.9 2.1 5.1 3.3 2.4 Credit Credit investor update 1 (%) (USD Total Shareholders equity Shareholders bn) % HY of 4 <1 2 4 2 2 3 3 5 - 17 30 © Zurich APPENDIX strategic and financial rationale Acquisition of ANZ’s Life insurance November November 2018 3 2 1 As calculated by ANZ (excluding franking credits ANZ(excluding calculated by As completion. on paid be to regu to subjectexpected paid reinsurance commissions, 1bn upfront of 2.85bn AUD AUD comprises price of The transaction an Calculated with financial targets Enhances group Funding financials Attractive Group strategy Alignment with Australian life Leadership in AUD/USD exchange exchange rate1.33. of AUD/USD              Distributable Distributable earnings expected to exceed NIASdue to run Immediately accretive to earnings and cash, ROI >10% expected year 2 from USD 2.14bn Group earnings volatility reduced through increased stable life technical Aligned with Group focus on retail banc Distribution through independent channels strengthened further life insurance solutions partnership 20 year strategic with a ANZ, leading Australian banking group, for the distribution of a Creates leading Australian life business with a 19% retail protection share market Expected Expected to increase dividend plans within postthe first year for 2017 Cash target remittance BOPAT ROEtarget expected to be raised by 50bps on completion of transaction Modest reduction in Group capital flexibility Transaction expected to be funded through combination of internal andresources senior debt ofcashover AUD1.4bn first five remittances the ). 1 / AUD 2.85bn / 2.85bn AUD purchase price - 19 19 expected to be enhanced by ~USD 225m business, compelling - assurance and assurance life protection 2 equivalent equivalent to ~1x Embedded Value years - off of legacy businesses, with expected lat completion ory approval in May 2018 in May approval the remaining balance ory with income 1 / 300m AUD 3 Credit Credit investor update 31 © Zurich APPENDIX achieve leadership in Argentina on attractive terms Acquisition of QBE’s November November 2018 3 2 1 Completion expected by year by expected 2018.end Completion adjustments. to closing Subject dataBased from on the financials Attractive strengthened presence Regional Argentina Leadership in Superintendencia           ROI expected ROI 409m USD of consideration Aggregate financial attractive Highly Brazil in distribution to access and capabilities scale, Incremental P&C in share market ~9% with Ecuador in (#3) position A leading synergies for scopeproviding countries key Zurich’s with overlap geographical Significant region the #4 in becoming America Latin in position overall Group’s the strengthens Further distribution incremental as as well retail and commercial SME in particularly capabilities additional bringsand operations existing complements business Acquired become to Zurich creates Transaction de de Seguros Latam de lade Nación to . comfortably exceed Group’s 10% hurdle rate within first first within rate hurdleGroup’s10% exceed comfortably #3 in P&C and #1 and P&C #3 in business, a unique opportunity to the leading insurer leading the profile with sizeable sizeable with 1 overall with ~8% market share market ~8% with overall 2 1 expected to be financed from internal resources internal from financed be to expected in the in profitable and growing Argentine market Argentine growingand profitable synergies , Colombia Credit Credit investor update full and year Mexico 3 32 © Zurich APPENDIX leadership position in anattractive Asian growth market Acquisition of November November 2018 1 Transaction terms provide for potential future incremental payments contingent on business performance relative businessp on performance to business potentialincremental future contingent terms for payments Transaction provide Financials strategic fit Strong market and Attractive details Transaction growing           Closing subject to customary regulatory approval within the next 6 months 6 next the within approval regulatory to customary subject Closing P/E 2017 Implied of price purchase Upfront P&C Asian within diversification and scale Increased leverage to Opportunity becomes Zurich Rapidly by Asia Southeast ( people million 262 with world the in country populousmost 4th (5 Bank PT with partnerships strategic term long separate two of Formation PT in stake 80% of Acquisition Adira th largest bank) and bank) largest growing middle class class middle growing Insurance,a unique opportunity to achieve a a leading player in player leading a of GDP and young demographics with 84% of the population below age of 54 of age below populationof the 84% with demographicsand youngGDP 22.1x; Capital impact of ~1ppt to Group Z Group to ~1ppt of impact Capital 22.1x; Adira the strong the USD USD Finance (2 Finance driving increased insurance increased driving Asuransi 414m for 80% stake and two strategic partnerships strategic two and stake for 80% 414m a fast growing a fast distribution networks of Bank networks distribution nd Adira largest provider of automotive of provider largest Dinamika and attractive market attractive and ( Adira penetration la n. - ECM ratio ECM Insurance) 2017), largest largest 2017), Danamon financing) Danamon Credit Credit investor update and economy in economy Adira 1 Indonesia Finance 33 © Zurich Disclaimer Disclaimer and cautionary statement November November 2018 FINANCIAL AS WELL AS MANAGEMENT, AND THE COMPANY ABOUT INFORMATION DETAILED WILL CONTAIN THAT THE ISSUER AND FROM OBTAINED BE STATES IN THE SECURITIES UNITEDWILL TO MA BE OF MADE OFFERING BE PUBLIC ANY AND OR REGISTRATION, EXEMPTIONREGISTRATION FROM DOES OFFER NOT CONTAINOF AN THIS COMMUNICATIONSECURITIES FOR IN THESALE UNITEDSTATES; SECURITIES NOT MAY BE OFFERED SO OR an an offerthe sale of securities for or invitation in any orpurchase constitutedoes not jurisdiction. This communication adviser. an independent consult should advice requiring Persons pastis atoperformance. not future notedthatperformanceguide It be should of Farmersof the performance an understanding to is the support Farmers proprietary isExchanges but provided Exchanges, interest have Ltd, intheFar any ownership Group ZurichInsurance and Ltd Company Insurance parent Zurich itsnor companies, the attorneys California domiciled interinsurance theirby exchanges ownedpolicyholders withgovernance by oversight their Boards of Gover and All referencestoInsurance Exchange ‘FarmersExchange, meanFarmers InsuranceFire Truck Exchanges’ Insurance or otherwise. circumstances or update revise any theseLtd to publicly forward obligation of undertakes no Group Insurance achieved. Zurich have regulations inthepolicies ofregulatorsInsur and may lawsa directoperations the results ofZurich on bearing of e mortality morbidity rates; severityclaimsand development frequency, events; and (vi) of insuredexchange (v) currency and factors,particularlyand markets; inkey competitive the risk (ii) downturn of conditions a global economic general economic differthe to Group materiallyexpressed or from Ltd orimplied those Group in thef Insurance objectivesofZurichplans and statementsplaced such on because, their by nature, they are subjectrisksto knownandand unknown uncertaintiesbe and can financial andinsurance marketresults,as of general well condit aseconomic, statementsunderstanding regarding the Group’s Forward ‘Grou(the Group the Zurich Insurance or Ltd Group futureInsurance events,orplans indicate trends,or objectivesofZurich areCertain forward statements in this document - looking statements include statements regarding the Group’s targeted profit, return on equity targets, statementsstatementstargeted equity on include regarding the Group’sreturn profit,expenses, pricing looking - in - fact for the Farmers Exchanges and in that capacity provide certain non provide forcapacity the Farmers inthat and Exchanges fact - looking statements, including, but not limitednot to,statementsthat but arestatements, predictioincluding, looking - claims administrative andmanagement claims se - looking statemen looking anc p’) orw ; ( ; xpe . e Group Ltd and its Group and on whether the targetsbe whether on will and Group its and Ltd Group e iii) performance of financial markets;iii) performancelevels interest (iv) of rates ion mer Gro aff nor ard looking statements (or from past results). Factors such as (i) statementsresults).Factors from such looking past (or ard ns of ns rience; (vii) policy renewalrience; and lapse policy rates; in (vii) and changes (viii) the s and expected developments. Undue reliance should not be not reliance Undue should developments. expected and s conditions, dividend policy and underwriting and claimsand underwriting and dividend policy conditions, rvices to the Farmers Exchanges. Neither Farmers Group, Inc., to theInc., Farmers NeitherFarmersrvices Exchanges. Group, ts, whether to reflect new information, future events futureinformation, or to reflectwhethernew ts, ected by otherby ectedcausethat factors actual could results and s. Farmerss. Inc.and its Group, subsidiariesare appointed as up, Inc. and Farmers Reinsurance Company. andFarmersInc. Reinsurance up, s Exchanges. Financial information about the Farmers information Financial about s Exchanges. ir affiliates. subsidiariesand The three are Exchanges LD LD DE IN THE UNITEDSTATES ABSENT BY MEANS OF A PROSPECTUS APROSPECTUS THAT MAYOF BY MEANS ST ATEMENTS Credit Credit investor update 34 © Zurich For further information November November 2018 Patricia Patricia Heina Events Mathias Meisel Christian Carl Group Treasury & Capital Management Gianni Michèle Samuel Han Francesco Bonsante Richard Burden Investor CALL US Vitale Matlock Relations & Rating Agency Management +41 44 625 48 26 +41 44 625 28 +41 44 625 32 + +41 44 628 96 +41 44 625 38 +41 78 745 28 10 +41 44 625 31 00 41 44 628 00 68 44 50 57 40 VISIT OR FOLLOW US   Follow us Follow Financial Financial website Relations Investor results andreports results Credit Credit investor update 35 © Zurich Insurance Company Ltd Credit investor update 36