Credit Update Presentation July 2021 Disclaimer

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2 Table of Contents

1 Overview of esure 4

2 Market Environment 13

3 Financial Overview 17

4 Risk Profile & Balance Sheet 20

5 ESG Strategy 27

3 Overview of esure Overview of esure

Focused UK Personal Lines Insurer Specialists in Digital Distribution Strong Customer Proposition

Distribution Split by Channel (%)(3) Net Promoter Score(6)

88% of new 12% business is 54 56 88% distributed via top 4 UK PCWs(4) PCW Direct (5) % of Group Total 88% 12% Income(1) Operating Under Two Main Brands

Market 5.8% 1.7% 2019 2020 Share(2) UK’s leading Focussed direct insurer brand • Strong customer service Market providing car, offering car, track record Rank(2) #7 #9 home and travel home and insurance travel insurance

Notes: 1. FY20 Total Income of £644MM for esure Group. Comprises Net Earned Premium, Investment Income, Instalment Interest Income and Other Income 2. Market share and ranking based on ABI data (2020) 3. FY20 new business split 4. PCW: Price Comparison Website 5. Includes sales via web and telephone 6. Net Promoter Score (“NPS”) is an index that measures the willingness of customers to recommend products or services to others. Out of a theoretical sample of 100 customers, the score represents the number of 5 “promoters” less the number of “detractors” The esure Journey: 2000 to Today

16 Feb 2000 11 Feb 2010 31 Mar 2015 19 Dec 2018 15 July 2019 18 Mar 2020 Founding of the esure completes a esure Group Taken private by Appointment of Appointment of group management buy-out from completes the Bain Capital for David McMillan as Peter Bole as CFO the company's previous acquisition of the £1.2Bn CEO joint venture partner, outstanding 50% of HBOS/Lloyds Banking Group Gocompare

2000 2006 2010 2013 2015 2016 2018 2019 2020

30 Oct 2006 27 Mar 2013 3 Nov 2016 2018/2019 24 Mar 2020 esure offers its car esure Group GoCompare Reserve Appointment of insurance via a PCW becomes a publicly demerged from strengthening and Andy Haste as for the first time, listed company and esure Group and actions Chairman home insurance is enters the FTSE 250 listed separately on added 29 days later the

6 esure is an Established Player in the UK Market

Almost 20m Policies Underwritten Since 2012 Approaching £1Bn of Annual Revenue In-Force Policies (m) Total Annual Revenue (£m)(1)

911 966 940 949 2.37 2.45 2.38 2.45 2.17 730 1.93 1.95 2.00 1.76 0.48 0.51 0.56 0.57 588 605 585 619 0.57 0.55 0.57 0.57 0.50 1.94 1.61 1.90 1.82 1.87 1.26 1.39 1.38 1.44

2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020

Motor Home

• Approaching £1Bn of revenue across underwritten and • esure has been an at-scale player in the UK personal lines non-underwritten income streams market for a number of years • Disciplined approach to pricing and growth in a • Scale and experience support efficient, profitable business competitive market model • 2020: GWP broadly flat y-on-y, reflecting lower claims • 2020: Return to growth in IFPs (+3% YoY) experience in the context of Covid-19

Notes: 1. “Total Revenue” calculated as Gross Written Premium (2020: £841.0MM) plus Instalment Income (2020: £55.6MM) and Other Income (2020: £51.9MM). The main components of Other Income include: Brokerage & Commission Income (2020: £12.0MM); Claims and Related Income (2020: £6.4MM), Profit Commission from Reinsurers (2020: £12.3MM) and Policy Administration Fees & Other Income (2020: £21.2MM) 7 FY20 Numbers Demonstrate esure’s Strength

FY20 Financial Highlights Financials Reflect the Group’s Scale and Stability

£MM, unless otherwise stated 2020 • Almost 2.5m insured customers at FY20, generating In-Force Policies (m) 2.45 gross written premium of £841MM

• Improving profit trajectory with further upside from Gross Written Premium 841.0 delivery of internal strategy

• Strong underlying ROE, driven by: Trading Profit 82.6 – Focussed business model

– Digital distribution Adjusted ROE (%)(1) 21.8% – Significant contribution from non-underwriting revenues Total Equity 287.8 – Use of reinsurance to transfer risk and manage capital Solvency II Ratio (%) 164% • Solid Solvency II ratio of 164%, above the target range of 140-160%

Notes: 1. “Adjusted ROE” calculated as “Adjusted Post-Tax Profit” divided by average of opening and closing shareholders’ equity. “Adjusted Post-Tax Profit” is calculated as statutory post-tax profit (2020: £29.0MM), adjusted for non-trading expenses (2020: £38.5MM), net of tax at 19%. 8 Experienced and Dynamic Management Team

Key Members of Leadership Team

Andy Haste Non-Executive Chairman >20  Joined esure in March 2020  Currently serves as Senior Independent Deputy Chairman of Lloyd’s of London  Former CEO of RSA Insurance Group plc and Chief Executive of Sun Life PLC  Former Senior Independent Director of ITV PLC  Former Chairman of Wonga Group

David McMillan Peter Bole >15 Chief Executive Officer >20 Chief Financial Officer  Joined esure as CEO in July 2019  Joined esure in January 2020 and became CFO in March 2020  Former Group COO of QBE  Previously Chief Financial Officer of Virgin Money and  Former CEO of UK General Insurance at , as well as other senior  Former senior financial roles at Group, and roles within the group including CEO of Europe, CEO of India and Deloitte Chairman of Global Health

Darren Boland Andy Burton >20 - Chief Risk Officer Chief Technology Officer

 Joined esure in March 2013 as Head of Risk and was promoted to Chief  Joined esure in January 2021 as CTO, with over 30 years’ experience of Risk Officer later that year working in and leading technology teams across a range of sectors,  Previous senior roles at Aspen and in both the audit and actuarial teams including financial services at PwC  Former CTO at The Very Group and Sky Betting and Gaming

Elspeth Hackett Graham Hughes >25 >30 Chief Underwriting Officer Chief Claims Officer >25  Joined esure in February 2016  Joined esure in October 2015  Over 30 years’ experience within the insurance industry, leading  Previous roles include Commercial Claims director at RSA and other underwriting and product teams senior roles at and Aviva  Former Head of Personal Lines Underwriting at LV= and RBS Insurance

Years of insurance industry experience 9 Summary of esure’s Game Changer Strategy

Ambition

• Become the leading scale pure-play digital insurer in the UK • Provide an easy digital experience and an extremely competitive price Ambition • Keep our customers longer

Where to play How to win

1.1 Pricing leadership • PCW as the primary channel 2.2 Improve cost efficiency Choices • Motor as the primary product 3.3 Differentiate to build customer lifetime economics • Mass market (core footprint and beyond) 4.4 Modern, scalable cloud native tech Where How 5.5 Be a customer-driven organisation to play to win Priorities

1 Pricing Leadership 2 Improve Cost Efficiency 3 Differentiate to build customer A. Expand footprint A. Digitise and automate key processes lifetime economics B. Advanced data capability B. Improve indemnity spend efficiency A. Easy digital journeys

Priorities C. High-velocity trading culture C. Achieve lowest IT run cost B. Drive multi-product holdings C. Persistency propositions (e.g. UBI)

4 Modern, scalable cloud native tech: Re-platform onto the most modern, scalable and extensible cloud native technology in the industry

5 Be a customer-driven organisation: Customer-led culture and DNA across all foundational/ propositional elements

10 Redefining the Cost Base

Tech Re-Platforming will allow esure to unlock a Expense Ratio Expected to Reduce Over Time number of benefits: Expense ratio, %(1)

31.6% • Straight through processing of claims and customer interactions

• Data and data science driving strong and efficient customer outcomes

• Simplified administrative functions

• Simplified (and growth focussed) IT function

• Open/ cloud-based architecture will allow esure to make use of the latest technology developments across the insurance value chain

2020A Medium-Term

Notes: 1. Expense Ratio calculated as Insurance Expenses (excluding Non-Trading Costs) plus Claims Handling Costs, divided by Net Earned Premium 11 esure Group Highlights

Experienced player in large and profitable market • #7 player in Motor, with a growing presence in Home 1 • Significant competitive advantage built up through data and underwriting experience • Further upside to come from ongoing transformation strategy

2 Balanced revenue mix between underwritten and additional services revenues • Significant profit contribution from additional revenue streams • Strong relationships with reinsurance counterparties ensures a sustainable risk management and capital strategy

3 Business model supports underlying ROE in excess of 20% • Capital-light model and high margin revenue streams support above-market ROE • Strong returns underpinned by a highly cash generative business model

4 Strong and stable balance sheet • Solvency II ratio of 164%, above the top end of the group’s target range • Conservative approach to reserving and investment management 5 Experienced and high quality management team • esure is well-equipped to compete in a changing industry • Backed by an experienced and supportive investor, Bain Capital 12 Market Environment Key Themes in UK Personal Lines Market

• Personal lines have performed well through the COVID pandemic  Mainly due to lower claims frequency in both Motor and Home COVID & Market • However, the improved claims experience has delayed price hardening in the Motor market Environment  Motor pricing has continued to decline across the market in Q1 and Q2 2021 • Claims inflation is running above long-term levels  Increasing technology and complexity of car design and short-term impacts from COVID pandemic

• FCA policy statement published on 28 May 2021 • From January 2022, various measures will be enacted to end the practice of so-called “price walking”  FCA Pricing Insurers will no longer be able to raise prices for existing customers solely based on tenure Practices Review • esure is strongly supportive of the measures announced and is well-placed to respond & Regulation  Significant administrative and compliance burden that will be more demanding for more complex businesses • PCWs are expected to remain a key distribution channel as new business pricing will still vary across the market • Incoming Whiplash reforms set to reduce personal injury pay-outs

• Incumbent insurers continue to invest in technology in order to enhance digital capabilities and improve cost efficiency • A number of insurtechs performed well during the pandemic (e.g. those whose products are well-suited to lower or irregular driving volumes) Technology  However, still a limited impact on the overall market to date • Over the longer-term, the trend towards connected cars is expected to continue, although the market implications are still uncertain

14 Overview of the esure Story

Large UK Personal Lines Markets Growing Share of PCW Distribution Higher CORs in Motor Offset Total Market Premium (2020), £Bn (1) PCW Share of Market Distribution, % (1) by Greater Ancillary Revenues Market Combined Operating Ratios, % (1) 12.8 Motor Motor 81% 108% 68% 70% 73% 75% 104% 59% 64% 66% 66% 102%101% 100% 6.0 98% 94% 93% Avg.: 100%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 Motor Home Home Home 63% 54% 55% 56% 59% 100% Market premium per 43% 47% 94% 94% 96% policy (£) 465 266 37% 93% 92% 31% Avg.: 94% 89% 90% esure premium per policy (£)(2) 399 184 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 Source: ABI

• Combined premium volume of £19Bn • Motor market average COR of 100% over across Motor and Home • PCWs now account for >80% of personal time lines Motor sales and >60% for Home • esure’s average premium per policy is – Profitability supported by non- underwritten revenue sources below market average in both Motor and • Share continues to grow across both Home lines • Home margins more dependent on – Reflects lower risk customer profile weather/ catastrophe losses

Notes: 1. Sourced from Association of British Insurers (ABI) data 2. Calculated as FY20 GWP for Motor (£737MM) and Home (£104MM) divided by average of FY19 and FY20 In-Force Policies for each line of business (Motor: 1.846MM; Home: 0.565MM) 15 Overview of FCA Pricing Practices Review

What is the FCA Review? Industry Implications

Key changes: • Home (rather than motor) more impacted given greater price walking • Insurers have to equalise front book and back book pricing • Expect to see 2 main effects of this regulation play out: • Auto-renewal made stricter and cancellation made easier 1.1 New business prices increase to offset reduced profitability of • Enhanced product rules to ensure fair value the back book With strict enforcement: 2.2 Greater persistency over time as price differential and incentive • Strong anti-avoidance measures and reporting requirements to switch decreases • Hard rules that insurers must follow Pricing measures come into force from January 2022

What Does This Mean for esure?

• Although market dynamics are uncertain, FCA changes present an opportunity for esure:

 Higher churn in non-digital back-books from more established players

 Low cost insurers with lower equalisation point between front and back book are most able to take opportunity of market dislocation

• This validates the direction of esure’s blueprint strategy to provide consumers with competitive products, easy to use digital customer experience achieved through a low cost operating model

16 Financial Overview FY20 Financial Performance: Headlines

Improving Underlying Trajectory • Following a reset in FY19, FY20 £MM demonstrated esure’s renewed strategy Summary Financials FY19 FY20 Change (%) and ability to attract customers in a difficult pricing environment

In-Force Policies (MM) 2.38 2.45 3.0% • Business model and revenue mix reduce Gross Written Premium 834.5 841.0 0.8% the gearing to underwriting profitability  High proportion of additional income streams Underwriting Profit inc. Instalment Income(1) 12.6 32.7 159.5% • Reinsurance structures transfer risk and Net Investment Income 22.0 14.6 (33.6)% optimise capital (2) Net Other Income 23.1 35.3 52.8% • As a result, ROE can exceed the levels Trading Profit(3) 57.7 82.6 43.2% generated by traditional P&C business models Adjusted Post-Tax Profit(4) 41.7 60.2 44.2%  Adjusted ROE of 21.8% in FY20 Adjusted ROE (%)(5) 16.1 21.8 5.7% • Solvency II ratio above the top end of the target range (140%-160%) Combined Operating Ratio (%) 106.3 104.4 (1.9)ppt • Underlying performance of the Solvency II Ratio (%) 149 164 15ppt group continues to improve Notes: 1. “Underwriting Profit inc. Instalment Income” is calculated as the sum of: Net earned premium, net incurred claims, claims handling costs, insurance expenses and instalment income 2. “Net Other Income” is calculated as the sum of: Other income and other operating expenses 3. “Trading Profit” is defined as earnings before interest, tax, non-trading expenses and amortisation of acquired intangible assets 4. “Adjusted Post-Tax Profit” is calculated as statutory post-tax profit, adjusted for non-trading expenses (FY20: £38.5MM; FY19: £44.6MM), net of tax at 19% 18 5. “Adjusted ROE” calculated as “Adjusted Post-Tax Profit” divided by average of opening and closing shareholders’ equity Further Analysis of the Business Model

Non-Underwritten Revenue Sources Drive Strong Overall Economics

FY20 Trading Profit Bridge, £MM FY20 GWP to NEP bridge, £MM • Underwriting profitability is only one 841 part of the overall customer economics in the UK personal lines market 522 522 (222) (92) (6)  Illustrated by an industry-wide Motor COR of ~100% over the long- term Gross Ceded Under Ceded Under Other (1) Net Earned Written LPT & Q/S Excess Premium Premium of Loss • Non-underwritten revenue streams supplement core underwriting profit

• Non-underwritten revenue streams 15 52 83 contributed £106MM in FY20 (410) (17) 56 33  Equivalent to ~20% impact on the COR (135) (23) Net Earned Net Incurred Insurance Underwriting Instalment Underwriting Other Investment Non-Insurance Trading Premium Claims (2) Expenses Profit Income Profit Income (3) Income Expenses Profit (inc. Instalment Income)

Non-underwritten revenue streams of £106MM = >20% of Net Earned Premium Notes: 1. Sum of net written-to-earned adjustment (£(4.5)MM) and FY20 LPT adjustment (£(1.8)MM) 2. Net Incurred Claims plus Claims Handling Costs 3. Other Income includes: Brokerage & Commission Income (2020: £12.0MM); Claims and Related Income (2020: £6.4MM), Profit Commission from Reinsurers (2020: £12.3MM) and Policy Administration Fees & 19 Other Income (2020: £21.2MM) Risk Profile & Balance Sheet Strong Balance Sheet with Low Risk Exposure

1 2 Low risk and highly liquid Conservative reserving methodology, investment portfolio generating positive run-off over time

3 4 Significant reinsurance protection, Strong Solvency II position with low resulting in lower back-book risk and sensitivity to market movements higher capital efficiency

21 1 Low Risk Investment Portfolio

Conservative Approach to Asset Allocation… …Supplemented by Well-Managed Credit Risk % % Investments Bearing Credit Risk and Total Investments: £1.2 Bn Cash and Cash equivalents: £1.1 Bn Deposits Below BBB or Not with credit Government BBB Rated institutions bonds 8% 7% 22% 34%

A AAA 13% 45% Equities 7% Derivatives 0.4% AA 27% Cash Corporate 4% bonds (1) 33%

• Conservative asset allocation, with majority of portfolio allocated to high quality fixed income asset classes • Significant allocation to liquid asset classes – more than sufficient to meet the group’s requirements, even in a stress scenario

Source: Annual Report, SFCR Report

Notes: 1. “Corporate bonds” allocation also includes corporate bonds included within the “Collective Investment Undertakings” category shown in the group SFCR 22 2 Conservative Reserving Approach

Accident Year Ultimate Net Loss Ratio Development Over Time(1) % of Ultimate Accident Year Net Earned Premium

86% 85% 84% 84% 83% 81% 78% 78% 76% 75% 69% 72% 67% 61% 65% 62%

2011 2012 2013 2014 2015 2016 2017 2018

End of Reporting Year +1 year +2 years +3 years +4 years +5 years +6 years +7 years +8 years +9 years

• Ultimate loss ratios have reduced over time, demonstrating conservative initial reserve estimates

Notes: 1. Excluding 2019 given effect of LPT on ultimate NEP 23 3 Supported by Prudent Reinsurance Programme

3 Pillars of Reinsurance Protection: 1 • Reduces capital intensity through risk-sharing with Significant Risk-Sharing via Quota-Share reinsurance partner Quota-Share as % of Earned Premium(5) • Supportive for ROE as esure retains 100% of higher margin non-underwritten revenue streams Quota 30% 40% Share(1) • Quota Share agreement also results in Profit Commission income based on profitability of business ceded to 70% 60% reinsurance counterparty – Profit Commission receivable stood at £15.8MM as at 2020 2021 FY20 (FY19: £1.8MM)(3) Retained Reinsured via Q/S Ongoing

2 Key Terms of Excess of Loss Programmes(6) • “Business as usual” excess of loss (XoL) programme protects against downside risk Home Motor Excess of Type Per Event Type Per Risk Loss • Supplements prudent underwriting approach Programme Deductible 10% of Home GWP Deductible £1MM • Home programme protects against the equivalent of a 1- Limit 200% of Home GWP Limit Unlimited in-5 year event(4) 100% placed (i.e. no gaps in cover) 100% placed (i.e. no gaps in cover)

3 • Provides protection against deterioration on older accident years • 85% reduction in net reserves held against business earned LPT(2) • Significantly reduced the group’s overall capital up to H1 2019 requirement Notes: 1. Quota Share is a pro-rata reinsurance contract in which the insurer and reinsurer share premiums and losses according to a fixed percentage 2. The LPT (Loss Portfolio Transfer), and the related Adverse Development Cover (ADC), is a reinsurance contract in which an insurer cedes claims from a defined accident period to a reinsurer and includes reinsurance should any deterioration be seen in the amounts ceded 3. Profit Commission receivables are shown on a Solvency II valuation basis 4. Based on internal analysis using climate variability modelling approach 5. Quota-Share percentage reflects original cession to reinsurance counterparty. Subsequently, esure has the ability to commute (re-assume) a portion of the risk over time 6. Home: Excess of Loss programme covers losses occurring during the 12-month period from July 2021 to June 2022. Motor: Excess of Loss programme covers risks attaching during the 12-month period from 24 January to December 2021 Reserving & Reinsurance Actions Have De-Risked 3 Balance Sheet

Underwriting Risk Has Declined in LPT Has Reduced Risk of Back-Book Deterioration Absolute and Relative Terms Split of Net Reserves by Accident Year (£MM, %) SCR Breakdown (£MM) 2018 Net Reserves: 2020 Net Reserves : £528MM(1) £376MM(1) 330

233 290 283 173 248 108 % of 106 reserves % of 87 61 ~25% 87 reserves (40) (46) 69 19 23 ~12% 2018 2020 2018 2020

Non-Life U/W Risk Diversification Other Risks Prior 2016 2017 2018 Prior 2018 2019 2020

• Introduction of the LPT has materially de-risked the back-book and transformed the group’s capital intensity • This complements the group’s conservative underlying reserving approach

Notes: 1. Net Reserves as per statutory financials were £415MM (2020) and £602MM (2018) respectively. Analysis above excludes Provision for Claims Handling Costs, Salvage & Subrogation and Recoverables Due to Reinsurer as these items are not allocated to specific accident years

25 Solid Solvency II Position, with Low Sensitivity 4 to Market Movements

Capital Position Marginally Above Target Range Low Sensitivity to Market Risks Group Solvency II Ratio, % Group Solvency II Ratio Sensitivities, %

Solvency II Motor loss ratio 5ppts worse (12%) 149% 164% Ratio: 1987 Hurricane (7%) 383 361 Target Real estate values -25% (4%) Range: 140- Credit spreads of corporate bonds +50bps (1%) 117 160% 121 Interest rates -50bps 0%

Equity markets -25% 0%

Ogden discount rate of -1% 0% 267 242 240 233 Capital Management • Solvency Capital Requirement determined using Standard Formula • Regular assessment by the Group of the appropriateness of the Standard Formula for the business and its risk exposures

20192019 20202020 – Regular communication with the PRA, including current dialogue on potential modification to the Standard Formula in respect of Solvency Capital Unrestricted Tier 1 Tier 2 Requirement reinsurance structures and Profit Commission receivables

26 ESG Strategy ESG Strategy

We continuously strive to be a responsible and sustainable business in everything we do. It is, put simply, the right thing to do and will also help us deliver long-term value. Our recent progress on Environmental, Social and Governance matters is summarised below:

• Board approved an ESG Policy in 2020 with the following priorities:  Ensure that ESG is central to all strategic decisions  Address the impact of ESG factors on customers, colleagues and wider communities ESG  Link remuneration to ESG factors to ensure accountability Framework • Also established an Inclusion and Diversity working group consisting of representatives from across the organisation • Further initiatives to be launched during 2021

COVID • In Q1 2020, the Group quickly prioritised investment in resources to ensure our colleagues could transition to working from home Response • Launched a number of initiatives to support customers and colleagues during the pandemic

• Invested in a new colleague engagement tool to enable “continual listening” Employee Engagement • Strong results seen so far:  First survey received a 92% response rate with an engagement score of 7.7

• Continuing to develop the metrics and targets to guide our approach on carbon footprint Environment • Several actions taken to date, including transitioning to renewable energy sources throughout the office network, pilot scheme to use recycled auto parts to repair our customers’ vehicles and considering the installation of electric car charging points across the group’s offices

• During 2021, we will formalise our ESG monitoring metrics, targets and limits in relation to our asset management function Investment • Our current investment portfolio is already well-positioned from an ESG perspective Management  Low levels of exposure to high carbon emission industries  Investments managed by funds with good ESG credentials

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