RBC Mid-Market M&A

March 21, 2019

Insurance Sector Update June 2020 Table of Contents

1 Introduction

2 Current Market Events And Economic Statistics

3 Valuation Trends & Precedent Transactions Table of Contents of Table

4 Appendix A – Overview of RBC’s M&A Capabilities

R B C M I D - MARKET M&A | 2 Introduction

Section 1 Introduction Situation Overview

. The economic landscape and financial markets have gone through a significant change with COVID-19 having a material impact on our lives and businesses in the near term . Many business owners are looking for answers as to the interim impacts of the virus on business values, lending, the Situational Overview overall M&A market and their own unique situation . The heightened anxiety around the virus is affecting Canada and many of the clients we serve in unprecedented ways - RBC Mid-Market M&A (“RBC M&A”) remains focused on helping you navigate this extraordinary situation

. This presentation is meant to provide an overview of the current market situation and the impacts we are seeing in the insurance industry. The document includes relevant macro and insurance market information, valuation statistics, Update Overview and commentary for various subsectors, including: ‒ Insurance Brokerage, Life Insurance, P&C Insurance, Multi-line Insurance and Reinsurance companies

. RBC M&A provides capital market advisory services to mid-sized companies in Canada . RBC M&A has 6 offices across Canada and 30 professionals serving the needs of our clients . RBC is a global financial institution with capabilities, platforms and professionals in Canada, the United States, the United Kingdom, Europe and Asia . RBC is the #1 ranked M&A advisor in Canada and the #2 middle market advisor in North America

R B C M I D - MARKET M&A | 4 Current Market Events and Economic Statistics

Section 2 Macro Economic Environment

Commentary % Change Quarter-over-Quarter in GDP(1)

. The global macro economic environment has been significantly impacted by the COVID-19 pandemic, resulting in lockdowns across the world 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 45% . The pressure on the economy has been widespread with services sector 35% being impacted by a demand shock as physical distancing keeps consumers and employees at home 25% 20.0% . The physical distancing measures are resulting in an economic decline, which 15% 8.0% 5.0% 4.0% 5.0% 5.0% has translated into discounted prices for a variety of products 5% . The impact on labour markets is expected to be significant as companies (5%) implement measures to save on costs, including furloughing employees (15%) (8.2%)  Unemployment rate is forecasted to reach 12% in 2Q2020 (25%) . It is expected that as the virus is brought under control and physical (35%) (32.0%) distancing measures ease, so will the economic drag (45%) . The Bank of Canada and governments have been quick to respond to the crisis by unveiling a wide range of policies to support companies and their Canadian Unemployment Rate(1) employees manage through this crisis. It is expected that as long as businesses can weather the near-term economic impact, there would be a potential for a return to work for laid-off employees relatively quickly in certain sectors 12.0% Canadian Prime Rate (%)(2)

4.5 9.5% 8.5% 8.1% 7.7% 7.4% 4.0 7.0% 6.3% 3.5

3.0

2.5 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021

2.0 Actual Forecast Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20

COVID-19 has resulted in a challenging economic environment and an uncertain outlook

(1) RBC Economics (2) Capital IQ R B C M I D - MARKET M&A | 6 Valuation Trends & Precedent Transactions

Section 3 Trends in the Industry

Trends Measures(1)

Insurance Companies Are Prepared . New measures have been put in place in response to the increasing . Insurers have gained experience from previous virus impact of COVID-19 on consumers, the industry and the overall economy outbreaks such as SARS and some have introduced Measures include: clauses for epidemics and pandemics into non-life products Reduced Premiums . Driving habits have changed significantly because of the pandemic Employees Compensation . Insurance companies have been adjusting premiums to . An increase in workers claims is expected to surge reflect that change not adequately protected by their employers against exposure driven by essential and front line employee claims who did not receive appropriate protection by their employers against the virus Flexible Payment Options . Some insurers have been exploring flexible and deferred Credit Insurance payment options to help customers facing financial

. With the increasing risk of company bankruptcies driven s difficulties as a result of COVID-19’s impact by economic shutdown and supply chain disruption, claims against default on debt payments could increase in the next months

No Change in Policies Measure Travel & Event Cancellations . Insurance providers are not expecting to modify current . With major cities imposing shutdowns, social distancing insurance policies in case customers are temporarily using Trends and quarantines, travel and event cancellations have their cars or homes differently during the pandemic surged in the last few weeks . Most of large events and some flight tickets have policies that may cover for cancellations Non-Sufficient Funds Fees (‘NSF’) Waiver . Some insurers are exploring NSF waivers if customers have Market Volatility insufficient funds to cover the premiums . Falling interest rates and market volatility could impact the insurers profitability and earnings

. Measures are expected to result in $600 million in savings to consumers Fraud Risk . With companies trying to operate remotely or with partial . Insurers have taken measures to support Canadians and businesses who staff, fraud risk is expected to increase, which would are most adversely affected by COVID-19 trigger an increase in fraud protection claims

COVID Could Have a Positive Impact on the Industry . COVID-19 may cause people to reconsider their individual health insurance needs

(1) IBC R B C M I D - MARKET M&A | 8 COVID-19 Impact on the Insurance Industry The Insurance Industry has been affected by COVID-19 with uncertainty lying ahead

Impact(1,2)

. COVID-19 has had a strong impact on the global economy, disrupting supply chains, modifying demand for goods, services, and commodities; and imposing a fundamental change on the daily lives of people around the world . Wide-reaching government policies have been implemented across the globe to slow the coronavirus. These measures have sent massive shock waves through the North American and global economy, bringing many industries to a halt . In 2008/2009, the insurance providers’ revenue and operating income decline was generally sharp, but results recovered fairly quickly coming out of the recession  One meaningful difference between now and 2008/2009 is interest rates – Interest rates are far lower compared to the heart of the 2008/2009 financial crisis. While it is expected that the insurance industry is in for a difficult few quarters, the sector is in much better shape than in 2008/2009 and reflects better balance sheets, excess capital positions, and investment quality . Credit deterioration and a declining equity values are expected to affect insurers' financial strength  Insurance related pressure such as increased claims, is expected to be a less significant risk factor for the industry as a whole  Most business interruption policies have been deemed to only cover losses from physical events and exclude diseases . Life insurers are more at risk than other subsectors, particularly companies with relatively thin capital buffers and significant exposure to financial market volatility through their asset portfolios or product offerings . For non-life insurance companies, social distancing and travel restrictions are expected to lead to an increase in claims, such as credit, bond, mortgage, travel insurance and event cancellation . Overall multiples have declined across the insurance industry, with some verticals being more resilient than others

TEV / EBITDA Multiples

20x S&P 500 S&P 500 Insurance (Industry Group)

15x

10x

5x

0x Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Source: Capital IQ (1) RBC Capital Markets – Insurance Observations – April 20th 2020 (2) S&P Global – COVID-19 Will Test Insurers’ Resilience R B C M I D - MARKET M&A | 9 Public Market Valuation All subsectors of the Insurance industry have been affected by COVID-19

Overview(1)

. The global COVID-19 pandemic has been labeled by industry participants as one of the most significant and fastest developing credit events . There were certainly direct impacts on the insurance industry visible in 1Q2020, however, it is expected that much of the impact from COVID-19 still lies ahead . Share prices have declined across all subsectors of the insurance industry with some variation to the extent of the decline:  U.S and Canadian Life insurance companies were the most affected, with index values declining by more than 28%  Insurance Brokers were the least affected by the pandemic, with the index value declining by 5.2%

Public Company Share Price Performance by Subsector(2)

(3.9%) S&P 500

(5.2%) Insurance Brokers

(17.1%) Reinsurance

(22.8%) P&C Insurance Companies

(23.5%) Multi-line Insurance

(23.5%) Multi-line Insurance

(28.5%) Canadian Life Insurance

(30.7%) U.S Life Insurance Companies

Source: Capital IQ (1) RBC Capital Markets – Insurance Observations – May 18th 2020 (2) Share price change between December 31st 2019 and June 23rd 2020 R B C M I D - MARKET M&A | 10 Insurance Brokers

Valuation and Recent Market Statistics Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of Company Name Price(1) 52 Week Cap. Value(2) Revenue EBITDA EBITDA Revenue EBITDA P/BV(3) Marsh & McLennan Companies, Inc. (NYSE:MMC) $ 142.81 -12% 72,277 91,921 23,268 5,832 3.0x 4.0x 15.8x 7.3x Aon Plc (NYSE:AON) $ 255.22 -21% 58,978 70,618 14,973 4,432 2.4x 4.7x 15.9x 13.8x Willis Towers Watson Public Limited Company (NasdaqGS:WLTW) $ 261.93 -12% 33,720 42,047 12,413 2,990 2.5x 3.4x 14.1x 2.4x Arthur J. Gallagher & Co. (NYSE:AJG) $ 131.68 -11% 24,969 31,777 9,216 1,785 3.4x 3.4x 17.8x 3.7x Brown & Brown, Inc. (NYSE:BRO) $ 55.66 -15% 15,774 17,610 3,327 1,102 1.6x 5.3x 16.0x 3.4x Mean 2.6x 4.2x 15.9x 3.2x Median 2.5x 4.0x 15.9x 3.7x

Value as a Multiple of Latest 12 Months EBITDA* Weekly North American M&A Volume - Insurance Brokers

20x S&P 500 Insurance Brokers 30 2020 2019 123 transactions since March 1st 2020 25 15x 20

10x 15 10 5x 5 0 0x

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Jun-1 Jun-8

Apr-06 Apr-13 Apr-20 Apr-30

Jan-02 Jan-05 Jan-13 Jan-20 Jan-28 Jun-14

Mar-02 Mar-09 Mar-16 Mar-25 Mar-31

Feb-04 Feb-10 Feb-18 Feb-24

May-11 May-18 May-26 *Calculated using weighted average of market capitalization May-04 Notable Developments(4,5,6,7) M&A Transactions and Developments . While insurance brokers have experienced a great start for the year, Value Date Target Buyer publically traded companies are expected to be impacted by COVID-19 in the (C$MM) remainder of 2020 . In response to the current market environment, insurance brokers are taking Fidelity Financial Simplicity Group Apr-20 - cost reduction measures such as: salary reductions, as well as spending cuts Group Inc. Holdings, Inc. on travel and entertainment, technology, third party contractors and bonus pools Impact  Marsh & McLennan Companies, Inc. (“MMC”) has pledged no job losses Mar-20 Canada Brokerlink Inc. - Insurance Brokers Inc. due to COVID-19 and haven’t instated a hiring freeze . Both Aon Plc (“AON”) and MMC suspended share buybacks – Insurance Willis Towers Watson Aon Plc brokers are focusing on building up cash and preserving it Mar-20 40,968 . M&A is widely expected to slow down due to COVID-19 (NasdaqGS:WLTW) (NYSE:AON)  Contrarily, Arthur J. Gallagher & Co. (“AJG”) announced that it is still looking to complete transactions in the near future Source: Capital IQ, Figures presented $MM CAD (1) June 23rd 2020 (4) Businesswire - Marsh & McLennan Companies Announces Pricing of $750 Million Senior Notes Offering (2) Value: Total enterprise value (Equity plus net debt) (5) RBC Capital Markets – Insurance Observations – Week of May 4th 2020 R B C M I D - MARKET M&A | 11 (3) Price-To-Book Ratio (6) RBC Capital Markets – Insurance Observations – Week of May 11th 2020 (7) Piper Sandler – Willis Tower Watson P&C Insurance Companies

Valuation and Recent Market Statistics Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of Company Name Price(1) 52 Week Cap. Value(2) Revenue EBITDA EBITDA Revenue EBITDA P/BV(3) Chubb Limited (NYSE:CB) $ 174.70 -23% 78,852 101,698 45,863 6,387 3.5x 2.2x 15.9x 1.1x The Travelers Companies, Inc. (NYSE:TRV) $ 156.89 -25% 39,668 48,284 42,964 5,382 1.6x 1.1x 9.0x 1.2x The Hartford Financial Services Group, Inc. (NYSE:HIG) $ 53.35 -37% 19,103 25,261 28,021 4,135 1.4x 0.9x 6.1x 0.9x Fairfax Financial Holdings Limited (TSX:FFH) $ 428.80 -35% 11,917 22,980 25,578 527 5.0x 0.9x 43.6x 0.7x Arch Capital Group Ltd. (NasdaqGS:ACGL) $ 39.91 -39% 16,150 20,398 9,100 1,913 1.3x 2.2x 10.7x 1.1x Markel Corporation (NYSE:MKL) $ 1,259.50 -31% 17,350 17,250 9,978 194 NM 1.7x 89.1x 1.3x W. R. Berkley Corporation (NYSE:WRB) $ 77.83 -28% 13,910 16,522 10,500 1,124 2.2x 1.6x 14.7x 1.9x Cincinnati Financial Corporation (NasdaqGS:CINF) $ 86.13 -46% 13,851 14,491 7,651 212 2.9x 1.9x 68.4x 1.3x Selective Insurance Group, Inc. (NasdaqGS:SIGI) $ 70.00 -36% 4,180 5,358 3,798 489 2.3x 1.4x 10.9x 1.5x RLI Corp. (NYSE:RLI) $ 111.17 -18% 4,994 5,169 1,158 91 1.8x 4.5x 56.9x 4.0x Mean 2.4x 1.6x 11.2x 1.2x Median 2.2x 1.7x 15.3x 1.3x Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions 20x S&P 500 P&C Insurance Companies Value Date Target Buyer (C$MM) 15x The Progressive Corporation Apr-20 ARX Holding Corp. 323 (NYSE:PGR) 10x Anchor Specialty Insurance Weston Insurance Holdings Jan-20 - Company Corporation 5x

Jan-20 National Lloyds Corporation Align Financial Group, LLC 198 0x Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 *Calculated using weighted average of market capitalization Notable Developments(4,5,6,7,8,9) . P&C insurance companies have been offering flexible solutions to their clients through waiver of additional premium for closed businesses and reworking coverages within policies . Most of P&C insurance companies indicated that the vast majority of their business interruption (“BI”) policies require physical damage to qualify as a BI loss and have specific virus exclusions on most policies . P&C insurance companies expect workers’ compensation claims to surface as a result of the pandemic in areas like health care and first responders . Directors and officers liability insurance as well as short-term disability claims are expected to increase due to COVID-19  Offsetting some of these exposures are reduced driving miles, lower business activity related claims and reduced elective benefits claims . P&C insurance companies are expecting to incur elevated legal expenses in order to defend insurance contracts

Source: Capital IQ, Figures presented $MM CAD (1) June 23rd 2020 (4) RBC Capital Markets – RELI Corp. (7) RBC Capital Markets – Selective Insurance Corp (2) Value: Total enterprise value (Equity plus net debt) (5) RBC Capital Markets – Chubb (8) Piper Sandler – 1Q20 Earnings Review Maintaining Overweight Rating R B C M I D - MARKET M&A | 12 (3) Price-To-Book Ratio (6) RBC Capital Markets – Fairfax (9) Piper Sandler – Selective Insurance Corp U.S Life Insurance Companies

Valuation and Recent Market Statistics Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of Company Name Price(1) 52 Week Cap. Value(2) Revenue EBITDA EBITDA Revenue EBITDA P/BV(3) MetLife, Inc. (NYSE:MET) $ 50.01 -30% 45,393 162,562 96,719 16,351 7.1x 1.7x 9.9x 0.5x Prudential Financial, Inc. (NYSE:PRU) $ 85.31 -39% 33,698 42,976 85,180 5,817 1.4x 0.5x 7.4x 0.4x Aflac Incorporated (NYSE:AFL) $ 49.14 -36% 35,256 42,790 29,453 5,654 1.3x 1.5x 7.6x 1.0x Principal Financial Group, Inc. (NasdaqGS:PFG) $ 56.56 -31% 15,491 16,394 22,995 2,333 0.2x 0.7x 7.0x 0.9x Brighthouse Financial, Inc. (NasdaqGS:BHF) $ 41.39 -36% 3,884 13,779 20,032 NM NM 0.7x NM 0.2x Globe Life Inc. (NYSE:GL) $ 101.03 -33% 10,753 13,068 6,132 1,375 1.7x 2.1x NM 1.2x Lincoln National Corporation (NYSE:LNC) $ 52.22 -42% 10,089 12,623 23,924 1,718 1.5x 0.5x 7.3x 0.5x Unum Group (NYSE:UNM) $ 22.17 -53% 4,510 8,530 16,045 2,094 1.9x 0.5x 4.1x 0.3x American Equity Investment Life Holding Company (NYSE:AEL) $ 31.38 -32% 2,872 1,422 2,896 909 NM 0.5x 1.6x 0.6x Mean 1.3x 1.0x 7.2x 0.6x Median 1.5x 0.7x 7.3x 0.5x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions 20x S&P 500 U.S Life Insurance Companies Value Date Target Buyer (C$MM) 15x FGL Holdings Fidelity National Financial, Feb-20 3,946 (NYSE:FG) Inc. (NYSE:FNF) 10x Lincoln Benefit Life Guaranty Income Life Dec-19 - Company, Inc. Insurance Company 5x Cincinnati Equitable Life Farm Bureau Life Sep-19 - 0x Insurance Company Insurance Co. Of Michigan Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 *Calculated using weighted average of market capitalization Notable Developments(4,5,6,7,8,9) . Publically traded U.S Life insurance companies have been affected to a certain extent by an increase in amount of claims on benefit products, primarily short- term disability . Overall, COVID-19 related death claims have been limited so far . Most publically traded U.S Life insurance companies have benefited from the suspension of certain non-essential medical services, such as dental, which has resulted in reduced overall claims activity . Prudential Financial, Inc. (“PRU”) expects to incur additional costs related to sales support, employee health protection, and incremental technology . Some U.S Life insurance companies suspended share repurchases . On February 7th, 2020, Fidelity National Financial announced it had reached a deal to acquire FGL Holdings (“FG”)

Source: Capital IQ, Figures presented $MM CAD (1) June 23rd 2020 (4) RBC Capital Markets – Lincoln National Corporation (7) RBC Capital Markets – Metlife, Inc. (2) Value: Total enterprise value (Equity plus net debt) (5) RBC Capital Markets – Brighthouse Finnacial, Inc. (8) RBC Capital Markets – Aflac Incorporated R B C M I D - MARKET M&A | 13 (3) Price-To-Book Ratio (6) RBC Capital Markets – Principal Financial Group, Inc. (9) RBC Capital Markets – FGL Holdings. Canadian Life Insurance Companies

Valuation and Recent Market Statistics Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of Company Name Price(1) 52 Week Cap. Value(2) Revenue EBITDA EBITDA Revenue EBITDA P/BV(3) Manulife Financial Corporation (TSX:MFC) $ 18.72 -33% 36,307 43,165 74,343 7,237 0.3x 0.6x 6.0x 0.7x Sun Life Financial Inc. (TSX:SLF) $ 50.00 -25% 29,229 29,211 34,757 3,659 NM 0.8x 8.0x 1.3x Great-West Lifeco Inc. (TSX:GWO) $ 24.30 -32% 22,543 28,842 38,101 3,085 0.2x 0.8x 9.3x 1.1x iA Financial Corporation Inc. (TSX:IAG) $ 46.84 -39% 5,012 6,133 12,676 994 0.6x 0.5x 6.2x 0.9x Mean 0.4x 0.7x 7.4x 1.0x Median 0.3x 0.7x 7.1x 1.0x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions 20x S&P 500 Canadian Life Insurance Companies Value Date Target Buyer (C$MM) 15x Gerber Life Insurance Canadian Premier Life Feb-20 - Company (Canadian Business) Insurance Company 10x

5x

0x Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 *Calculated using weighted average of market capitalization

Notable Developments(4,5,6,7) . With more than a third of their investment portfolios allocated to corporate debt, the credit cycle is very important to Canadian life insurers  Canadian life insurance companies’ net earnings have been negatively affected by the current market headwinds  A shift in the credit cycle will lead to a loss of credit experience gains  During the Financial Crisis, Life insurance companies recorded a cumulative $4.3 billion of credit losses - Given the stronger capital levels of Canadian life insurance companies compared to the Financial Crisis, along with an implementation of Government relief programs, a repeat of this scenario is unexpected . Sun Life Financial Inc. (“SLF”) announced that COVID-19 did not significantly impact 1Q20 results notwithstanding market impacts but uncertainty remains  SLF mortality and morbidity claims from COVID-19 have been limited to date, amounting to less than 5% of the monthly average for mortality and disability claims, and some have been offset by lower claims in other areas . Great-West Lifeco (“GWO”) has seen fewer health and dental claims as clinics have closed, but a modest increase in disability claims in Canada . GWO expects that with advisers unable to meet clients face-to-face, sales of insurance for individuals might fall in the next quarters

Source: Capital IQ, Figures presented $MM CAD (1) June 23rd 2020 (4) RBC Capital Markets – Manulife Financial Corporation (7) BNN Bloomberg- Great-West Lifeco sees Q1 earnings (2) Value: Total enterprise value (Equity plus net debt) (5) RBC Capital Markets – Sun Life Financial Inc. plunge by almost 50% amid COVID-19 R B C M I D - MARKET M&A | 14 (3) Price-To-Book Ratio (6) National Bank – Canadian Life Insurance Companies Reinsurance

Valuation and Recent Market Statistics Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of Company Name Price(1) 52 Week Cap. Value(2) Revenue EBITDA EBITDA Revenue EBITDA P/BV(3) Munich Re (XTRA:MUV2) $ 355.90 -18% 49,861 47,515 87,077 6,186 NM 0.5x 7.7x 1.1x Swiss Re AG (SWX:SREN) $ 106.31 -37% 30,900 41,413 66,606 2,123 3.5x 0.6x 19.5x 0.8x Hannover Rück SE (XTRA:HNR1) $ 239.00 -19% 28,822 33,172 33,867 3,017 1.0x 1.0x 11.0x 1.8x Mean 2.3x 0.7x 9.3x 1.2x Median 2.3x 0.6x 11.0x 1.1x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions 20x S&P 500 Reinsurance Value Date Target Buyer (C$MM) 15x The Carlyle Group Inc. Fortitude Group Nov-19 (NasdaqGS:CG); T&D United 2,389 Holdings, LLC 10x Capital Co., Ltd.

Nov-19 Ewi Re, Inc Artex Risk Solutions, Inc. 4 5x

Global Reinsurance Randall & Quilter America Sep-19 104 0x Corporation Of America Holdings Inc. Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 *Calculated using weighted average of market capitalization

Notable Developments(4,5,6,7)

. Munich Re’s (“MUV2”) earnings have been impacted by a €800 million loss across a number of business lines  The impact on earnings was largely driven by event cancellation insurance  The impact on life/health insurance will depend on mortality levels in North America  MUV2 expects that the impacts of COVID-19 will be manageable from a financial perspective . Swiss Re (“SREN”) experienced $253 million of COVID-19 related losses in P&C reinsurance . Hannover Rück SE (“HNR1”) expects losses from event cancellation and business interruption  Hannover’s P&C segment has also been affected by losses from events such as the bushfires in Australia and storm Sabine/Ciara in Europe

Source: Capital IQ, Figures presented $MM CAD (1) June 23rd 2020 (4) RBC Capital Markets – Munich Reinsurance Co. (7) Insurance Business Mag - (2) Value: Total enterprise value (Equity plus net debt) (5) RBC Capital Markets – Swiss Re AG Hannover Re bucks trend, sees higher Q1 profit R B C M I D - MARKET M&A | 15 (3) Price-To-Book Ratio (6) Insurance Business Mag - Munich Re profits hit by 65% thanks to COVID-19 Multi-line Insurance

Valuation and Recent Market Statistics Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of Company Name Price(1) 52 Week Cap. Value(2) Revenue EBITDA EBITDA Revenue EBITDA P/BV(3) AXA SA (ENXTPA:CS) $ 28.80 -27% 68,717 149,600 203,667 11,219 5.4x 0.7x 13.3x 0.6x Allianz SE (XTRA:ALV) $ 280.62 -21% 115,529 137,700 166,273 18,610 0.9x 0.8x 7.4x 1.1x American International Group, Inc. (NYSE:AIG) $ 43.28 -45% 37,274 86,056 69,890 19,355 2.3x 1.2x 4.4x 0.5x Mean 2.9x 0.9x 8.4x 0.7x Median 2.3x 0.8x 7.4x 0.6x Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions 20x S&P 500 Multi-line Insurance Value Date Target Buyer (C$MM) 15x SSQ, Life Insurance La Capitale Insurance and Jan-20 - Company Inc. Financial Services Inc. 10x

5x

0x Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 *Calculated using weighted average of market capitalization Notable Developments(4,5,6) . While the duration and severity of COVID-19 will ultimately determine the overall impact on multi-line insurance sector, publically traded companies have started to see their financials being affected by the pandemic

. The largest impact on Allianz SE (“ALV”) came from losses on entertainment, business interruption, credit insurance and travel insurance, with a relatively small offset from lower motor claims frequency as a result of the lockdown

. AXA SA (“CS”) expects that lockdowns will impact revenues through lower new business activity

 CS also expects an impact on earnings from event cancellation losses

. American International Group, Inc. (“AIG”) recorded a $272 million charge related to COVID-19 from travel and accident & health lines, contingency, commercial property, trade credit, and workers’ compensation

 Similar to its peers, the majority of AIG’s business interruption policies have both virus exclusions and require physical damage to trigger claims

Source: Capital IQ, Figures presented $MM CAD (1) June 23rd 2020 (4) RBC Capital Markets – Allianz SE (2) Value: Total enterprise value (Equity plus net debt) (5) RBC Capital Markets – AXA SA R B C M I D - MARKET M&A | 16 (3) Price-To-Book Ratio (6) RBC Capital Markets – American International Group, Inc. Appendix A – Overview of RBC’s M&A Capabilities RBC Mid-Market Mergers & Acquisitions

Overview Transaction Focus

Company Profile: The team works with companies operating in a . RBC’s Mid-Market M&A team provides capital markets advisory services variety of industries to Canadian Mid-Market companies . We advise business owners, management teams and shareholder groups Business Divestitures: Working with business owners to 1 and are focused on private company transactions develop and execute a divestiture process designed to maximize the value of the business being sold. . The team is part of RBC’s Corporate Client Group, leveraging a broad depth of knowledge from offices in all major financial centres across Acquisitions: We have extensive experience assisting Canada 2 companies manage the acquisition process and can provide . Our strong relationship with RBC’s Capital Markets platform allows us to a useful resource when dealing with the seller of a business. bring to bear significant industry research and global market reach to our Buyouts: We provide advice to companies or individuals engagements 3 seeking to complete a management or shareholder buyout.

Clients choose to work with RBC Mid-Market M&A for the following reasons:

The senior professionals on the team each have over 15 years experience successfully closing mid-market Experience transactions

Capabilities We have access to RBC’s strong relationships with domestic and international strategic and financial acquirers

Focus The team is dedicated to focusing exclusively on the mid-market

Ability to leverage the full resources of RBC including financing, wealth management, and succession planning RBC’s Vast Resources services

RBC’s Mid-Market M&A team leverages the experience of its professionals and the extensive capabilities of RBC to provide customized capital markets advisory services

R B C M I D - MARKET M&A | 18 RBC Mid-Market Mergers & Acquisitions National Coverage of the Canadian Mid-Market

Toronto

Robert Hickey Paul Morgan Jeff Ng Jeff Tone Graeme Blair Brandon Beadow Managing Director & Head Managing Director Director Director Vice President Vice President (416) 955-3635 (416) 974-3624 (416) 348-3170 (416) 842-1131 (416) 842-2126 (416) 805-8177 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Matt Mantin Matthew Roberts Nisarg Shah Connor Campbell Jeff Miller Tarek Chami Vice President Vice President Vice President Associate Associate Associate (416) 842-9062 (416) 842-5567 (416) 955-0364 (416) 842-2860 (416) 842-7955 (416) 974-7875 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Alena Huberts Zafer Qureshi Associate Associate (416) 974-5509 Serving the (416) 347-4192 [email protected] 6 Offices Across Canada [email protected] Tuhin Nair Montreal Analyst Canadian (416) 842-1151 Mid-Market [email protected] Mark Anthony Serri Managing Director Shelby Canvin (514) 874-5209 Analyst [email protected] (416) 955-7075 [email protected] Shu Wei Zhang Associate (514) 874-5227 30 [email protected] Dedicated Professionals Raphael Morin Associate (514) 874-7291 [email protected]

Western Canada (Vancouver, Calgary & Edmonton) Halifax

Greg Wright Hussein Poonjani Jackie Fimrite Quaz Jiwan Paul Wourms Mark Marshall Managing Director & W. Head Director Vice President Vice President Vice President Director (604) 257-3249 (780) 707-0789 (403) 292-2137 (604) 257-3230 (587) 215-3844 (902) 421-7530 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Ben McKay Jacob Dickau Abhishek Makkar Peter Wooding Jared Bischof Associate Associate Associate Associate Associate (604) 257-3330 (604) 257-2511 (403) 292-2539 (780) 691-7221 (902) 421-4183 [email protected] [email protected] [email protected] [email protected] [email protected]

R B C M I D - MARKET M&A | 19 Selected Insurance Mid-Market M&A Transactions Transaction Summary

RBC Mid-Market Mergers & Acquisitions acted as the exclusive financial advisor to Sutton Special Risk (“Sutton”), during an investment into the Company by Brit Limited (“Brit”).

Sutton is a Managing General Underwriter (“MGU”) and premier provider of Accident & Health, Life, and Sports & Entertainment insurance and reinsurance solutions. Sutton is a fast-growing MGU that has spent more than 40 years as a Lloyd’s coverholder.

Founded in 1978, Sutton has a team of 40 employees based in Toronto, New York and London. Sutton Special Risk. has received a strategic Sutton will retain its independence, continuing to underwrite as an MGU on behalf of its existing broad panel of Lloyd’s investment from Brit Limited syndicates and international carriers. RBC Mid-Market M&A acted as exclusive financial advisor to the Brit, is a leading global specialty insurer and reinsurer, focused on complex risks. Brit underwrites a broad class of sellers commercial specialty insurance with a strong focus on property, casualty and energy business and has a major presence in Lloyd’s of London. Brit is a subsidiary of Fairfax Financial Holdings Limited (TSX:FFH).

RBC Mid-Market Mergers & Acquisitions acted as the exclusive financial advisor to McLean Insurance (“McLean”) during the sale of the business to Canada BrokerLink, a subsidiary of Intact Financial Corporation (TSX:IFC).

McLean is an award winning personal and commercial insurance broker, specializing in automobile, homeowner and commercial insurance. McLean is a second generation family-owned business, providing affordable insurance solutions in Ontario since 1972, and has experienced significant growth over the past 10 years. McLean Insurance has been Established in 1991, Canada Brokerlink Inc. constitutes one of the largest Canadian property and casualty insurance acquired by Canada brokerage operations with over 115 offices supported by more than 1,400 employees across Ontario, Alberta and Atlantic BrokerLink, a subsidiary of Canada. Intact Financial Corporation

RBC Mid-Market M&A acted as exclusive financial advisor to McLean Insurance

R B C M I D - MARKET M&A | 20 Top Canadian Financial Services M&A Experience

Element Financial has Aviva Canada has acquired CTL Corp. has been McLean Insurance has been Silver Bay Realty Trust has VersaBank and PWC Capital E-L Financial has agreed to separated into Element Fleet RBC General Insurance and acquired by iA Financial acquired by BrokerLink, a been acquired by Tricon have agreed to merge by purchase Guardian’s stake in Management and ECN has entered into a long-term Group subsidiary of Intact Financial Capital means of an amalgamation Empire Life Capital distribution agreement

Not Disclosed ~US$1,400,000,000 C$1,308,190,000 Not Disclosed C$582,000,000 ~C$200,000,000 Not Disclosed

Sole Financial Advisor to Sole Financial Advisor to Financial Advisor to Element Financial Advisor to Financial Advisor to RBC McLean Insurance Tricon Capital Financial VersaBank Insurance Financial Advisor to Guardian Financial Advisor to CTL Corp. June 2017 May 2017 October 2016 Pending January 2016 December 2015 October 2015

Paradigm Quest and Merix Ally Credit Canada Ltd and Benesure has been acquired HOMEQ Corporation have been acquired by Brit Plc has been acquired by Blue Chip Group has been Carfinco Financial Group has ResMor Trust has been by has been acquired by Fortress Investment Funds Fairfax Financial Holdings acquired by Chesswood been acquired by Banco acquired by Manulife Financial Birch Hill Equity Partners and Culpeper Capital Group Limited Santander, S.A. RBC Partners

~C$2,300,000,000 C$64,000,000 C$298,000,000 Not Disclosed $3,800,000,000 $109,000,000 $138,000,000

Financial Advisor to Financial Advisor to Financial Advisor to Financial Advisor to Financial Advisor to Financial Advisor to Financial Advisor to Fairfax Financial Holdings Chesswood Group Limited Banco Santander, S.A. Five Fathom Partners RBC Benesure HOMEQ July 2015 March 2015 March 2015 February 2013 February 2013 January 2013 November 2012

AGF Trust MCAP has acquired 80% stake Merger of Equals between Underwritten Rights Issue National Leasing Group Inc. Cumis Group Ltd. Has been Compu-Quote Inc. has been acquired by in MCAP Service Corporation TMX Group and London has been acquired by acquired by Central 1 Credit has been acquired by Laurentian Bank from BMO & Sun Life Stock Exchange Group plc Canadian Western Bank Union and Co-operators Life Applied Systems Inc. Insurance Company

Not Disclosed $415,000,000 $77,000,000 C$7,888,942,591 £2,055,000,000 $130,000,000 $232,000,000

Financial Advisor to RBC Capital Markets acted as Financial Advisor to Financial Advisor to AGF Financial Advisor to London Stock Exchange Financial Advisor, Corporate Financial Advisor to Financial Advisor to Compu-Quote Management Ltd. MCAP Group plc Broker, and sole UKLA Sponsor National Leasing Group Inc. Cumis Group Ltd. June 2012 June 2012 April 2012 February 2011 July 2010 December 2009 September 2009

R B C M I D - MARKET M&A | 21 Disclaimer

This presentation is incomplete without reference to, and should be viewed and understood solely in conjunction with, any other written materials that supplement the presentation and the oral briefing provided by the Royal Bank of Canada (“RBC”).

This presentation was prepared exclusively for the benefit and internal use of the recipient for the purpose of considering the transaction or transactions contemplated herein. This presentation is confidential and proprietary to RBC and neither this presentation nor its content may be disclosed, reproduced, distributed or used for any other purpose by the recipient without the express prior written consent of RBC. The information in this presentation, and any analyses contained herein, are taken from, or based upon, publicly available information, third-party providers, or information obtained from the recipient. This presentation and its content reflect prevailing conditions and our views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of any information made available to us. RBC does not make any representation or warranty, express or implied, as to the accuracy, reasonableness or completeness of the information contained in this presentation.

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Any calculations or value ranges indicated herein (i) are preliminary and should not be construed as opinions of RBC or their individual members as to value, fair market value, or prices at which a transaction would be considered fair from a financial point of view, and (ii) have not been subject to the processes that we apply to fairness opinions and valuations, including our due diligence process and our internal opinion review process and, accordingly, must not be considered to constitute a valuation, formal valuation, appraisal, professional opinion, or fairness opinion as contemplated under IIROC Rule 29 or Multilateral Instrument 61-101 and must not be relied upon or disclosed as constituting such a document or opinion. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. The recipient should not act upon such information without appropriate professional advice after a thorough examination of the particular situation.

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