VALUE FOCUSInsurance Industry

www.mercercapital.com

Sector Overview & Commentary Property & Casualty 1Reinsurance 2Life & Health 2Managed Care 3Brokers 3InsurTech, Claims & Services 4

Insurance M&A Highlights Insurance Underwriters 5Insurance Brokers 6

Publicly Traded Insurance Companies Reinsurance 10Multiline 10Life & Health 11Managed Care 12Brokers 13InsurTech, Claims & Services 13

About Mercer Capital 14

First Quarter 2016

© 2016 Mercer Capital // www.mercercapital.com 1

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Sector Overview & CommentaryProperty & Casualty

• P&C stocks gained 2.1% for the quarter and have risen 7.8%

over the last twelve months, with all segments posting positive,

albeit moderate, returns. For reference, the S&P 500 returned

just 0.8% for the quarter, and -0.3% Y/Y.

• Per MarketScout, aggregate commercial lines renewal pricing

continued to drop significantly in Q1, falling 4% in January and

February and 3% in March after dropping an average of 3% in

Q42015. For personal lines, rates renewal pricing also fell, dropping

1% in the first two months of the year but remaining flat in March.

• The soft market is poised to continue throughout 2016, according to

Marsh, reflecting ample insurer capacity, competition and relatively

low catastrophe losses. In its outlook, Marsh expects demand for

cyber insurance to continue to grow in 2016, along with demand

within the workers’ compensation segment, while it views automobile

liability as one of the most challenging among casualty areas.

• Amidst the backdrop of a soft pricing environment, the next

three years may see increased competition for the acquisition

of attractive assets, according to a survey conducted by Willis

Towers Watson M&A Risk Consulting.

• In a March 15th report, Fitch Ratings highlighted the 7.2% decline

in U.S. insurers’ operating earnings in 2015, citing the competitive

operating environment and low investment yields as primary

contributing factors. Underwriting profitability also fell moderately

from a combined ratio of 93.4% in 2014 to 94.5% in 2015.

Sector Pricing and Valuation Summary

Share Price Δ Price / Earnings Price / Book

LTM Return

on EquitySegment %YoY %1Q16 LTM FY16E FY17E P/B P/TB

Property & Casualty (all) 7.8% 2.1% 15.3x 14.3x 13.5x 1.34x 1.42x 9.2%

P&C - Commercial Lines 8.5% 2.0% 12.8x 12.4x 11.9x 1.25x 1.29x 9.8%

P&C - Personal Lines -5.3% 1.2% 14.7x 12.6x 11.2x 1.41x 1.49x 10.6%

P&C - Specialty 12.2% 2.3% 17.4x 16.3x 16.0x 1.18x 1.28x 7.6%

P&C - Workers' Comp 10.2% 3.2% 14.2x 14.7x 14.4x 1.88x 2.21x 15.6%

Reinsurance 2.3% 0.4% 9.5x 10.8x 9.9x 1.02x 1.12x 10.1%

Multi-line 10.2% -4.2% 12.8x 12.1x 10.6x 1.05x 1.08x 5.4%

Life & Health -8.8% -5.9% 10.4x 9.6x 9.0x 0.85x 0.87x 9.6%

Managed Care 2.1% 3.2% 21.4x 16.6x 14.0x 2.40x 3.94x 11.7%

Source: S&P Global Market Intelligence, Mercer Capital analysis. Median measures shown for segments.

Share Price Δ Enterprise Value / EBITDAEV /

LTM RevLTM Rev GrowthSegment %YoY %1Q16 LTM FY16E FY17E

Insurance Brokers 8.1% 9.6% 13.4x 10.3x 9.5x 2.80x 2.0%

Claims, Tech, & Services -9.4% -6.4% 18.8x 4.7x 4.3x 1.59x 13.3%

Source: S&P Global Market Intelligence, Mercer Capital analysis. Median measures shown for segments.

© 2016 Mercer Capital // www.mercercapital.com 2

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Sector Overview & Commentary

Reinsurance

• Reinsurance stocks treaded water in Q1, with the median return for the sector just

0.4%. The sector has experienced similarly lukewarm results over the last twelve

months, increasing only 2.3%.

• According to the latest Aon Benfield Aggregate report, total global reinsurer

capital fell 2% to $565 billion at Dec. 31, 2015 from 2014. Due to the strengthening

U.S. dollar and impact of rising interest rates on bond valuations, traditional rein-

surance capital dropped 4% to $493 billion, though this still comprises 87% of the

total. Alternative capital grew to $72 billion, a 12% increase.

• In Q1, the catastrophe bond and insurance-linked securities market experienced

an infusion of approximately $2.2 billion of new risk capital from 10 transactions,

per Artemis’ first-quarter cat bond and ILS market report.

• Fitch has maintained a negative outlook on the reinsurance sector in the face of

intense market competition and sluggish cedent demand. The ratings agency

warns that a price floor has not yet been reached and that a further drop in pricing

combined with declining investment returns could pose a continued challenge for

reinsurers throughout 2016.

Life & Health

• Life and health stocks continued their negative trend, decreasing 5.9% on the

quarter, pushing the sector’s overall median return down to -8.8% over the

past year.

• Median price/book for the L&H sector fell in Q1, from 0.92x the prior two quarters

to 0.85x, a change that could make companies in the sector even more attractive

acquisition targets.

• MetLife, recently won its case against the Financial Stability Oversight Council to

shed its tag as a nonbank systemically important financial institution (SIFI), freeing

it from the potential for additional federal oversight. Shares of MetLife rose 5.23%

in just two hours in the wake of the news. Fellow nonbank SIFIs Prudential Finan-

cial and American International Group’s actions will be monitored closely moving

forward.

• U.S. life insurance premiums grew at their fastest pace in four years in 2015,

4.48%. For context, direct premium written grew at an average nominal growth

rate of less than 2% from 2004 to 2014, according to a McKinsey & Co. report.

However, in the same report, the consulting firm warned that the industry actually

contracted in real terms over this period, with defined contribution plans offered by

asset managers eating into life insurers’ market share.

© 2016 Mercer Capital // www.mercercapital.com 3

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Sector Overview & Commentary

Managed Care

• Managed care stocks rose 3.2% on the quarter, an increase reflective of their

modest returns over the last twelve months, 2.1%.

• In the last week of the quarter, most health insurers struggled with the Aetna/

Humana and Anthem/Cigna deals still on hold. Centene bucked this trend as

state regulators approved its merger with Health Net on March 24th, pushing Cen-

tene’s stock up 8.9%.

• The median price/earnings ratio of the managed care sector rose to 21.4x in the

first quarter of 2016, trending upwards from 18.7x in Q42015 and 18.5x in Q32015.

• According to research conducted by Mizuho Securities analysts, health care

stocks have historically performed better than the broader market in periods

preceding and following federal elections, provided there is a balance of power

between the White House and at least one chamber of Congress, as is the case

heading into the 2016 election.

• As the U.S. presidential race intensifies, the future structure of the country’s health

care system hangs in the balance. Republican nominees Ted Cruz, Donald Trump

and John Kasich promise to repeal the ACA, while Democratic frontrunner Hillary

hopes to expand it. Dark horse candidate Bernie Sanders instead promotes a fed-

erally administered single-payer system. Regardless of the election’s outcome,

proposals promising significant changes in costs and coverage are of great impor-

tance to health insurance participants.

Brokers

• Broker stocks’ enjoyed a positive quarter gaining 9.6%. The sector’s Y/Y returns

remain robust as well, at 8.1%.

• According to a market survey conducted by The Council of Insurance Agents

& Brokers, commercial P&C rates continued to decrease in the first quarter,

sustaining the trend that began in Q12015. Rates declined by 3.7% on average,

compared with an average 2.8% decrease in the fourth quarter of 2015. Large

accounts once again suffered the biggest decline at 4.6%, followed by medium-

size accounts at 4.4% and small accounts at 2.1%. Commercial auto, D&O liability

and employment practices liability were the only lines to experience climbing rates.

• The robust M&A environment in the sector has persisted into 2016, though activity

is down slightly from the record-setting pace of 2015 when the full-year total of 472

deals blew away the previous high-water mark of 359 set in 2012. Private equity

firms are engaging in an increasingly large portion of the transactions with seven

PE-backed brokers accounting for 37% of the deals YTD and publicly traded bro-

kers BRO, MMC, and AJG combining for only 9%.

• After fluctuating between 12.0x and 12.8x since 2013, EV/EBITDA multiples in the

broker sector jumped to 13.4x in the first quarter of 2016.

© 2016 Mercer Capital // www.mercercapital.com 4

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Sector Overview & Commentary

InsurTech, Claims & Services

• TPAs, insurance software/technology firms and other ancillary service providers

experienced mixed results to start 2016, with the median return for the sector

-6.4%. Returns ranged from positive 24.4% (Ebix) to negative 29.1% (Connecture).

Y/Y, the sector returned -9.4%, though again, individual results were extremely

varied.

• Ebix’s (EBIX) gain was likely a function of its surprising Q42015 earnings report

in which the reported $0.65 EPS well outperformed consensus expectations of

$0.46 per share. In two days alone following the report’s release, the stock gained

20.3%. Ebix is a supplier of on-demand software solutions and E-commerce ser-

vices to the insurance industry.

• Crawford & Company (CRD.B) enjoyed a similarly successful quarter, gaining

22.0% after announcing strong forward guidance for FY 2016, including a plan to

rearrange its internal management to feature a shared services leadership struc-

ture. The company provides claims management solutions for the risk manage-

ment and insurance industries, as well as self-insured entities worldwide.

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 5

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Insurance M&A Highlights

Insurance Underwriters

18 deals were announced in 1Q16, down from 23 in 4Q15. Year-to-

date, underwriter transaction activity is up 50%, from just 12 deals

in 1Q15. Key deals of 1Q16 include:

• National General Holdings Corp. purchasing Century-

National Insurance Company, a California-based P&C

underwriter, for a price of approximately $315 million.

○ The estimated purchase price at announcement equates

to 1.46x statutory book value and 20.1x statutory LTM

earnings, with $140 million to be paid upfront in cash and

the balance to be deferred over two years.

• The Hartford Financial Services Group, Inc. acquiring

Northern Homelands Company, the holding company of

Maxum Specialty Insurance Group, for $170 million in cash.

○ Maxum, an excess and surplus lines insurer, will main-

tain its brand and wholesale distribution model and will

be managed as a separate unit under the agreement.

The implied statutory multiples at announcement are

1.48x book value and 21.4x LTM earnings.

Q1! Q2! Q3! Q4! YTD at 3/31!2013! 24 ! 19 ! 25 ! 15 ! 24 !2014! 17 ! 15 ! 11 ! 29 ! 17 !2015! 12 ! 20 ! 26 ! 23 ! 12 !2016! 18 ! 0 ! 0 ! 0 ! 18 !

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M&A Activity Recap: Insurance Underwriters

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 6

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Insurance M&A Highlights

Insurance Brokers

112 broker transactions were recorded in 1Q16, up from 107 in

4Q15. Year-to-date, deal activity is down 7% from 121 in 1Q15.

The largest deals announced in 1Q16 include:

• BB&T Corp. has agreed to acquire CGSC North America

Holdings Corp. for $500 million in cash.

○ CGSC North America consists of the wholesale broker

Swett & Crawford, specialty managing general agencies

including J.H. Blades & Co and Creechurch International

Underwriters, and a U.S. reinsurance broker. The

transaction is expected to add more than $200 million

in annual revenue, or an additional 15%, to BB&T’s

Insurance segment.

• Aspen Insurance Holdings Limited announced its acquisition

of AgriLogic Insurance Services, LLC, diversifying its

portfolio of specialty insurance businesses.

○ The announced deal value is $76 million in cash. Head-

quartered in Kansas, AgriLogic is a specialist U.S. crop

business with an integrated agricultural consultancy

and estimated gross written premiums of $185 million

in 2015.

M&A Activity Recap: Insurance Brokers

Q1! Q2! Q3! Q4! YTD at 3/31!2013! 45 ! 42 ! 57 ! 79 ! 45 !2014! 81 ! 66 ! 93 ! 91 ! 81 !2015! 121 ! 122 ! 109 ! 107 ! 121 !2016! 112 ! 0 ! 0 ! 0 ! 112 !

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© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 7

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Property & Casualty

3/31/15Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div. Yield

Underwriting Ratios

Invest Yield

LTM ROETicker Name LTM FY16E FY17E P/B P/TB Loss Expense Comb.

Commercial Lines

AIG American International Group, Inc. 54.05 64,531 -1.4% -12.8% 32.8x 11.2x 9.3x 0.72x 0.73x 1.81% 77.5% 34.9% 112.4% 4.21% 2.2%

CB Chubb Limited 119.15 38,672 6.9% 2.0% 13.8x 12.1x 11.4x 1.33x 1.65x 2.28% 58.1% 29.2% 87.3% 3.02% 9.7%

TRV Travelers Companies, Inc. 116.71 34,534 7.9% 3.4% 10.7x 12.0x 11.8x 1.46x 1.75x 2.16% 56.6% 31.7% 88.3% 3.30% 14.1%

CINF Cincinnati Financial Corporation 65.36 10,715 22.7% 10.5% 17.1x 22.4x 22.2x 1.67x 1.67x 3.11% 60.2% 30.9% 91.1% 4.28% 9.8%

CNA CNA Financial Corporation 32.18 8,697 -22.3% -8.4% 18.2x 10.6x 9.8x 0.74x 0.75x 2.84% 61.0% 34.4% 95.4% 3.88% 3.9%

AFG American Financial Group, Inc. 70.37 6,156 9.7% -2.4% 17.9x 12.4x 12.0x 1.34x 1.42x 1.55% 63.8% 30.9% 94.7% 4.28% 7.3%

ORI Old Republic International Corporation 18.28 4,789 22.4% -1.9% 12.4x 14.6x 13.8x 1.23x 1.29x 3.97% 47.5% 48.5% 96.0% 4.24% 10.7%

THG Hanover Insurance Group, Inc. 90.22 3,879 24.3% 10.9% 12.2x 14.2x 13.4x 1.36x 1.46x 2.26% 61.3% 34.4% 95.7% 3.54% 11.5%

SIGI Selective Insurance Group, Inc. 36.61 2,100 26.0% 9.0% 12.8x 14.0x 14.3x 1.50x 1.51x 1.79% 57.7% 34.8% 92.5% 2.71% 12.5%

UFCS United Fire Group, Inc. 43.82 1,102 37.9% 14.4% 12.4x 16.7x 18.6x 1.25x 1.29x 2.30% 61.0% 31.0% 92.0% 3.20% 10.6%

EIG Employers Holdings, Inc. 28.14 907 4.3% 3.1% 9.7x 12.5x 11.9x 1.19x 1.27x 0.88% 62.2% 31.9% 94.1% 2.38% 13.0%

EMCI EMC Insurance Group Inc. 25.65 533 13.8% 1.4% 10.6x 14.3x 14.6x 1.02x 1.02x 3.00% 65.0% 31.3% 96.3% 3.69% 9.7%

DGICA Donegal Group Inc. 14.38 375 -8.5% 2.1% 19.2x 10.3x 9.0x 0.92x 0.93x 3.84% 65.8% 33.2% 99.0% 2.69% 4.9%

HALL Hallmark Financial Services, Inc. 11.50 220 8.5% -1.6% 10.2x 9.6x 9.2x 0.84x 1.09x 0.00% 65.9% 28.0% 93.9% 2.43% 8.4%

AFH Atlas Financial Holdings, Inc. 18.14 218 2.7% -8.8% 16.1x 10.2x 8.4x 1.78x 1.90x 0.00% 59.2% 27.8% 87.0% 2.01% 11.9%

Median 3,879 8.5% 2.0% 12.8x 12.4x 11.9x 1.25x 1.29x 2.26% 61.0% 31.7% 94.1% 3.30% 9.8%

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 8

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Property & Casualty

3/31/15Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div. Yield

Underwriting Ratios

Invest Yield

LTM ROETicker Name LTM FY16E FY17E P/B P/TB Loss Expense Comb.

Personal Lines

ALL Allstate Corporation 67.37 25,668 -5.3% 8.5% 13.3x 12.4x 10.8x 1.41x 1.51x 1.93% 69.4% 25.5% 94.9% 3.98% 10.2%

PGR Progressive Corporation 35.14 20,508 29.2% 10.5% 16.3x 17.6x 16.5x 2.81x 3.23x 2.79% 72.1% 20.4% 92.5% 2.65% 17.4%

MCY Mercury General Corporation 55.50 3,062 -3.9% 19.2% 41.1x 20.8x 19.5x 1.68x 1.75x 5.33% 72.5% 26.7% 99.2% 1.16% 4.0%

NGHC National General Holdings Corporation 21.59 2,279 15.5% -1.2% 17.0x 11.4x 9.9x 1.76x 2.74x 0.55% 64.9% 29.1% 94.0% 2.80% 10.6%

HMN Horace Mann Educators Corporation 31.69 1,286 -7.3% -4.5% 14.4x 14.0x 12.5x 1.02x 1.06x 3.01% 70.5% 26.5% 97.0% 4.57% 7.0%

STFC State Auto Financial Corporation 22.06 911 -9.2% 7.1% 17.9x 16.4x 13.5x 1.03x 1.03x 1.94% 67.9% 33.6% 101.5% 3.86% 5.8%

IPCC Infinity Property and Casualty Corp. 80.50 898 -1.9% -2.1% 17.8x 17.1x 15.6x 1.31x 1.47x 2.09% 76.9% 18.7% 95.6% 2.48% 7.4%

SAFT Safety Insurance Group, Inc. 57.06 861 -4.5% 1.2% NM 14.8x 14.0x 1.34x 1.34x 4.97% 83.0% 29.0% 112.0% 3.32% -2.1%

UVE Universal Insurance Holdings, Inc. 17.80 625 -30.4% -23.2% 6.0x 5.9x 5.5x 2.13x NA 2.07% 37.2% NA NA 0.93% 41.5%

SNC State National Companies, Inc. 12.60 538 26.6% 28.4% 12.5x 12.6x 11.2x 2.04x 2.09x 2.45% NA NA NA 2.65% 17.3%

HRTG Heritage Insurance Holdings, Inc. 15.97 486 -27.4% -26.8% 5.2x 5.7x 4.8x 1.36x 1.40x 0.92% 37.5% 27.5% 65.0% 1.53% 29.9%

UIHC United Insurance Holdings Corp. 19.21 413 -14.6% 12.3% 15.0x 11.3x 9.2x 1.73x 1.75x 1.17% 54.5% 39.5% 94.0% 1.95% 12.4%

FNHC Federated National Holding Company 19.66 271 -35.8% -33.5% 6.7x 7.2x 6.4x 1.17x 1.17x 0.68% 49.7% 38.2% 87.9% 2.47% 19.2%

Median 898 -5.3% 1.2% 14.7x 12.6x 11.2x 1.41x 1.49x 2.07% 68.7% 27.5% 94.9% 2.65% 10.6%

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 9

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Property & Casualty

3/31/15Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div. Yield

Underwriting Ratios

Invest Yield

LTM ROETicker Name LTM FY16E FY17E P/B P/TB Loss Expense Comb.

Specialty Lines

MKL Markel Corporation 891.57 12,445 15.9% 0.9% 21.4x 34.0x 33.0x 1.59x 2.12x 0.00% 50.7% 38.1% 88.8% 2.49% 7.5%

ACGL Arch Capital Group Ltd. 71.10 8,719 15.4% 1.9% 17.4x 17.3x 16.6x 1.48x 1.51x 0.00% 54.9% 34.6% 89.5% 1.02% 8.7%

WRB W. R. Berkley Corporation 56.20 6,930 11.3% 2.6% 14.5x 16.4x 15.9x 1.51x 1.59x 0.88% 60.5% 33.2% 93.7% 3.71% 11.0%

WTM White Mountains Insurance Group, Ltd. 802.60 4,514 17.3% 10.4% 15.9x 105.6x 68.0x 1.15x 1.28x 0.14% 59.7% 36.9% 96.6% 5.11% 7.6%

ENH Endurance Specialty Holdings Ltd. 65.34 4,365 6.9% 2.1% 11.4x 10.0x 10.1x 0.99x 1.14x 2.19% 46.4% 36.5% 82.9% 1.64% 8.9%

AWHAllied World Assurance Company

Holdings, AG34.94 3,178 -13.5% -6.1% 39.3x 16.2x 14.7x 0.90x 1.05x 2.70% 63.7% 31.4% 95.1% 0.62% 2.3%

ESGR Enstar Group Limited 162.58 3,132 14.6% 8.4% 14.3x 13.0x 12.5x 1.24x 1.35x 0.00% NA NA NA 1.35% 9.2%

RLI RLI Corp. 66.86 2,911 27.6% 8.3% 21.4x 29.3x 29.7x 3.54x 3.87x 1.23% 42.7% 41.8% 84.5% 5.38% 16.5%

AGII Argo Group International Holdings, Ltd. 52.17 1,603 14.4% -4.1% 10.0x 14.9x 14.1x 0.96x 1.11x 1.34% 55.8% 39.4% 95.2% 2.69% 9.8%

OB OneBeacon Insurance Group, Ltd. 12.73 1,210 -16.3% 2.6% 33.5x 17.7x 18.2x 1.21x NA 6.77% 59.6% 36.7% 96.3% 0.40% 3.6%

NAVG Navigators Group, Inc. 83.87 1,210 7.7% -2.2% 15.3x 16.1x 16.1x 1.10x 1.11x 0.00% 58.2% 35.9% 94.1% 2.62% 7.6%

JRVR James River Group Holdings, Ltd. 32.26 934 37.1% -3.8% 17.7x 14.9x 13.5x 1.37x 2.03x 1.91% 60.5% 33.5% 94.0% 3.01% 7.7%

NATL National Interstate Corporation 29.92 596 6.6% 12.1% 28.5x 19.0x 18.1x 1.66x 1.70x 1.95% 80.6% 19.8% 100.4% 2.44% 5.8%

GBLI Global Indemnity plc 31.13 543 12.2% 7.3% 18.4x 25.9x 24.0x 0.72x 0.75x 0.00% 54.6% 39.9% 94.5% 1.78% 4.6%

BWINB Baldwin & Lyons, Inc. 24.61 370 4.9% 2.4% 15.9x 14.5x 14.5x 0.94x 0.94x 4.16% 59.2% 32.2% 91.4% 1.51% 5.8%

CNFR Conifer Holdings, Inc. 6.53 50 NA -29.6% NM 9.3x 6.9x 0.65x 0.63x 0.00% 56.8% 45.3% 102.1% 1.79% 0.1%

Median 2,257 12.2% 2.3% 17.4x 16.3x 16.0x 1.18x 1.28x 1.05% 58.2% 36.5% 94.1% 2.11% 7.6%

Workers’ Compensation Focus

AFSI AmTrust Financial Services, Inc. 25.88 4,553 -9.2% -15.9% 9.2x 8.6x 7.7x 1.88x 2.80x 1.95% 66.7% 24.3% 91.0% 2.99% 20.1%

PRA ProAssurance Corporation 50.60 2,687 10.2% 4.3% 24.0x 19.7x 19.9x 1.37x 1.62x 2.56% 59.2% 31.3% 90.5% 1.75% 5.6%

AMSF AMERISAFE, Inc. 52.54 1,005 13.6% 3.2% 14.2x 14.7x 14.4x 2.21x 2.21x 1.18% 57.1% 22.7% 79.8% 2.24% 15.6%

Median 2,687 10.2% 3.2% 14.2x 14.7x 14.4x 1.88x 2.21x 1.95% 59.2% 24.3% 90.5% 2.24% 15.6%

Median All Sub-Groups 1,603 7.8% 2.1% 15.3x 14.3x 13.5x 1.34x 1.42x 1.94% 60.2% 32.1% 94.1% 2.65% 9.2%

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 10

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Reinsurance

3/31/15Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div. Yield

Underwriting Ratios

Invest Yield

LTM ROETicker Name LTM FY16E FY17E P/B P/TB Loss Expense Comb.

XL XL Group plc 36.80 10,847 0.0% -6.1% 8.9x 11.9x 9.3x 0.93x 1.15x 1.84% 58.4% 33.6% 92.0% 2.62% 11.1%

RE Everest Re Group, Ltd. 197.43 8,429 13.5% 7.8% 8.9x 10.8x 10.5x 1.11x 1.12x 2.18% 56.6% 26.8% 83.4% 1.67% 12.9%

AXS AXIS Capital Holdings Limited 55.46 5,328 7.5% -1.4% 9.2x 13.1x 12.4x 1.02x 1.03x 2.17% 59.0% 35.7% 94.7% 1.12% 10.9%

RNR RenaissanceRe Holdings Ltd. 119.83 5,237 20.2% 5.9% 12.9x 12.9x 12.3x 1.21x 1.29x 1.06% 32.0% 32.7% 64.7% 1.13% 9.3%

VR Validus Holdings, Ltd. 47.19 3,912 12.1% 1.9% 10.9x 10.7x 10.7x 1.08x 1.18x 2.77% 43.5% 36.2% 79.7% 1.24% 10.3%

AHL Aspen Insurance Holdings Limited 47.70 2,906 1.0% -1.2% 10.5x 10.8x 10.5x 1.02x 1.03x 1.72% 55.2% 36.7% 91.9% 2.36% 9.5%

TPRE Third Point Reinsurance Ltd. 11.37 1,199 -19.6% -15.2% NM 12.5x 5.3x 0.87x 0.87x 0.00% 68.9% 35.8% 104.7% -1.05% -6.0%

MHLD Maiden Holdings, Ltd. 12.94 954 -12.7% -13.2% 9.9x 7.5x 6.5x 1.10x 1.21x 3.55% 66.9% 32.4% 99.3% 3.18% 9.9%

GLRE Greenlight Capital Re, Ltd. 21.79 807 -31.5% 16.5% NM 6.2x 5.9x 0.98x 0.98x 0.00% 77.6% 34.2% 111.8% -10.16% -31.8%

BCRH Blue Capital Reinsurance Holdings Ltd. 17.92 157 3.5% 4.5% 7.6x 9.5x 8.9x 0.84x NA 7.00% 6.9% 38.4% 45.3% 0.00% 11.4%

Median 3,409 2.3% 0.4% 9.5x 10.8x 9.9x 1.02x 1.12x 2.00% 57.5% 35.0% 92.0% 1.19% 10.1%

Multiline

3/31/15Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div. Yield

Underwriting Ratios

Invest Yield

LTM ROETicker Name LTM FY16E FY17E P/B P/TB Loss Expense Comb.

HIG Hartford Financial Services Group, Inc. 46.08 18,516 10.2% 6.0% 11.6x 11.4x 10.4x 1.05x 1.08x 1.93% 66.2% 30.4% 96.6% 3.81% 9.1%

AMP Ameriprise Financial, Inc. 94.01 16,079 -28.1% -11.7% 11.1x 9.7x 8.4x 2.23x 3.07x 2.52% 97.7% 15.8% 113.5% 3.50% 19.9%

AIZ Assurant, Inc. 77.15 5,080 25.6% -4.2% 37.6x 12.9x 10.9x 1.12x 1.49x 2.48% NA NA NA 4.38% 2.9%

ANAT American National Insurance Company 115.50 3,106 17.4% 12.9% 12.8x NA NA 0.70x 0.70x 3.13% 67.3% 32.0% 99.3% 4.46% 5.4%

KMPR Kemper Corporation 29.57 1,518 -24.1% -20.6% 17.9x 17.3x 13.8x 0.76x 0.91x 2.58% 76.8% 26.0% 102.8% 4.99% 4.2%

Median 5,080 10.2% -4.2% 12.8x 12.1x 10.6x 1.05x 1.08x 2.52% 72.1% 28.2% 101.1% 4.38% 5.4%

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 11

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Life & Health

3/31/16Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div.YieldInvest. Yield

ROE

Ticker Name LTM FY15E FY16E P/B P/TB LTM FY16E FY17E

MET MetLife, Inc. 43.94 48,247 -13.1% -8.9% 9.6x NA NA 0.73x 0.86x 3.11% 4.64% 7.5% 9.8% 9.7%

PRU Prudential Financial, Inc. 72.22 32,290 -10.1% -11.3% 5.9x 7.4x 6.9x 0.77x 0.79x 3.44% 4.39% 13.2% 12.3% 12.1%

AFL Aflac Incorporated 63.14 26,795 -1.4% 5.4% 10.8x 10.0x 9.4x 1.51x NA 2.74% 3.18% 14.3% 15.4% 14.1%

PFG Principal Financial Group, Inc. 39.45 11,496 -23.2% -12.3% 9.7x 9.3x 8.6x 1.23x 1.66x 3.38% 4.60% 12.5% 12.5% 12.8%

LNC Lincoln National Corporation 39.20 9,558 -31.8% -22.0% 8.7x 6.2x 5.6x 0.70x 0.85x 1.99% 4.61% 7.7% 10.8% 10.7%

UNM Unum Group 30.92 7,449 -8.3% -7.1% 8.8x 8.1x 7.5x 0.86x 0.88x 2.22% 4.77% 10.1% 10.5% 10.4%

TMK Torchmark Corporation 54.16 6,628 -1.4% -5.2% 13.0x 12.4x 11.5x 1.63x 1.83x 0.94% 5.18% 11.8% 13.5% 13.3%

RGA Reinsurance Group of America, Inc. 96.25 6,276 3.3% 12.5% 12.9x 10.6x 9.8x 1.02x 1.02x 1.73% 5.01% 7.6% 10.7% 10.9%

VOYA Voya Financial, Inc. 29.77 6,225 -30.9% -19.3% 16.5x 9.1x 7.6x 0.46x 0.47x 0.11% 4.48% 2.7% 8.0% 8.6%

CNO CNO Financial Group, Inc. 17.92 3,298 4.1% -6.1% 12.9x 12.1x 10.6x 0.80x 0.80x 1.47% 5.49% 6.1% 7.6% 8.2%

PRI Primerica, Inc. 44.53 2,151 -12.5% -5.7% 12.0x 10.7x 9.4x 1.88x 1.98x 1.36% 4.00% 15.9% 17.5% 19.0%

FGL Fidelity & Guaranty Life 26.24 1,547 23.8% 3.4% 10.1x 11.8x 10.5x 1.11x NA 1.02% 5.08% 9.6% 9.1% NA

FFG FBL Financial Group, Inc. 61.52 1,526 -0.8% -3.3% 13.6x 14.8x 14.1x 1.35x 1.36x 2.51% 5.13% 9.5% NA NA

AELAmerican Equity Investment Life Holding

Company16.80 1,367 -42.3% -30.1% 6.2x 6.7x 6.2x 0.70x 0.70x 0.92% 4.40% 10.8% 9.2% 9.8%

GNW Genworth Financial, Inc. 2.73 1,359 -62.7% -26.8% NM 3.2x 2.9x 0.11x 0.11x 0.00% 4.13% -4.4% 2.4% 2.9%

NWLI National Western Life Group, Inc. 230.63 839 -9.3% -8.5% 8.3x NA NA 0.52x 0.52x 0.14% 5.04% 6.2% NA NA

KCLI Kansas City Life Insurance Company 40.00 387 -12.9% 4.5% 14.5x NA NA 0.58x 0.58x 2.82% 4.59% 4.0% NA NA

CIA Citizens, Inc. 7.24 363 17.5% -2.6% NM NA NA 1.50x 1.62x 0.00% 3.89% -1.4% NA NA

IHC Independence Holding Company 15.92 275 17.1% 14.9% 9.3x NA NA 0.85x 1.08x 0.65% 4.44% 9.9% NA NA

Median 2,724 -8.8% -5.9% 10.4x 9.6x 9.0x 0.85x 0.87x 1.41% 4.59% 9.6% 10.7% 10.8%

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 12

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Managed Care

3/31/16Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Price / Earnings Price / Book

Div.YieldInvest. Yield

ROE

Ticker Name LTM FY15E FY16E P/B P/TB LTM FY16E FY17E

UNH UnitedHealth Group Incorporated 128.90 122,842 9.0% 9.6% 21.4x 16.7x 14.7x 3.63x NA 1.70% 2.59% 17.7% 16.6% NA

AET Aetna Inc. 112.35 39,266 5.5% 3.9% 16.6x 14.1x 12.8x 2.44x NA 0.92% 3.81% 15.5% 16.1% NA

ANTM Anthem, Inc. 138.99 36,309 -10.0% -0.3% 14.8x 12.7x 11.5x 1.58x NA 1.79% 3.47% 10.9% 11.8% NA

CI Cigna Corporation 137.24 35,208 6.0% -6.2% 17.1x 14.9x 13.7x 2.93x 6.46x 0.03% 5.22% 18.4% 17.1% NA

HUM Humana Inc. 182.95 27,129 2.8% 2.5% 21.7x 21.0x 18.5x 2.62x 4.03x 0.65% 3.25% 12.6% 11.7% 12.5%

CNC Centene Corporation 61.57 7,410 -12.9% -6.4% 21.4x 14.6x 12.5x 3.44x 6.39x 0.00% 1.12% 18.3% 16.9% NA

WCG WellCare Health Plans, Inc. 92.75 4,092 1.4% 18.6% 34.7x 20.6x 16.4x 2.37x 2.95x 0.00% 1.97% 7.1% NA NA

MOH Molina Healthcare, Inc. 64.49 3,611 -4.2% 7.3% 25.0x 16.7x 13.6x 2.32x 3.94x 0.00% 0.40% 10.8% NA NA

GTS Triple-S Management Corporation 24.86 621 25.1% 4.0% 12.3x 16.5x 14.4x 0.73x 0.76x 0.00% 4.95% 6.1% NA NA

UAM Universal American Corp. 7.14 604 -33.1% 2.0% NM 45.2x 28.2x 1.58x 1.92x 0.00% 1.79% -28.0% NA NA

Median 17,269 2.1% 3.2% 21.4x 16.6x 14.0x 2.40x 3.94x 0.01% 2.92% 11.7% 16.4% 12.5%

© 2016 Mercer Capital // www.mercercapital.com // Source: S&P Global Market Intelligence 13

Mercer Capital’s Value Focus: Insurance Industry First Quarter 2016

Publicly Traded Companies

Brokers

3/31/16Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

EV ($M)

EV / EBITDA

EV / LTM Rev. Div.Yield

LTM EBITDA Margin

LTM Rev.

Growth

Organic Rev Growth

Ticker Name LTM FY16E FY17E 15Q4 15Q3

MMC Marsh & McLennan Companies, Inc. 60.79 31,726 8.4% 9.6% 34,766 12.0x 11.3x 10.4x 2.7x 2.24% 22.4% -0.5% 5.0% 2.0%

AON Aon plc 104.45 28,181 8.7% 13.3% 33,497 13.4x 12.1x 11.4x 2.9x 1.25% 21.4% -3.0% 5.0% 2.0%

WLTWWillis Towers Watson Public Limited

Company118.66 8,141 -7.0% -7.8% 10,875 16.7x 6.1x 5.8x 2.8x 2.55% 16.8% 2.0% 4.8% 3.3%

AJG Arthur J. Gallagher & Co. 44.48 7,871 -4.9% 8.6% 9,844 13.5x 10.3x 9.5x 2.4x 3.62% 18.1% 13.3% 4.2% 4.1%

BRO Brown & Brown, Inc. 35.80 4,976 8.1% 11.5% 5,677 10.3x 9.9x 9.4x 3.4x 1.53% 33.1% 5.4% -3.0% 1.6%

Median 8,141 8.1% 9.6% 10,875 13.4x 10.3x 9.5x 2.8x 2.24% 21.4% 2.0% 4.8% 2.0%

InsurTech, Claims & Services

To3/31/16Price

Market Cap ($M)

Share Price %YOY

Share Price %Qtr

Total EV ($M)

EV / EBITDA

EV / LTM Rev. Div.Yield

LTM EBITDA Margin

LTM Rev. Growth

LTM Rev. ($M)Ticker Name LTM FY16E FY17E

GWRE Guidewire Software, Inc. 54.48 3,895 3.6% -6.4% 3,702 NM NM NM 9.7x 0.00% 4.5% 5.4% 383

EBIX Ebix, Inc. 40.79 1,363 34.3% 24.4% 1,513 14.9x NA NA 5.7x 0.91% 38.2% 23.9% 265

BNFT Benefitfocus, Inc. 33.35 974 -9.4% -8.4% 991 NM NM NM 5.4x 0.00% -23.0% 34.7% 185

CRVL CorVel Corporation 39.42 773 14.6% -10.2% 723 11.3x NA NA 1.5x 0.00% 12.9% 1.4% 497

CRD.B Crawford & Company 6.48 358 -25.0% 22.0% 529 26.3x 4.7x 4.3x 0.4x 3.77% 1.6% 2.0% 1,242

PN Patriot National, Inc. 7.70 216 -39.4% 14.8% 332 18.8x 4.6x 3.9x 1.6x 0.00% 15.1% 78.8% 210

CNXR Connecture, Inc. 2.56 56 -75.3% -29.1% 100 29.2x 7.1x 4.8x 1.0x 0.00% 3.6% 13.3% 96

Median 773 -9.4% -6.4% 723 18.8x 4.7x 4.3x 1.6x 0.00% 4.5% 13.3% 265

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