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Meritz F&MMeritz F&M3Q. FY2010 Financial Results3Q. FY2010 Financial Results

1DisclaimerDisclaimer

This material has been prepared based on internally audited figures and final figures may change due to the results of an independent audit without notice.

This presentation includes forward-looking statements regarding the company’s outlook for FY2010 and beyond, including projected premium and net income. These forecasts are subject tounknown risks and uncertainties that may cause actual figures todiffer from those stated or implied by such statements. We have no obligation or responsibility regarding investment made based on such forward-looking statements.

2Contents

2

3

-- 3Q.FY2010 Financial Results3Q.FY2010 Financial Results-- FY2009 Embedded ValueFY2009 Embedded Value

1 About Meritz F&MAbout Meritz F&M

3Q.FY2010 Review3Q.FY2010 Review

Meritz Financial Group TransitionMeritz Financial Group Transition

AppendixAppendix

33History

Era of Growth(1983~2004)

Second rebirth (2005~ )

Rebirth (1950~1982)

Era of foundation & exploration(1922~1949)

1996.05 Total assets exceed W1t

1983.12 Head office relocated to Yeoido

2010.12 Total assets exceeded W7t

2010.08 Total Invested Assets exceeded W5t

2010.08 Acquisition of Meritz Business Service (MBS) as subsidiary

2010.04 Founding of ‘Meritz Securities’ (Merger of Meritz Securities and Meritz Investment Bank)

2009.12 Founding of Ritz Partners (Sales Subsidiary)

2008.07 Founding of Meritz Asset Management

2008.04 Founding of Meritz Financial Information Service

2007.08 Share offering (W225.7b)

2006.11 Acquisition of Meritz Investment Bank as subsidiary

2006.02 Stock split 10:1 (W5,000 →W500)

2005.11 Acquisition of Meritz Securities as subsidiary

2005.10 Rechristened Meritz Fire & Marine Insurance, Head office relocated to new building in Kangnam

2005.03 Disaffiliates from Hanjin Group

1976.12 Sales exceed W10b, a first among Korean insurers

1967.07 Hanjin Group acquires Oriental Fire & Marine Insurance

1956.07 IPO on KSE, becoming Korea’s first listed insurer

1950.05 Rechristened Oriental Fire & Marine Insurance

1922.10 Founding of Chosun Fire & Marine Insurance

(Korea’s first non-life insurance company)

4

Major Shareholder’s stake: 21.6%

Jung-ho Cho : 21.4% (26,500,725 shares) etc

Shareholders Structure

Free-float : 59.8 % → Foreign investors : 12.0%, domestic : 47.8%→ Major shareholders:

:KB Asset management 9.2%, NPS 9.1%

21.6%

3.0%

2.6%

13.0%12.0%

47.8%

AffiliatesShareholders (2010.12.31)

Meritz Securities

Ritz Partners

Meritz Financial

Service

Meritz Asset

Management

30.71% 100% 100% 100%

MeritzBusinessService

100%

• Major shareholders

• ESOP

• Related companies

• Treasury

• Foreigners

• Domestic

5Share Price Performance

Meritz, Industry, KOSPI Performances (10.01.01~ 10.12.31)

1.85

4,864

13.17

684

08.03.31

1.66

4,575

12.65

601

07.03.31

1.12

7,757

8.07

1,079

2011.12.31

1.100.90Adj PBR

6,4574,293Adj BPS

5.90-Adj PER

-800

09.03.31

1,244Adj EPS

2010.3.31(Unit: won, x)

100.0%

KOSPI124.6%

Meritz139.6%

Top 4 123.4%

12/30 3/4 5/7 7/10 9/12 11/15 1/18

MeritzKOSPIIndustryTop 4 avg

Industry100.7%

66Dividends

Dividend Net income Dividend ratio Payout ratio

FY05 W 100 W 26.4 bn 2.4% 29.6%

FY06 W100 W 35.8 bn 1.4% 22.2%

FY07

Interim W 100 (11.8 bn) W 56.9 bn 1.1% 20.7%

Year-end W 125 (14.2 bn) W 71.1 bn 1.4% 20.0%

Total W 225 (26.0 bn) W 71.1 bn 2.5% 36.6%

FY08

Interim W 50 (5.3 bn) W 42.3 bn 0.6% 12.6%

Year-end - W -58.8 bn - -

Total W 50 (5.3 bn) W -58.8 bn 0.6% -

FY09

Interim - W 71.5 bn - -

Year-end W 300 (32.0 bn) W 140.4 bn 4.0% 22.8%

Total W 300 (32.0 bn) W 140.4 bn 4.0% 22.8%

Samsung Hyundai Dongbu LIG

Payout ratio 24.9% 30.5% 19.8% 21.1%

Dividend yield 1.6% 3.7% 2.3% 2.7%

[Dividend History] The first insurance company to pay an interim dividend (Sep 2007)

[FY09 Industry Dividend]

Note: Implemented 10:1 stock split in Feb 2006

77Our Management

- CEO since June 2005

- Chief Operations Officer at PCA Life

- Chief Information Officer at Samsung Fire & Marine

- 26 yrs of experience at US P&C insurers (General Accident, Harleysville Insurance Group)

Vice Chairman & CEO: Myung Soo Michael Wohn

Chairman: Jung Ho Cho

CFO: Jin Kyu Song

- Chairman of Meritz Insurance since 2003

- Chairman & CEO of Meritz Securities (2003)

- Vice Chairman & CEO of Hanjin Securities (1999)

- Swiss International Institute for Management Development (MBA)

- CFO of Meritz Insurance since May 2005, head of strategic planning division

- Current member of Korean Actuarial Association

- More than 20 years in the non-life insurance industry

- Actuary and risk management manager of Samsung Fire & Marine (2005)

8Contents

1

2

3


3Q.FY2010 Financial Results3Q.FY2010 Financial Results


AppendixAppendix


9

260.6%(292.3%)

16.1%

100.2

91.2

5.1%

189.5

102.4%

-70.7

2,867.3

3Q. FY2010

4.9%2.8%5.6%5.9%6.4%Investment Yield

140.4-58.871.135.826.4Net Profit

154.0-99.184.747.538.7Adj Net Profit

26.2%-16.1%18.6%13.7%12.0%Adj ROE

230.9%(269.7%)

189.9%235.8%170.4%193.2%Solvency Ratio

(RBC Ratio)

207.6106.2179.2159.2149.5Net investment profit

100.1%108.7%102.8%105.4%106.3%Combined Ratio

-16.4-186.4-77.2-116.0-114.1U/W Profit

2,180.2

FY2006

3,288.02,896.42,534.01,876.9Direct premium

FY2009FY2008FY2007FY2005(Unit: KRW Bn)

Overview (Industry leader in average annual profit G/R)

[Net Profit]91.2 bn

140.4 bn

71.1 bn

35.8 bn26.4 bn

-58.8 bn

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

w/out Unusual factors

99.6 bn

FY2008 Unusual factors:•RG loss : -181.7 bn / bad investments write-off : -60.2 bn / additional DAC amortization : -30.2bn

Net Profit

G/R 35.6%

98.6%

40.1%

41.0%

10

Direct Prem Mix

49.6% 56.6% 61.3% 63.9% 69.2%

34.0%30.8% 27.0% 25.1% 21.0%

71.2%

20.4%12.6%16.4% 11.7% 11.0% 9.8% 8.4%

FY2005 FY2006 FY2007 FY2008 FY2009

55.4% 57.0% 62.9% 64.2%

33.8% 32.4% 31.7% 29.3% 26.7% 25.2%

12.8% 12.2% 11.3% 11.9% 10.4% 10.6%

58.8%53.4%

F Y 2 0 0 5 F Y 2 0 0 6 F Y 2 0 0 7 F Y 2 0 0 8 F Y 2 0 0 9 3 Q . F Y 1 0

FY 2 00 4

Meritz Top 4

CommAuto

L T

65.2%

80.7% 83.6% 85.8% 83.3%76.7%

47.2%

78.1%72.0% 70.2% 70.4%

60.0%

Meritz

Top 4

LT New Premium Protection mix

LT New Premium Protection M/S

10.2%9.1%

11.4% 10.6% 10.7% 10.5%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

Meritz

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

Maintain ProtectionMaintain Protection--type driven salestype driven sales

LT New Premium & Sales Portfolio (#1 leader in LT mix & Protection-type Mix )

Note1) LT Protection New Premium M/S and Mix : Excludes 1 time payment

11Issue: Issue: Recent LongRecent Long--term Protectionterm Protection--type new premium growthtype new premium growth

Note1) FY2009, 1H.FY2010 is monthly average, Oct~Dec is based on each month

5,532

4,1464,449

4,846

5,263

FY2009 1H.FY2010 2010.10 2010.11 2010.12

Premium

Protection-type New Premium

Meritz’ recovery of protection-type new premium as of September 2010 and

will turnover to growth in FY2011

76.7%

61.1%

67.4%

74.7% 78.1%

Protection Mix

(KRW Mn)

8.9% 8.6%

0.8%

-38.9%

5.5%

G/R 10.8%

12.1%

10.7%10.2%10.7%

M/S

12Underwriting Profit (#1 in L/R and #2 in C/R)

106.3% 105.4%102.8%

108.7%

100.1%102.4%

81.9%78.9%

82.5%79.7%

100.9%

101.3% 103.0%

100.7%103.8%103.3%

75.4%

81.1%

81.7%

81.5%

78.5%

81.4%78.6%

76.7%

14.4%13.0%

11.9% 11.2% 10.7%

24.4% 24.3% 23.9%

26.2%

22.6%

12.4%12.7% 12.1% 12.0%

11.9% 11.9%

10.7%

24.7%

21.6% 22.3% 22.2%

24.2%22.7%

21.6%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q. FY2010

Top 4 Avg

Meritz

Top 4 Avg

Meritz

Top 4 Avg

Meritz

Top 4 Avg

Meritz

Note) General Expense ratio : Expense Ratio- Selling cost ratio

Combined Ratio

Loss Ratio

Expense Ratio

Administrative Ratio

13

Note) Long-Term New Premium Mix : Excluding one-time payment

50.8%

49.2%

47.8%

Industry Avg

52.8%

47.2%

45.7%

Top 4 Avg

52.8%

47.2%

45.9%

D

52.6%

47.4%

47.2%

C

50.3%

49.7%

48.9%

B

54.3%

45.7%

43.3%

A

34.8%Savings-type

65.2%Protection-type

Protection-type monthly payment 63.4%

Meritz

Long-Term New Premium Mix

U/W Profit- (#1 leader in efficiency of Long- Term line)

#1 L/R in industry #1 C/R in industry

Meritz Top 4

85.0%

82.5%

77.5%

86.6%

84.4%

82.4% 82.2%83.3%

89.6%

78.8%

80.0%

88.8%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

Meritz Top 4

103.7%

101.3%

99.0%

103.6%

101.5%

103.4%

101.3%100.5%

98.4%

101.2%

107.0%

104.4%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

Meritz Top 4

14

69.9%75.5%

84.7% 86.0% 90.2%80.9%

77.6%

FY2008 FY2009 1H.FY2010 3Q.FY2010 2010.10 2010.11 2010.12

L/R

22.7%

25.7%27.7% 28.4% 28.9% 31.2%

29.1%

Accident ratio

Issue : Auto L/R

) * : 50 / 10%

Auto L/R & Accident Ratio

Countermeasure for Auto Insurance

Note1) Accident ratio = # of accidents/Valid automobiles. Increased # of auto accidents since diversification of Premium standard ($500 Max $ 2,000) in Jan 2010

Note2) The figures of Oct-Dec are based on each month

19,013

22,040 21,87422,815 23,547 24,162

26,380

# of Accidents

E/R 2.1%p2011.4Limit Expectation Expense to 40%Sales cost limit

2011.2Current min discount rate 40% 30%Expand discount rate for no-accident driver

2011.2Surcharge only people with penalties

Expand to people with finesReform traffic violations

surcharge system

2011.1QRent with domestic cars for the accidents with imported carsRationalize rent car price

Classification

L/R 1.9%p

Improvement

2011.2

2011.2

Effective Date

10yrs or more/10% premium discount for below 1,600ccDevelop product for low-incomes (Decrease price for small cars)

Switch to Proportional deductibleFrom fixed amount ($50)

variable rate (20% of loss amount)

Contents

C/R 4.0%p

15

36.5% 34.9% 32.6% 29.9% 26.7%

9.3% 16.3% 22.1% 27.8% 33.5%

30.7%28.2%

26.6% 24.5% 22.3%

23.5% 20.7% 18.7% 17.8% 17.5%

24.5%

35.7%

22.1%

17.8%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

Property, etcDeathLiving Benefit Non-GuaranteedLiving Benefit Guaranteed

Continually expanding Life NonContinually expanding Life Non--Guaranteed MixGuaranteed MixIssue: Continually Expanding living benefit N/G Mix

78.676.5

40.334.4

33.6

40.744.644.2

57.256.5

52.451.247.4

64.3

107.3

109.7106.4

113.7

103.8108.7

101.0

94.0

68.568.2

108.7

84.1

79.1

76.273.6

70.6

FY05 FY06 FY07 FY08 FY09 FY10.12월

(Unit : %)

Death Property and etc

LB guaranteed LB non-guaranteed

Total

3Q.FY2010

Non-Guaranteed coverage renewal initiated in Oct 2010 ( 5 yr (sold in 2004), 3 yr (sold in 2007) )

Risk Premium Mix Risk L/R by each mix

Increase of renewal policy effect : FY2010 0.4%, FY2011 3.2%Increase of renewal policy effect : FY2010 0.4%, FY2011 3.2%, FY2012 8.2%, FY2012 8.2%

16Channel

GA(independent

general agency)

44.8%34.0% 30.3%

21.7% 22.8%

18.6%

22.4% 23.6%31.0% 34.9% 33.3%

12.2%14.6% 17.0% 19.2%

19.3%

24.4% 28.9% 29.1% 28.1% 25.9% 24.5%

20.3%

18.9%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

FC

TC

GA

Others

[Channel Mix]

Exclusive Channel

Multi-channel,

New-channel

FC

TC

Others

Employed

sales

Home-shopping, cross-selling,

on-line direct, etc.

Common

channel

Bancassurance

8.2%

Total 8.5%

Financial consultant4,238

Total consultant3,312

Traditional sales force2,224

Exclusive for commercial line corporate clients

72

16 banks6,018 branches

1,244 agenciesAbout 70,000

employees

In-force bizProfit margin

9.0%9.8%

11.2%

13.8%

9.4%8.8%

FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010

10.4%

9.8%

5.8%

Note) In-force biz profit margin : Based on FY2009 EV

[Sales force qualification exam market share]

[New contract premium portfolio by channel]

17Investment Portfolio (Focused on fixedFocused on fixed--income asset)income asset)

Total Assets exceeded W 7 Trillion, Investment Assets W 5 TrilliTotal Assets exceeded W 7 Trillion, Investment Assets W 5 Trillion, 5.1% Yieldon, 5.1% Yield

Total Asset

Total investment asset

Equity-method & real estate

Sub-total

Other

Stock-type asset

Performance-based asset

Fixed-income asset

(Unit: W bn)

5.1%189.518.0%-5,462.6-4,627.6-4,138.3

-

3.2%

5.9%

-15.6%

6.0%

-1.2%

6.6%

Yield

16.0%

7.5%

20.4%

74.5%

34.9%

23.5%

18.1%

G/R Profit

-

10.9

178.6

-4.7

18.6

-2.2

166.8

-

-

100%

-

-

100%

-

-

100%

1.1%

10.6%

5.9%

82.5%

Mix

0.7%

9.5%

5.7%

84.1%

Mix

1.3%

10.2%

4.1%

84.4%

Mix

921.7857.6805.7

4,540.93,770.03,332.6

47.827.443.9

482.3357.6338.9

266.5215.8137.9

7,001.5

3,744.3

2010. 12

6,035.0

3,169.3

2010. 3

5,265.5

2,811.9

2009. 3

Note) Fixed income = deposit, AFS bond, overseas bond, loan / performance based = trading bond, alternative investment /Stock = outsourced investment, trading stock, stock-type AI / Other = Non-operating deposit, Property management fees

18

Adj

ROE

Solvency RatioNote) Meritz FY2008 Adj ROE: Not reflecting RG Loss

TARGETTARGETZONEZONE

200%200%

15%15%

FY08

FY08FY08

• Adj ROE : 9.2%• Solvency Ratio : 189.9%

• Adj ROE : 26.2%• Solvency Ratio: 230.9%

Meritz 2nd Tiers

FY09FY09

DecDecFY10FY10



(RBC 291.6%)

Risk & Return Balance (#2 in Solvency Ratio & Adj ROE)

DecDecFY10FY10

FY09



19Contents

3

1

22




AppendixAppendix (3Q.FY2010 Financial Results)(3Q.FY2010 Financial Results)


20

(1) The need to create synergy to secure revenue-based business and maintain stable market position under the current group business line

In order to overcome weaknesses each affiliates under Meritz group, the creation plan of recapitalization and synergy consolidation is in need to raise the necessary conditions

Comparison with other industry

Securities

M/SShare’s equity

Assets

1.3% 529.5 1,991.8

7.8% 2,450.2 13,147.8

-6.4% -1,920.6 -11,156.0

Asset Management

M/SShare’s equity

Assets

0.2% 7.8 8.1

8.6% 207.0 247.8

-8.3% -199.1 -239.7

Non-life Insurance

(Unit : KRW bn) M/SShare’s equity

Assets

Meritz 8.3% 680.0 6,035.0

Top 4 Avg 18.1% 1,992.0 14,523.9

GAP -9.9% -1,312.0 -8,488.9

(2) Need of diversification of financial business to provide comprehensive financial service

Payment

Deposit

Trust

Securities

Asset Management

Insurance

Variable Insurance

Financial Derivative

Credit Information

Loan

Foreign Exchange

Operating Assets ResearchConsulting

Function of Financial serviceNon-life

Financial

Investment

Asset

ManagementExclusive

Sales

Bank Life Insurance

Savings Bank

LoanCredit

Information

OperatingBusinesses

Non-OperatingBusinesses

Enhance customer’s loyalty through one-stop comprehensive financial serviceIn order to secure new engines for sustainable growth of the group, diversification of financial business is needed

Function of financial service and business line

Necessity of Financial Group Transition

(Source: Financial Statistic Information, FY09 Public data,)

21

[Reference] Meritz Group Financial Information

-2.1

14.0

15.3

0.06

15.4

3Q.FY10

0.4

1.0

3.0

6.9

9.9

3Q.FY10

0.03

15.0

12.2

0.5

12.7

3Q.FY10

35.9

308.9

637.3

4,345.7

4,983.0

3Q.FY10

91.2

61.9

831.7

6,169.8

7,001.5

3Q.FY10 FY2009FY2009FY2009FY2009FY2009

Capital 10.01.015.0308.961.9

(W Bn)

-0.5

9.5

0.02

9.5

Ritz Partners

0.3-1.024.1140.4Net

income

2.612.2678.4680.0Share’s Equity

5.20.52,956.85,355.0Liability

7.812.73,635.26,035.0Assets

Financial Information

Asset Management

SecuritiesF&M


22

(3) Need of proactive measure for division of manufacturing and sales of financial productsIn order to proactively respond to introduction of exclusive sales company for the sales of comprehensive financial products and development of Integrated-type channel, It needs to strengthen the competitiveness of the group’s sales company. Financial holding company structure will enable to share customer DB which will help sales company to grow.

BankNonLife

Life FinancialInvestmentCard Loan Asset

Management. . .

IndividualCustomer

CorpCustomer VIP. . .

Exclusive Sales Company

Insurance Channel development followed by diversification

Traditional channel

New SalesChannel

Open type Channel

IntegratedChannel

Solicitors/Traditional

Channel

Home ShoppingDirect sales

(TM/internet/Credit card/mail)

GA(Independent)

banc assurance

ExclusiveInsurance

sales channel

(4) Capital finance and Investment capacity

There is limit to provide comprehensive financial service as the amounts of investment affordability under the currentcorporate governance are KRW130 bn ~ 180 bn.


Meritz Fire

SecuritiesAsset

Management

FinancialInformation

servRitz Partners

30.5% 100% 100% 100%

• Total Investment affordability : KRW181.0bn• Amount invested : KRW143.1 bn

(invested to subsidiaries)• Remaining amount to invest : KRW 37.9bn

No affordability to invest

• Investment affordability

- KRW100 bn ~ 150 bn

Corporate governance and investment affordability

Major shareholder

21.4%

(Based on Sept2010, excluding foreign subsidiaries and grandson companies)

※ Meritz Securities' special account equity not included (0.2%)

Investment

Capacity

130~180 bn

Meritz Business Service

100%

23

(6) Provide Business efficiency for financial group

• restructuring, expansion of new businesses strategic rolestrategic role• prevent risk, trimming down overlapping resources managing rolemanaging role• Strengthening business through customers, channels, products operating roleoperating role

NeedNeedControl TowerControl TowerProvide business Provide business

efficiency for groupefficiency for group

Provide efficiencyProvide efficiencythrough focusing on through focusing on

core competencecore competence

• Improvement of management efficiency by integrating the common roles to

relevant subsidiaries while each company focusing on core competence

F&M

Securities

Asset Management

Ritz Partners

Financial Info-Service

Business Service

Common Function

· Brand mgmt/PR/IR · system mgmt / data maintenance

· purchasing · building lease/maintenance/administrative cost

· customer serv (call center) · wage/big 4 insurance/yr-end settlement

· HR/support/education · legal serv / bond follow-up control

· inflow mortgage · accting/ ledger mgmt / expense process

Holding company- Brand management

Shared Service Center-Customer service

-(call center)

maintenance, exclusive management company

-Building lease, facility management-Maintenance, purchasing, etc

(5) Need to structure an independent management system and to prevent subsidiary's risk diffusion

Despite F&M performances, business performance based on subsidiary can expose F&M financial performance to

decline due to current governance where F&M directly invest to subsidiaries, hence in need for governance transition

to protect policyholders.

Shareholders and subsidiary’s customers are concerned about losing confidence in independent management of the businesses under

current structure where F&M is directing variety of businesses that has different type of products, channels and type of risk


24

(1) Transition Method and StructureSplitting part of Meritz F&M subsidiary’s stocks, Treasury and part of cash assets to establish Holding Company. After IPO, Holding Company will buy Meritz F&M’s shares through tender offer to meet shareholders requirements for holding company (listed 30%, non-listed 50%)

Transition method

F&M

Asset Management


Ritz Partners

Securities

Major Shareholder

Holding Company

Holding Co

AssetManagement


Ritz Partners

Securities

Major Shareholder

F&M

Investment in kind(Tender offer

method)

21.4%

21.4% 21.4% + Investment in kind’s exchange shares

1st step : Meritz F&M Investment Division Split 2nd step : Tender offer for Meritz F&M

30.5 % 100% 100% 100%

Treasury(13.0%), part of cash asset

Division 30.5%+ 100% 100% 100%34.4%+

: Participation of regular shareholder’s in tender offer : Acquisition of Meritz Securities’ transferred cash assets transferred

Spin offs : After the split, distributing holding company’s shares proportionally to existing shareholders.

ex) For 1 share= Split to Meritz F&M 0.7049248 Holding 0.2950752


Hanjin Korindo

51%Exception


100%

100%

25

(2) Split assets breakdown

Transferring subjects

Transition method

Note) The numbers are estimated based on the division date and might vary depending on the financial status at the time of division

639.5

6,397.0

7,036.5

Meritz F&M

After the division

872.9

6,407.8

7,281.6

Before the division

316.6[Total Equity]

Deferred tax for previous securities and provision for retirement benefits

10.8Noncurrent liabilities

10.8[Liabilities]

Brand Trademark5.7Intangible Assets

F&M Treasury(83.3), Securitie’s(174.3), Asset management(12.0),

Financial Information(2.9), Ritz Partners(15.1), MBS(0.9) (5 subsidiaries’ stock price)

288.5Securities

Funds will be used to operate holding company and system construction 33.2Cash and

Deposits

327.4[Assets]

RemarksHolding company

Subjects

26

(1) Advantage in entering new biz in aspect of capital finance and investment capacity

Investment affordability of KRW 370 bn by reinstatement of Meritz Fire’s investment capacity and capital

finance of holding company. Advantage in aspect of capital raising in the case of entering into new

business through joint venture

Transition Effect

Group investment capacity

30

150

KRW 180 bn

150

150

70

Before After

KRW 370 bn

106%Holding s

Entering into New

Biz

Holdings

Fire SecuritiesAnnuityOn-line ins.Saving BankDomestic Credit

Domestic Credit Domestic Credit

J/VJ/V J/V

Direct Investment and J. Venture

- New biz

Securities

Fire

272727

(2) Opportunity to expand new biz according to the ease regulation for Ins. Holdings As Ins. Holdings allowed to have non-financial company , there are opportunities to enter into non-financial business for new business or to establish non-financial company for providing customer services in Group

Insurance Holdings

Insurance Company

Financial C. N.Financial C.

Financial company Non financial company

(O) (X)

(O)(O)(O)

(O) (O) (O) (O) (O)

(O)(O) (O)

(X) (X) (X)

(X)

30%(50%)

30%(50%)

100%

30%(50%) 20%(40%)

100% 100% 100% 100%

20%(40%)

20%(40%)

Exc. Bank, other ins.

Exc. Bank, ins.savings, Investment com., securities

Incl. relevant company with financing business

Exc. approved company by insurance Act.

Subsidiary

Granddaughter

Great Granddaughter

%-listed company, (%)-unlisted company minimum requirement for retention shares

(particular rules for ins. Holdings’ dominance on subsidiary company (the regulation for Financial holding company 25))

30%(50%)

Exc. Bank, other ins. Exc. Bank, ins.savings, Investment com., securities



Financial C. N.Financial C. Financial C. N.Financial C.

Financial C. N.Financial C. Financial C. N.Financial C. Financial C. N.Financial C. Financial C. N.Financial C.

Transition Effect

28

(3) FY2010 ~ FY2012 Expected Synergy effect

Under the holding company system, cross-sales to individual or corporate customers are allowed and

expansion of its strategy by directing of holding company will product synergy

Synergy Aspect FY2010 FY2011 FY2012 Total

Profit

Customer information

share0.1 1.3 1.5 2.9

Marketing 0.5 7.5 9.0 17.0

Cost Resource redundancy - 1.4 1.7 3.1

Total 0.6 10.2 12.2 23.0

(Unit: KRW bn)

Securities(9.9 bn, 43.0%)F&M

(10.4 bn, 45.2%)

Common(2.7bn,11.7%)

Transition Effect

With financial holding company law, sharing customer database among affiliates that would allow to manage customers and develop strategy to target different type of customers would produce various values

Customers, Products, and Geographic divisions (horizontally) can be distinguished and managed by Existing affiliates

(Vertically), hence generating synergy through trimming down of overlapping resources and business professionalism

Synergy by company

29

Maintain stabilized capital adequacy and high ROE and BPS

ROE

capital adequacy

22.0%

F&M + Holdings

25.1%

F&M + Holdings

14.9%

F&M + Holdings

HoldingsHoldingsHoldings Meritz F&MMeritz F&MMeritz F&M

19.9%23.7%0.2%

F&M(3Q.FY2010)

23.4%25.9%21.4%16.1%

FY2012FY2011FY2010

252.3%

-

2014. 3(K-IFRS)

292.3%

260.6%

2010.12afterBefore K-GAAP

Category

236.4

-

2013. 3(K-IFRS)

216.4%201.2%210.5%287.1%RBC

-181.1%187.3%264.9%Solvency

ratio

2012. 3(K-IFRS)

2011. 32011.3 @ the time of split

BPS

14,300

F&M + Holdings

11,830

F&M + Holdings

8,835

F&M + Holdings

HoldingsHoldingsHoldings Meritz F&MMeritz F&MMeritz F&M

14,02812,2288,683

F&M(3Q.FY2010)

14,47211,5798,8997,757

FY2012FY2011FY2010

Key indicators before and after the split

* IFRS will be applied starting in Apr 1st 2011: RBC after

* Meritz F&M ROE : Adj ROE

(Unit: Won)

30

■ Estimated P/L

FY2010(Unit: KRW Bn) FY2011 FY2012

Earned premium 3,365.8 3,957.6 4,566.0

Premium income 3,817.1 4,374.4 4,990.3

Premium paid 274.8 300.0 327.4Unearned premium

brought forward 377.7 554.2 671.0Unearned premium

carried forward 554.2 671.0 767.9

Incurred losses 1,227.9 1,232.9 1,385.3

Refund of LT insurance policy 551.8 861.8 1,022.3

Net operation expenses 828.1 985.4 1,143.8Increase in premium reserve for LT

savings-type 795.8 892.2 1,041.4

Net increase in policyholders’dividend reserve 7.2 8.2 9.4

Increase in catastrophe reserve 16.1 19.0 22.2

U/W profit -61.1 -41.9 -58.5

Net investment profit 244.9 284.0 339.6

Total operating profit 183.7 242.1 281.1

Non-operating profit -4.0 -4.0 -4.0

Net profit before tax 179.7 238.1 277.1

Tax 43.5 52.4 61.0

Net profit 136.2 185.7 216.2

■ Estimated B/S

FY2010

167.7 148.6 132.2 Others

641.0

184.9

412.5

43.6

6,456.8

169.7

283.8

135.6

5,867.7

7,097.8

84.7

1,056.7

95.4

188.0

1,528.8

4,772.6

711.7

5,484.3

(Unit: KRW Bn) FY2011 FY2012

Investment assets 6,576.9 7,826.1

Real Estate 728.1 744.9

Others 5,848.8 7,081.2

Non-investment assets 1,822.3 2,150.9

Outstanding receivables 209.0 232.3

Deposit 102.2 109.5 Unamortization of deferred

Acquisition cost 1,292.9 1,552.7

Special account assets 106.4 133.5

Total Assets 8,505.6 10,110.5

policy reserve 6,949.6 8,190.2

catastrophe reserve 154.6 176.7

other liabilities 331.4 387.0

Special account liabilities 214.2 270.4

Total liabilities 7,649.7 9,024.2

Capital 43.6 43.6

Capital Surplus 557.3 717.8

Other capital 254.9 324.9

Total Equity 855.9 1,086.3

[Reference] Meritz F&M Financial Statements

3131

■ Estimated B/S■ Estimated P/L

3.0 4.3 5.7 Intangible assets

(Unit: KRW Bn) FY2010 FY2011 FY2012

Cash and deposit 32.8 17.8 22.2

Securities 289.1 710.5 852.8

Tangible assets 0.1 0.1 0.1

Other non-current assets (deposits) 0.4 1.1 1.1

Total assets 327.9 733.7 879.1

Loan Payable - 41.9 83.8

Other liabilities 10.8 16.7 20.8

Total liabilities 10.8 58.9 104.6

Capital stocks 18.3 31.1 31.1

Capital surplus 317.6 569.6 569.6

Capital adjustments -33.0 -33.0 -33.0

other comprehensive income accumulated 13.7 13.7 13.7

Retained earnings 0.5 93.7 193.0 Total shareholder’s equity 317.2 675.1 774.5

(Unit: KRW Bn) FY2010 FY2011 FY2012

Operating income 0.8 111.9 140.6

Equity-method income 0.7 105.5 133.5

Interest income - 0.4 0.4

Earnings in Brand-usage 0.1 6.0 6.7

Operating expense 0.1 6.8 9.5

Equity-method loss 0.1 1.5 -

Interest expense - 1.0 5.0

Management cost 0.1 4.3 4.5

Total operating Profit 0.6 105.1 131.1

Profit before tax 0.6 105.1 131.1

Income tax (*) - - -

Net income 0.6 105.1 131.1

[Reference] Holdings Financial Statements

32

2010

1st Step

May~Aug

Main Task Yr/Month2011

5 6 7 8 9 10 11 12 1 2 3 4 5 6

1. Preparation for division

2. Board resolution of financial holding company

3. Financial holding’s preliminary application and approval

2nd Step

Oct~Mar

5. Board resolution for division

6. Shareholders’ meeting for division

7. Apply and approval of financial holdings

8. Division

3rd Step 9. Request re-listing of holding company/IPO

4th Step

May~June

10. Board resolution for tender offer and new shares issued

11. Proceed tender offer

(2010. 5. 19)

Holdings

Transition Schedule

(2010. 8. 5)

Important datesBoard resolution for division: Dec 1st 2010/ Shareholders’ meeting for division: Jan 11th 2011

Division : March 25th 2011. / Trading suspension : 2011. 3. 23 ~ 4. 8

Meritz F&M change listing : 2011. 4. 11 / Holdings listing : End of April 2011

33Contents

※

3

1

22




AppendixAppendix

-3Q.FY2010 Financial Results- FY2009 Embedded Value

34

17.5%

816.9%

21.0%

-3.5%

19.9%

10.3%

-5.5%

G/R

100.0%

2.3%

66.7%

2.2%

68.9%

20.3%

8.4%

Mix

2,867.3

66.2

1,912.9

61.6

1,974.5

584.7

241.9

3Q. FY2010

16.2%2,534.014.3%2,896.413.5%100.0%3,288.0Total

-30.4%7.6-26.5%5.6298.2%0.7%22.3One-time pymt

26.6%1,482.719.3%1,768.622.3%65.8%2,163.1Recurring

18.7%62.520.8%75.517.7%2.7%88.9New

26.2%1,545.219.3%1,844.122.1%68.5%2,252.0Long-term

2.1%685.56.0%726.7-4.8%21.0%691.8Auto

8.0%295.88.2%320.00.6%9.8%321.9Commercial

G/RG/RG/RMix

FY2007FY2008FY2009(KRW Bn)

0.0%p

6.0%p

-0.1%p

-0.6%p

-0.1%p

0.1%p

-1.0%p

G/R

3Q FY2010

8.2%

10.4%

9.1%

8.1%

9.0%

6.4%

7.1%

0.9%p9.8%-0.4%p9.4%-0.5%p8.9%New

0.1%p8.1%0.2%p8.3%-0.1%p8.2%Total

-1.3%p5.8%0.2%p6.0%3.1%p9.1%One-time pymt

0.4%p9.0%0.2%p9.2%-0.1%p9.1%Recurring

0.4%p9.0%0.2%p9.2%-0.1%p9.1%Long-term

-0.6%p6.4%0.2%p6.6%-0.4%p6.2%Auto

0.2%p8.7%-0.3%p8.4%-0.6%p7.8%Commercial

G/RG/RG/R

FY2007FY2008FY2009M / S

Appendix : Sales

35

5.3%p

16.4%

24.7%

6.1%p

4.5%p

3.2%p

24.2%

29.4%

6.1%p

-4.3%

3.5%

33.3%p

-1.6%

99.0%

G/R

79.7%

2,609.5

2,080.1

84.1%

87.2%

80.0%

2,010.9

1,608.7

80.9%

500.0

404.5

67.8%

98.6

66.9

3Q. FY2010

-2.2%p78.9%3.6%p82.5%-7.1%p75.4%Loss ratio

19.6%2,266.915.1%2,609.816.7%3,046.4Earned prem

16.3%1,788.420.3%2,152.96.7%2,296.8Losses

Total

3.0%p72.8%2.5%p75.3%2.2%p77.5%LT risk L/R (w/o IBNR)

-1.1%p77.1%3.5%p80.6%3.6%p84.2%LT risk L/R (w/ IBNR)

-2.3%p82.6%-3.8%p78.8%-1.3%p77.5%Loss ratio

25.8%1,500.619.7%1,795.524.1%2,228.1Earned prem

22.2%1,238.014.2%1,414.822.1%1,727.2LossesLong-term

-4.3%p74.2%-4.3%p69.9%5.6%p75.5%Loss ratio

7.5%641.45.0%673.32.1%687.2Earned prem

1.6%475.7-1.1%470.310.4%519.0Losses

Auto

6.8%p-

59.8%-

131.1%p-

189.9%(61.1%)

-151.3%p(-1.8%p)

38.6%(59.3%)

Loss ratio( w/o RG)

17.4%124.911.6%141.0-7.0%131.1Earned prem

32.5%74.8258.0%267.8-81.1%50.6LossesCom -

mercial

G/RG/RG/R


Appendix : Loss Ratio

36

Sales Expense Ratio

-0.4%p23.9%2.3%p26.2%-1.5%p24.7%2.8%p22.6%Expense Ratio

-0.8%p12.5%-0.6%p11.9%-0.8%p11.1%0.1%p10.7%Admin Expense Ratio

2.6%p

2.9%p

16.4%

3.6%

-4.7%

21.0%

-7.3%

27.3%

8.9%

3.2%

G/R

3Q. FY2010

102.4%

11.9%

2,609.5

591.0

33.0

26.9

332.3

142.0

122.8

624.0

-2.6%p102.8%5.9%p108.7%-8.6%p100.1%Combined ratio

0.4%p11.4%2.9%p14.3%-0.7%p13.6%

19.6%2,266.915.1%2,609.816.7%3,046.4Gross premium earned

17.5%542.126.1%683.510.1%752.4Net expenses

5.0%51.63.1%53.2-10.7%47.5Expenses recovered

21.8%23.612.7%26.615.0%30.6Other expenses

19.9%296.638.7%411.49.7%451.3Sales-related

12.5%125.514.3%143.56.4%152.7Administrative

12.0%147.94.9%155.26.5%165.3Wages & benefits

16.3%593.724.1%736.78.6%799.9Expenses

G/RG/RG/R


Appendix : Expense Ratio

Note) Sales-related expenses: acquisition cost/collection fees, commissions paid to agencies, acquisition cost, amortization, deferred acquisition cost, etc

Other expenses: loss adjustment expenses, co-insurance paid, reinsurance commission paid, etc

Expenses recovered: claim service fee recovered, R/I commission received, etc

37

100.0%

16.5%

-

3.1%

1.5%

4.5%

6.3%

12.7%

55.4%

80.4%

Mix

2,040.6

335.7

-

64.0

30.3

92.0

128.2

259.1

1,131.3

1,640.9

3Q. FY2010

100.0%1,552.8100.0%1,849.6100.0%2,274.1Total

15.4%239.013.8%2,56.012.1%274.5Savings

0.0%0.40.0%0.3--Corporate pension

3.9%60.93.6%66.33.4%77.5Personal annuities

2.8%44.02.5%47.21.8%41.9Bundle

12.6%196.29.0%167.16.0%136.5Disease

10.5%163.38.7%161.66.9%157.6Property

17.9%278.015.8%291.913.9%316.1Drivers

36.8%571.046.5%859.255.8%1,270.0Accident

80.7%1,252.582.6%1,527.084.5%1,922.1Protection-type

mixFY2007mixFY2008 mixFY2009 (KRW Bn)

57.5%

79.6%

1,262.1

1,012.0

-5.3%p

6.0%p

55.5%

44.5%

62.8%

73.6%

1,103.7

745.9

-1.2%p

-5.6%p

59.7%

40.3%

64.0%

79.2%

973.0

579.8

0.7%p

2.8%p

62.7%

37.3%

25th month persistency

13th month persistency

Savings premiums

Risk+loading premiums

3.1%p

0.8%p

55.6%

44.4%

60.6%

82.4%

1,133.6

907.0

Appendix: Long-term product portfolio

* Including one-time payment, 3Q.FY2010 Persistency: 6 months Average

38

100.0%

17.6%

3.9%

8.0%

12.8%

35.4%

60.1%

22.4%

Mix

79.1%

56.5%

70.6%

90.4%

101.1%

108.7%

102.2%

34.6%

L/R

FY2009Category

3Q. FY2010 FY2008 FY2007

L/R Mix L/R Mix L/R Mix

Death coverage 40.3% 22.0% 33.7% 24.5% 40.6% 26.6%

Living benefits 108.1% 60.1% 101.6% 57.7% 97.2% 54.7%

Medical treatment

115.0% 35.4% 107.1% 31.7% 97.8% 29.2%

Daily allowance 112.7% 12.3% 94.1% 13.5% 91.2% 12.9%

Disease 93.1% 8.0% 98.6% 8.5% 103.4% 8.7%

Other 67.3% 4.4% 90.1% 4.0% 98.5% 3.8%

Property/other 57.2% 17.8% 52.3% 17.8% 52.1% 18.7%

Total 84.1% 100.0% 76.2% 100.0% 73.7% 100.0%

* Loss Ratio: As of Gross Premiums Written, excluding IBNR

* Death coverage: death/disablement (total disablement, disease death) / Medical treatment: accident treatment, disease treatment

Daily allowance: accident daily allowance, disease daily allowance / Disease: cancer, other diseases, CI

Other: other accident (fracture/burn, etc), other disease (food poisoning, etc)

Property/Other: Driver expenses, liabilities, property loss, fire

Appendix: Long-term product portfolio

39

83.9%

5.20

6.89

4.36

3Q. FY2010

81.0%

4.84

5.60

3.92

FY2009

86.5%68.5%Matching ratio

3.784.82Liability Duration

4.494.70Bond Duration

3.273.30Asset Duration

FY2007FY2008ALM

1.5%p

5.7%

87.7%

12.3%

4.03%

5.26%

4.18%

3Q. FY2010

1.5%p

5.8%

84.7%

15.3%

4.16%

5.36%

4.34%

FY2009

4.45%4.23%Variable

5.95%5.63%Fixed

23.4%19.3%Fixed mix

0.8%p-0.9%pSpread

5.6%3.6%Investment yield

76.6%80.7%Variable mix

4.81%4.50%Funding Cost

FY2007FY2008LT Funding Cost

Appendix : Long-term Funding Cost & ALM

Note1) Subject : LT/Pension account

Note2) RBC Duration : FY2009 Asset 4.34, Liability 4.08

1H.FY2010 Asset 4.86, Liability: 4.10

3Q.FY2010 Asset 4.89 , Liability 4.12

40

-

100.0%

14.4%

17.1%

1.3%

9.6%

11.4%

34.5%

4.1%

2.7%

0.0%

2.7%

4.8%

Mix

4.9%

4,627.6

667.3

790.2

62.1

446.1

525.4

1,597.6

190.2

126.3

0

126.3

222.2

FY2009

G/R G/R

-5.6%-2.8%0.2%p--5.1%Investment yield

100.0%3,624.0100.0%4,138.3-100.0%18.0%5,462.5Investment assets

11.1%402.316.0%662.4-1.4%p13.0%6.4%709.8Real estate

11.8%426.813.7%568.8-0.5%p16.6%14.5%905.2Loans

1.7%60.72.2%89.82.4%p3.7%226.4%202.6Other

7.6%276.110.3%427.4-0.8%p8.8%7.4%479.1Overseas securities

14.3%518.212.5%516.6-0.2%p11.2%16.9%614.1Investment funds

41.7%1,510.232.6%1,349.3-0.7%p33.8%15.6%1,847.4Domestic bonds

3.6%132.13.5%143.3-0.2%p3.9%11.4%211.9Equity-method stakes

2.7%96.13.4%142.40.2%p2.5%5.8%133.6Available-for-sale

0.0%0.50.0%00.5%p0.5%-25.7Trading

2.7%96.63.4%142.40.2%p2.9%26.1%159.3Equities

5.5%201.05.8%238.31.3%p6.1%49.9%333.0Cash & equivalents

MixMixMix

FY2007FY20083Q. FY2010(KRW Bn)

Appendix : Investment Assets Portfolio

41

905.2

1.2

22.1

928.5

132.1

60.2

130.3

77.2

399.8

290.7

238.0

0

528.7

3Q. FY2010

568.7

0.2

8.3

577.2

54.3

0

55.0

77.9

187.2

260.7

129.1

0.2

390.0

FY2008

790.2

1.1

13.3

804.6

157.9

50.8

44.6

47.5

300.8

275.1

228.6

0

503.8

FY2009

63.2Secured

8.7Bad debt Allowance

435.4Total

0Additional

deferred loan income

426.7

72.4

0

1.1

136.7

219.9

76.5

2.3

298.7

FY2007

PF

SOC related

Credit

Policyholder

Secured

Credit

Net Income

Corporate loan

Retail loan

(KRW Bn)

3.06%

1.19%

2.0%

65.2%

22.1

3.65%

928.5

7.2

10.1

16.6

1.5

893.1

3Q. FY2010

2.5%

1.7%

2.0%

74.9%

8.3

1.92%

577.2

1.8

0

9.3

0.6

565.5

FY2008

4.67%

1.02%

2.45%

144.6%

13.3

1.14%

804.6

2.0

3.8

3.4

11.2

784.2

FY2009

3.2%

4.8%

4.3%

48.3%

8.7

4.13%

435.4

0.9

1.4

15.7

2.1

415.3

FY2007

Substandard

Corporate

Retail

Coverage ratio(Provisions

/substandard & below)

Total

Delinquency ratio

Doubtful

Provisions

Estimated loss

Precautionary

NPL ratio

Normal

(KRW Bn)

Appendix: Loan Quality

Note1) Corporate Credit : Including Unsecured private placement bondsNote 2) Mortgage Companies : Private Equity-backed bondsNote 3) Corporate PF : Classify as PF ABCP loan as of Dec 2009

Note1) FSB Standard (including retirement accounts, 30 days Overdue principal and interest, Delinquency on Policyholder loan

Note2) JID PF loan 7.4 bn (Kumho Industry), Solyeon PF loan 3.7bn (Sungwon)

Note 1)

Note 2)

Note 3)

Note 1)

Note 2)

4242

(Unit: KRW bn)

Appendix : PF loan

Debtor Site/Project Constructor Loan amount Maturity NPL Remark

Sol Yeon C&DYong-in Complex

(Office & apartment)SungWon

Corporation 3.7 ‘10-10-19 Doubtful100% is reserved in bad debt allowancenote1)

Saenal, Co. Gimpo apartment Shindongah, NamKwang, Chonggu 10.0 ’12-12-14 3)

Pre-cautionary,

fixed

39.6% is reserved in bad debt allowancenote2)

Jeju Investment & Development, Co. Jeju ICC Anchor resort&hotel Kumho Industrial 7.4 ‘10-03-25

Pre-cautionary,

fixed

32.5%is reserved in bad debt allowancenote3)

N-mode House, Co.Wonhyo-ro Complex(Office & apartment)

Prime Construction, Dongah Construction 10.0 ‘12-04-09 Normal

PSIB Posco E&C office building POSCO Engineering 10.0 ‘12-10-16 Normal completed

Shin Dong D&I Co. Suwon Shin Dong urban development project

Samsung C&T Corporation 30.0 ‘12-09-28 Normal Permit in progress

C-First, Ltd Chong-na Complex(Office & apartment) PF ABL POSCO Engineering 20.0 ‘13-06-15 Normal

Yang Woo Construction Gimpo apartment Samsung C&T

Corporation 7.2 ‘12-05-26 Normal

Song-do Global Complex Development,

Co.Song-do A3 block apartment Lotte Engineering &

Construction 10.0 ‘13-11-30 Normal

S.L D&C, LtdChun-ho Dong Complex

(Office & apartment)Samsung C&T

Corporation 20.0 ‘14-08-24 Normal Permit in progress

Echo city J35 pole previous site development

projTaeyoung Cons,

KCC Cons3.0 ‘11-12-23 Normal Permit in progress

Total 132.1Note1) Sungwon corp applied for court (March’10.)

Note2) shindongah, Namkwang pushing for workout. Chonggu bankrupted (reserved 39.6 bn)

Note3) Geumho Industry applied for workout (Dec 09) reserved 23.95 bn

43

-20.8%

-24.6%

-21.7%

-

17.3%

-

-21.1%

5.1%

44.3%

3.6%

-4.8%

24.7%

19.8%

17.5%

16.4%

G/R

91.2

26.4

117.6

-1.3

189.5

-70.7

9.0

6.2

723.8

591.0

477.6

2,080.1

2,672.2

2,867.3

2,609.5

3Q. FY2010

-

-

-

-

95.5%

-

-

182.1%

37.2%

10.1%

-1.0%

-2.7%

14.8%

13.5%

16.7%

G/R

140.4

46.8

187.2

-4.0

207.6

-16.4

13.6

7.9

638.9

752.4

656.8

993.2

3,020.9

3,288.0

3,046.4

98.7%71.1--58.8Net income

254.5%29.8--19.7Incurred tax expenses

128.3%100.9--78.5Ordinary income

--1.1-1.8Non-operating income

12.5%179.2-40.8%106.2Investment income

--77.2--186.4Underwriting income

16.1%13.6--40.2Incr in catastrophe reserves

-22.7%6.0-53.6%2.8Net incr in policyholders’

dividend reserves

-5.3%441.75.4%465.6Incr in premium reserves

for LT savings

17.5%542.126.1%683.5Net operating expenses

52.1%591.212.2%663.5Refund of LT insurance polices

10.9%749.636.2%1,021.0Incurred losses

17.9%2.291.014.9%2,631.4Net premium written

16.2%2.534.014.3%2,896.4Gross premium written

19.6%2.266.915.1%2,609.8Net premium earned

G/RG/R


Appendix : P & L

44

16.5%

31.1%

29.6%p

-5.6%

19.9%

0.2%

0.0%

22.3%

-0.3%

7.6%

17.2%

15.2%

9.4%

18.0%

16.0%

G/R

420.3

1,094.8

260.5%

-110.1

357.0

236.2

61.9

831.8

537.3

128.5

5,504.1

6,169.8

1,539.1

5,462.5

7,001.6

3Q. FY2010

12.6%282.114.6%323.316.1%375.3Solvency guidance

55.8%665.1-7.7%613.941.1%866.4Solvency amount

65.4%p235.8%-45.9%p189.9%41.0%p230.9%Solvency margin ratio

--787--28.1--116.6Capital adjustment

24.8%235.7-33.2%157.489.2%297.8Retained earnings

718.1%237.2-1.2%234.40.6%235.8Capital surplus

44.3%61.90.0%61.90.0%61.9Capital stock

75.4%456.1-6.7%425.659.8%680.0Total shareholders’

equity

30.5%461.316.5%537.40.2%538.9Other liabilities

10.2%146.0-27.5%105.812.9%119.4Cat reserves

16.6%3,501.119.9%4,196.611.9%4,697.0Policy reserves

17.8%4,108.417.8%4,839.810.6%5,355.0Total liabilities

25.8%940.519.8%1,127.124.9%1,407.4Non-invested assets

20.8%3,624.014.2%4,138.311.8%4,627.6Investment assets

21.8%4,564.515.4%5,265.514.6%6,035.0Total assets

G/RG/RG/R


Appendix : B/S

45Appendix : Embedded Value (FY2009 EV 1,599.1 Bn)

Adjusted Net Worth

Value of In-force Business

6.7%-0.2%p6.9%-0.4%p7.3%Profit Margin

143.728.7%41.2184.924.3%45.0229.9Value of 1-year New Business

808.2-33.8%-273.3534.958.0%310.5845.4

Profit Margin 7.1%

416.4

1,224.6

FY2007G/RGrowthG/RGrowth

-

33.5%

-11.0%

0.7%p

139.7

-133.5

FY2008

7.8 %

556.2

1,091.1

-

35.5%197.5753.7

508.0

FY2009

0.7%p8.5%

46.6%1,599.1Embedded Value

Classification(Unit : KRW Bn)

[Reference] Value of In[Reference] Value of In--force Businessforce Business : Economic AssumptionEconomic Assumption

Risk Discount Rate : 11.5% [CAPM (Capital Asset Pricing Model)]

Inflation Rate : 3.0%

Tax : FY2010 ~ FY2011 : 24.2%, After FY2012 : 22.0%)

Required Capital : Applied 150% of solvency ratio standard

Investment yield : 5.1%

5.00

FY2008

5.255.10Investment Yield

FY2007FY2009(Unit : %)

46Appendix : Embedded Value (FY2009 EV by Risk Discount Rate )

Unit : KRW Bn

680.0Shareholder’s Equity

52.7

254.9

202.2

1,511.9

238.4

904.9

666.5

13.0%

RBC(RDR 11.5%)

Risk Discount RateCategory

Cost of Capital

PV of future profit 279.2279.2307.5

41.949.244.5

1,631.51,599.11,701.9Embedded Value

237.3229.9263.0Value of 1-year New Business

972.7972.71,051.3PV of future profit

186.6219.0194.8Cost of Capital

753.7

11.5%

856.5

165.4

845.4

10.0%

786.1Value of In-force Business

Adjusted Capital

Adjusted Net Worth

47

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