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2013. 5

Meritz F&M FY2012 Financial Results & Embedded Value

FY2012 Financial Results & FY2013 Business Forecast

FY2012 Embedded Value

Q & A

FY2012 Financial Results & FY2013 Business Forecast

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 FY2013 and beyond,

including projected premium and net income. These forecasts

are subject to unknown risks and uncertainties that may cause

actual figures to differ from those stated or implied by such

statements. We have no obligation or responsibility regarding

investment made based on such forward-looking statements.

1. FY2012 Financial Results

2012 Vision The Greatest Insurance Company in Korea

3 Big New Growth Momentum Differentiated Strategy in

Accordance with Market Condition

1

2

3

5

6

+

4

5/43

Great leap in 90th Anniversary

Maintain LT health high margin- focused strategy

Expansion of Auto Insurance

Maintain commercial insurance remodeling

Adopt new sales channel

Regional differentiation growth strategy

Stabilized investment strategy

Major Outcomes

1. Solid Competitiveness in LT Health Insurance

LT Health insurance-focused growth(M-Basket launch, etc) → M/S 12.7% (+0.3%p↑)

Long-term L/R #1 in the industry → 6%p lower than Top 4

4.6bn 4.9bn

3.9bn 4.0bn

5.6bn 10.5%

11.1% 11.6%

12.4% 12.7%

FY2008 FY2009 FY2010 FY2011 FY2012

Monthly Earning Power

M/S

+0.3%p↑

G/R

26% 8% -20% 3% 39%

78.8%

77.5%

79.5% 80.1%

79.7%

82.4% 82.2%

83.2%

85.2% 85.8%

FY2008 FY2009 FY2010 FY2011 FY2012

Meritz Top 4

(K-GAAP 78.8%)

Long-term L/R 79.7%

6/43

2. Secure Growth Momentum by On-line Auto Increase

Growth of auto insurance by on-line channel → M/S 6.4%, improved 0.3%p YoY

Sales 815.6bn(G/R 2.4%), M/S 6.4%(+0.3%p↑)

Online Portfolio 18.5% (+7.2%p↑)

Online P/F

4.7% 6.1% 8.1% 11.3% 18.5%

Sales 151.2bn(G/R 67.3%), M/S 4.2%(+1.5%p↑)

Increase of resources on online channel

FY11 FY12 Growth

# of Call Centers 2 7 +5

# of TMs 258 437 +179

7/69

726.7bn 692.2bn

776.8bn 796.4bn 815.6bn

6.6% 6.2% 6.3% 6.1%

6.4%

FY2008 FY2009 FY2010 FY2011 FY2012

Sales

M/S

34.3bn 42.5bn 63bn

90.4bn

151.2bn

1.1% 1.8%

2.3% 2.8%

4.2%

FY2008 FY2009 FY2010 FY2011 FY2012

Sales M/S

3. Improvement of Commercial Insurance

→ Transit to Earnings Growth Model

FY12 higher growth in the market, turn-around to evident growth model

U/W profit margin improvement by remodeling and profit-focused U/W

U/W Margin beyond 2nd tier

FY2009 FY2010 FY2011 FY2012

39.4% 37.6% 36.3% 37.8%

50.3%

45.3%

34.4% 32.4%

Meritz 2nd Tier

* Profit Margin : U/W Profit / Earned Premium

0.6%

-6.9% -10.7%

11.2% 8.0% 6.9%

12.0%

8.7%

Meritz G/R Industry G/R

M/S 7.8% 6.8% 5.4% 5.5%

Rapid Growth

※ FY2012: As of 2013. 2

8/69

321.9bn 299.7bn

267.7bn 297.7bn

FY2009 FY2010 FY2011 FY2012 • U/W Profit = Earned P – Losses – Sales expense(excluding general administrative cost)

4. Recruitment of New Sales Channel & Active Personnel Increase

Best recruit achievement

→ Monthly Avg. new recruitment +116(69%↑) YoY, Active Personnel over 8,000

FY2009 FY2010 FY2011 FY2012

335 327 372

488

Highest Recruitment

→ Qualified M/S 11.1% (+1.8%p YoY)

+116↑

9.0% 9.5% 9.3%

11.1%

Qualifed M/S

FY2009 FY2010 FY2011 FY2012

6,200 6,361 6,586

8,137

Active Personnel over 8,000

→ Rapid Increase of Elite Personnel Ratio

+1,551↑

Elite Personnel

Ratio

40.2% 42.4% 43.0%

58.7%

9/69

5. Expand Base Focused on Core Regions

Branches

LT Health

Capital Area

Chungcheong

Bugyeong

Daegyeong

Honam

Gangwon

Jeju

87→ 102(+15)

7.8 → 9.8 8 → 8(0)

6.0 → 7.4

29 → 30(+1)

12.7 → 15.4

45 → 56(+8)

13.8 → 17.5

6 → 6(0)

31.8 → 38.3

28 → 29(+1)

12.8 → 14.9

24 → 25(+1)

11.1 → 13.5

(Unit : %, Branches)

* FY11 → As of FY12.12

Secure competitiveness by expansion in core region(capital area) → 256 branches, up 26 branches YoY

Regional marketing reinforcement, LT Health M/S improvement in core region : 12.7%, up 2.6%p YoY

10/69

6. Invested Asset Portfolio :Focus on fixed income assets

Total assets 10.1trn, Invested assets 8.0trn

80.2% mix of Fixed income assets

(KRW Bn) 2011. 3 2012. 3 2013. 3

Mix Mix Mix G/R Profit Yield

Fixed-income asset

3,888.5 72.4% 5,034.3 75.8% 6,411.5 80.2% 27.4% 322.3 5.8%

Performance-based asset

305.9 5.7% 283.7 4.3% 494.2 6.2% 74.2% 20.1 5.3%

Stock-type asset

413.8 7.7% 547.7 8.2% 235.7 2.9% -57.0% 10.7 2.8%

Other 39.2 0.7% 18.9 0.3% 27.4 0.3% 45.0% -7.4 -27.6%

Freely invested Assets

4,647.5 86.6% 5,884.6 88.6% 7,168.7 89.7% 21.8% 345.8 5.4%

Equity-method

& real estate 720.0 13.4% 757.6 11.4% 827.0 10.3% 9.2% -2.5 -0.3%

Total investment asset

5,367.5 100% 6,642.2 100% 7,995.8 100% 20.4% 343.3 4.8%

Total Asset 6,973.9 - 8,654.5 - 10,158.4 - 17.4% - -

11/69

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

Rapid growth of LT Health which has high future profitability : 67.4bn(11.4bn↑ compared to plan)

→ Future value of LT 376.9bn, Future value of LT Health 315.9bn

Built infra for increasing future value : Organization/regions expansion, displayed value increase

FY2012 LT NBV 376.9bn(e), G/R 37%

Conclusion :

FY2012, Expansion of future value & Strengthened Value Creation Capability

+102.5bn (37.3%↑)

LT Health New Biz.

Future Total Prm. Income

New Biz. Value

674억

3,208bn

315.9bn Multiple 47.6x

Profit Margin 9.8%

Large new recruitment

Active personnel – 8,000

90th anniversary events, advertisement

Customer Satisfaction Hall of Fame

→ Brand awareness ↑

Head Branch : 1 Foundation

Branch : 14 Foundation,

13 Partition

376.9bn

84%(e) of NBV

12/69

FY2008 FY2009 FY2010 FY2011 FY2012

184.9bn

229.9bn 233.9bn

274.4bn

Plan Report profit Actual profit

-24.3bn

-51.6bn

+11.6bn

Report Net Profit : 130.7bn → due to external influence : △24.3bn (38% of Gap btw Plan & Actual)

195bn

P&L increase

External influence

Strategic decision

Excluding △75.9bn (external / strategical influence)

․ Alternation in valuation method of beneficiary certificates △25.1

․ Retirement benefit actuarial P&L △6.9bn

․ Pre-payment of selling expense (additional amortization △68.1bn)

130.7bn

Actual profit 206.6bn

13/69

2013.3 RBC Ratio 183.1% → Main factor : regulation change (△62%p)

RBC Ratio : 16%p ↓ for Last 2 Years by Changed Regulation, etc

2013.3 2011.3

199% 183%

+46.4%p -62.2%p

Earned surplus ↑ - RBC regulation change - Adopted IFRS - Cost of Business & System Renovation

14/69

Overview

(Unit: KRW Bn) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012

Direct premium 2,534.0 2,896.4 3,288.0 3,836.1 4,254.3 4,780.4

U/W Profit -77.2 -1,86.4 -16.4 -95.8 -47.8 -160.9

Combined Ratio 102.8% 108.7% 100.1% 102.4% 101.2% 103.6%

L/R 78.9% 82.5% 75.4% 79.3% 80.4% 80.6%

E/R 23.9% 26.2% 24.7% 23.1% 20.8% 23.0%

Net investment profit

179.2 106.2 207.6 257.0 268.6 343.3

Investment Yield 5.6% 2.8% 4.9% 5.3% 4.6% 4.8%

Net Profit 71.1 -58.8 140.4 120.9 164.6 130.7

ROE 18.6% -16.1% 26.2% 18.7% 20.8% 13.2%

Solvency Ratio

(RBC Ration)

- (235.8%)

- (189.9%)

269.7% (230.9%)

198.9% (162.9%)

176.1% -

183.1%

-

15/69

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

2. FY2013 Business Forecast

FY2013 Business Environment Forecast

Growth rate decrease

Prolonged low interest

RBS, RAAS improvement

Strict supervision of sales channel

Reinforcement of consumer protection

Slow growth due to base effect

Competitive On-line auto

Competitive LT Health

Medical expense regulation

Installment of sales commission

Engagement of costumer protection law

17/69

Shrinking consumption

FY2013 Strategery

25.4bn↑YoY

Recover RBC ratio of 200%

※ FY 2013 is 2013.4~12 (9months) due to change in Insurance Business Act

18/69

4 Tactics

01 02

03 04

01. Internal stability growth

Continue LT Health growth (reinforce base for retention ratio, continuous prem.)

Expansion of auto insurance (Online, offline growth)

Core business focused commercial insurance growth

Sustain core region competiveness

02. Efficiency/Retrenchment

03. Optimization of asset

management

04. Risk management

reinforcement

Sustain expense retrenchment

Sales expense balance, efficiency reinforcement

Enhance Auto insurance efficiency (Improve C/R, indemnity innovation, exit strategy)

Branch & elite channel reinforcement,

Invest on new low-risk profit source

Defend against low interest risk with ALM focused asset management

Consumer protection risk reinforcement (Civil petitions, customer info. protection, etc)

Preemptive risk control

Emphasize on communication & responsibility

Efficient management of expanded capitals

Enhance individual info. protection

19/69

Maximizing

Profit

FY2013 Management Targets

FY2012.12 FY2013 Target

104.6bn

+25.4 bn

(G/R 24.2%)


103.4%

△1.1%p

55.5bn capital increase reflected


14.6%

+0.3%p

20/69

※ FY 2013 is 2013.4~12 (9months) due to change in Insurance Business Act

Divisional Business Plan

LT Insurance : Sustain LT Health growth strategy & improve profitability

Sales Vs. Sales expense balance : LT Health sales 44.8bn (△4.9bn YoY) → Sales expense ratio 14.2% (△1.8%p YoY)

C/R 101.1% (△1.3%p YoY)

Stabilizing sales E/R with adequate sales

Sustain LT Health

Growth

U/W P&L

Stabilization

Sales↔Sales Expense Balance

Interest Rate Risk

Management

FY2012 FY2013 Growth

Sales

LT Health (M/S)

49.7bn (14.3%)

44.8bn (13.1%)

-4.9bn (-1.2%p)

New contract (M/S)

66.8bn (7.9%)

64.4bn (8.0%)

-2.4bn (+0.1%p)

Sales E/R 16.0% 14.2% -1.8%p

Additional depreciation

68.1bn 12.3bn -55.8bn

E/R 22.6% 21.4 % -1.2%p

L/R 79.8% 79.7% -0.1%p

Risk L/R 84.0% 83.5% -0.5%p

C/R 102.4% 101.1% -1.3%p

Switch to growth after 2Q due to regulation revision

Stabilize commission allocation

Exclusive channel portfolio improvement

Pricing strategy in accordance with market environment

1

※ FY2012: As of 2012. 12 / New Contract : Monthly Equivalent Prem standard

21/69

Auto Insurance : Sustain Expansion Stance

Competitiveness focused on exclusive channel(Branches+Online)

→ Sustain online-focused growth

Secure M/S of 7% → Online 5.9% (+1.0%p)

2

AG

45.5%

Online

17.1%

Branch

37.4%

[FY2012]

AG

39.6%

Online

26.1%

Branch

34.3%

[FY2013]

Exclusive channel(Online+Branches) Portfolio Expansion

: FY12 54.5% → FY13 60.4%

Increase online resource investment


# of Centers 7 9 +2

# of TMs 437 546 +109

43.4bn 66.4bn 106.2bn

176bn

584.7bn 606.3bn 622.7bn

673.7bn

2.1% 2.7%

4.9% 5.9% 6.4%

6.2%

6.4% 7.0%

FY10 FY11 FY12 FY13 Target

Online Total Online M/S Total M/S


L/R 85.6% 84.8% -0.8%p

E/R 24.8% 24.4% -0.4%p

C/R 110.4% 109.2% -1.2%p

※ FY2012: As of 2012. 12 ※ Sales, M/S : As of Dec. of each year

22/69

Auto Insurance : Improve Business Efficiency

Arrange virtuous cycle of business efficiency by reducing C/R by 1.2%p(min.)

- Reducing C/R gap b/w 2nd tier → Secure scale merit

→ Reduce expense, claim survey fee

77.3 76.4

8.3 8.4

10.4 9.6

14.4 14.8

일반경비

판매비

손해조사비

손해율

FY2012 FY2013

109.2% 110.4%

Target : reducing C/R by 1.2%(min.)

L/R △0.9%p↓

⇒ Improve business efficiency with

‘total directional L/R management’

Exclusive channel (Online+Branches)

portfolio Expansion

: FY12 54.5% → FY13 60.4%

- Supply branch-specialized product

Indemnification efficiency

- Optimizing emergency service

- Improve management process for hospital &

repair shop

Enhance risk management (heavy snow, etc)

- Control P&L variability by reforming X/L

program

2

※ L/R : Based on K-GAPP

23/69

General Expense

Sales Expense

Survey Fee

L/R

Commercial Insurance : Core Business Growth Based on Remodeling

Sales 252.5bn (+23.3bn YoY, G/R 10.2%, M/S 5.6%)

Net premium written 111.3bn (G/R 11.6%)

3

FY2012 FY2013 G/R

Sales 229.2bn 252.5bn +10.2%

M/S 5.5% 5.6% +0.1%p

L/R 54.5% 63.6% +9.1%p

E/R 33.4% 33.9% +0.5%p

C/R 87.9% 97.6% +8.4%p

Remodeling stabilization → Higher G/R than the market

Maintain 2 digits G/R (G/R 10.2)

Sustain retention growth

Net premium written

G/R 11.6% (+11.5bn)

Minimizing P&L variability by huge losses

Total analysis on huge losses ※ Based recent 5y L/R & remodeling effect

(Rare low L/R until FY2012. 12)

※ FY2012: As of 2012. 12

24/69

Investment Profit : Focus on Risk Management & New profit Source under Low Interest

4

Target Profit : 273.6bn(min.) +15.3bn↑, G/R 5.9% YoY

Investment yield 4.3% (△0.6%p)

- Focus on fixed income assets & maintain LT Duration 85%

FY2012 FY2013 Target

10.7%

13.2%

76.1%

etc

Performance Based Assets

Fixed Income Assets

9.3%

12.8%

77.9%

7,671.2bn

9,114.3bn

New investment

+139.2bn

+1,443.1bn

[Portfolio] [Investment Profit]

※ ( ) :Investment yield

(4.9%)

258.3bn

273.6bn

(4.3%)

+15.3bn (△0.6%p)

FY2012 FY2013 Target

Maintain 85% matching

ratio for LT Duration

Chance of business recovery in 2H

Flexibility b/w LT investment for dividend

& time-trading

Invest on overseas

structured securities

Increased invest on

KP-focused

structured product

※ FY2012: As of 2012. 12

25/69

23.2% (779.3bn)

FY2012 FY2013

9.1% (335.4bn)

14.6% (489.8bn)

8.6% (289.5bn)

Sales E/R

General E/R

22.3% (816.1bn)

△ 1.5%p↓ (△ 9.1bn)

+0.5%p↑ (+45.9bn)

△ 1.0%p↓ (+36.8bn)

13.1% (480.7bn)

Expense Ratio : Efficiently Execute Expenses

FY2012

289.5bn

BRS stabilization Regional differentiation strategy Continuous on-Line business

8.6%

FY2013

335.4bn

9.1% General E/R

General Administrative

Costs

Labor Costs

114.8bn

174.7bn

137.7bn

197.7bn

Net Operation E/R

+45.9bn

0.5%p↑

+22.9bn

+23bn

E/R 22.3% : Sales E/R △1.5%p↓ YoY, General E/R +0.4%p ↑ YoY

Enhancing profitability based on effective expense

- Minimize unnecessary new business, invest on core business

5

※ FY2012: As of 2012. 12

26/69

Settlement of Recruited Sales Channel

Increase settlement ratio & settlement of 2012 recruits

95.0

76.0

54.0

38.0

263.0

2nd 4th 7th 13th Total Month

(Unit: %, %P)

2.4 5.1 4.0 3.6 15.1 YoY

2,162 1,941 2,080

3,263

987 939 961

정착대상 정착인원

FY2010 FY2011 FY2012 FY2013

45.7

48.4

46.2

[13th month S/R, No. of Settled]

Increase S/R by 3%

100 more settled recruits

Focus on settlement of new recruits, due

to slow growth of the market in 2013

Combined settlement ratio

: 263.0% (min.) / 15.1%p↑

S/R

Selective introduction, training center reinforcement, strict evaluation

6

27/69

# of Subject

# of Settled

FY2013 Business Plan Summary

Sales Plan (Profit & Loss)

(KRW Bn)

FY2013

YoY

Loss ratio

Long-term 79.7% -0.1%p

(Risk) 83.5% -0.5%p

Auto 84.8% -0.8%p

Commercial 63.6% +9.1%p

Total 80.1% -

Expense ratio 22.3% -1.0%p

Combined ratio 102.3% -1.0%p

Investme

nt

Investment

profits 273.6 +5.9%

(Yield) 4.3% -0.6%p

Net Profits 130.0 +24.2%

ROE 14.9% +0.3%p

(KRW Bn) FY2013

G/R M/S Difference

Long-

term

Initial Premium

(monthly equivalent) 64.4 -3.7% 8.0% +0.1%p

Protection 47.3 -8.2% 11.1% -0.6%p

(Health) 44.8 -9.9% 13.1% -1.2%p

Savings 17.1 11.4% 4.5% +0.8%p

Initial Premium 78.8 -8.4% 6.2% -

Continuous Prem 2,892.8 12.9% 9.0% +0.2%p

Sub total 2,971.6 12.2% 8.9% +0.2%p

Auto

Off-line 497.7 -3.6% 7.4% +0.2%p

On-line 176.0 65.6% 5.9% +1.0%p

Sub total 673.7 8.2% 7.0% +0.5%p

Commercial 252.5 10.2% 5.6% +0.1%p

One-time payment 27.0 -67.1%

Total 3,924.9 9.6% 8.2% +0.3%p

28/69

Note) New Monthly Equivalent Premium : Excludes One-time payment and Annuity / New Premium: Includes Annuity, but excludes one-time payment

FY2013 Business Plan Summary

Balance Sheet

(KRW Bn) FY2013

YoY

Assets

Invested assets 9,114.3 18.8%

Non-invested assets 2,015.1 3.9%

Total 11,129.4 12.6%

Liability

Policy reserve 9,444.9 15.8%

Other liability 441.7 0.2%

Total 9,886.6 11.4%

Total

Shareholder’s

Equity

Capital stock 51.6 6.8%

Capital surplus 313.5 20.0%

Retained earnings 426.8 34.0%

Cat reserve 167.2 9.6%

Capital Adjustment 6.0 -

Other comprehensive

income 444.8 17.1%

Total 1,242.8 22.5%

※ FY2013 YoY : As of 2012. 12

29/69

Beyond Great Leap in 90th anniversary,

“Top Insurer”& “Leading Financial Company”

Sales exceed 4trn

Improve profit strength

Lead the market with

differentiated strategy

(LT Health, core regions, etc)

Prepare groundwork for

growth

Great leap in 90th anniversary

FY2013

~

100th Anniversary FY2012

FY2011

LT Health M/S exceed 13%산 10조원 돌파

The recordable recruitment

Secure 2nd tier level LT Health M/S

Secure economies of scale for auto insurance

Maintain RBC ratio 200%, ROE 15%(min.)

“Countdown 100years”

Switch to a holding

company system

Acknowledgement of

Meritz’s potentials

Best LT Health competiveness in the market

Improve future value

Secure riskless constitution with management stability

Best auto insurance company

→ Best profitability, growth, stability in

the industry

Long Term Business Plan 30/69

(Unit : KRW Bn) CY2013 CY2014 CY2015

YoY Yoy

Direct Premium 5,123.8 5,715.1 11.3% 6,244.9 9.3%

Combined Ratio 102.8% 102.0% -0.8%p 1,01.1% -0.9%p

L/R 80.6% 79.9% -0.7%p 79.6% -0.3%p

E/R 22.2% 22.1% -0.1%p 21.5% -0.6%p

Net Profit 155.8 194.8 23.7% 236.3 21.3%

Total Assets 11,273.9 12,693.1 12.6% 14,024.7 10.5%

Total

Invested

Assets

9,258.8 10,662.0 15.2% 11,945.6 12.0%

※ CY : Jan. ~ Dec.

3 Year Forecast 31/69

FY2012 Embedded Value

Certain of the statements contained herein are statements of future

expectations and other forward looking statements that are based on

management's current view and assumptions and involve known and unknown

risks and uncertainties. In addition, expressions and words which are forward-

looking by reason of context identify forward-looking statements. Actual results,

performance or events may differ materially from those in such statements due to

general economic conditions, performance of financial markets, the frequency

and severity of insured loss events, mortality and morbidity levels and trends,

persistency levels, interest rate levels, general competitive factors, changes in

laws and regulations, changes in the policies of governments and/or regulatory

authorities. Although the embedded value and value of new business results

presented in this document are based on a traditional embedded value

methodology calculated on a deterministic basis, alternative valuation

methodologies and approaches to calculate these results have emerged. Meritz

Insurance assumes no obligation to update any forward-looking information

contained in this report. We also have no obligation or responsibility to

investment made based on such forward looking statements.

Disclaimer

Contents

Ⅵ. Review Statement

Ⅰ. Embedded Value

Ⅱ. Value of New Business (VNB)

Ⅲ. Movement of EV

Ⅳ. P/EV

Ⅴ. Sensitivities

35

Ⅰ. Embedded Value

1. Embedded Value results

2. Adjusted Net Worth (ANW)

3. Value of in-force business (VIB)

4. RoEV

Ⅰ- 1. Embedded Value results

▶ FY2012 Embedded Value : 2,490.2 bn (increased by 336.2 bill (15.6%) from FY11)

Value of in-force business

Adjusted Net Worth

Embedded Value

1,316.6

837.4 159.2

19.0% ↑

336.2 15.6% ↑ 2,154.0

177.0 13.4% ↑

639.3

1,041.7

FY2011 FY2010

1,681.0

1,493.6

996.6

2,490.2

FY2012

198.1 31.0% ↑

473.0 28.1% ↑

274.9 26.4% ↑

36/69

Unit : KRW bn

Ⅰ- 2. Adjusted Net Worth (ANW)

▶ FY2012 ANW : 996.6 bn (increased by 159.2 KRW bn (19.0%) from FY11)

37/69

130.7

-53.2

-25.7

104.9

2.5

Unit : KRW bn

FY2012

837.4

Net

Income

Dividend

Gain from

valuation of AFS

996.6

FY2011

Intangible

Asset Other

Ⅰ- 2. Adjusted Net Worth (ANW)

▶ FY2012 ANW

Category FY2012

(A)

FY2011

(B)

YoY

(A-B) Note

Shareholder’s

Equity (a) 1,086.7 899.0 187.7

•Net Income : +130.7

•Gain from valuation of AFW : 104.9

•Dividend : -53.2

•Intangible Asset : -25.7

※ Declared dividend of 29.0 is included

-90.1 -61.6 -28.5

Allowance for Bad Debt 5.6 7.2 -1.6

Intangible Asset -90.8 -65.1 -25.7

Prepaid Expense -4.9 -3.7 -1.3

Adjusted Net Worth (a+b) 996.6 837.4 159.2

Adjusted Capital (b)

38/69

Unit : KRW bn

Ⅰ- 3. Value of in-force business - Assumptions

▶ Operational Assumption

39/69

Lapse - Based on experience analysis of 3 years’ data by product type and channel

Loss Ratio (L/R) - Analyze past 6 years’ data by 17 benefit categories

- Inforce Business’s PV L/R : FY2011 86.8% , FY2012 84.7%

Expense

- Commission : Applied Meritz’s payment schedule

- Expense cost excluding commission : Experience study on one year’s

experience data

Crediting Rates

- Separately applied for traditional /ISP

→ Crediting rates for ISP are applied by interest type

(declared rates., policy loan , etc)


▶ Economic Assumption

40/69

□ Investment return : 4.10% (FY11 - 4.85%)

(Unit : %) FY2010 FY2011 FY2012

Investment return 5.6 5.6 5.7

Crediting rate 4.3 4.2 4.1

Spread 1.3 1.4 1.6

Govt Bond (3 yrs)* 3.6 3.5 3.0

- Recent 3 years’ spread used for EV - Recent 3 years’ investment experience

(Unit : %) FY2010 FY2011 FY2012

Investment

return 5.0 4.85 4.1

Crediting rate 4.24 4.11 3.62

Spread 0.76 0.74 0.48

■ Meritz’s investment return – actual experience in the spread increased by 20bp from last year,

but taking into account the current low yielding environment , this year’s investment return and

crediting rate decreased by 75bps and by 26 bps respectively from last year.

* Govt Bond (3 yrs): 1 year average preceding to valuation date


▶ Economic Assumption

□ Cost of Capital (Required Capital) : Based on RBC requirement x 150%

※ RBC required capital changes

41/69

Long-term insurance

price risk Mar 2012 Mar 2013

Category Product type Benefit type

Confidence level 95% 99%

Risk factor 26.6% 30.0%

Change 27.7 KRW bn

○ Long-term insurance price risk

Formula

(Investment return – crediting rate) * 0.5

Investment return : 5 yr govt bond’s average

over the last year

+ risk spread (5 yr average)

Change 4.6 KRW bn (Mar 2013)

○ Interest risk negative spread

□ Risk Discount Rate): 10.0% (FY11- 11.0%)

□ Inflation Rate : 3.0%, Tax : 24.2%

Type FY2010 FY2011 FY2012 Remark

Risk Free Rate (govt bond) 4.8 3.6 2.8 Continuous market interest rate

trend is reflected. RDR 11.5% 11.0% 10.0%

* Risk Free Rate (govt bond): as at the end of valuation year

Ⅰ- 3. Value of in-force business (VIB)

▶ VIB = Present Value of Future Profit – Cost of Capital = 1,493.6 KRW bn

Category FY2012 FY2011 YoY

PV of Future Premium (a) 16,437.6 13,851.1 2,586.5 18.7%

PV of Future Profit (b) 1,831.0 1,542.9 288.0 18.7%

Margin (b/a) 11.1% 11.1% +0.0%p

Cost of Capital (c) 337.4 226.3 111.0 49.1%

(c/a) 2.1% 1.6% +0.4%p

Value of In-force Business (d = b - c)

1,493.6 1,316.6 177.0 13.4%

Value Margin (d/a) 9.1% 9.5% -0.4%p

42/69

Unit : KRW bn

Ⅰ- 3. Value of in-force business (VIB)

▶ VIF comparison before and after economic assumption and RBC regulation changes

264.5

1,493.6

1,697.4

-129.5

Current

(after

changes)

68.8

43/69

Unit : KRW bn

Before changes

Investment

return

RDR

Change in

RBC policy

□ Changes in VIF due to economic assumption

and RBC regulation changes

○ Decrease

- A decrease in investment return and spread

: - 264.5 KRW bn

- RBC regulation impact : -68.8 KRW bn

○ Increase

- lowered RDR : +129.5 KRW bn

□ Comparison before and after assumption changes

Category Current Before changes

VIB 1,493.6 1,697.4

YoY 13.4% 28.9%

Unit : KRW bn

▶ RoEV

31.3% 8.4%p ↓

Ⅰ- 4. RoEV

※ EV : Adjusted EV at BOP

FY2010 FY2011

EV(KRW bn) 1,610.0 1,706.9

△EV(KRW bn) 503.6 390.4

FY2012

2,147.7

395.7

22.9% 18.4%

4.5%p ↓

44/69

Ⅱ. Value of New Business (VNB)

Ⅱ. Value of new business (VNB)

▶ Value of 1-year new business : 376.9 KRW bn

Category FY2012 FY2011 YoY

PV of Future Premium (a) 4,775.5 3,776.5 999.0 26.5%

Annualized Premiums equivalent

(b) 1,294.9 1,151.8 143.1 12.3%

PV of Future Profit (c) 439.9 319.4 120.5 37.7%

Margin (c/a) 9.2% 8.5% +0.7%p

Cost of Capital 63.0 45.0 18.0 40.1%

Value of 1-year New Business (d) 376.9 274.4 102.5 37.3%

Profit Margin (d/a) 7.9% 7.3% 0.6%p

Profit Margin on ANP (d/b) 29.1% 23.8% +5.3%p

※ ANP : Annualized premiums equivalent

46/69

Unit : KRW bn

Ⅱ. Value of new business (VNB)

▶ Value of 1-year new business variance

47/69

Category FY2011

Variance

FY2012 Sales

effect

Persistency

rate Loss ratio Expense

Economic

assumption Others

Cumulative Value 274.4 364.4 381.6 434.4 402.7 371.3 376.9 376.9

% - 32.8% 39.1% 58.3% 46.7% 35.3% 37.3% 37.3%

Change Value - 90.0 17.2 52.8 -31.7 -31.4 5.6 102.5

% - 32.8% 6.3% 19.2% -11.6% -11.4% 2.0% 37.3%

※ Sales effect : sales increase/Product Mix, Economic assumption : Discount rate/investment return/Cost of capital, Others : Dividend/Tax

274.4

90.0 17.2

52.8 -31.7 -31.4

5.6 376.9

FY2012 FY2011

Sales effect

Persistency rate Loss ratio

Expense Economic

assumption

Others

Unit : KRW bn

48

Ⅲ. Movement of EV

Ⅲ. Movement of EV

Value of

New Business

FY2011 FY2012

2,154.0

102.4

2,147.7

Adjusted EV

at BOP

-46.7

376.9

14.6

General

Account

investment

Income -98.8

-10.1

-6.3

Model

Change

-208.1

Economic

Assumption

Change RBC

& Tax

(in-force)

18.4

Discount

Unwinding

(new biz)

188.9

Discount

Unwinding

(in-force)

▶ 2,490.2 KRW bn, increased by 336.2 KRW bn

28.4 2,490.2

-109.9

Variances

Changes in NAV

- Dividend : -532 KRW bn

- AOCI: 1,101 KRW bn

- Adjusted Capital : -285 KRW bn

86.5

RDR

49/69

Unit : KRW bn

Operational

Assumption

Change

P&C

Operating

Profit

Change in

Net Asset

Value

Non

operating

profit

50

Ⅳ. P/EV

Ⅳ. P/EV

▶ Stock price, EVPS (EV per share), P/EV

FY2010 FY2011

P/EV

W 12,500

W 19,825

Current (2013.5.22

)

W12,350

W 24,575 0.50x

0.63x 0.58x

W 12,900

W 22,275

51/69

EVPS Stock Price Stock Price Stock Price EVPS EVPS

52

Ⅴ. Sensitivities

Ⅴ. Sensitivities ( In-force business )

-10%

+10%

-10%

+10%

-10%

+10%

+50bp

-50bp

75.0(5%)

-70.4(-5%)

61.2 (4%)

-61.1(-4%)

181.5 (12%)

-196.8 (-13%)

287.0(19%)

-281.2 (-19%)

53/69

Interest※※ Loss ratio

Lapse Expense※

※ Expense sensitivity does not apply to commission and other expenses.

※※ Interest sensitivity includes changes in crediting rate.

Unit : KRW bn

Ⅴ. Sensitivities ( New Business )

-10%

+10%

-10%

+10%

-10%

+10%

+50bp

-50bp

26.4(7%)

-24.6(-7%)

27.9 (7%)

-27.9 (-7%)

26.6 (7%)

-34.6 (-9%)

62.7 (17%)

-62.6 (-17%)

54/69

Unit : KRW bn

Interest※※ Loss ratio

Lapse Expense※

※ Expense sensitivity does not apply to commission and other expenses.

※※ Interest sensitivity includes changes in crediting rate.

Ⅴ. Sensitivities ( Others )

Category Risk Discount Rate

9.0% 10.0% 11.0%

Adjusted Net Worth 996.6

Shareholder’s Equity 1,086.7

Adjusted Capital -90.1

Value of In-force Business 1,640.4 1.493.6 1,364.1

PV of future profit 1,953.4 1,831.0 1,721.8

Cost of Capital 312.9 337.4 357.7

Embedded Value 2,637.0 2,490.2 2,360.7

Value of 1-year New Business 412.0 376.9 345.8

PV of future profit 471.1 439.9 412.0

Cost of Capital 59.0 63.0 66.2

55/69

Unit : KRW bn

56

Ⅵ. Review Statement

Ⅵ. Review Statement - Towers Watson 57/69

Towers Watson has reviewed the methodology and assumptions used to determine the results of Meritz’s Embedded Value as at 31 March 2013 and the value of new business written in the twelve months to 31 March 2013 for the long-term insurance business.

Towers Watson has concluded that:

The methodology used is consistent with recent industry practice for traditional deterministic embedded value reporting in Korea. In particular the values have been based on a deterministic projection of future profits, with allowance for risk through the use of a risk discount rate specified by Meritz and an explicit adjustment for the cost of holding an amount of solvency capital. While this is in line with recent industry practice as regards traditional deterministic embedded value calculations, this may not correspond to a capital markets valuation of such risk (so called “market consistent valuation”);

The operating assumptions have been set with appropriate regard to past, current and expected future experience; and

The economic assumptions used have made allowance for the company's current and expected future asset mix and investment strategy and are internally consistent.

Towers Watson has reviewed the results of the calculations made by Meritz, given the methodology and assumptions set out in this document, by undertaking a number of high-level checks of the models, processes and model outputs, and has confirmed that any issues discovered do not have a material impact on the disclosed embedded value as at 31 March 2013 or the disclosed value of new business written in the twelve months to 31 March 2013 for the long-term insurance business.

In arriving at these conclusions, Towers Watson relied on data and information provided by Meritz. This opinion is made solely to Meritz in accordance with the terms of Towers Watson's engagement letter. To the fullest extent permitted by applicable law, Towers Watson does not accept or assume any responsibility, duty of care or liability to anyone other than Meritz for or in connection with its review work, the opinions it has formed, or for any statement set forth in this opinion.

※ Appendix

- FY2012 Financial Results

Appendix : Sales

(KRW BN) FY2012 FY2011 FY2010 FY2009

Mix G/R Mix G/R Mix G/R G/R

Commercial 297.7 6.2% 11.0% 267.7 6.3% -10.7% 299.7 7.8% -6.9% 321.9 0.6%

Auto 815.6 17.1% 2.5% 796.4 18.7% 2.6% 776.2 20.2% 12.2% 691.8 -4.8%

Long-term 3,579.6 74.9% 14.4% 3,128.7 73.5% 16.6% 2,683.7 70.0% 19.2% 2,252.0 22.1%

New 109.2 2.3% 12.8% 96.8 2.3% 16.8% 82.9 2.2% -6.7% 88.9 17.7%

Recurring 3,470.4 72.6% 14.5% 3,031.8 71.3% 16.6% 2,600.8 67.8% 20.2% 2,163.1 22.3%

One-time pymt 87.4 1.8% 41.9% 61.6 1.4% -19.5% 76.5 2.0% 242.9% 22.3 298.2%

Total 4,780.4 100% 12.4% 4,254.3 100% 10.9% 3,836.1 100% 16.7% 3,288.0 13.5%

M / S FY2012 FY2011 FY2010 FY2009

G/R G/R G/R G/R

Commercial 5.5% 0.0%p 5.5% -1.3%p 6.9% -0.9%p 7.8% -0.6%p

Auto 6.4% 0.3%p 6.1% -0.2%p 6.3% 0.1%p 6.2% -0.4%p

Long-term 8.7% -0.1%p 8.8% -0.2%p 9.0% -0.1%p 9.1% -0.2%p

New 5.8% -1.0%p 6.8% -1.1%p 7.8% -1.3%p 9.1% -0.4%p

Recurring 8.8% -0.1%p 8.9% -0.2%p 9.1% 0.0%p 9.1% -0.1%p

One-time pymt 5.3% 2.9%p 2.4% -7.2%p 9.6% 1.3%p 8.3% 4.8%p

Total 7.8% 0.2%p 7.6% -0.5%p 8.1% 0.0%p 8.1% -0.2%p

59/69

Appendix : Loss Ratio

(KRW Bn) FY2012 FY2011 FY2010 FY2009

G/R G/R G/R G/R

Com -

mercial

Losses 86.0 11.7% 77.0 -22.3% 88.4 74.7% 50.6 -81.1%

Earned prem 119.6 0.5% 119.0 -6.3% 127.0 -3.1% 131.1 -7.0%

Loss ratio

( w/o RG) 71.9% 7.1%p 64.8% -4.9%p 69.7% 10.4%p

59.3%

(38.6%)

-1.8%p (-151.3%p)

Auto

Losses 653.1 1.2% 645.1 8.7% 545.7 5.1% 519.0 10.4%

Earned prem 7,55.2 -1.7% 768.5 13.1% 679.5 -1.1% 687.2 2.1%

Loss ratio 86.5% 2.6%p 83.9% -3.6%p 80.3% 4.8%p 75.5% 5.6%p

Long-

term

Losses 2,888.8 14.4% 2,524.2 15.6% 2,161.6 25.2% 1,727.2 22.1%

Earned prem 3,624.8 15.1% 3,149.8 15.8% 2,719.8 22.1% 2,228.1 24.1%

Loss ratio 79.7% -0.4%p 80.1% -0.2%p 79.5% 2.0%p 77.5% -1.3%p

LT risk L/R (w/ IBNR) 84.0% -3.1%p 87.1% 1.1%p 86.0% 1.8%p 84.2% 3.6%p

LT risk L/R (w/o IBNR) 81.8% -2.1%p 83.9% - 83.2% 5.7%p 77.5% 2.2%p

Total

Losses 3,627.9 -1.6% 4,037.3 12.8% 2,795.7 21.7% 2,296.8 6.7%

Earned prem 4,499.6 11.5% 3,686.8 14.5% 3,526.3 15.8% 3,046.4 16.7%

Loss ratio 80.6% 0.2%p 80.4% -1.2%p 79.3% 3.9%p 75.4% -7.1%p

60/69

Note1) Commercial L/R in ( ) includes RG losses, Note2) FY2011, FY2012 figures are based on K-IFRS

Appendix : Expense Ratio

(KRW Bn) FY2012 FY2011 FY2010 FY2009

G/R G/R G/R G/R

Expenses 1,070.8 22.3% 875.5 2.1% 857.9 7.3% 736.7 8.6%

Wages &

benefits 155.5 -4.4% 162.6 -8.7% 178.0 7.7% 155.2 6.5%

Administrative 254.7 20.9% 210.6 10.4% 190.8 25.0% 143.5 6.4%

Sales-related 657.3 31.6% 499.5 10.7% 451.0 -0.1% 411.4 9.7%

Other expenses 3.3 13.8% 2.9 -92.5% 38.1 24.5% 26.6 15.0%

Expenses recovered 37.8 2.7% 36.8 -14.0% 42.8 -9.9% 53.2 -10.7%

Net expenses 133.1 -84.1% 838.7 2.9% 815.1 8.3% 683.5 10.1%

Gross premium earned 4,499.6 11.5% 4,037.3 14.5% 3,526.3 15.8% 2,609.8 16.7%

Expense Ratio 23.0% 2.2%p 20.8% -2.3%p 23.1% -1.6%p 26.2% -1.5%p

Admin Expense

Ratio 8.8% -0.2%p 9.0% -2.0%p 11.0% -0.1%p 11.9% -0.8%p

Sales Expense

Ratio 14.2% 2.4%p 11.8% -0.3%p 12.1% -1.5%p 14.3% -0.7%p

Combined Ratio 103.6% 2.4%p 101.2% -1.2%p 102.4% 2.3%p 100.1% -8.6%p

61/69

Note1) FY2011, FY2012 figures are based on K-IFRS Note2) Sales-related expenses: acquisition cost/collection fees, commissions paid to agencies, acquisition cost, amortization, deferred acquisition cost, etc Note3) Other expenses: loss adjustment expenses, co-insurance paid, reinsurance commission paid, etc Note4) Expenses recovered: claim service fee recovered, R/I commission received, etc Note5) Sales expenses: collection fees and agencies commissions/ Admin cost: Labor cost excluding sales cost, maintenance cost

Appendix : Long-term Product Portfolio

(KRW Bn) FY2012 Mix FY2011 Mix FY2010 Mix FY2009 Mix

Protection-type 2,892.1 78.9% 2,544.0 79.3% 2,227.3 80.7% 1,922.1 84.5%

Accident 2,242.2 61.1% 1,846.3 57.5% 1,545.6 56.0% 1,270.0 55.8%

Drivers 328.8 9.0% 343.8 10.7% 345.3 12.5% 316.1 13.9%

Property 185.1 5.1% 208.5 6.5% 175.1 6.3% 157.6 6.9%

Disease 97.0 2.6% 108.4 3.4% 121.0 4.4% 136.5 6.0%

Bundle 39.0 1.1% 39.7 1.2% 40.3 1.5% 41.9 1.8%

Personal annuities 106.2 2.9% 95.8 3.0% 86.2 3.1% 77.5 3.4%

Savings 669.0 18.2% 568.9 17.7% 446.7 16.2% 274.5 12.1%

Total 3,667.3 100.0% 3,208.7 100.0% 2,760.2 100.0% 2,274.1 100.0%

Risk+loading premiums 1,654.3 45.1% 1,435.1 45.3% 1,233.3 44.7% 1,012.0 44.5%

Savings premiums 2,013.0 54.9% 1,773.6 54.7% 1,526.9 55.3% 1,262.1 55.5%

13th month persistency 76.1% -3.5%p 79.6% +0.4%p 79.2% -0.4%p 79.6% 6.0%p

25th month persistency 67.0% +2.9%p 64.1% -5.8%p 69.9% 12.4%p 57.5% -5.3%p

62/69

Note) Including one-time payment. Persistency: 6 month average

Appendix : Long-term Product Portfolio 63/69

Category

FY2012 FY2011 FY2010 FY2009

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

Death coverage 42.6% 19.7% 39.6% 20.9% 38.0% 22.0% 34.6% 22.4%

Living benefits 97.4% 65.2% 103.8% 62.2% 105.6% 60.4% 102.2% 60.1%

Medical

treatment 108.2% 38.4% 114.1% 36.3% 113.0% 35.5% 108.7% 35.4%

Daily allowance 90.0% 12.0% 99.5% 12.3% 111.3% 12.3% 101.1% 12.8%

Disease 83.3% 10.1% 90.2% 9.2% 88.4% 8.4% 90.4% 8.0%

Other 58.1% 4.7% 59.1% 4.4% 60.3% 4.1% 70.6% 3.9%

Property/other 45.6% 15.1% 49.7% 16.9% 55.1% 17.7% 56.5% 17.6%

Total 78.8% 100.0% 81.2% 100.0% 81.8% 100.0% 79.1% 100.0%

Note1) Loss Ratio: As of Gross Premiums Written, excluding IBN Note2) 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 Funding Cost & ALM

Long-term FY2012 FY2011 FY2010 FY2009

Funding Cost 3.94% 4.21% 4.19% 4.34%

Fixed 4.06% 5.14% 5.19% 5.36%

Variable 3.88% 4.12% 4.06% 4.16%

Fixed mix 33.2% 9.1% 11.4% 15.3%

Variable mix 66.8% 90.9% 88.6% 84.7%

Investment yield 5.7% 5.6% 5.6% 5.8%

Spread 1.7%p 1.4%p 1.4%p 1.5%p

ALM FY2012(E) FY2011 FY2010 FY2009

Asset Duration 4.43 3.88 4.21 3.92

Bond Duration 6.40 5.43 6.30 5.60

Liability Duration 5.28 4.61 5.04 4.90

Matching ratio 83.9% 84.2% 83.5% 80.0%

Note1) Subject : LT/Pension account, Funding cost: Monthly basis, Investment yield is YTM

Note2) RBC Duration : : FY2009 Asset 4.34, Liability 4.08 FY2011 Asset 4.02, Liability 3.35

FY2010 Asset 4.73, Liability 4.16 FY2012 Asset 4.68, Liability 4.23

64/69

Appendix : Investment Assets Portfolio

(KRW Bn)

FY2012 FY2011 FY2010 FY2009

G/R Mix YTD Mix Mix Mix

Cash & equivalents 460.3 14.6% 5.8% -0.2%p 401.5 6.0% 343.7 6.4% 222.2 4.8%

Equities 177.9 6.0% 2.2% -0.3%p 167.9 2.5% 196.9 3.7% 126.3 2.7%

Trading 0 - - - 0 - 45.6 0.9% 0 0.0%

Available-for-sale 177.9 6.0% 2.2% -0.2%p 167.9 2.5% 151.3 2.8% 126.3 2.7%

Equity-method

stakes 4.5 60.7% 0.1% 0.1%p 2.8 0.0% 2.8 0.1% 190.2 4.1%

Domestic bonds 3,120.4 21.0% 39.0% 0.2%p 2,579.2 38.8% 1,887.9 35.2% 1,597.6 34.5%

Investment funds 1,059.5 44.2% 13.3% 2.2%p 734.9 11.1% 651.2 12.1% 525.4 11.4%

Overseas securities 704.0 15.3% 9.1% -0.1%p 610.4 9.2% 499.7 9.3% 446.1 9.6%

Other 120.5 -21.4% 1.5% -0.8%p 153.3 2.3% 113.8 2.1% 62.1 1.3%

Loans 1,500.2 21.2% 18.8% 0.2%p 1,237.4 18.6% 954.3 17.8% 790.2 17.1%

Real estate 822.5 9.0% 10.3% -1.1%p 754.8 11.4% 717.2 13.4% 667.3 14.4%

Investment assets 7,995.8 20.4% 100% - 6,642.2 100% 5,367.5 100.0% 4,627.6 100.0%

Investment yield 4.8% 0.2%p - - 4.6% - 5.3% - 4.9% -

65/69

Note) FY2011, FY2012 figures are based on K-IFRS

Appendix : Loan Quality

(KRW Bn) FY2012 FY2011 FY2010 FY2009

Normal 1,494.0 1,231.2 943.3 784.2

Precautionary 8.9 0.3 0.5 11.2

Substandard 5.0 11.6 15.0 3.4

Doubtful 0.0 8.5 13.2 3.8

Estimated Loss 9.2 6.6 3.2 2.0

Total 1,517.1 1,258.2 975.2 804.6

NPL ratio 0.94% 2.12% 3.22% 1.14%

Provisions 23.1 26.0 19.7 13.3

Coverage ratio 162.6% 97.2% 62.6% 144.6%

Delinquency ratio 0.28% 0.74% 1.45% 2.45%

Retail

0.57% 0.79% 0.98% 1.02%

Corporate

0.07% 0.68% 2.12% 4.67%

(KRW Bn) FY2012 FY2011 FY2010 FY2009

Retail loan 626.6 686.9 571.7 503.8

Credit 0.0 0.0 0.0 0.0

Secured 254.9 337.2 273.2 228.6

Policyholder 371.7 349.7 298.5 275.1

Corporate loan 890.5 571.3 403.5 300.8

Credit 138.1 97.8 80.2 47.5

Secured 236.5 133.2 130.7 44.6

SOC related 245.8 142.5 65.7 50.8

PF

270.1 197.8 126.9 157.9

Total 1517.1 1,258.2 975.2 804.6

Discounts

difference in

Present value

-1.1 -1.2 0 0

Bad debt

Allowance -16.6 -21.0 -19.7 -13.3

Additional

deferred loan

income

0.8 1.4 -1.2 -1.1

Net Total Loan 1,500.2 12,374 954.3 7,902

66/69

Note1) NPL ratio = Substandard & below /Total

Note2) Based on K-IFRS

Note3) Coverage ratio = Total Provision / substandard & below

Note4) FSB Standard (including retirement accounts, 30 days Overdue

principal and interest, Delinquency on Policyholder loan)

※ FY2011, FY2012 is based on K-IFRS, others are K-GAAP Note1) Corporate Credit : Including Unsecured private placement bonds Note2) Corporate secured : Including mortgage bond, RP, CP Note3) SOC related : including development enterprise loan

Note1)

Note2)

Note3)

Note4)

Note1)

Note2)

Note3)

(KRW Bn)

Appendix : PF Loan

Debtor Site/Project Constructor Loan

amount Maturity NPL Remark

Saenal, Co. Gimpo apartment Shindongah, NamKwang,

Chonggu 10.8 ’14-12-31

Pre-

cautionary,

fixed

81.8% is reserved in bad debt allowance

N-mode House, Co. Wonhyo-ro Complex

(Office & apartment)

Prime Construction,

Dongah Construction

8.1 ‘14-04-09 Pre-

cautionary

As of Mar 74.6% in process (Planned

process 81.5%) / 93.7% Contracted

C-First, LLC Chong-na Complex

(Office & apartment) PF ABL POSCO

Engineering 13.0 ‘13-06-15 Normal As of Mar 100% in process (Planned

process 100%) / 96.5% contracted

Song-do Global Complex Development, Co.

Song-do A3 block apartment Lotte

Engineering & Construction

5.0 ‘13-11-30 Normal As of Mar 87.29% in process (Planned

process 87.32%) / 85.1% contracted

S.L D&C, Ltd Chun-ho Dong Complex

(Office & apartment) Samsung C&T Corporation 34.3 ’16-06-24 Normal Permit in progress

White Korea, Ltd Kangseo Kayang GS Xi

mixed-use development GS Cons 21.8 ’14-03-28 Normal

As of Mar 81% in process (Planned


Digiprism Co., Ltd Uiwang Poil Information

Technology Center

Samsung Heavy

Indurtries 28.9 ‘14-09-26 Normal

As of Mar 37.4% in process (Planned


Karkas Ⅰ, LLC Cheon-an Sungsung-dong

City Development Daewoo E&C 30.0 ‘13-10-28 Normal Permit in progress

SC Co., Ltd Yongin Dongbaek

Healthcare Town GS Cons 40.0 ‘13-08-17 Normal

Start constructing and contracting in 1H

of 2013

Central Janggyo Co., Ltd Janggyo District 4

Hotel Development Daelim 48.3 ‘14-03-18 Normal Permit in progress

Minrak District 2

House Development REITs

Minrak District 2 Block 8

Development Daewoo E&C 4.95 ‘16-09-28 Normal Permit in progress

JWL Co., Ltd Gwangju Dochuck Distribution

Center Development LSIS 25 ‘13-10-18 Normal Permit in progress

Total 270.15

67/69

Appendix : P & L

(KRW Bn) FY2012 FY2011 FY2010 FY2009

G/R G/R G/R G/R

Net premium earned 4,499.5 11.4% 4,037.3 14.5% 3,526.3 15.8% 3,046.4 16.7%

Gross premium written 4,780.4 12.4% 4,254.3 10.9% 3,836.1 16.7% 3,288.0 13.5%

Net premium written 4,530.4 12.7% 4,019.5 12.0% 3,590.4 18.9% 3,020.9 14.8%

Incurred losses 153.0 -88.9% 1,380.3 10.3% 2,795.7 18.2% 993.2 -2.7%

Refund of LT insurance

polices 948.0 29.4% 732.7 8.2% 673.7 2.6% 656.8 -1.0%

Net operating expenses 1,033.2 23.2% 838.7 14.2% 815.1 8.3% 752.4 10.1%

Incr in premium reserves

for LT savings 1,170.7 3.7% 1,129.0 20.1% 940.3 47.2% 638.9 37.2%

Net incr in policyholders’

dividend reserves 5.5 25.0% 4.4 -44.5% 7.4 -6.0% 7.9 182.1%

Incr in catastrophe reserves - - - - 11.3 -17.0% 13.6 -

Underwriting income -160.9 - -47.8 - -95.8 - -16.4 -

Investment income 463.8 72.7% 268.6 15.2% 257.0 23.8% 207.6 95.5%

Non-operating income -10.1 215.6% -3.2 - -4.9 - -4.0 -

Ordinary income 172.3 -20.8% 217.5 52.1% 156.3 -16.5% 187.2 -

Incurred tax expenses 41.6 -21.4% 52.9 55.5% 35.4 -24.3% 46.8 -

Net income 130.7 -20.6% 164.6 51.1% 120.9 -13.9% 140.4 -

68/69


Appendix : B/S

(KRW Bn) FY2012 FY2011 FY2010 FY2009

G/R G/R G/R G/R

Total assets 10,158.4 17.4% 8,654.5 24.1% 6,973.9 15.6% 6,035.0 14.6%

Investment assets 7,995.8 20.4% 6,642.2 23.7% 5,367.5 16.0% 4,627.6 11.8%

Non-invested assets 2,162.6 7.5% 2,012.3 25.3% 1,606.4 14.1% 1,407.4 24.9%

Total liabilities 9,071.7 17.0% 7,755.5 22.0% 6,358.3 18.7% 5,355.0 10.6%

Policy reserves 8,405.2 18.4% 7,101.3 24.5% 5,702.1 21.4% 4,697.0 11.9%

Cat reserves 153.3 7.4% 142.8 9.2% 130.8 9.5% 119.4 12.9%

Other liabilities 666.6 1.9% 654.2 24.5% 525.4 -2.5% 538.9 0.2%

Total shareholders’

equity 1,086.7 20.9% 899.0 46.0% 615.6 -9.5% 680.0 59.8%

Capital stock 48.4 0.0% 48.4 11.0% 43.6 -29.5% 61.9 0.0%

Capital surplus 261.3 0.0% 261.3 53.3% 170.4 -27.7% 235.8 0.6%

Retained earnings 326.2 21.7% 268.0 -30.7% 386.8 29.9% 297.8 89.2%

Capital adjustment 6.0 15.4% 5.2 - -250.9 - -116.6 -

Solvency margin ratio - - - - 162.9% -68.0%p 230.9% 41.0%p

RBC Ratio 183.1% 7.0%p 176.1% -22.8%p 198.9% -70.8%p 269.7% -

69/69


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