© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Employee Benefits Broker success story worldwide March 2, 2007

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Contents A history of Employee Benefits (UK) Employee Benefits Drivers Contemporary Employee Benefits Menu Complexity creates Intermediation opportunities Clients feedback Employee Benefits Drivers in Romania Romanian Employee Benefits Menu Focus on base pay Challenges for Romanian Brokers Aviva Romania Pillar III and Pillar II

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide A History of Employee Benefits (UK) 19 th century – employee benefits were offered for business reason, moral reason (moral duty to look after their employees) or both 20 th century – state started to bring in benefits for population – benefits as unemployment insurance, sick pay and state pension During 1980s for political and economical reason, the welfare state was reined back and many state benefits means tested. During 1990s organisations starts to adopt a bundle of financial and non-financial rewards (such as flexi-time or home working)

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Employee Benefits Drivers EMPLOYEE BENEFITS Labour Market Employment Law Social Security Provision Socio – Demographic

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Contemporary Employee Benefits Menu Quality of work Work/Life Balance Inspiration / Values Enabling Environment Growth / Opportunity Engagement Factors Tangible Benefits Cars Clubs Discounts Active Benefits Retirement Health and Welfare Holiday Passive Benefits Stock / Equity Performance Shares Long Term Rewards / Incentive Annual Incentive Bonus / Split Awards Team Awards Short Term Variable Base Salary Hourly Wage Base Cash Intrinsic Extrinsic Elements which contribute to internal value or motivation All the things to which we can assign a monetary value Source: Hay

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Complexity creates intermediation opportunities …… Independent Brokers Direct EmergingDevelopingMature Type AMature Type B Independent Brokers Multinational Brokers Independent Brokers Direct Network Brokers Multinational Brokers Direct Multinational Brokers Employee Benefits Specialist Direct Independent Brokers Network Brokers

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide …. as evident in client feedback Customer Satisfaction Criteria Source: World Insurance Report

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Employee Benefits Drivers in Romania EMPLOYEE BENEFITS Labor Market increasingly competitive limited mobility Employment Law harmonization with EU structural changes Social Security Provision increasing awareness limited capabilities Socio – Demographic consumption culture young but ageing population

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Romanian Employee Benefits Menu Quality of work Work/Life Balance Inspiration / Values Enabling Environment Growth / Opportunity Engagement Factors Tangible Benefits Cars Clubs Discounts Active Benefits Retirement Health and Welfare Holiday Passive Benefits Stock / Equity Performance Shares Long Term Rewards / Incentive Annual Incentive Bonus / Split Awards Team Awards Short Term Variable Base Salary Hourly Wage Base Cash Intrinsic Extrinsic Elements which contribute to internal value or motivation All the things to which we can assign a monetary value Source: Hay

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Focus on direct or indirect base pay Source: Price Waterhouse Coopers

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide The Challenges for Romanian Brokers Find the “right” client: -Price Focused – likely to relinquish advise for a cheaper price -Relationship Focused – they will use an adviser when purchasing any product, including very basic ones -Non - Committals – they make each decision based on market circumstances. However, they all value after sales service more than the product -Product Focused – focus on product first and foremost. Depending on the product Became Employee Benefits experts / specialists

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Aviva Romania and Employee Benefits Protection Products Health Products Private Pension Pooling partner

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide Pillar III and Pillar II window of opportunity Adoption of private pension (Pillar III) by employers is likely to happen in waves -16 % of the companies will be Early Adopters (Multinationals) -34 % will be Early Majority (Large Industrials) -Late Majority will be represented by Mid-sized & large domestic companies and represent 34 % -Last 10 % of the companies will be Laggards (Small companies) Adoption for Pillar II has to be completed in 4 months as provided by law, being thus a huge opportunity for brokers to help their clients achieving this target

© Aviva Asigurari de Viata RomaniaEmployee Benefits – Broker success story worldwide