© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 GLOBAL PROGRAMS Structuring insurance programs for multinationals in an increasingly globalized environment Thisiani Matsumura Martins Technical Officer Brazil Insurance XL Group XI Congreso ALARYS

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Agenda 2 Progress means risk What is a Global Program? Who should buy a global program? What are the benefits of a Global Program? Key elements of a Global Program How is a Global Program structured Key Parties involved at Master Level How to pick the right partner? Summary

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Progress means risk 3 88% of multilatinas plan to explore new markets over the next 3 to 5 years. In 2010, there were 95 companies with operation outside Brazil. In 2014, 400 Brazilian companies were operating in 56 countries. Moving into new markets and territories could expose your company to different liabilities and regulations: Whether you're bringing existing product to these markets; or Establishing operations. There could be implications to your company’s premises, working practices and staff.

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 What is a Global Program? 4 A Global Program is an insurance structure involving a master policy in one country with one or more local policies issued in another country(ies) – e.g. master policy in Germany, with local policies in Brazil, France, Japan, USA, … A Global Program with a master policy and coordinated local policies including DIC/DIL master cover Individual and independent local policies in each of the countries Master Policy providing Difference in Condition (DIC) and Difference in Limits (DIL) cover either on a licensed, Permissible Unlicensed (PUC) or Financial Interest (FI) basis Master Policy Country A Local Policy Country B Local Policy Country C Local Policy Country D Local Policy Country E Policy Country A Policy Country B Policy Country C Policy Country D

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Who should buy a global program? 5 Multinational corporations… with exposure / locations in more than one country with centralized Risk Management / decision making wanting to (or mandated by law to) buy consistent insurance coverage for the worldwide exposure / locations of the corporation

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 What are the benefits of a Global Program over standalone policies? 6 Consistency of worldwide coverage through one master policy providing DIC/DIL cover around local policies Cost savings through purchasing power, no overlaps of coverage Centralized purchasing decision Client’s centralized Risk Management department - instead of individual local entities - makes insurance purchasing decisions Efficient Insured working with one global carrier, not 20+ local carriers

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 What are the benefits of a Global Program over standalone policies? (con't) 7 Gain time Client‘s Risk Management department time freed up to concentrate on business and loss prevention Centralize risk control effectively mitigate exposures and operational risks of multinational corporations Ease of access to information A Global Program drives the availability of information (e.g. loss reports) on a worldwide basis for effective risk quantification Facilitate reinsurance to captives / 3rd party reinsurers Less administrative work carrier handles administration, not the insured

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Key elements of a Global Program Master policy providing Difference in Conditions (DIC) / Difference in Limits (DIL) cover either on a licensed, Permissible Unlicensed Cover (PUC) or Financial Interest (FI) basis to provide seamless and comprehensive global cover. “Program clause” explains the relationship between master and local policies and may seek to impose a program aggregate limit and / or simultaneous termination of local policies upon termination of the master policy 8 Master Policy providing Difference in Condition (DIC) and Difference in Limits (DIL) cover either on a licensed, Permissible Unlicensed (PUC) or Financial Interest (FI) basis Master Policy Country A Local Policy Country B Local Policy Country C Local Policy Country D Local Policy Country E

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Types of Global Program structures 9

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Possible Structures of Global Programs Quota Share 10 Coinsurer or reinsurer participates on a quota share basis on master policy plus some or all local policies Master policy is issued by XL carrier, e.g. XL Insurance Company SE (XLICSE) in Germany. Co-insurers write lines on the master policy as a following market to XL. Local policies will be written 100% by either XL carriers, e.g. XL Seguros Brasil S.A or a Fronting Partner (FP) company. Co-insurers on the master policy reinsure the local XL entity on local policies. FPs are reinsured by XLICSE (the reinsurer for all FP policies) for 100% or the maximum permissible percentage where compulsory local retentions apply. Master Policy Country A Local Policy Country E Local Policy Country D Local Policy Country C Local Policy Country B

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Possible Structures of Global Programs Excess of Loss 11 Master Policy Country A Local Policy Country B Local Policy Country C Local Policy Country D Local Policy Country E Coinsurer or reinsurer participates on an excess of loss basis on master policy, sometimes also on some or all local policies Any combination of quota share and excess of loss structures as well as co- insurance and reinsurance set-ups are possible. Details on set up of policies and cessions are outlined on previous slide about quota share

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 Key parties involved at master level Master insurer “Owns” insurer’s business relationship with client and provides risk assessment for Global Program as a whole, providing underwriting expertise as necessary to “incoming” (local policy) underwriters, and recommending pricing. Risk assessment performed with inputs from risk engineers and network incoming underwriters (owned entities as well as Fronting Partners) Shares/cedes capacities to other carriers as per broker/client request Master broker Submission to Insurer in the name of master client for worldwide solution, submission includes risk information such as insurable values etc. on a worldwide basis Defines lead insurer for Global Program plus possibly places some capacities on a reinsurance or coinsurance basis with other (re)insurers 12 Master client Provides risk relevant information to broker (and possibly directly to insurer), instructs broker to get offers based on risk management concept and needs Accepts offer for program setup, signs master policy Defines lead insurer plus possible other carriers on the Global Program

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 How to pick the right partner? 13 Choose a Global Program provider who offers: Product and Underwriting expertise Global coverage provided by owned offices and Fronting Partners Worldwide IT platform Excellente service – premium flow, policy issuance, claims handling Global tax and regulatory compliance Building a Risk Management Culture

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 In summary 14 Talk to your insurer if you're a multinational corporation with existing or planned exposure in 1+ countries Having a Global Program can have many benefits for your company: Consistency and overview of worldwide coverage Cost savings Centralized purchasing decision and risk control Efficient and gain in time Ease of access to information Facilitate reinsurance Less administrative work

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 About XL Group plc XL Group plc, through its subsidiaries, is a global insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world. Our insurance segment offers property, casualty, professional and specialty insurance products globally. Businesses that are moving the world forward choose us as their partner. To learn more, visit xlgroup.com/insurancexlgroup.com/insurance Our reinsurance segment is one of the leading reinsurers in the world. It offers products that include aerospace, property, casualty, marine and specialty. The world’s top insurers choose us to help move their businesses forward. To learn more, visit xlgroup.com/reinsurancexlgroup.com/reinsurance We are the organization clients look to for answers to their most complex risks and to help move their world forward. To learn more, visit xlgroup.comxlgroup.com The global program products and structures used by XL Insurance carriers are designed to address and minimise licensing and tax compliance risk for their insured clients. However XL cannot guarantee that programs conclusively eliminate all risks, or that no further risks exist or will arise in future. Rules and regulations are stated as XL believes them currently to be to the best of its knowledge. However, actual and prospective insureds and intermediaries are advised to take their own independent professional advice. 15

© 2014, XL Group plc companies. All rights reserved. I MAKE YOUR WORLD GO Yellow R= 255 G= 255 B= 0 Orange R= 244 G= 121 B= 32 Magenta R= 236 G= 0 B= 14- Red R= 237 G= 28 B= 36 Lt Green R= 141 G= 198 B= 63 Green R= 57 G= 181 B= 74 Cyan R= 0 G= 174 B= 239 Dk Blue R= 45 G= 49 B= 146 Yellow 2 R= 213 G= 206 B= 146 Orange 2 R= 203 G= 125 B= 101 Mag 2 R= 182 G= 114 B= 146 Red 2 R= 239 G= 63 B= 107 LG2 R= 156 G= 162 B=63 Green 2 R= 0 G= 137 B= 143 Cyan 2 R= 0 G= 182 B= 190 DB2 R= 0 G= 65 B= 89 GLOBAL PROGRAMS Structuring insurance programmes for multinationals in an increasingly globalised environment Thisiani Matsumura Martins Technical Officer Brazil Insurance XL Group 6 th ALARYS congress