Innovate Products and Services Greg Meyer, COO, CSAA Insurance Group Nick Eppinger, Sr. VP Insurance Sales & Membership, AAA Mid Atlantic CREATE THE PERFECT CUSTOMER EXPERIENCE EXPAND DISTRIBUTION AND GROW MEMBERSHIP CONNECT TO THE DIGITAL WORLD GROW RUN TRANSFORM FOSTER A CULTURE OF INSIGHT AND INNOVATION COMPLETE AND OPTIMIZE OUR MEMBER-CENTRIC PLATFORM ACCELERATE AND INNOVATE PRODUCTS AND SERVICES Before I speak about IP&S, our #1 priority is to continue to improve transactional quality through continuous monitoring, identifying problems, and mitigate member impacts   I am also going to provide a quick review of SS. Please keep in mind he difference between SS rating and underwriting models and PAS which is our policy administration platform. Finally, when we talk about our efforts to A & I P & S Nick Eppinger is going to join me give us his view on the exciting rollout of the New UBI in mid atlantic

Signature Series Signature Series Schedule Auto – Launched in all states except CA Home – Launched late 2014 in AZ, PA, VA, NJ Will launch in all other states, excluding CA, by late 2016 Convert existing book by year-end 2017 Signature Series Design Homeowners Leverages affinity and unique data of 19.7 million members Member loyalty benefits: By peril rating Territorial factor refinement (to reflect risk concentrations) Inclusion of CAT-specific rating variables (e.g., elevation and distance to coast) Expanded number of market tiers Incorporate Signature Series Auto rating variables By any measure we use to assess SS is market leading – rating factors, price dispersion and granularity _ most importantly SS offers highly competitive and sustainable rate for target high retention and high life time value members.  

Signature Series Auto Results MULTILINE VS MONOLINE CLOSE RATIO – (ALL) 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Multiline Monoline Close Ratios Close ratio for multi-line members is extraordinary relative to market (varies by state) Market-leading price segmentation plan highly competitive for lowest loss frequency, high retention and high lifetime value members. Superior insurance risk selection creates sustainable competitive pricing Success in target segments also presents challenges in “Competitive” tiers 100% 80% 60% 40% 20% 0% J I H G E D C B A F (Best) (Worst) Annualized Retention % (Includes mid-term cancellations)

Accelerate and Innovate Products and Services AutoPay Connected Home Market Joint-Use Vehicles UBI We are going to briefly review our plans for …

Create Usage-Based Offering for Members Foundational Competitively priced UBI product Competitive Telematics benefits via a mobile app that displays driving stats Leading UBI compatible with multiple devices that incorporates connected-car technologies Integral part of a connected car AAA Arizona distributes 3,000 units in 2014 Metromile offers mobile app with telematics dongle so users can view vehicle location, miles driven, and engine status Progressive and telematics providers including OnStar launch next-gen connected car capabilities UBI UBI is a core component of automobile insurance. Over 20% of members will purchase our new UBI product, UBI gives members ability to manage the cost of their insurance UBI is being shown to reduce the riskiness of young drivers over time in longitudinal studies The companies who offer UBI discounts will attract and retain the cohorts of young lower risk drivers   I am going to ask Nick Eppinger to speak about UBI

Address Growing Trends of Sharing Economy Foundational Develop ride-sharing endorsements in key markets Competitive Partner with sharing companies to distribute products and stay abreast of emerging trends Leading Partner with sharing companies to distribute products and stay abreast of emerging trends MetLife partnered with Lyft to develop and distribute product for rideshare drivers Note: Rideshare and Home-Share markets uncertain – competitors cautious Of course consumers change over time and one of the best examples is the proliferation of the sharing economy. We need to make sure that we offer members the same level of protection and security if they are operating their vehicle part time commercially. By showoff hands, how many people in the audience have used UBER or LYFT? In 2015 our plan is to design and file a RS product Joint-Use Vehicles

Enter Connected Home Market Foundational Offer policy discounts to customers with connected home features Competitive Partner with connected home companies to streamline insurance discount offerings with connected home products Leading Partner with sharing companies (i.e., TNCs) to distribute products and keep abreast of emerging trends Connected Home Market State Farm offers “Control Your Home, Protect Your Family and Save Up to 10% with Home Automation and Security” Liberty Mutual and Vivint, one of the nation’s largest home automation companies, jointly offer insurance discounts with the purchase of connected home products Home technology is undergoing dramatic change and the reliability and cost of technology will continue to drive utilization. With the IGs investment in UBI, we are developing the same processing capabilities and expertise required to process and analyze vast amounts of connected home data.

Create E-Products for Simplicity Foundational Eliminate certain fees or provide discounts for some mix of e-doc delivery, auto-pay, and self-service Competitive Deliver complete, easy-to-use online purchase with consultative tools packaged with e-docs, auto-pay & self-service – full e-product” experience Leading Allow for seamless migration to other channels during the lifecycle of the policy, especially at or after renewal – including assignment to local agent Allstate offers 10% eSmart discount for an ePolicy Progressive discounts Sign online Internet (originate quote online) Paperless (bills/docs via email) Esurance Coverage Counselor gives users a few simple questions to answer for a list of coverages to consider Bank of America offers low-balance checking accounts (ATM or online-only) to some segments, e.g., college students, upgrading to no-fee access to tellers and other services as balances grow Of course we need to offer members an experience when, where, and how they want. Each year, an increasing percent of consumers (especially younger consumers) want to transact with their company digitally. They also want lower costs. E products offer significant reductions in costs, satisfy a preferred method of interaction for a growing % of members, and allow us to offer more competitive prices.   E products will be one of the tactics we use to drive expenses and prices lower for younger drivers I am going to turn it back over to Deb E-Products AutoPay