Introduction to Multinational PoolingSylvia M. Alvariño

Director of the Americas

Multinational Benefit Associates, Inc.

dba Insurope

September 14, 2017

The Prudential Insurance Company of America (Prudential)

0308968-00001-001

Introduction to Multinational Pooling

►The Insurope Network

►The advantages of Insurope pooling solutions

►Market trends and developments

2

The Insurope Network

About Insurope

4

Key Figures for Insurope

5

Sources: 2016 Insurope’s Client Database and the 2017 Pooling Networks’ Survey

High Client Satisfaction and Loyalty

6

97% 93% 80%

Likelihood of continuing the

pooling agreement with Insurope

Multinational clients who would recommend

Insurope

Satisfaction with Insurope

From Insurope’s satisfaction and market surveys 2015 and 2016

The Advantages of Insurope Pooling Solutions

Multinational Pooling – Our Structure

8

MultinationalProgram

Network Member

Network Member Local

contract

Local contract

Advantages of Multinational Pooling with Insurope

9

Better terms and conditions (i.e. High Free Cover Limit), which makes it easier to insure employees with high benefits

Reporting, information and pool analysis tools

Account Management support and coordination

Strong local Network Members

Reduced costs through international dividends, which can be paid locally

Possible to set up local one-country pool

10

Market Segmentation and Solutions

Large Multinationals

> 1,500 lives

• Single Employer pool

• Flexible solutions

• Variety of risk solutions

• Risk result depending onown results and experience

• Possible to set up a local“One Country” pool

Small Multinationals

< 1,500 lives

• Multi-employer pool

• Standardized risk solution

• Unique payout method

• Average pay-out of 18.5%last 5 years

• Possible to set up a local“One Country” pool

Products and Services

11

RISK SPECTRUM

To w a r d s m o r e p r o t e c t i o n

LCF RO 5 RO 3 RO 2 2ySL SL

Carry forward Stop loss

A more “self-insured” approach A more “insured” approach

Loss Free

Highest risk charge

= full protection

Zero risk charge

= no protection

Potential for Dividends

12

• On average 60% of the Insurope pools produce positive results

• On average 65-70% of local country plans produce a positive

result

• Insurope dividends are on average 10% of risk premiums

• High pay-out ratio in the Insurope Multipool

Source: 2016 Insurope’s Client Database

Administration, Information and Risk Management

13

Information & pool analysis tool

Pooling illustration

Multinational report

Online access to CRM system

Market Trends and Development

15

Multinational Companies –Challenges and Observations

• Global expansion

• Local practice and product offerings

• More focus on governance and control

• Global management information and tracking

• Managing global benefit plans

• Retaining employees

• Harmonization of benefits and adapting to local market practices

• Increased disability and medical claims

• Increased health cost

• Change in demographics

• High cost of DB plans

• Solvency II

• Cost control

• Administrative challenges and solutions

• Financial risk and growing cost

Challenges

• Increased governance, control andcoordination

• Global approach (central/regional)

• Global consultants and global RFPs

• Multinational pooling is part of theglobal strategy for multinationals

• Increased focus on non-financial benefits

• Risk monitoring systems and access to claims information

• Financial benefits of pooling

Observations

The Advantages of Using a Pooling Network –Client Satisfaction Survey Responses

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93%

69%

60% 59%55%

45%

24%

93%

53%

60%

47%43%

50%

27%

Price/dividend Better terms andconditions

Reporting Bettercoordination with

local insuranceprovider

Access toinformation

Governance Improvedcustomer service

2016 2015

From Insurope’s satisfaction and market surveys 2015 and 2016

Managing Employee Benefit Programs

17

Centralized vs decentralized

Use of a global broker

Decision makers in placing local business

Centralized

Decentralized

Don't know

Central decision

Local decision

Combination

55%

35%

10%

Not important

Somewhatimportant

Important84%

10%

6%

No Yes62%

38%

From Insurope’s satisfaction and market surveys 2015 and 2016

62%

35%

3%

The importance of pooling in placing local business

The Advantages of Using a Pooling Network –Client Satisfaction Survey Responses

18

52%

28%

14%

3%0%

57%

23%

13%

3% 2%

Strength of localNetwork Members

Network terms &conditions

Geographic coverage Reputation Don't know

2016 2015

From Insurope’s satisfaction and market surveys 2015 and 2016

Conclusions

►Insurope is a network of strong local partners in 80 + countries

►Multinational Pooling is actively used by many multinational companies, and it is

growing in importance

►Insurope offers valuable benefits such as potential for cost savings, account

management teams, worldwide reporting and access to information

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DISCLAIMER

The Insurope Network (“Network”) is a network of locally licensed member insurance companies (“Members”) who jointly own Insurope SCRL/CVBA(“Insurope”), a cooperative company with limited liability, duly incorporated and existing under the laws of Belgium, with a registered office at Avenue desArts 9, 1210 Saint-Josse-Ten-Noode, Belgium. Insurope is represented in the U.S. by Multinational Benefit Associates, Inc., a New York licensed insurancebroker, with an office at 420 Lexington Avenue, Floor 28, New York, New York. Insurope promotes the Network but does not issue policies or provideinsurance; such activities are carried out by the Network Members. The non-U.S. Members are not licensed or authorized to do business in New York and thepolicies and contracts they issue have not been approved by the New York Superintendent of Financial Services, are not protected by the New York stateguaranty fund, and are not subject to all of the laws of New York.

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Group Insurance coverages are issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ.

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