kirs non deal roadshow - home - the ardonagh group non deal roadshow may 2017 disclaimer this...

KIRS Non Deal Roadshow

May 2017

Disclaimer

This presentation (the “Presentation”) has been prepared by KIRS Group Limited (“KIRS”) and is its sole responsibility. For purposes hereof, the Presentation shall mean and include the slides that follow, any oral presentation by KIRS or any person on its behalf, any question-and-answer session that may follow the oral presentation, and any materials distributed at, or in connection with, any of the above.

The information contained in the Presentation has not been independently verified and some of the information is in summary form. No representation or warranty, express or implied, is or will be made by any person as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information or opinions expressed in the Presentation. No responsibility or liability whatsoever is or will be accepted by KIRS, its shareholders, subsidiaries or affiliates or by any of their respective officers, directors, employees or agents for any loss howsoever arising, directly or indirectly, from any use of the Presentation or its contents or attendance at the Presentation.

KIRS cautions that the Presentation may contain forward looking statements in relation to certain of KIRS’ business, plans and current goals and expectations, including, but not limited to, its future financial condition, performance and results. These forward looking statements can be identified by the use of forward looking terminology, including the words “aims”, “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, “plans”, “predicts”, “assumes”, “shall”, “continue” or “should” or, in each case, their negative or other variations or comparable terminology or by discussions of strategies, plans, objectives, targets, goals, future events or intentions. By their very nature, all forward looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond KIRS’ control, including but not limited to insurance pricing, interest and exchange rates, inflation, competition and market structure, acquisitions and disposals, and regulation, tax and other legislative changes in those jurisdictions in which KIRS, its subsidiaries and affiliates operate. As a result, KIRS’ actual future financial condition, performance and results of operations may differ materially from the plans, goals and expectations set out in any forward looking statement made by KIRS. All subsequent written or oral forward looking statements attributable to KIRS or to persons acting on its behalf should be interpreted as being qualified by the cautionary statements included herein. As a result, undue reliance on these forward looking statements should not be placed.

The information and opinions contained in the Presentation have not been audited or necessarily prepared in accordance with international financial reporting standards and are subject to change without notice. The financial results in this document and the Presentation include certain financial measures and ratios, including EBITDA, ProForma Adjusted EBITDA and certain other related measures that are not presented in accordance with IFRS and are unaudited. These measures may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS. The financial information included in this Presentation only includes nine months of audited information from the year ended December 31, 2015 for TIG Finco plc and its subsidiaries (“Towergate”). Towergate’s financial results as of and for the first quarter of 2015 are unaudited and unreviewed and may not reflect what Towergate’s results would have been had the current group structure and management been in place on January 1, 2015.

The information contained in the Presentation, including but not limited to any forward-looking statements, is provided as of the date hereof and is not intended to give any assurance as to future results. No person is under the obligation to update, complete, revise or keep current the information contained in the Presentation, whether as a result of new information, future events or results or otherwise. The information contained in the Presentation may be subject to change without notice and will not be relied on for any purpose.

The Presentation is solely for informational purposes and does not constitute or form part of, and should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation or inducement to any person to purchase, underwrite, subscribe to or otherwise acquire securities in KIRS or any of its subsidiaries nor does it constitute an invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (“FSMA”). The Presentation does not constitute an invitation to effect any transaction with KIRS or to make use of any services provided by KIRS.

The distribution of the Presentation in certain jurisdictions may be restricted by law. Recipients of the Presentation should inform themselves about and observe such restrictions. KIRS disclaims any liability for the distribution of the Presentation by any of its recipients. This document is for distribution only in the United Kingdom and the Presentation is being made only in the United Kingdom to persons falling within Articles 19, 43, 47 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended), to persons who have professional experience in matters relating to investments or to persons in the United Kingdom to whom this document may otherwise be lawfully distributed. This document is being supplied and the Presentation made to you solely in that capacity for your information. This document may not be reproduced, redistributed or passed on to any other person, nor may it be published in whole or in part, for any purpose.

By accepting the Presentation, you agree and acknowledge (i) that the Presentation and its contents may contain proprietary information belonging to KIRS and (ii) to be bound by the foregoing limitations, undertakings and restrictions.

2

Agenda

3

Introduction

Investment Thesis

KIRS Strategy and Business Highlights

Update on Key Strategic Initiatives

KIRS Financial Highlights

Conclusion

Q&A

KIRS has appointed Bank of America Merrill Lynch to organise a series of investor meetings in Europe and the US, GBP, EUR and / or USD bond / loan offerings may follow subject to market conditions

Investment Thesis

Investment Thesis

KIRS(1) will be the result of a carefully targeted acquisition and hiring strategy in the UK insurance market

Towergate, Autonet(2)(3), Price Forbes(2)(3), Direct Group(2)(3) and Chase Templeton(2)(3) were specifically targeted due to:

A. Strong management teams

B. Leading position in their respective market segments

C. Significant organic growth and acquisition opportunities

D. Ability to create additional value from portfolio effect without disruption or integration of underlying businesses

Presence across the entire insurance value chain will allow KIRS to optimise service to customers and maximise commission capture

KIRS will be a leading diversified independent insurance intermediary group in the UK and is positioned to capitalise on the significant benefits of scale across all its segments

Highly resilient business model with significant cash flow generation capabilities

5

1

2

3

4

5

(1) Represents the Project Name for the creation of the new group. The final group name will be published in due course when trademark process is finalised.(2) Price Forbes, Chase Templeton, Autonet and Direct Group transactions are signed and completion is subject to regulatory approval.(3) Majority ownership.

KIRS will be the leading diversified independent insurance intermediary group in the UK

Significant Strategic Investment By Core Shareholders

6

2015 2016Jun NovApr Dec

2017 2018Q3 – Q4

Creation of Nevada and

acquisition of majority stake in Price Forbes

Acquisition of majority stake

in Broker Network

MDP investment in Towergate and Nevada


in Chase Templeton(1)


in Direct Group(1)

Acquisition of majority stake in

Autonet

HPS investment in

Towergate

~£680m Total Investmentby Core Shareholders to Support

the Creation of KIRS

KIRS is the result of a carefully crafted acquisition strategy executed over the last 24 months

(1) Completion subject to regulatory and other customary approvals.

Dedicated Shareholder Base

7

Key shareholders have invested ~£680m in the development of KIRS and will own >95% of group equity

(1) As of April 1, 2017.(2) As of March 31, 2017 SEC filing.

Founded in 2007

>100 investment professionals globally

$39bn(1) asset under management

Joint owner of Watford Re, global insurance and reinsurance group, alongside Arch Capital and second largest shareholder in NFP Corp.

Founded in 1992

41 investment professionals

$12.5bn(2) asset under management

Largest shareholder of NFP Corp., a leading US insurance broker

Founded in 1976

Over 390 investment professionals globally

Approximately $138bn asset under management

Strong prior knowledge of the insurance sector having invested in Willis Group, Alliant Insurance Services and USI

Founded in 1998

>110 investment professionals globally

$33bn asset under management

Significant experience in the insurance sector, including investments in many US mid-market insurance brokers

KIRS Vision and Key Highlights

Highly Supportive Market Backdrop

9

Phase 1First period of consolidation

Phase 2 Financial crisis

Phase 3 Consolidation of the consolidators & increased focus on innovation

2008 – 2011

Credit crisis causes significant slowdown in acquisitions

Total Number of Large Broker Acquisitions

2005 – 2008

First wave of consolidation

2012 – Today

“Historical” consolidators being acquired, new leaders emerge

Clear consolidation opportunity in a highly fragmented market

c. 150 consolidator transactions backed by £17bn of private equity capital and cheap leverage

Insurer funding providing additional firepower to consolidators

Consolidation significantly slowed down

Focus on new avenues of organic growth (new products and channels)

Oval and Giles acquired by AJ Gallagher, Jelf and Bluefin acquired by Marsh

New consolidators emerge backed by fresh private equity capital

Latest transaction multiples reflect highly attractive opportunity in the sector

Focus on integration across the value chain development of strong technology / digital footprint

KIRS is ideally positioned to capitalise on latest market trends

31

59

14

2008 2009 2010 2011

KIRS Resulted from Highly Selective Investment Strategy

10

2015 2016Jun Nov

Apr

Dec2017 2018

Q3 – Q4

Carefully structured acquisition plan executed in parallel with execution of Fix / Build / Grow plan in Towergate

Build

(1) Price Forbes, Chase Templeton, Autonet and Direct Group transactions are signed and completion is subject to regulatory approval.(2) Majority ownership.(3) 20% ownership.

(3)

(1)(2)(1)(2)(1)(2)(1)(2)

Grow

Fix

11

KIRS is a multi-faceted insurance intermediary powerhouse with best-in-class capabilities across all parts of the insurance value chain

UK Broking & Underwriting Foundation

Broad UK coverage and expertise

Traditional & select digital distribution

Specialised underwriting capability

SME & consumer focused

Complex risks

Leading independent Lloyd’s broker

Blue chip brand

Recruiting top industry talent

Leading digital van broker

Premier digital platform Built for scale

Highly Efficient Service Platform

Leading service offering

Scale claims operations

Complementary underwriting capabilities

Attractive specialist proposition

Leading independent UK PMI provider

Growth engine

Proven acquisition platform

KIRS

Leading diversified independent UK insurance intermediary group

Extensive local footprint combined with global reach

Large and diversified earnings base

Highly scalable operating platform

Stable and cash generative business model

Early and continued engagement with the FCA

Market leading, highly experienced management team

Digital Market Leader

Health Care Market Leader

InternationalWholesale

KIRS Strategic Vision

KIRS Guiding Principle: Maximise Presence Across Value Chain

12

e.g. American Airlines, Exxon

e.g. Private Motor, Home

Customer Characteristics

CU

STOM

ER

Services (Policy Administration, Claims, Renewals)

Pe

rso

nal

Smal

l &

Me

diu

m

Co

mm

erci

al

Larg

e C

orp

ora

teC

om

ple

x

Aggregator

Affinity partner

Consultant

Reg Broker

Reg Broker

MGAInternational

Wholesale Broker

Reg Broker

MGA

LondonWholesale Broker

Reg Broker

Online Broker

MGA Retail Broker

Retail Broker

Wholesale BrokerMGA

High £ / Policy Low Volume

Low £/ Policy High Volume

Market Characteristics

CA

PIT

AL

Collectively we have created significant opportunities to disrupt the “traditional” value chain, and realise value across multiple channels and verticals

Multiple Avenues to Capture Incremental Commission

13

£100 £100 £100 £100 £100 £100

AdvisoryWholesale

DigitalCar & Van

UnderwritingSpecialty MGA

UnderwritingInternational

AdvisoryCommericalCombined Retail Household

Distribution Underwriting Wholesale

Services Other Income Premium to Carrier

KIRSEconomics

£15 £25 £30 £35 £40 £50

Illustrative purposes only

Integration across the value chain gives KIRS the opportunity to maximise commission per policy

Cost savings with a 12 month average payback period are being executed ahead of plan, providing a platform for growth

14

Total 24 cost savings initiatives within the programme

─ 8 initiatives complete as of end Q1‘17

─ Significant progress on all key projects

Key Programs include:

Fix

─ IT infrastructure and cost base

─ Finance transformation

─ Turnaround Small Business Unit

─ Property space and supplier consolidation

Operational Effectiveness

─ Various staff saving initiatives

─ Robotics opportunity analysis underway

Build

─ Broker system consolidation

Synergies

─ From acquisitions – Direct Group and Chase Templeton

£13m actual cost savings delivered in 2016 and £21m additional annual savings from activities already completed at end Q1’17

Cost Initiatives Growth Initiatives

2 major income uplift initiatives completed

─ New contract with premium financing counterparty

─ Fee for service agreements with strategic insurance partners

Investment in income initiatives to drive organic growth include:

─ Strategic income hires across businesses particularly in Wholesale and Underwriting

─ Hires to drive organic growth in Advisory

─ Broadening product offerings in Autonet, Paymentshield, and Underwriting

─ Acquisitions bring cross-sell opportunities (e.g., Chase Templeton, Direct Group and Autonet)

Investment in Change Management

Dedicated Change team with considerable large scale change experience

Change governance in place for all major programs to coordinate investment control, delivery assurance and benefit realisation

─ Change Director report progress to Executive Committee, Board and Regulator on a regular basis

Key business stakeholders involved in project design, implementation and monitoring

Partnered with global market leaders to assure execution and outcomes

Continued Execution of Strategic Initiatives

KIRS Operating Framework

15

Distribution Wholesale Underwriting (4)

Services

Leading UK broker services network and leading claims management and TPA platform

Leading UK insurance broker with strong online presence, extensive local

footprint and high margin specialist brands

International insurance and reinsurance broker with a diverse

international income stream

Leading MGA in the UK with diversified product focus

Digital / Direct Advisory

GEO

(3)(1) (2)

(1)(2)

London Market International(1)(2)

(1)(2)

(1) Price Forbes, Chase Templeton, Autonet and Direct Group transactions are signed and completion is subject to regulatory approval.(2) Majority Ownership.(3) 20% ownership.(3) KIRS Group does not incur any of the ultimate underwriting or principal risk in relation to any of the services or products that we provide and therefore we neither provide capital nor assume any responsibility for

insurance claims costs.

Highly diversified and integrated insurance distribution, underwriting and services company with a diverse portfolio of leading brands

16

Product Focus

Distribution Model

Market Position

2016 PF(1)

Income(Total: £487m)

2016A PF Adj. EBITDA

(Total: £134m)(2) (3)

Van

Property insurance via mortgage brokers

Specialist and bespoke products

Online (direct and price comparison websites (‘PCW’))

Direct via phone

Mortgage brokers

Leading UK broker in van

Leading distributor of property insurance via mortgage brokers

One of the top UK SME broker via PCW

£311m £79m

£93m £18m

AdvisoryDigital Underwriting

WholesaleSegment Services

Distribution Segment

(1) “Pro Forma Income” means the combined income of Towergate, Price Forbes (FX adjusted), Autonet, Direct Group and Chase Templeton (annualised) for the year ended December 31, 2015 and 2016, as applicable.(2) Includes £3m in KIRS group costs.(3) “Pro Forma Adjusted EBITDA” means Towergate EBITDA, Autonet EBITDA, Price Forbes EBITDA, Direct Group EBITDA and Chase Templeton EBITDA, as adjusted for certain run rate cost savings and other exceptional

items as determined by management.

£97m

£25m

2016A GWP

(Total: £2.8bn)£1,230m £950m £625m

General insurance

Health (Private Medical Insurance (‘PMI’) broker to SMEs)

Face-to-face broking

Direct via phone and call centres

Leading independent General Insurance and PMI broker in the UK

Large and complex specialty risk

Design and placement of risks from all major international insurance and reinsurance markets in London, Bermuda and Europe

Leading Top 5 independent wholesale broker

Commercial Lines

Specialty Personal Lines

Specialty Lines

Agriculture

Motor

Premium sourced from external and internal brokers

Global capability

Leading full service MGA in Europe

Post-sales servicing

End-to-end claims management

Insurers, corporates and affinities

Carriers, underwriters and brokers

Leading provider of claims management and post-sales servicing in the UK

Underwriting and Services Segment

Overview of KIRS Segments

KIRS Company Highlights

1. Leading diversified independent UK insurance intermediary group

17

2. Extensive local footprint combined with global reach

3. Large and diversified earnings base

4. Highly scalable operating platform

5. Stable and cash generative business model

6. Early and continued engagement with the FCA

7. Market leading, highly experienced management team

1. Leading Diversified Independent UK Insurance Intermediary Group

18

UK’s leading MGA

Underwriting

Wholesale

Price Forbes is a top five independent London and international wholesale broker(1)

Services

UK’s leading broker services network and leading claims management platform

(£ in millions)

UK Insurance Broker Rankings by Income (1)

Leading independent SME and specialty personal lines-focused UK broker, distributing 3rd party and own branded insurance products

UK’s leading provider of property related insurance products via mortgage brokers

Leading van broker in the UK with significant share

Strong provider of Buildings & Contents (B&C) and Mortgage Payment Protection Insurance

Leading private medical insurance intermediary in the UK

Distribution

KIRS has a strong position in the UK insurance intermediary market

Leading diversified independent broker and top 10 broker overall in the UK market with c.£2.8bn GWP

(1) Source: Insurance Times Top 50 Brokers 2016.(2) Income is pro forma for Bluefin and Jelf acquisitions.(3) Pro Forma Income.

£953

£866

£758

£650£601

£507 £487

£387

£285£243 £229 £223 £219

£146 £131 £117 £109£75 £69 £64 £63 £62 £61 £56 £55 £55 £41 £40 £38 £36 £36 £35 £32

International

Personal

Commercial

London

(3)

2. Extensive Local Footprint Coupled with Global Reach

19

Distribution

Wholesale

Underwriting

Services

Key

Distribution

Underwriting

Wholesale

Services

9 local offices serving local brokers

Highly efficient operations centre in Doncaster

Primary operations in Doncaster and Preston

7 national contact centers each with a product focus online and on the phone

81 local offices across the country serving local clients

London headquartered, in close proximity to Lloyd’s and London market

97% of premium in respect of non-UK risks sourced from an extensive network of global brokers

IrelandUnited

Kingdom

Extensive UK distribution network linked to international capital markets

Wholesale Markets

3. Large and Diversified Earnings Base…

No material GWP or income concentration around key producers

Call centre and online operations naturally diversified

Stability of frontline staff further underpinned by a comprehensive retention strategy, including long-term incentive plans for top performers, focus on culture change and integrated CRM systems

Strong retention figures for 2016 across the business

No material income concentration on any specific customer

No more than 11% of total GWP written by a single carrier

Top 5 carriers all “A”-rated or above

Long term relationships with all key carriers, underpinned by recently renewed capacity agreements

20

Highly Diversified Business Model 2016 Pro Forma Income(1)

Digital

Advisory

Wholesale

Underwriting

Services

34%

30%

16%

18%

2%

No meaningful concentration by income producer, carrier, distribution channel or product

(1) “Pro Forma Income” means the combined income of Towergate, Price Forbes (FX adjusted), Autonet, Direct Group and Chase Templeton (annualised) for the year ended December 31, 2015 and 2016, as applicable.

ExpertSpecialist knowledge

Partnerships

Strong customer relationships

“Stickiness” of specialist products

3. …With Numerous Niche Specialisms

21

A depth of specialist knowledge built-up over many years

Examples of Specialties

Est. 1990

Property

Est. 1982

Marine

Est. 1998

Van

Est. 1907

Healthcare

Est. 2002

Medical

Est. 1983

Haulage

Est. 1985

Classic Car

4. Highly Scalable Operating Platform

22

Significant investments made across all KIRS businesses since early 2016 to optimise operating infrastructure and prepare the group for the next phase of growth

Key Programmes Include:

Premium and policy management

Renewals and administrative services

Offline sales and servicing

Coverage of the complete claims lifecycle

Platform provision

Optimisation of support functions (e.g. Finance, HR)

Key Areas of Focus:

IT Transformation Programme: £19m investment completing in Q2‘17 to create fit for purpose IT infrastructure

Finance Transformation Programme: £21m ongoing investment to maximise efficiency and integration vs. front end systems

Implementation of automated solutions in low complexity / high volume processes

Consolidation and simplification of property footprint and procurement function

Middle and Back Office Capabilities

Well-invested Claims and TPA platforms with significant spare capacity in existing systems

Services

Multiple investments underway focused on improving pricing capabilities and speed of product launches

Underwriting

Broad IT investment programme to upgrade and upscale existing infrastructure

Wholesale

Highly scalable, well invested online platform

Fast growing home insurance panel

Significant investment in new, consolidated front-end system

Distribution

5. Highly Diversified, Stable, and Cash Generative Business Model

23

Pro Forma Income(1)

Strong foundation, poised to achieve substantial growth and rapid organic deleveraging

Pro Forma Adjusted EBITDA(2)

% Margin 27%

5.7x

Opening

£134

2016A

£487

2016A

Rapid organic deleveraging driven by cost reduction

plans well under-way

(£ in millions)

Targeted Net Debt / Pro Forma Adjusted EBITDA

(1) “Pro Forma Income” means the combined income of Towergate, Price Forbes (FX adjusted), Autonet, Direct Group and Chase Templeton (annualised) for the year ended December 31, 2015 and 2016, as applicable.(2) “Pro Forma Adjusted EBITDA” means Towergate EBITDA, Autonet EBITDA, Price Forbes EBITDA, Direct Group EBITDA and Chase Templeton EBITDA, as adjusted for certain run rate cost savings and other exceptional


Distribution: £311m

Wholesale: £79m

Underwriting: £97m

Towergate: strong continuing trend of organic quarter-on-quarter PF Adj. EBITDA growth

Nevada: track record of organic EBITDA growth with strong cash flow conversion

6. Early and Continued Engagement with the FCA

The FCA has been involved from the outset of the process, and remains supportive of the proposed new group

We have engaged with the FCA with full transparency and acted swiftly and appropriately when required

We continue to liaise with the FCA as the KIRS management team remains highly focused on completing the implementation of best in class risk and compliance policies and improvement of legacy operations

24

The FCA has been supportive of the development of KIRS

7. Market Leading, Highly Experienced Management Team

25

KIRS has attracted an experienced best of breed management team with a high profile in the market

Distribution Management

Wholesale Management

Underwriting and Services Management

Paul Dilley+25 years experience

Derek Coles+25 years experience

David Leatham+30 years experience

Andy Baughan+30 years experience

Andrew Bell+20 years experience

David Bruce+30 years experience

Scott Hough+20 years experience

Michael Donegan+35 years experience

David Baxter+40 years experience

Neil Pearce+20 years experience

James Masterton+25 years experience

Gordon Newman+50 years experience

Steve Anson+20 years experience

Joe Thelwell+15 years experience

Warren Dickinson+25 years experience

Craig Ball+10 years experience

Corporate Management

Kay Martin+25 years experience

Geoff Gouriet+20 years experience

Sarah Dalgarno+25 years experience

Antony Erotocritou+15 years experience

David Ross+26 years experience

Mark Mugge+20 years experience

Adrian Brown+28 years experience

Janice Deakin+16 years experience

Ian Donaldson+20 years experience

Update on Key Strategic Initiatives

Towergate: Extensive Cost Reduction Programme

27

£56m cost savings identified and committed (20% reduction in 2015 cost base) with circa 1 yearaverage payback – 61% complete at end March 2017

programme essentially completed in Q1’17

Including server migration to Azure Cloud

Improvements to networks and telephony

Over 4,000 users upgraded to Windows 10

Contract signed with Accenture

Investment in robotics and process automation started

Completed initial process engineering activities

Closed Milton Keynes and Manchester locations

Footprint reduced by 21% with locations reduced from 140 to 98 (Jan‘15 to date)

Consolidated suppliers across cleaning, waste, repairs & maintenance and security

Back office operational process efficiency

Reduced reliance on agency and temporary staff

Commenced supplier rationalisation and procurement programme using external parties

Detailed implementation planning for consolidation of broker systems completed

First roll-outs commenced in 2017£5m

Total

IT Transformation £19m£7m

Finance Transformation

£21m£14m

SBU Turnaround £4m£7m

Property Cost Reduction

£1m£5m

InitiativeTotal One-off

Costs

Total Medium-

Term SavingsProgress to Date

Operational Efficiency

£2m£18m

Broker Systems Consolidation

£12m

£56m £59m

£6m

£4m

£7m

£4m

AnnualisedSavings toend Q1’17

£13m

--

£34m

£7m

£13m

£7m

£5m

AnnualisedSavings to end 2017

£16m

--

£48m Programme = 20% reduction in 2015 cost base

£13m cost savings already achieved in 2016 in-year result, 50% one-off spend paid before March’17

Additional Benefits Not Included in £134m Pro Forma Adjusted EBITDA(1)

28

Medium-term identified cost savings of £8m, signed contracts resulting in £6muplift in profitability and near-term revenue synergies of £2m have been excluded from Pro Forma Adjusted EBITDA(1)

£8

Medium-term identified and committed cost savings

£6

Signed contracts resulting in profitability

step-change in 2017£2

Near-term identified and committed revenue

synergies

£16

Potential additional savings

(£ in millions)

(1) “Pro Forma Adjusted EBITDA” means Towergate EBITDA, Autonet EBITDA, Price Forbes EBITDA, Direct Group EBITDA and Chase Templeton EBITDA, as adjusted for certain run rate cost savings and other exceptional items as determined by management.

No cost to achieve additional benefits

KIRS Financial Highlights

Strong Income and EBITDA Growth Potential

30

Strong Pro Forma Adjusted EBITDA growth driven by efficiency improvements and income growth in Nevada

Growth

2015 2016 £ %

Towergate N.A. £84(3) N.A. N.A.

Nevada £46 £50(4) £4 +10%

KIRS Group N.A. £134 N.A. N.A.

Pro Forma Income(1)

Pro Forma Adjusted EBITDA(2)

2015 2016 Growth

Towergate N.A. 26% N.A.

Nevada 30% 31% +1%

KIRS Group N.A. 27% N.A.

Pro Forma Adjusted EBITDA Margin

(£ in millions)

Growth

2015 2016 £ %

Towergate N.A. £325 N.A. N.A.

Nevada £151 £163 £12 +8%

KIRS Group N.A £487 N.A. N.A.

(1) “Pro Forma Income” means the combined adjusted income of Towergate, Price Forbes (FX adjusted), Autonet, Direct Group and Chase Templeton (annualised) for the year ended December 31, 2015 and 2016, as applicable.


(3) Includes £35m of Pro Forma adjustments for Towergate related to the cost reduction initiatives as set out on page 27.(4) Includes £13m of net Pro Forma adjustments primarily consisting of FX and expected cost synergies.

Towergate: Very Positive Income and Expense Trends

31

Income vs. Prior Year

Expenses vs. Prior Year

Second quarter of sustainable income growth and third quarter of Pro Forma Adjusted EBITDA(1) growth

(7%) (7%)(5%)

2%

1%

(10%)

(5%)

0%

5%

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17

5% 5% 5%

3%

(3%)

(0%)

(6%)(8%)

(4%)

(10%)

(5%)

0%

5%

10%

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17

Quarter 1 2017

Growth

2016 2017 £ %

Income £77 £78 +£1 +1%

Staff costs (£46) (£40) £6 14%

Op expenses (17) (19) (1) (8%)

Total expenses (£63) (£59) +£5 +8%

PF Adj. EBITDA(1) £14 £19 +£6 +42%

Margin 18% 25% +7%

New management team: expense savings started

(£ in millions)

Note: The financial information included in this Presentation only includes 9 months of audited information from the year ended December 31, 2015 for Towergate. Towergate’s Q1 2015 financial results are unaudited and unreviewed and may not reflect what Towergate results would have been had the current group structure and management been in place from January 1, 2015.(1) “Pro Forma Adjusted EBITDA” means Towergate EBITDA, Autonet EBITDA, Price Forbes EBITDA, Direct Group EBITDA and Chase Templeton EBITDA, as adjusted for certain run rate cost savings and other exceptional


Nevada: A Continuing Trend of Income Growth

32

Source: Autonet, Price Forbes, Direct Group and Chase Templeton: Reported revenues as per statutory accounts.(1) Price Forbes, Chase Templeton, Autonet and Direct Group transactions are signed and completion is subject to regulatory approval.(2) Majority Ownership.

KIRS Resulted from Highly Selective Investment Strategy

Chase Templeton (1) (2)Direct Group (1) (2)

Autonet (1) (2) Price Forbes(1) (2)Nevada Pro Forma Adjusted Income

8%

1.9% 9.3%

16.4% 31.5%

Nevada Portfolio Comprises Strong Organically Growing Businesses (£ in millions)

£140

£155

£11

£8

£151

£163

2015 2016

Reported Income Pro Forma Adjustment

£41.5 £42.3

2015 2016

Reported Income

£61.6£67.3

2015 2016

Reported Income

£12.7£16.7

2015 2016Reported Income

£24.4£28.4

2015 2016

Reported Income

Highly Cash Generative Business Model

33

Nevada is highly cash generative – Towergate capex and exceptional spend expected to reduce significantly post completion of the ongoing Transformation Programme

63%

90%

76%

Towergate Nevada KIRS Group

(1) Operating Cash Conversion defined as Operating and Investing Cash Flow (Adjusted EBITDA less Working Capital Movement and Maintenance Capex) over Adjusted EBITDA and excludes capex and exceptional costs related to cost reduction initiatives and other one-off costs. Typical maintenance capex is c.2% of income.

2016 Operating Cash Conversion(1)

Indicative Capitalisation and Leverage

34

KIRS Group is expected to support circa £800m gross debt, with a net leverage of circa 5.7x,organically de-leveraging rapidly – we are exploring different financing options

Indicative Capitalisation & Leverage

2016A Pro Forma Adjusted EBITDA(1)

Towergate £84

Nevada £50

Total KIRS Group £134

Estimated Gross Debt £800

Estimated Cash (40)

Indicative Net Debt £760

Indicative Net Leverage 5.7x

Implied Transaction Equity Value(2) £655

(£ in millions)


(2) Based on third party fairness opinion supporting Nevada roll-over contribution and price of Towergate's most recent rights issue.

Proceeds of any potential financing to be used to refinance existing debt, finance the acquisitions of Direct Group, and Chase Templeton, pay fees and expenses, and cash on Balance Sheet

KIRS Group Financial Targets

Mid-single digit income growth, underpinned by market growth and investments made in income producers

2019 EBITDA margin in 25-35% range

Operating cash conversion(1) 80-90%

Project Capex and exceptional costs largely complete by 2018, £45-55m spend expected through 2018

ETV: Gross £45-65m before any insurance, vendor or asset recoveries (estimated to be c.£12m)

Positive levered free cash flow expected for 2018

Rapid organic deleveraging

35

1

2

3

4

5

(1) Operating Cash Conversion defined as Operating and Investing Cash Flow (Adjusted EBITDA less Working Capital Movement and Maintenance Capex) over Adjusted EBITDA and excludes capex and exceptional costs related to cost reduction initiatives and other one-off costs. Typical maintenance Capex is c.2% of Income.

6

7

Conclusion

Conclusions

We are creating KIRS to capitalise on highly supportive market tailwinds in a structurally attractive sector

Transactions completed to date will combine into one of the largest independent players in the market, an ideal platform for future growth

Strong combination of market leading management teams, deep product expertise and wide presence across entire value chain

Highly resilient business model with great cash flow generation capabilities

HPS and MDP share management vision and are fully committed to supporting its implementation

37

1

2

3

4

5

KIRS will be a leading diversified independent insurance intermediary group in the UK

Appendix

40

Description

Highlights & Strategy

Create leading online distributor of SME and niche personal lines insurance, with competitive advantage in scale, technology and pricing insight Combination of Autonet (a leading van provider)

and Towergate’s SME online business (#2 SME provider) creates a dominant online player transacting £100m van and SME GWP online

Extend pricing and risk expertise combining technology and data insight of both businesses

Build online scale in Home (Paymentshield) and niche products using market position, brand and expertise e.g., Classic Car

Utilise Direct Group to drive further efficiencies, and invest savings in driving growth of high margin niches

2016A GWP: c. £480m

Products: Blend of volume and niche General Insurance products (SME, Van, Home, Caravan, Marine, Medical, Excess)

Channels: Online direct, online price comparison websites, mortgage brokers, affinities and wholesale

FTEs: c. 1,800

Locations: Stoke, Southport, Oxted, Stevenage, Dudley, Cheltenham, Colchester

Home

SME

Car

Van

Medical

Non-Standard Property

CaravanCare Homes

Marine Other

Direct

Aggregator

Mortgage Broker

Partner

Overview 2016A Business Mix by GWP

2016A Distribution Mix by GWP

Distribution – Digital Overview

Relentlessly focused on expanding Digital across new products and channels

Description

41

Unique market position as the only scale independent General Insurance and Health business in the UK through a combination of the leading independent regional SME and Healthcare brokers £600m General Insurance Premium + £160m API

in Health Cross-sell across combined client base of 800k

customers 400 strong, dedicated and expert sales force

Significant synergy opportunity between Chase Templeton and existing Healthcare / PMI offering in Advisory

Expand product offering off the back of ongoing roll-out of single, improved front end system

2016A GWP: c. £750m

Products: General insurance (including Commercial Motor, Commercial Property, Private Home, Professional Indemnity, Private Car, General Personal, Marine) and Health

Channels: Face-to-face broking, telephone

FTEs: c. 1,800

Locations: 9 national contact centres and 67 local offices


General Commercial

Commercial Motor

Commercial Property

Private Home

Professional Indemnity

Other GI

Corporate PMI

Individual PMIOther PMI

Carrier A

Carrier B

Carrier CCarrier DCarrier E

Carrier FCarrier G

Other

Distribution – Advisory Overview


New producer hires and commission monetization have positioned Advisory for growth

2016A Carrier Mix by GWP(1)

(1) Excludes Chase Templeton.

42

Description


Wholesale – Overview

Price Forbes is a top five independent London wholesale broker

Strong presence in major international markets

Diversified mix of business with growth in Non-Marine business over recent years

Focus on large and more complex risks

Investment in Bishopsgate will create a new growth vehicle that has been untapped to date

Large scale recruitment of new producers to date will establish a robust growth platform

Continued recruitment will drive growth in new products and capabilities

Significant cross-sell opportunity with Advisory and Underwriting

Key segments: Marine, Energy, Natural Resources and Non-Marine (including Aviation, Cargo, Financial Products, Health, Property and Specie)

Channels: Insurance and reinsurance markets in London, retail brokers and direct to policyholders

FTEs: c. 400

Locations: London headquarters, in close proximity to Lloyd’s market

Non-Marine -International

Non-Marine -North America

Marine, Energy & Natural

Resources -International

Marine, Energy & Natural

Resources -North America

Other

Bishopsgate New Hires

Role / Product Line Key Hire(1) (Joining date)

Executive Chairman Gordon Newman (Jul-17)

Professional Indemnity Emma Lucas (Feb-17)

Confidential appointment (Apr-17)

International Property / Canadian / Australian

Matt Edwards (Dec-16)

International Binders Simon Allport (Jan-17)

Personal Accident Confidential appointment (May-17)

UK Binders Confidential appointment (Jul-17)

Wholesale – Overview

Overview Price Forbes 2016A Business Mix by Income

Leading Wholesale franchise continues to expand with new business and new hires

(1) Name provided where individual has already joined. All other names withheld but employment contracts have been signed.

Description


Underwriting – Overview

43

The combined Towergate Underwriting and Direct Group is the largest full service MGA in Europe

Significant improvement in Towergate loss ratios in 2016 creating a stable platform for sustainable profitable growth

Strong relationships and long-term commitments with eight main carriers

Good growth opportunities to expand internationally and to create a London Market MGA

Direct Group organic growth and new business capabilities are highly accretive to current franchise

Four pillar strategy to access UK, London and International markets

2016A GWP: c. £625m

Products: Commercial, Household, Specialty Personal Lines and Agriculture

Channels: External and internal insurance brokers

FTEs: c. 800

Locations: Offices throughout the UK and three European locations

Underwriting – Overview


Combination of Towergate Underwriting and Direct Group creates leading MGA platform

2016A Carrier Mix by GWP

Commercial

Personal

Agriculture

Household

Other

Carrier 1

Carrier 2

Carrier 3Carrier 4

Carrier 5

Carrier 6

Carrier 7

Carrier 8

Others

Description


Services – Overview

44

Direct Group is a leading outsourcing partner to the UK insurance industry

More than 2,000 active broker relationships with over 225,000 claims handled in 2016

Provides services to UK General Insurers representing almost 87% of total UK GWP

Strong growth trajectory across all business lines expected to continue, driven by high retention and highly executable new business pipeline (new client wins already secured in Q1’17)

Products: Post sales administration outsourcing on behalf of insurers, corporate and affinities and front and back-office outsourcing

Channels: Provide services to 14 of the 20 largest UK General Insurers

FTEs: c. 540

Locations: Primary operations in Doncaster and Preston

TPA Services

Claims Management Services

Overview Selected Trading Relationships

Leading claims management and TPA services offering

kirs non deal roadshow - home - the ardonagh group non deal roadshow may 2017 disclaimer this...

Documents