2012ANNUAL REPORTANNUAL REPORT

C.A. Cannegieter St. # 28

Philipsburg, St. Maarten

Tel: 1-721.542.2739

Fax: 1-721.542.4476

info@nagico.com

nagico.com

This is the NAGICO Way

30 Years19 Territories1 Group

Contents

We are a financially strong and innovative insurance provider leading the insurance industry in the Caribbean. At NAGICO, we provide our customers with exceptional value through our competitive and flexible products, expertise and responsive service offered throughout our regional network of branch offices, agents and brokers in the Caribbean and future markets. The NAGICO experience is shaped by the many cultures of the Caribbean, which enhances the quality of life for our customers and the communities in which they live.

Chairman’s Statement

CEO’s Statement

CFO’s Statement

Statement of Corporate Governance

Group Board Of Directors

Independent Auditors’ Report

Consolidated Statement of Financial Position

Consolidated Statement of Comprehensive Income

Notes to the Consolidated Financial Highlights

NAGICO Distribution Network

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FUTURE

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We are smarter today because of lessons from the past. Our financial integrity is solid because we respond to current market trends. Our future is secure because of the futures we secure for others.

I am pleased to report that 2012 was a year of consolidation for the NAGICO Group. There was considerable expansion territorially in 2011 which led to a planned increased premium income for 2012.

I have observed that in both Europe and America the number of Insurance Companies has declined dramatically in the last two decades due to the fact that only the fittest could survive. Indeed, here in the Caribbean quite rightly, regulators have become more demanding which in itself is increasing the costs to all insurance companies and the consumers. At NAGICO we believe we have the best IT systems, a full range of products and a strong balance sheet. These are the factors I believe that will continue to drive NAGICO forward in even the toughest market conditions.

I would like at this point to thank NAGICO’s dedicated Management Team who have taken the Company through the expansion program which it has deliberately embarked on in the last few years.

I and my fellow board members believe in NAGICO’s corporate plan and we believe we have the correct management and capital base to take us forward as one of the strongest Insurance Companies in the region. We therefore look forward to serving our customers all over the Caribbean with even better service and the right products at the right price whilst maintaining the highest financial standards of any insurance institution in the region.

CHAIRMAN’S STATEMENT

Michael Bishop Chairman of the NAGICO Group Board of Directors

May 31, 2013

LEADERSHIP

9Imran McSood Amjad, ACIINAGICO Group Chief Executive Officer

May 31, 2013

True leadership comes from those who know

how to motivate others to discover their own

pathways to success rather than merely leading

them there by the hand.

CEO’S STATEMENT

The Macro Economic conditions in 2012 in most of the islands where we operate were not conducive to growth or profits. In addition the political situation has been unstable, resulting in changes in Governments on several islands. However, I am pleased to state that the NAGICO Group continues to grow and generate acceptable returns.

We celebrated our 30th Anniversary in 2012 and having been the CEO from inception, I am proud to say that we marked the occasion with historic achievements.

NAGICO commenced operations on St. Maarten in 1982 with a mere US$75,000 in paid in capital. By the end of 2012, the enclosed financial statement shows premium income of over US$108 million, assets of over US$170 million and net assets of over US$77 million. 2012 was a particularly good year with earnings surpassing US$10 million, mainly from operating income, but also from asset revaluation in accordance with IFRS rules.

The above results justify NAGICO’s strategy of growth, profitability and spreading risks by expanding in new markets.

In 2012, we acquired majority shares in VINSURE, a leading insurer in St. Vincent, established offices in Grenada and the Bahamas and strengthened our management structure. We continue to place emphasis on education and now have over 20 qualified Chartered Insurers and Accountants and established the NAGICO Information Technology Centre (NITC) in the Dominican Republic to enhance our state of the art Insurance Software programs.

I take this opportunity to recognize and thank our Shareholders, Management, Staff, Directors, Agents, Brokers, Reinsurers and many Associates who have been instrumental in our phenomenal success.

Whilst there will be many challenges, we look to the future with great optimism, certain in our quest for growth, profits and excellence.

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REPUTATION

Financial ResultsNAGICO’s audited consolidated financial statements for the year ended 31 December 2012 have shown significant improvements in the Group’s performance with an increase in net profit before taxation of $11 million compared to $5 million in the previous year; this represents an increase of $6 million or 120% which was mainly attributed to the growth in insurance premium revenue which increased to $109 million or 28% over the previous year and a relatively stable loss ratio of 34%.

Additionally, during 2012, we have experienced growth in our investment income of $2 million and other operational income of $5 million.

We have continued to be conservative in our investment approach as proven by our investment securities amounting to $61 million which primarily comprised government securities and term deposits.

NAGICO continues to be a very liquid group with liquid assets accounting for approximately 69% of the investment portfolio and 55% of total net assets which is mainly due to the retention of capital since the shareholders of the Group have a “no dividend” policy. Consequently, the Group continues to be solvent and maintain adequate risk-adjusted capitalization for its current business profiles. Overall, total assets and equity have grown to $170 million and $77 million respectively.

OutlookGiven the changes we have seen within the various governments throughout the region, regulators, consumer spending and the global economy, we are introducing new financial measures to become more efficient and effective, thereby avoiding any significant adverse

effect on the Group and staff as we strongly believe that our human resources are our most valuable asset. Therefore, for 2013, the Group has budgeted further growth in our operating results which we plan to achieve through a number of cost cutting measures and through growing our new operations within the developing and new markets which we operate.

CFO’S STATEMENT

Our reputation is carried on the voices of those we serve well. It lights our path into new markets and lays the foundation for our continued success and secure position in the Caribbean.

Justin WoodsChief Financial Officer

May 31, 2013

STRENGTH

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Our strength is born from our commitment to

our community. It is evidence of our resilience

to catastrophic weather, life-altering events and

insurmountable challenges that threaten our

customers’ way of life.

The NAGICO Group and its subsidiaries now undertake operations in 19 jurisdictions throughout the Caribbean region, of which 18 involve licensed insurance activities. Most jurisdictions have their own separate insurance regulatory body, as a result of which NAGICO is required to report to 15 different regulatory bodies. The two main home regulatory bodies are the Central Bank of Curaçao & St Maarten and the Anguilla Financial Services Commission. Other regulatory bodies include the Prudential Control Authority, part of the Banque de France based in Paris, covering NAGICO’s activities in French St Martin and the other French overseas territories and the Dutch Central Bank covering activities in the BES islands. It should be noted that the Dutch based regulatory bodies require NAGICO to have a Supervisory Board, made up entirely of independent board members.

Given such diverse regulatory reporting, Corporate Governance and the related activity of internal and external Compliance have now taken on an even more important role within the Group. Basically Corporate Governance refers to the processes, structures and information, including accountability, used for directing and overseeing the management of an institution. A number of Caribbean regulators issue Corporate Governance Guidelines and the Group follows these very closely.

Proactive corporate governance and compliance ongoing Group projects through 2012/2013 include review of the current senior management structure; establishment of a risk management program; putting in place a business continuity plan, given the ongoing possibility of a catastrophe occurrence in the region; strengthening existing internal audit and Audit Committee functions; reviewing how senior management reports to the various boards; maintaining more regular contact with regulatory bodies, including formal presentations; ensuring regulatory compliance

by all NAGICO offices with local legislation and regulations; reviewing existing internal Anti Money Laundering manuals and procedures, particularly where long-term insurance is involved and which is more susceptible to AML risks.

Finally NAGICO is reviewing the impact of a new insurance regulatory regime within the European Union,entitled Solvency II, which is scheduled to come into effect during 2014. This new regime will bring in more stringent reporting and compliance requirements.

STATEMENT OF CORPORATE GOVERNANCE

John D.K. LawrenceHead of Group Compliance

May 31, 2013

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Michael Bishop NAGICO Group Chairman

Ronald Knowles Board Member – NAGICO NV, Life, Ltd, Bahamas, Grenada, St. Lucia, Trinidad & Tobago, Audit Committee

Ron VerhaarBoard Member – NAGICO NV & Life

BOARD OF DIRECTORS

Mark TeelucksinghBoard MemberNAGICO Trinidad & Tobago

Dawn Davies Board MemberNAGICO Bahamas

Lisa FulchanBoard MemberNAGICO Trinidad & Tobago

Edward LordBoard MemberNICL Grenada

Francis BowmanBoard Member – NAGICO NV, Life, Trinidad & Tobago, Audit Committee

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Opinion

In our opinion, the Consolidated Financial Highlights derived from the audited

consolidated financial statements of Nagico Holdings Limited for the year ended

December 31, 2012 are consistent, in all material respects, with those financial

statements, in accordance with International Financial Reporting Standards.

We report that the management report, to the extent we can assess, is consistent with

the consolidated financial statements.

The accompanying Consolidated Financial Highlights, which comprise the consolidated

balance sheet as at December 31, 2012 and the consolidated statement of

comprehensive income for the year then ended and related notes, are derived from the

audited consolidated financial statements of Nagico Holdings Limited for the year ended

December 31, 2012. We expressed an unmodified audit opinion on those financial

statements in our report dated April 23, 2013.

The Consolidated Financial Highlights do not contain all the disclosures required by

International Financial Reporting Standards. Reading the summary financial statements,

therefore, is not a substitute for reading the audited consolidated financial statements of

Nagico Holdings Limited.

Management’s Responsibility for the Consolidated Financial Highlights

Management is responsible for the preparation of Consolidated Financial Highlights of

the audited financial statements in accordance with International Financial Reporting

Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Consolidated Financial Highlights

based on our procedures, which were conducted in accordance with International

Standard on Auditing (ISA) 810, “Engagements to Report on Summary Financial

Statements.”

INDEPENDENT AUDITORS’ REPORT

Sint Maarten

May 31, 2013

KPMG Accountants B.V.

M.L.M. Kesselaer RA

Managing Director

CONSOLIDATED FINANCIAL HIGHLIGHTSConsolidated Statement Of Financial Position As At December 31, 2012

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Assets 2012 2011(in U.S. dollars)

Property, plant and equipment 16,016,684 14,027,727Retirement benefit asset 7,921,719 7,517,031Investment properties 26,829,521 20,476,120Investment securities 61,310,518 53,857,449Investment in associate - 124,675Intangible assets 1,119,387 582,718Deferred tax asset 3,201,441 1,930,598ReceivablesUnearned reinsurance premiums-net 3,360,572 3,522,939Claims receivable reinsurance 2,026,597 1,232,808Insurance receivables-net 16,900,224 12,198,174Prepayments and other current assets 4,599,184 3,162,102

26,886,577 20,116,023

Cash and cash equivalents 26,746,293 23,801,004

170,032,140 142,433,345

Equity and liabilities 2012 2011(in U.S. dollars)

EquityShare capital 10,000 10,000Additional paid in capital 43,514,753 43,514,753Revaluation reserves 552,621 687,301Other reserves 15,663 -Retained earnings 31,630,130 21,167,103Shareholders' equity 75,723,167 65,379,157Minority interests 1,664,212 -Total equity 77,387,379 65,379,157LiabilitiesGross insurance liabilities 80,729,861 68,353,574Pension liabilities - 1,585,341Deferred tax payable 4,604,338 2,842,147Current tax payable 910,972 698,228Accounts payable and accrued liabilities 6,399,590 3,574,898

92,644,761 77,054,188

170,032,140 142,433,345

CONSOLIDATED FINANCIAL HIGHLIGHTSConsolidated Statement Of Comprehensive Income For The Year Ended December 31, 2012

2012 2011(in U.S. dollars)

RevenuesInsurance premium revenue 108,808,246 84,774,595Insurance premium ceded to reinsurers (28,566,004) (25,566,639)Commissions (16,769,235) (12,412,756)Net insurance premium revenue 63,473,007 46,795,200

Investment income 2,856,764 1,083,387Other income 8,748,891 3,925,889

11,605,655 5,009,276

Total revenues 75,078,662 51,804,476

ExpensesInsurance claims and loss adjustment expenses net ofrecoveries from reinsurers 36,568,073 28,221,556Personnel expenses 12,757,341 9,829,795Administration expenses 4,089,208 2,623,429Other operating expenses 9,369,149 4,986,067Amortization other intangible assets 49,851 -Amortization deferred acquisition cost 174,753 391,935Depreciation 1,057,737 826,620Total expenses 64,066,112 46,879,402Result before taxation 11,012,550 4,925,074

Taxation (1,023,008) 842,188Net result after taxation 9,989,542 5,767,262

Other comprehensive incomeChange in fair value of equity securities 15,663 -Change in other comprehensive income 15,663 -Comprehensive income for the year 10,005,205 5,767,262

Attribution:Comprehensive income for the year attributable to shareholders 9,934,964 5,767,262Comprehensive income for the year attributable to minority interests 70,241 -Comprehensive income for the year 10,005,205 5,767,262

Basis of Estimates The preparation of the financial statements requires the Group to make estimates and assumptions that affect items reported in the statement of financial position and statement of comprehensive income. Notably the insurance liabilities are prone to estimates and assumptions. Although these estimates and assumptions are based on management’s best knowledge of current facts, circumstances and, to some extent, future events and actions, actual results ultimately may differ, possibly significantly from those estimates.

For financial statement presentation purposes certain 2011 balances have been reclassified in order to be in conformity with the 2012 presentation.

Basis of ConsolidationSubsidiaries are all entities over which the Group has the power to govern the financial and operating policies. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that control ceases. The following subsidiaries have been consolidated as of December 31, 2012.

General NAGICO Holdings Limited (the “Company”) was incorporated in Anguilla on July 15, 1999. The Company’s principal activity is to manage its subsidiaries. The address of the Company’s registered office is Caribbean Commercial Centre, The Valley, Anguilla. The consolidated financial statements of the Company as at and for the year ended December 31, 2012 include the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in associates. The Group is primarily involved in the offering of property and casualty insurance including fire, motor, public liability, health and marine insurance and on a lesser scale, life insurance. The Group conducts business through subsidiaries and their branches and agents in St. Maarten, St. Martin, French Overseas Territories (mainly Guadeloupe and Martinique), Anguilla, British Virgin Islands, Antigua, Aruba, Curaçao, Bonaire, Dominica, St. Kitts and Nevis, Montserrat, Saba, St. Eustatius, St. Vincent and the Grenadines, Trinidad & Tobago and St. Lucia. A significant portion of the Company’s casualty and life insurance business is reinsured.

On May 18, 2012, a subsidiary company (NAGICO Ltd.) purchased 54,54% of the shares of St. Vincent Insurances Limited (Vinsure), a company incorporated in St. Vincent and the Grenadines, from Cooper Gay (Holdings) Limited. Vinsure is primarily involved in the offering of property and casualty insurance including fire, motor and public liability insurance and conducts business through agents located in St. Vincent and the Grenadines.

In June 2012, the Company sold it’s remaining 25% shares of Grensure Fire and General Insurances Limited (“Grensure”). Grensure is registered under the Insurance Act of 1973 of Grenada, to conduct general business and acts as correspondents for Lloyds Insurance Brokers.

The financial statements were approved by the Board of Directors on April 23, 2013.

Basis of Preparation The principal accounting policies adopted in the preparation of the consolidated financial statements of NAGICO Holdings Limited and its subsidiaries (the “Group”) are set out below. These explanatory notes are an extract of the detailed notes included in the consolidated financial statements and are consistent in all material respects with those from which they have been derived.

Statement of Compliance The consolidated financial statements, from which the consolidated financial highlights have been derived, are prepared in accordance with International Financial Reporting Standards (“IFRS”).

NOTES TO THE CONSOLIDATED FINANCIAL HIGHLIGHTS AS PER DECEMBER 31, 2012

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Details of the Company’s subsidiaries and associate as at December 31, 2012 are as follows:

Name of subsidiaryor associate

Place of incorporation and operation

Proportion ofownership interest

Principalactivity

National General Insurance Corporation (NAGICO) N.V St. Maarten 100% Non-life insuranceNAGICO Insurance Company Ltd. (NICL) Anguilla 100% Non-life insuranceNAGICO Aruba N.V. Aruba 100% thru NAGICO N.V. Non-life insuranceNAGICO Investments Ltd. Anguilla 100% InvestmentsNAGICO Life N.V. St. Maarten 100% Life insuranceNAGICO Finance B.V. St. Maarten 100% thru NAGICO N.V. InvestmentsPasha N.V. St. Maarten 100% thru NAGICO N.V. Real estateZonoever N.V. St. Maarten 100% thru NAGICO N.V. Real estateNAGICO Reinsurance Company Anguilla 100% InactiveBlue Chip Ltd. St. Kitts 100% InactiveNAGICO Road and Claims Services Aruba 100% thru NAGICO N.V. Road assistance serviceGTM Insurance Company Limited Trinidad & Tobago 100% thru NAGICO N.V. Non-life insuranceBritish American Insurance Company N.V. Curacao 100% Life insuranceBritish American Insurance Company (Aruba) N.V. Aruba 100% thru BAICO N.V. Life insuranceSt. Vincent Insurance Ltd. St Vincent & the Grenadines 54.54% thru NICL Non-life insuranceNAGICO Insurance Company Limited, Bahamas Bahamas 100% thru NICL Non-life insuranceNICL General Insurance Company Ltd., Grenada Grenada 100% thru NICL Non-life insuranceNAGICO (St. Lucia) Limited St. Lucia 100% thru NICL Non-life insuranceThe Grenadines Insurance Limited St Vincent & the Grenadines 54.54% thru St. Vincent None-trading

Insurance Ltd.

value basis to the Group’s key management personnel. The Group’s investment strategy is to invest in equity and debt securities and to evaluate them with reference to their fair values. Assets that are part of these portfolios are designated upon initial recognition at fair value through profit or loss.

Recognition and MeasurementFinancial assets are initially recognized at fair value plus, in the case of all financial assets not carried at fair value through profit or loss, transaction costs that are directly attributable to their acquisition. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the statement of profit or loss.

Loans and receivables are carried at amortized cost using the effective interest method.

Other non-derivative financial instruments not measured at fair value are measured at amortized cost using the effective interest method, less any impairment losses.

Financial assets are derecognized when the rights to receive cash flows from them have expired or where they have been transferred and the Group has also transferred substantially all risks and rewards of ownership.

Impairment of AssetsFinancial assets carried at amortized costThe Group assesses at each end of the reporting

period whether there is objective evidence that a financial asset or group of financial assets is impaired.

Financial instruments

ClassificationThe Group’s non-derivative financial instruments comprise financial assets at fair value through profit or loss, loans and receivables (including fixed deposits), held to maturity instruments, and trade and other payables.

Held-to-maturity assetsIf the Company has the intent and ability to hold debt securities to maturity, then such financial assets are classified as held to maturity. Held-to-maturity financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method, less any impairment losses.

Held-to-maturity financial assets comprise debt securities.

Loans and ReceivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, and other than those that the Group intends to sell in the short term or that it has designated as at fair value through profit or loss. Receivables arising from insurance contracts are also classified in this category and are reviewed for impairment as part of the impairment review of loans and receivables.

Interest on loans and receivables are included in the statement of comprehensive income and is reported as ‘Investment income’.

Financial assets at fair value through profit or lossThis category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset is classified into the ‘financial assets at fair value through profit or loss’ category at inception if acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short-term profit-taking, or if so designated by management. This includes investments in equities.

Financial assets designated as at fair value through profit or loss at inception are those that are:

• Held in internal funds tomatch insurance andinvestment contracts liabilities that are linked to the changes in fair value of these assets. The designation of these assets to be at fair value through profit or loss eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as ‘an accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases.

• Managedandwhoseperformanceisevaluatedon a fair value basis. Information about these financial assets is provided internally on a fair

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Investment securities

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2012 2011

(in U.S. dollars)

Long term investments 27,845,034 18,830,884Short term investments 33,465,484 35,026,565

61,310,518 53,857,449Investments can be broken down into the following categoriesInvestments held to maturityLong term investments - held to maturity 27,845,034 18,830,884Short term investments - held to maturity 31,438,016 33,013,655

59,283,050 51,844,539Other categories of investmentsShort term investments - loans 1,873,246 1,874,351Short term investments - available for sale 154,222 138,559

2,027,468 2,012,91061,310,518 53,857,449

Investments can be broken down into the following categoriesLong term investments - Level 2 27,845,034 18,830,884Short term investments - Level 2 33,264,807 34,888,006Short term investments - listed 200,677 138,559

61,310,518 53,857,449

Contingencies and commitments Certain pending litigations exist for which the outcome is uncertain at this time and for which no provision has been made. A provision is made where a potential liability is assessed as being probable.

Solvency requirement margin for insurance companyCBCS requires a life insurance business to have a minimum solvency margin equal to 4% of the technical provision of previous year. The general insurance business is required to maintain a solvency margin as per the requirement of the regulators where the Group entities operate. The Group entities are in compliance with the solvency margin requirements where these entities operate as of and for the year ended December 31, 2012.

Contingent Asset

NICL General Insurance Company Ltd., Grenada As at December 31, 2012 there is a loss of ED 297,712 that will attract utilizable tax losses. Given the business started operations in January 11 2012 management has assumed that the recoverability of the tax losses is still in doubt because a trend in profitable growth is not yet fully established.

Nagico (St. Lucia) Limited As at December 31, 2012 there is a loss of ED 1,983,133 that will attract utilizable tax losses. Given the business started operations in January 11, 2012 management has assumed that the recoverability of the tax losses is still in doubt because a trend in profitable growth is not yet fully established.

Nagico Life As at December 31, 2012 there is a cumulative loss of USD 941,268 that will attract utilizable tax losses. Management has assumed that these losses may not be realized given the fluctuation in profits and losses over the years and as such the losses have not been recognized on the statement of financial position.

Anguilla

NAGICO Branch Office Carlyn Carty- Acting Manager

Fairplay Management ServicesQuincy Gumbs Antigua Brysons Insurance Agency Marjorie ParchmentRuthlyn Herbert Aruba

Aruba Branch OfficeDetlef Hooyboer

Bahamas Bahamas Branch OfficeVibert Williams

Bonaire Bonaire Branch Office Christopher Hill Johannes William

Curacao

Curacao Branch Office Johannes William

British American/ NAGICO Life Koos Oosterwaal

NAGICO DISTRIBUTION NETWORK

Dominica Dominica Branch Office Merle Lawrence

French Antilles (Martinique/Guadeloupe)

Cooper Gay

Grenada

Grenada Branch OfficeFabian Walthrus

Montserrat

Judith Greer & Associates Inc.Judith Greer Nevis

Nevis Branch OfficeLaurenn Barry

Saba

Saba Branch OfficeRudy Zagers

Saint Martin (French Side)

Saint Martin Branch Office Tracy Harris

St. Eustatius A.R.C. Agency N.V. Arlene Cuvalay

Carmen Suares-Mars

I.F. Rivers Enterprises N.V. Ivan Rivers

St. Kitts

St. Kitts Branch Office Adrian Smith Advantage Capital Management Ltd. Austin Julius St. Lucia

St. Lucia Branch Office Royron Adams

St. Maarten

NAGICO Executive Office

St. Vincent

VINSuRESamuel Goodluck BVI (Tortola / Virgin Gorda) Century Insurance Agency Shan Mohamed Trinidad & Tobago

Trinidad Branch OfficeChristopher Henriques

For a complete overview of NAGICO Agents and Brokers, please visit www.nagico.com

2012ANNUAL REPORTANNUAL REPORT

C.A. Cannegieter St. # 28

Philipsburg, St. Maarten

Tel: 1-721.542.2739

Fax: 1-721.542.4476

info@nagico.com

nagico.com