Full Year 2017 Results 19 April 2018 Disclaimer This presentation - - PowerPoint PPT Presentation

Full Year 2017 Results

19 April 2018

2

Disclaimer

This presentation (the “Presentation”) has been prepared by The Ardonagh Group Limited (“Ardonagh” or “the Group”) and is its sole responsibility. For purposes hereof, the Presentation shall mean and include the slides that follow, any oral presentation by Ardonagh 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 Ardonagh, 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. Ardonagh cautions that the Presentation may contain forward looking statements in relation to certain of Ardonagh’s 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 Ardonagh’s 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 Ardonagh, its subsidiaries and affiliates operate. As a result, Ardonagh’s 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 Ardonagh. All subsequent written or oral forward looking statements attributable to Ardonagh 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, Adjusted EBITDA, Pro Forma Adjusted EBITDA, Organic growth and certain
• ther 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 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 Ardonagh 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 Ardonagh or to make use of any services provided by Ardonagh. 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. Ardonagh 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 Ardonagh and (ii) to be bound by the foregoing limitations, undertakings and restrictions.

• 1. Executive Summary

4

Executive Summary - 2017

1. The Ardonagh Group is delivering on the shared vision of shareholders and management

• Income of £536m in 2017(1) with +11% growth vs. prior year (+3.5% Organic growth)
• Pro Forma Adj. EBITDA of £162m in 2017(1) with +20% growth vs. prior year (+31% growth in Adj. EBITDA)
• Strong performance in Distribution and Wholesale, more than offsetting MGA legacy issues and PSL back-book run-off
• Significant progress made in reshaping structure and governance of the Group to support the next phase of development

2. Highly effective investment in cost reduction initiatives, highly accretive acquisitions and new hires

• Towergate Transformation Plan 81% complete, M&A synergies ahead of plan
• Over +120 front-end systems in Advisory replaced by single Acturis system by Q3 2018, 12 months ahead of plan
• Several additional initiatives identified to date to improve efficiency and effectiveness of the Group
• Completed acquisitions of both specialist businesses that complement existing platforms (Carole Nash and Healthy Pets) and

“add-ons” (Mastercover) that consolidate market positions in attractive niches

• Significant investment in new hires of producers across the business and strong retention of existing employees
• Influx of many high calibre, experienced senior leaders, attracted by Ardonagh business proposition

3. Relentless focus on our vision to be the largest, best performing diversified insurance intermediary in the UK with a growing global footprint

• Mid-single digit Organic income growth, underpinned by market growth and investments made in income producers
• Highly selective and accretive M&A activity
• Focus on maximising free cash flow generation
• Absolute commitment to achieving our financial targets

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018

5

April

HPS investment in Towergate

December

Creation of Nevada and acquisition of majority stake in Price Forbes

June

Acquisition of majority stake in Broker Network by HPS and MDP MDP equity investment in Towergate and Nevada Acquisition of majority stake in Autonet

2016

Creation of Ardonagh Group Acquisition of Direct Group and Chase Templeton Acquisition of Carole Nash, Mastercover and Healthy Pets

Q3’16 – Q1’17 November June Q3 – Q4 ‘17 2017 2015

The Ardonagh Group is the result of a carefully crafted acquisition strategy executed since 2015

History of The Ardonagh Group to Date

£536m 2017 Income (1) £162m Pro Forma Adjusted EBITDA(1) 30% Pro Forma Margin +11% (+3.5% Organic) 2017 Income Growth

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018

6

• Income growth +14% vs. prior year and underlying Organic growth of +1.5%. Strong performance in Advisory, Autonet and PSL(3) Panel,
• ffset by PSL(3) back-book run-off, SBU closure and market headwinds in Retail. +41% improvement in Adj. EBITDA vs. prior year due to

income uplift and strong delivery on cost saving initiatives

–

Advisory delivered strong Organic growth of +3% vs. prior year, driven primarily by new business up +3% and retention up +2pp, combined with re-negotiated Premium Credit contract and Fee for Service agreements. Adj. EBITDA up +57% vs. prior year and single Acturis system roll-out now well under way, 12 months ahead of plan

–

Autonet also delivered strong Organic growth of +3% vs. prior year. Continued strong execution on core business with exceptional retention performance, combined with investments in strategic initiatives supported by the hire of key individuals with proven capability for delivery. Strong start to Carole Nash integration

–

Chase Templeton continues to benefit from its bolt on M&A strategy, with 5 transactions completed in H2’17

–

PSL (3) demonstrated excellent performance in its core B&C market and delivered market leading retention of 84%. Underlying income growth vs. prior year of +6% overall in Home leading to stable topline overall as Panel growth offset back-book decline

–

Retail increased Adj. EBITDA by more than 3.5x vs. prior year as the result of cost reduction and pricing initiatives, which more than

• ffset SBU closure and market headwinds

Distribution MGA and Services Wholesale

• Price Forbes remains a major independent player in the London Market while Bishopsgate has made great strides in the year as it moved

from being primarily a UK broker to placing global business, which has attracted some of the best talent in the market

• Broader product and people investments made in the previous eighteen months are underpinning Organic income growth of +16% vs.

prior year. Addition of US Binders and US Energy hires with proven track records underpins growth ambitions into 2018 and beyond

• New product lines added to those already offered, including Cyber, Renewable Energy and Healthcare
• Maintained pre-eminent position in the London Wholesale Broking market

1) 2017 Income, Adj. EBITDA Margin 2) 2017 Total growth/ Organic growth 3) Paymentshield (“PSL”)

£351m, 25% (1) +14% / +1.5%(2) £90m, 21% (1) +20% / +15.9%(2) £93m, 14% (1) (3.6)% / (1.4)%(2)

• Remedial actions in MGA including rate increase +10% and exit of c.£1m long-term unprofitable business were accelerated in Q4 2017.

Improving loss ratios helped to secure long-term capacity and profit commission agreements. Profitable Underwriting culture embedded

• Investment complete in upskilling staff and detailed program to right-size organisation initiated
• Investment in core system capabilities nearing completion including Personal Lines system upgrade, while Agriculture system investment

due to complete in the second half of 2018 provides a platform for future growth

• Successfully launched London Market and European platforms. All new business lines have secured “A” rated capacity and actively trading
• Increasing focus on niche and specialist segments within personal and commercial lines
• Direct Group Organic income growth of +5% vs. prior year, synergies delivering well ahead of plan and additional opportunities identified

Ardonagh Group Key Highlights by Segment - 2017

7

Significant Investment into the Ardonagh Platform - 2017

Cost Savings and Synergies 2017 investment: £52m

• Towergate Transformation Plan (£24m in-year investment)

generating significant benefits in line with original plan

• £36m cash cost savings delivered in 2017
• £9m additional benefit from annualisation of actions

already completed in 2017

• £10m benefit from actions that will complete in 2018
• Strong delivery on M&A synergies (£2m investment) with a

total £11m annualised benefit identified, +£4m vs. plan

• Additional non-BAU investments to upgrade IT (£10m),

property (£5m) and Group infrastructure/ governance (£11m)

• £19m annualised benefit from newly identified cost savings

across the Group (incl. operational efficiency, M&A synergies)

• End-state EBITDA uplift from the Towergate Transformation

Plan estimated at £56m(1) p.a., in line with original plan

• Market leading, scaleable IT infrastructure built and ready to

support future growth. £21m(2) invested in 2017 in fixing and upgrading IT infrastructure to latest platforms, reducing future maintenance and capex spend

• Single Acturis front-end system in Advisory providing higher

quality management information to enable better and faster decisions and release of trapped cash through enhanced reconciliation

• Ongoing cost saving culture embedded, enabling a more

efficient and effective business M&A 2017 investment: £83m

• Acquisitions including Healthy Pets, Carole Nash, Master

Cover and several book-buys added £13m Adj. EBITDA in 2017 (excluding synergies)

• Robust current pipeline supports selective M&A strategy for

the foreseeable future

• Aggregate EV/EBITDA of deals closed to date of 6.0-7.0x (incl.

cost synergies)

• Significant revenue synergy opportunities not included in pro

forma adjustments to EBITDA Income Initiatives 2017 investment: £18m

• Investment of £18m in 2017 for new hires to accelerate

future growth, expected to deliver £10-15m in additional EBITDA in medium-term

• Continued focus on hiring as a way to accelerate revenue

growth

• “Virtuous circle” with marquee hires further raising the

Group’s profile in our core markets

Key Highlights Long-Term Benefits

£154m investment in 2017 to capture significant market opportunity and accelerate income and EBITDA growth

1) £56m total Towergate Transformation Plan savings, £55m actioned by Dec’18 2) £10m of this £21m IT investment included in Towergate Transformation Plan spend

8

Cost Synergies

• Delivery of synergies identified to date,

significant further potential across existing businesses

• Best practices being rolled out across the Group
• Group robotics program implementation
• pportunity
• Ongoing cost reduction culture embedded

£30m savings expected, including M&A cost synergies, OE and new cost reduction plans Transformation Plan

• Complete Finance Transformation Plan and

Broker System Consolidation by end 2018 £36m benefits already in EBITDA, 81% complete Procurement

• Continue to improve supplier and insurer

relationships

• Leverage combined scale allowing us to realise

improved supplier terms (e.g. PCL) £3bn of GWP within the Group – enabling significant leverage in market Revenue Synergies

• Significant cross-selling and up-selling being

actioned across the Group, no benefit included in 2017 income or EBITDA Significant additional revenue synergies identified in 2017, excluded from pro forma adjustments Mergers and Acquisitions (M&A)

• Robust pipeline of accretive M&A
• Acquisitions to date performing well and

validating the Group’s thesis and valuation approach 15 acquisitions signed/ completed since June’17, generating £13m annualised Adj. EBITDA Organic Growth

• Growing underlying market given the Group’s

business mix

• Strong execution on new hires and impressive

future pipeline

• New products launched, leveraging scale and

reach of the Group +3.5% Organic income growth during 2017

Income Growth Profit Margin Expansion Six key building blocks to support the Group’s growth ambitions

Ardonagh Group: Key Pillars of Our Strategy

9

Distribution MGA & Services Wholesale

• Insurers remain disciplined in their appetite and

rating, with rating environment stable in non- motor classes and increases in motor classes as a result of Ogden changes

• Ogden changes created a significant opportunity in

2017 for Autonet given its strong presence on price comparison websites

• Overall stable / slightly growing market for non-life
• Good growth in private rental sector, with PSL well

positioned to capitalise on this growth given #1 position as market leading provider of home insurance to mortgage brokers

• Increased proliferation of MGAs, now firmly

embedded as key distribution platforms for insurers to access niche and specialist distribution

• Looking forward, pricing increases now being

evidenced across commercial and personal lines

• Add-on acquisition opportunities as larger insurers

divest non-core businesses or outsource non-core processes

• Continued focus on efficiency expected to support

momentum in outsourcing of middle and back

• ffice services
• Geopolitical tensions are causing a heightened

sense of risk in the market and should lead to increasing demand for insurance products

• Rating environment remains weak in multiple

Wholesale products. Some hardening observed after 2017 US wind season

• Ongoing FCA market study on the competitive

environment in wholesale broking

Market Back Drop - 2017

The Group remains well positioned to capitalise on significant market opportunities

1 2 3 1 2 3 4 1 2 3

Macro Environment FX volatility Brexit uncertainty Mixed insurance rate environment

4

10

Medium-Term Financial Targets

Organic Growth

Mid-single digit Organic income growth +3.5% Organic income growth

EBITDA Margin

2019 Adjusted EBITDA margin c. 30% 30% Pro Forma Adj. EBITDA margin 21% Adj. EBITDA margin (+320bp vs. 2016)

Operating Cash Conversion

Operating Cash Conversion 80-90% 76% Normalised Operating Cash Conversion(1) 98% in Q4 2017

Capex / Exceptionals

Maintenance capex c. 2% income Project capex and exceptional costs largely complete by the end of 2018 (£45-55m spend expected in 2018) £10-15m additional discretionary investment p.a. in income and cost saving initiatives (c. 2 year cash payback) Capex / exceptional spend peaked in 2017 Transformation spend and related benefits in line with expectations Performance of additional discretionary investment to date supports target future payback

Free Cash Flow

Neutral levered free cash flow in 2018, with increased discretionary investments and ETV redress payments funded through a combination

• f existing liquidity and strategic disposals (e.g. BN stake sale)

Positive levered free cash flow in 2019 Estimated c. £51m ETV redress payments (vs. £45-65m previous guidance) over 24 months starting in Q3/Q4 2018

• Organic Deleveraging

Organic deleveraging Tactical debt raising activity to support growth ambitions (including M&A) Net secured leverage decreased from 5.7x in Dec’16 to 5.2x in Dec’17

1) Defined as Adj. EBITDA less net working capital movements less maintenance capex Normalised for timing of payment of £12m 2016 Towergate operating liabilities

Strong delivery against all our medium-term financial targets

Medium-Term Targets 2017 Performance

• 2. Key Credit Highlights

12

Ardonagh Credit Highlights - 2017

Diversified, resilient earnings base 3 Growing and cash generative business model 5 Market leading, highly experienced management team 6 Extensive local footprint and global reach 2 Strong track record of delivery on investments 4

 Leading diversified independent UK insurance intermediary group

1

13 £1,000 £956 £756 £752 £721 £581 £536 £434 £289 £271 £265 £242 £131 £127 £109 £88 £86 £70 £69 £66 £64 £63 £58 £56 £50 £50 £48 £47 £47 £42 £38 £38

Leading Diversified Independent UK Insurance Intermediary

(£ in millions)

UK Insurance Broker Rankings by Income (1)

International Personal Commercial London

(2)

1

1. Ardonagh Group is the result of a carefully targeted acquisition and hiring strategy focused on the UK insurance market 2. Ardonagh Group businesses were specifically selected due to:

• Strong management teams
• Leading position in their respective market segments
• Significant Organic growth and acquisition opportunities
• Ability to create additional value from portfolio effect without disruption or integration of underlying businesses

3. Presence across the entire insurance value chain allows the Group to optimise service to customers and maximise commission capture Key Highlights

1 2 3

1) Source: IMAS Corporate Finance and Insurance Times Top 50 Brokers 2017 2) 2017 Pro forma for M&A signed and/ or completed by 31 March 2018

14

Autonet Paymentshield Insurance Broking Schemes & Programs MGA Wholesale Online specialist in Van, Car and Bike, underpinned by market leading pricing capabilities, customer analysis and technical expertise The UK’s leading provider of Property Insurance solutions sold via Mortgage Broker channel Leading UK network of advisors providing risk management solutions to UK SME and corporate clients Provider of bespoke specialist insurance products with an integrated online and offline service proposition One of the UK’s largest MGAs, specialising in selected commercial and personal lines niches Independent London wholesale specialist, with multi-disciplinary expertise and true global reach. Trading under multiple brands for alternative customer propositions £0.2bn GWP £0.1bn GWP £0.7bn GWP £0.4bn GWP £0.5bn GWP £1.0bn GWP

• UK’s leading Van insurer
• More than 15% market

share of Motorcycle market

• Strong new business

growth and accretive book-buys

• #1 distributor in 9 of 10

networks with access to c. 83% of all intermediated mortgages

• Home policies up +25% in

2017, +19% in 2016

• Leading presence across

multiple specialist niches

• Largest private medical

insurance intermediary in the UK

• Organic growth +3%
• +120 systems consolidated

to single Acturis system

• Highly diversified product

portfolio with market leading positions (e.g. care, pet insurance)

• Significant product

innovation underway

• Increasing focus on niche

and specialisms (e.g. non- standard home, contractors plant)

• Investments made in

systems, people and London Market/ European platforms

• Fast growing international

presence (e.g. South America)

• +25 new income

producers hired into Wholesale

• +16% Organic growth

Distribution MGA & Services Wholesale

Leading Diversified Independent UK Insurance Intermediary

1

15

Extensive Local Footprint and Global Reach

2

 5 national contact centers each with a dedicated product focus  78 local offices across the UK  15 MGA and Service offices serving local brokers  Highly efficient operations centre in Doncaster  London headquartered, in close proximity to Lloyd’s and London market Extensive UK distribution network linked to international markets

Distribution Wholesale MGA & Services Ireland United Kingdom Wholesale Markets

 c. 440 regional income producers  Recently opened first international offices in Miami and Stockholm

16

14% 11% 30% 16% 11% 18%

Diversified, Resilient Earnings Base

2017 Income

Autonet Wholesale MGA

3

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

Paymentshield Insurance Broking Schemes & Programs 9% 7% 6% 6% 4% 36% 32%

2017 Exposure by Carrier

Carrier 1 Carrier 2 Carrier 3 Carrier 4 Carrier 5 Others

 Strong retention of income producers and customers across the business  Long term retention plans in place for top performing producers and underwriters  Highly diversified product portfolio significantly limits reliance on single markets / macro drivers  Long standing partnership with key carriers (more than 10 years on average)  Wholesale premium primarily driven through Lloyds and spread across numerous syndicates

Wholesale

17

Strong Track Record of Delivery – Completed “Fix” Programs

4

Initiative(1) Description Latest Update / Next Action IT Transformation (ITTP) £9m saving

• Updated all IT infrastructure providing a modern, resilient and scaleable

platform for future growth

• Networks: all upgraded
• Telephony: upgraded enabling Skype roll out
• Data migrated to the cloud
• Desktops: refreshed
• Helpdesk: transitioned and modernised
• Costs moved to predominantly variable and scaleable model
• Program closed
• Completed within cost budget
• £6m investment in 2017 and no further investment required
• All major infrastructure work complete
• Outstanding £1m benefit relates to licence reductions and some

supplier rationalisation – now BAU SBU Turnaround £7m saving

• Operational overhaul of SBU with closure of Manchester and Milton

Keynes sites

• Program closed
• Completed within cost budget
• £3m investment in 2017 and no further investment required

Property Cost Reduction (Phase 1) £5m saving

• Property rationalisation and supplier rationalisation, reducing overall

property cost by c.20%

• Program closed
• Completed within cost budget
• £1m investment in 2017 and no further investment required

for phase 1 Operational Efficiencies £17m saving

• Variety of initiates across all divisions, largely:
• Middle management and back office savings
• Supplier rationalisation and renegotiation of all contracts
• Program closed
• Completed within cost budget
• £1m investment in 2017
• All major changes complete
• Remaining £1m savings are procurement related and identified,

now managed as BAU Finance Transformation (Phase 1) £7m saving

• Technology implementation to upgrade to consistent finance general

ledger across the business and introduction of robotics to manual processes

• Technology implementations largely complete
• Overall finance project now split into two phases
• £9m investment in 2017 and no further investment required for

phase 1

Cost reduction programs delivered on time and to budget, with c. 1 year cash payback and no further spend required

1) Savings set out on an annualised basis

18

Strong Track Record of Delivery – “In-Flight” Cost Programs

4

Initiative(1) Description Latest Update / Next Action Finance Transformation (Phase 2) £5m saving

• Offshore total of c.180 roles and process efficiency project
• Detailed plans in place and expected to complete

implementation early 2019

• Program costs c.£3m above initial estimate
• £12m investment expected in 2018 to complete program

Broker System Consolidation (BSC) £5m saving

• Migrate over +120 Policy Admin Systems (PAS) across Broker Advisory to

single Acturis system – a single/common version

• Additionally drive improved controls, efficiencies and consistent ways of

working

• Simplify legal structure and governance overhead
• 65% of users now using new platform
• Continue with the Acturis roll-out. Currently tracking
• c. 12 months ahead of original plan and expected to complete

in 2018 in line with cost budget

• £4m investment in 2017 and £7m expected in 2018 to complete

program Synergies (Pre-June 2017 M&A) £11m saving

• Cost savings identified between Direct Group and Towergate businesses

as the result of the consolidation of claims activities and other cost savings as set out in the OM June’17

• Cost savings identified between Chase Templeton and the Ardonagh

group as the result of back office integration

• Price Forbes synergies identified as the result of the consolidation of the

Wholesale platform

• Claims transfer to Direct Group complete (50% synergies), other

plans fully developed

• Price Forbes synergies already actioned
• £2m investment in 2017 and £4m expected in 2018 to fully

deliver synergies Synergies (Post-June 2017 M&A) £4m saving

• Cost synergies identified from the integration of Carole Nash, Healthy Pets

and Mastercover into existing Distribution businesses

• Strong start to Carole Nash integration
• Healthy Pets and Mastercover integration in line with plan
• £4m investment expected in 2018 to fully deliver synergies

Cost reduction programs well under way with c. £29m(2) investment required to complete new cost savings with an average c. 1 year cash payback

1) Savings set out on an annualised basis 2) £29m investment includes £2m spend to complete Property initiative phase 2

19

Incremental Income £5m £30-40m Incremental EBITDA £0m £10-15m Investment (£18m) £0m

Strong Track Record of Delivery – Organic Income Initiatives

4

2017 Medium-term Run Rate

(£ in millions)

Payback c. 2-3 years +3.5% Organic growth delivered in 2017 vs. prior year £18m investment in 2017 for new hires to accelerate future Organic growth (c. 2-3 years cash payback)

2017 Income Initiative Summary Key Organic Growth Drivers

• Strong retention of existing producers due to highly

effective and hard to replicate retention mechanics including equity participation

• Significant cross-sell opportunities between businesses in

the Group, including recent acquisitions

• Leverage market expertise to continue expansion in high

quality specialty products niches

• Enhance marketing across digital platforms
• Leverage improved carrier and supplier arrangements to

support long-term sustainable income growth

• Supportive underlying market trends
• £18m investment in 2017 expected to generate

5-8% income uplift in the medium-term

20

Target Date Announced Description Complete Sept 2015 Leading independent Lloyd’s broker with blue chip brand Sept 2016 Leading digital van broker and premier digital platform Apr 2017 Leading claims processing

• perations

May 2017 Leading independent PMI provider with proven acquisition platform Sept 2017 Leading specialist pet insurance broker Oct 2017 Leading premium motorbike insurance specialist Oct 2017 Leading specialist SME driving instructor insurance broker

Strong Track Record of Delivery – Highly Selective M&A Strategy

4 Total EV at Close

• c. £0.5bn

EBITDA + Synergies £70-75m Multiple post Cost Synergies 6.0-7.0x

Each acquisition has been carefully selected and evaluated and is expected to deliver significant revenue synergies over and above the cost synergies identified. All integration plans have been successfully implemented and synergies are ahead of initial plans in all cases.

• c. £0.5bn invested to date in M&A at a highly attractive blended multiple of 6.0-7.0x EV/ EBITDA (incl. cost synergies).

Significant further uplift expected from income synergies. £83m investment in highly accretive M&A during 2017(1)

1) Investment excludes consideration for Direct Group and Chase Templeton

21

£m 2017 2016 Growth Income(1) 535.7 481.3 11.3% Adjusted EBITDA(1) 114.3 87.4 30.8% Margin 21% 18% 320bps Pro Forma Adjusted EBITDA 161.5 134.3 20.3% Margin 30% 28% 220bps Operating Cash Conversion (3) 76% 58% 18%

Growing and Cash Generative Business Model

Pro Forma Adjusted EBITDA and Income

5.8x 5.6x 5.3x 7.0x Dec'16 Sept'17 Dec'17 Average Peers

Total Net Leverage(2)

5

+20% Pro Forma Adj. EBITDA growth vs. prior year led to 0.5x reduction in net leverage Dec ’17 total net leverage of 5.3x compares favorably with privately held peers

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17 2) Defined as total net debt as at balance sheet date over LTM Pro Forma Adjusted EBITDA 3) Defined as Adj. EBITDA less net working capital movements less maintenance capex Normalised for timing of payment of £12m 2016 Towergate operating liabilities

(4)

4) Pro forma for June ’17 refinancing 5) Secured net leverage as at 31 Dec’17 was 5.2x 6) Based on a selected sample of privately held insurance brokers

(6)

6.0x

(5)

22

Autonet (Digital) Paymentshield Insurance Broking Schemes & Programs MGA Wholesale

Distribution MGA & Services Wholesale Corporate Management

Geoff Gouriet General Counsel

+20 years

Sarah Dalgarno

Strategic Risk Director

+25 years

Antony Erotocritou Group FD

+15 years

David Ross CEO

+26 years

Adrian Brown COO

+28 years

Janice Deakin

Deputy CEO

+16 years

Derek Coles

+25 years

Scott Hough

+20 years

Steve Anson

+20 years

Market Leading, Highly Experienced Management Team

6

Paul Dilley

+25 years

Andy Baughan

+30 years

David Leatham

+30 years

Kay Martin

+25 years

Rob Evans

+20 years

James Watson

+33 years

Joe Thelwell

+15 years

Rob Worrell

+31 years

Iain Laws

+25 years

Gordon Newman

+50 years

Neil Pearce

+20 years

James Masterton

+25 years

Mark Mugge Strategic Advisor

+25 years

Ian Donaldson

+20 years

Craig Ball

+10 years Years of relevant industry experience

• 3. Financial Overview

24

Ardonagh Group Key Financials - 2017

1. Ardonagh income of £536m is +11% higher vs. prior year(1) driven by successful “add-on” acquisition strategy, effective hiring of market leading talent and underlying Organic income growth of +3.5%

• £83m investment in 2017 in selected, highly accretive M&A including Carole Nash, Healthy Pets and Mastercover

contributing £37m annualised to income and £13m annualised to EBITDA in 2017

• £18m investment in 2017 to drive continued producer hiring momentum across the organisation,

expected to deliver £30-40m incremental income and £10-15m incremental EBITDA in the medium-term 2.

• Adj. EBITDA of £114m with +31% growth vs. prior year(1) driven by income uplift and conversion of “run rate” cost savings into cash cost

savings 3. Pro Forma Adj. EBITDA of £162m with +20% growth vs. prior year including £19m additional cost saving opportunities identified to date (including cost synergies related to post June’17 M&A) 4. £52m invested in 2017 in: Towergate Transformation Plan which is now 81% complete (£24m investment); M&A cost synergy delivery (£2m investment); additional non-BAU investments to upgrade IT (£10m), property (£5m) and Group infrastructure/ governance (£11m) 5. UCIS redress payments of £19m completed in Q3 2017 and ETV redress payments now expected at c. £51m (vs. £45-65m previous guidance) over 24 months starting from Q3/Q4 2018 6. Operating cash flow conversion of 76% including normalisation for timing of payment of £12m 2016 Towergate operating liabilities. Further improvements towards 80-90% target expected throughout 2018 as the result of recent strengthening of Treasury and IBA functions 7. Net Secured leverage reduced to 5.2x vs. 5.7x at closing of the June’17 refinancing. Total liquidity of £133m including £58m operating cash and £75m available RCF as at 31 Dec’17

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17

25

Variance Full Year Variance £m Q4 2017 Q4 2016 £m % 2017 2016 £m % Income 130.3 121.3 9.0 7.4% 535.7 481.3 54.4 11.3% Staff Expenses (68.7) (66.8) (1.9) (2.9%) (279.9) (269.5) (10.4) (3.8%) Operating Expenses (38.2) (33.2) (5.0) (15.1%) (141.6) (124.4) (17.2) (13.8%) Adjusted EBITDA 23.4 21.3 2.1 9.8% 114.3 87.4 26.9 30.8% Margin % 17.9% 17.5% 40 bps 21.3% 18.2% 320 bps Pro Forma Cost Adjustments 22.7 16.4 6.4 38.9% 47.2 46.9 0.4 0.8% Pro Forma Adjusted EBITDA 46.1 37.6 8.5 22.5% 161.5 134.3 27.2 20.3% Margin % 35.4% 31.0% 430 bps 30.1% 27.9% 230 bps Staff Costs as % of Income 52.8% 55.1% 230 bps 52.2% 56.0% 380 bps Operating Expenses as % of Income 29.3% 27.4% (200 bps) 26.4% 25.8% (60 bps) Organic Income Growth 1.8% 3.5% Secured Net Debt at hedged fx 842.9 766.0 Secured Net Leverage 5.2x 5.7x

Ardonagh Group Financial Overview – 2017

Strong income and EBITDA growth driven by M&A and Organic performance

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

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17 2) June’17 OM set out 2016 total net leverage of 5.75x and net secured leverage of 5.67x, which have been restated to account for USD SSN at hedged fx rate of 1.2742 (2)

26

Ardonagh Group Segmental Summary – 2017

Strong Organic growth in Wholesale, Advisory and Autonet. Distribution income performance affected by Paymentshield back- book run-off and weaker growth in Retail (market headwinds, SBU closure)

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

Variance Full Year Variance Organic Growth Income (£m) Q4 2017 Q4 2016 £m % 2017 2016 £m % Q4 YTD Distribution 82.3 74.3 8.0 10.7% 351.1 309.3 41.8 13.5% 2.1% 1.5% Wholesale 23.6 20.5 3.1 14.9% 90.3 75.2 15.1 20.1% 11.4% 15.9% MGA and Services 24.1 26.5 (2.3) (8.7%) 93.1 96.6 (3.4) (3.6%) (7.6%) (1.4%) Corporate 0.3 0.0 0.3 1.1 0.2 0.9 Income 130.3 121.3 9.0 7.4% 535.7 481.3 54.4 11.3% 1.8% 3.5% Variance Full Year Variance EBITDA (£m) Q4 2017 Q4 2016 £m % 2017 2016 £m % Distribution 17.0 12.5 4.5 35.8% 87.2 62.0 25.2 40.6% Wholesale 4.4 4.6 (0.2) (3.9%) 19.3 13.7 5.5 40.4% MGA and Services 3.0 5.6 (2.5) (45.3%) 13.2 17.0 (3.8) (22.1%) Corporate (1.1) (1.4) 0.3 (5.4) (5.3) (0.1) Adjusted EBITDA 23.4 21.3 2.1 9.8% 114.3 87.4 26.9 30.8% Pro Forma Cost Adjustments 22.7 16.4 6.4 38.9% 47.2 46.9 0.4 0.8% Pro Forma Adjusted EBITDA 46.1 37.6 8.5 22.5% 161.5 134.3 27.2 20.3% Variance Full Year Variance EBITDA Margin % Q4 2017 Q4 2016 (bps) 2017 2016 (bps) Distribution 20.7% 16.9% 380 24.8% 20.0% 480 Wholesale 18.6% 22.3% (370) 21.3% 18.2% 310 MGA and Services 12.6% 21.1% (840) 14.2% 17.6% (340) Adjusted EBITDA Margin % 17.9% 17.5% 40 21.3% 18.2% 320 Pro Forma Adjusted EBITDA Margin % 35.4% 31.0% 430 30.1% 27.9% 230

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17

27

2016 vs. 2017 Income Bridge

(£ in millions)

£481 £536 £561-571 £29 £37 £25-35m (£12) 2016 Underlying Growth Annualised M&A Legacy 2017 Medium-term Income Initiative Uplift Illustrative Medium- term Income Potential

M&A including Carole Nash, Mastercover, Healthy Pets, Chase Templeton acquisitions and various book- buys See page 19 Includes PSL back-book, impact of Underwriting legacy issues under remediation and SBU closure impact Organic growth

• f +3.5% and

investment in new hires

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17

Overall impact of legacy issues peaked in 2017 and will to decrease going forward

28

£87 £114 £162 £172-177 £25 £13 £47 £10-15m (£12) 2016 Underlying Growth Annualised M&A Legacy

• Adj. EBITDA

2017 Cost Adjustments Pro Forma Adjusted EBITDA 2017 Medium-term Income Initiative Uplift Illustrative Incl. Medium-term Income Potential

Driven by underlying income growth and £24m cost savings, partly offset by investments in people and systems

2016 vs. 2017 Adjusted EBITDA Bridge

(£ in millions)

Cost reduction initiatives expected to deliver “run rate” savings within 12 months See page 19

Margin 18% Margin 30% Margin 21% Margin 31%

(1)

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17

(1) (1)

M&A including Carole Nash, Mastercover, Healthy Pets, Chase Templeton acquisitions and various book- buys Includes PSL back- book, impact of Underwriting legacy issues under remediation and SBU closure impact

Overall impact of legacy issues peaked in 2017 and will to decrease going forward

29

£10m in-flight

(2016: £27m)

£9m actioned

(2016: 8m)

£36m delivered

(2016: £13m)

£3m in-flight

(2016: --)

£7m actioned

(2016: --)

£1m delivered

(2016: --)

£15m in-flight £4m actioned

• - delivered

Ardonagh Group Conversion of Pro Forma Adjustments

Transformation Plan Group Synergies New 2017 Cost Savings

£56m - 81% Complete £11m - 70% Complete £19m - 22% Complete

Consistent and rapid conversion of identified cost reduction opportunities into underlying EBITDA £37m delivered to EBITDA, representing a £24m increase vs. 2016

1) £56m total Towergate Transformation Plan savings, £55m actioned by Dec’18

30

Adjustments to EBITDA (£m) 2016 Pro Forma Adj 2017 Additional Delivery Increased line of sight 2017 Pro Forma Adj Net Change % Actions Complete (1) Towergate Transformation Plan 35.0 (22.9) 6.9 19.0 (16.0) 81% Completed "Fix" Programmes 28.9 (22.9) 1.4 8.2 (20.7) 92% In-Flight "Enhance" Programmes 6.1

• 5.5

10.8 4.7 35% (2) Group Synergies 6.9 (1.3) 4.1 9.7 2.8 70% (3) Other (incl. FX) 5.0

• (5.0)

Subtotal 46.9 (24.2) 11.0 28.7 (18.2) 79% (4) New Cost Savings

• 18.6

18.6 18.6 22% Cost Synergies with New M&A

• 3.9

3.9 3.9 26% New Ardonagh OE Programme

• 5.0

5.0 5.0 0% New Cost Reduction Plans

• 9.7

9.7 9.7 32% Total Pro Forma Adjustments 46.9 (24.2) 29.5 47.2 0.3 67% % of Pro Forma Adj. EBITDA 35% 29%

Ardonagh Group Overview of Pro Forma Adjustments - 2017

(£ in millions)

£24m savings embedded in 2017 EBITDA result and a further £30m identified during the year £18m like-for-like reduction in OM June’17 pro forma adjustments

1) Excludes £13m delivered in 2016 result 2) Not delivered in 2017 EBITDA result

(2)

(1)

31

Significant Cost Reduction Opportunities Delivered - 2017

Delivered Savings in 2017 EBITDA Annualised Savings for Actions Complete Dec-17 Annualised Savings for Actions Complete Dec-18 2017 Pro Forma Adjustment Spend to Dec’17 Total Investment Description / Progress Completed IT Transformation £5m £8m £9m £4m £19m £19m Majority actions complete, with smaller contract renegotiations to complete e.g. license reductions SBU Turnaround £6m £7m £7m £1m £4m £4m Completed Property Cost Reduction Phase 1 £5m £5m £5m

• £1m

£1m Completed Operational Efficiency £14m £16m £17m £3m £2m £2m Large changes complete, smaller procurement savings coming through in BAU Finance Transformation Phase 1 £6m £7m £7m £1m £12m £12m Completion of system upgrades including new single general ledger, automation of manual processes and initial offshoring Subtotal £36m £43m £45m £9m £38m £38m In-Flight Finance Transformation Phase 2

• £5m

£5m

• £12m

Complete offshoring and process efficiency. Some delivery challenges have extended programme and increased costs by c.£3m Property Cost Reduction Phase 2

• £2m

Further site consolidations identified for 2018 and 2019 Broker Systems Consolidation

• £2m

£5m £5m £4m £12m 65% of targeted systems moved to single platform, currently 12 months ahead of original plan Group Synergies and Other £1m £8m £11m £10m £2m £6m Claims all moved to Direct Group. Price Forbes synergies delivered and others on track to be delivered in 2018 Subtotal £1m £10m £21m £20m £6m £32m New Cost Synergies with New M&A

• £1m

£4m £4m

• £4m

Identifying cost savings once integrated with Ardonagh, primarily Carole Nash OE Program

• £5m

£5m

• £14m

Implementing robotics to improve operational efficiencies Cost Reduction Plans

• £3m

£10m £10m

• £4m

Further cost savings identified across every segment Subtotal

• £4m

£19m £19m

• £22m

Total £37m £57m £85m £47m £44m £92m

32

Ardonagh Group Cash Flow - 2017

• £20.3m normalised working capital outflow for the

full year although significant improvement in Q4

• 76% normalised operating cash conversion and

medium-term 80%-90% target unchanged

• Certain Q4 2016 operating payments in Towergate

were delayed into 2017 as we implemented new payment control systems, harmonized payment terms and renegotiated agreement with a number of

• suppliers. This will not be repeated going forward
• Acquisitions during the year, include Carole Nash,

Mastercover and Healthy Pets - £55m new bonds issued and £30m RCF draw to finance investment

• £18.3m investment in income initiatives includes:

Wholesale and Underwriting strategic hires and AE/DE tactical hires in Advisory

• £52.1m Cost saving Capex and Exceptionals includes:

Towergate Transformation Plan which is now 81% complete (£24m investment); M&A cost synergy delivery (£2m investment); additional non-BAU investments to upgrade IT (£10m), property (£5m) and Group infrastructure/ governance (£11m)

• UCIS redress completed in Q3’2017

Note: Certain reclassifications between line items have been made vs. previously reported numbers, impacting working capital movement, other exceptionals and legacy LTIPs. All costs in relation to Project Kairos are excluded from the above analysis. Please see appendix for a reconciliation to Q4 net cash flow. 1) Normalised for timing of payment of £12m 2016 Towergate operating liabilities

Cash flow reflects continued improvement in operating cash conversion and investment across the Group including selected M&A, cost and income initiatives

Full Year £m Q4 2017 Q4 2016 Variance 2017 2016 Variance Adjusted EBITDA incl. M&A 23.4 21.3 2.1 114.3 87.4 26.9 Pro Forma for M&A (1.2)

• (13.0)
• Adjusted EBITDA

22.2 21.3 0.9 101.3 87.3 14.0 Working Capital Movement(1) 0.7 1.0 (0.3) (20.3) (32.0) 11.7 Maintenance Capex (1.1) (1.6) 0.4 (4.3) (4.5) 0.1 Operating Cash Flow 21.7 20.7 1.0 76.7 50.9 25.7 Operating Cash Conversion % 98.2% 97.4% 0.8% 75.7% 58.3% 17.4% Investments in Both Income and Cost Initiatives: M&A Investments (60.8) (5.0) (55.8) (83.3) 6.3 (89.7) Investments in Income Growth (7.6) (6.5) (1.1) (18.3) (10.9) (7.4) Project Capex (4.6) (10.6) 5.9 (27.4) (25.2) (2.2) Cost Saving Exceptionals (10.2) 0.3 (10.5) (24.7) (11.9) (12.8) Total Investments (83.2) (21.7) (61.4) (153.7) (41.6) (112.1) Other Non-recurring: Normalisation of Working Capital Movement(1)

• 12.0

(12.0) (12.0) 12.0 (24.0) Legacy LTIPs / Shareholder Loans

• (7.1)

7.1 (1.8) (15.5) 13.7 Other Exceptionals (5.0) (8.1) 3.1 (10.6) (13.3) 2.7 Regulatory (incl. UCIS Redress) (0.9) (3.7) 2.8 (15.8) (13.7) (2.1) FX Hedge Losses (0.7) (2.0) 1.3 (7.9) (5.7) (2.3) Corporation Tax 0.3 (1.0) 1.3 (2.6) (4.7) 2.2 Cash Flow before Financing (67.7) (10.8) (56.8) (127.8) (31.6) (96.2)

33

£42 £56 £58 £26 £59 £55 £30 £133 (£71) (£83) 2016 Operating Cash 2017 Cash Flow (excl. Investments) Net Proceeds from June Financing Capex & Exceptional Spend 2017 Operating Cash Pre-M&A Oct-2017 Bond Tap RCF Drawdown 2017 M&A 2017 Operating Cash / Liquidity Post M&A

(1) (2)

Ardonagh Summary Funding Strategy - 2017

(£ in millions)

1) Pro forma for Jun-2017 refinancing 2) RCF increased to £105m from £90m in December 2017

Carefully crafted funding strategy to support significant level of investment, while maintaining ample liquidity at all times

• Incl. RCF

34

Ample liquidity available with £58m operating cash and £75m undrawn revolver as of 31 December 2017 Demonstrating deleveraging capabilities with net secured leverage post M&A now 5.2x vs. 5.7x as of Dec’16

Ardonagh Group Capitalisation and Net Leverage - 2017

Capitalisation (£m) Dec-16(5) Jun-17(2) Sep-17 Dec-17(6) Operating Cash(1) 42.1 78.1 52.2 58.1 Adjustment

• (21.1)
• (8.0)

Adjusted Operating Cash 42.1 56.9 52.2 50.2 SSRCF (£105m)(4)

• 30.0

GBP Senior Secured Notes 400.0 400.0 400.0 455.0 USD Senior Secured Notes(3) 408.1 408.1 408.1 408.1 Net Secured Debt 766.0 751.2 755.9 842.9 Other Debt 11.5 12.2 11.5 9.0 Total Net Debt 777.5 763.3 767.4 852.0 LTM Pro Forma Adjusted EBITDA 134.3 137.0 137.5 161.5 Interest on Senior Secured Notes 68.3 67.2 67.2 73.1 x Net Secured Leverage 5.7x 5.5x 5.5x 5.2x x Total Net Leverage 5.8x 5.6x 5.6x 5.3x x Fixed Charge Coverage 2.0x 2.0x 2.0x 2.2x

1 Excludes all TC2.4 cash 2 The cash adjustment for June 2017 includes transaction cost payable after 30 June 2017, consideration for post-balance sheet acquisitions (including Healthy Pets) and additional equity proceeds from rights issue 3 USD Senior Secured Notes at hedged USD / GBP FX Rate of 1.2742 4 RCF increased to £105m from £90m in December 2017 5 OM set out total net leverage of 5.75x and net secured leverage of 5.67x, which have been restated to account for USD SSN at hedged fx rate of 1.2742 6 Operating cash at December 2017 adjusted for consideration in relation to post balance sheet acquisitions

Appendix

36

Income 2017 2016 Change % Reported Income per Accounts 411.2 318.7 29% Pro forma for M&A pre-22 Jun'17 (Autonet, Chase Templeton, Direct Group, Price Forbes) 82.9 156.7 Income pro forma for M&A pre-22 June'17 494.1 475.5 4% Pro forma for M&A 22 Jun'17 to 31 Dec'17 (Carole Nash, Healthy Pets, Mastercover, US Binders) 32.3 34.9 Income pro forma for M&A to 31 Dec'17 526.4 510.4 3% Pro forma for M&A signed 31 Dec'17 to 31 Mar'18 (three book buys) 4.8 4.8 Income pro forma for M&A to 31 Mar'18 531.2 515.2 3%

• Adj. EBITDA

2017 2016 Change % Reported Adj. EBITDA per Accounts 79.8 49.2 62% Pro forma for M&A pre-22 Jun'17 (Autonet, Chase Templeton, Direct Group, Price Forbes) 21.5 38.2

• Adj. EBITDA pro forma for M&A pre-22 June'17

101.3 87.4 16% Pro forma for M&A 22 Jun'17 to 31 Dec'17 (Carole Nash, Healthy Pets, Mastercover, US Binders) 9.5 10.6

• Adj. EBITDA pro forma for M&A to 31 Dec'17

110.8 98.0 13% Pro forma for M&A signed 31 Dec'17 to 31 Mar'18 (three book buys) 3.5 3.4

• Adj. EBITDA pro forma for M&A to 31 Mar'18

114.3 101.5 13%

Reconciliation of Income and Adjusted EBITDA to the Accounts

As set out in the Annual Report As set out in this presentation

(1) (1)

1) Income set out in this presentation includes normalisation adjustment of £4.5m in 2017 and £5.5m in 2016 which includes hedging losses, loss corridor and remediation adjustments

37

Reconciliation of IFRS Loss to Alternative Performance Measures

The Group presents results to investors using alternative performance measures (‘APMs’). These seek to present the results as though the material acquisitions Nevada, Direct Group and Chase Templeton, had

• ccurred on 1 January 2016.

The Group presents EBITDA and Adjusted EBITDA as important APMs for both IFRS and pro forma results. The objective of presenting APMs is to facilitate readers’ understanding of progress irrespective of the capital structure and before deduction

• f

significant business investment and transformation costs, which have been a key element

• f the Group’s fix, build and grow strategy in recent years.

This slide presents the reconciliations between the IFRS comprehensive gain/(loss) for the year and the key APMs. The full IFRS results can be found in the Consolidated Financial Statements for The Ardonagh Group Limited on the website www.ardonagh.com. EBITDA and Adjusted EBITDA measures may not be comparable to similarly titled measures used by other companies. EBITDA, Adjusted EBITDA and EBITDA margins are not measurements of financial performance under IFRS and should not be considered as alternatives to other indicators of the Group’s operating performance, cash flows or any other measure of performance derived in accordance with IFRS.

1) 2017 pro forma for M&A signed and/ or completed by 31 March 2018; 2016 excludes M&A completed by The Ardonagh Group post June’17 2) Includes Autonet, Chase Templeton, Direct Group and Price Forbes 4) Other includes foreign exchange movements, dividends received and income tax (charge)/credit 5) Above reconciles the investor presentation to the Ardonagh Group Limited Annual Report, the accounts

• f Ardonagh Midco 3 plc show a loss of £242.3m, the difference of £18.6m being due to costs that are

incurred in Ardonagh Group Limited, primarily associated with acquisition & financing and board costs 3) Non trading income includes share of operating loss from associate, (reduction)/increase in the value of contingent consideration, (loss)/profit on disposal of business and investments, loss from disposal of assets and profit from discontinued operations

Reconciliation of IFRS loss for The Ardonagh Group Limited for the period to Alternative Performance Measures 2017 2016 Growth % Reconciliation of Pro Forma Adjusted EBITDA to a second pro forma Adjusted EBITDA that reflects the impact of annualising synergies and post period acquisitions Pro Forma Adjusted EBITDA(1) 161.5 134.3 +20% Towergate Transformation Plan 19.0 35.0 Group Synergies 9.7 6.9 Other

• 5.0

New Cost Savings 18.6

• Pro forma adjustments

47.2 46.9 Adjusted EBITDA per investor presentation(1) 114.3 87.4 +31% M&A pro forma(1) (3.5) 10.6 Adjusted EBITDA per annual report 110.8 98.0 +13% Reconciliation of the IFRS loss for the period to EBITDA, Adjusted EBITDA and pro forma Adjusted EBITDA Pro forma Adjusted EBITDA 110.8 98.0 Adjustments for acquisitions and disposals(2) (31.0) (48.8) Adjusted EBITDA 79.8 49.2 Regulatory costs (58.6) (5.2) Business transformation (25.7) (14.1) Business generation (15.0) (8.1) Legacy costs (17.1) (8.0) Acquisition and financing costs (21.6) 0.2 Non trading income(3) 9.4 19.9 Fair value gain on foreign exchange forward contracts 6.3 EBITDA (42.5) 33.9 Impairment of goodwill (84.5)

• Finance costs

(77.4) (47.0) Depreciation and amortisation charges (56.9) (44.1) Other(4) 0.5 11.8 Loss for the year(5) (260.9) (45.4)

38

Reconciliation to Net Cash Flow - 2017

1) Fiduciary funds represent client money used to pay premiums to underwriters, to settle claims to policyholders and to defray commission and other income. They are not available for general corporate

• purposes. All other balances are own funds for the Group.

£m Q3 2017 Q4 2017 H2 2017 Cash Flow before Financing (25.3) (67.7) (92.9) Refinancing and Transaction Costs (23.4) (10.6) (33.9) Rights Issue 22.1

• 22.1

Bond Issue

• 55.0

55.0 RCF Drawdown

• 30.0

30.0 Redemption of Price Forbes Loan Notes (0.7)

• (0.7)

Repayment of Borrowings

• (2.0)

(2.0) Interest (incl. RCF Commitment Fee) (0.3) 1.3 1.0 Acquired cash 0.2

• 0.2

Movement in Restricted Cash 1.5 13.7 15.1 Movement in Fiduciary Cash(1) 4.4 30.5 34.9 Other 0.1 (0.1) 0.0 Net Movement in Cash (21.4) 50.1 28.6

39

Non-IFRS Financial Measures

This investor presentation contains non-IFRS measures and ratios, including Adjusted EBITDA and Pro Forma Adjusted EBITDA, that are not required by, or presented in accordance with, IFRS. Our non-IFRS measures are defined by us as set out below. We define “Adjusted EBITDA” or “Adj. EBITDA” as the profit or (loss) on ordinary activities before finance costs, income tax, depreciation and amortisation charges, share of loss from an associate and impairment of goodwill, adjusted for loss or (profit) on the disposal of businesses, related party bad debt provision, reduction in value on contingent consideration, group reorganisation costs, regulatory costs, asset write-downs in connection with business restructuring, business investment costs, consultancy on regulatory matters, levy costs and finance legacy review costs, as applicable. Adjusted EBITDA is stated before exceptional costs and one-off items as determined by management. This includes Towergate, Price Forbes, Autonet, Direct Group and Chase Templeton financial results as if owned for the full period shown in the current and prior financial year. We define “Pro Forma Adjusted EBITDA” or “Pro Forma Adj. EBITDA” as the Adjusted EBITDA of each of Towergate, Price Forbes, Autonet, Direct Group and Chase Templeton, each as adjusted for overhead costs currently incurred by The Ardonagh Group, Atlanta Holdco and PF Holdco, certain cost saving initiatives and cost synergies, a USD/GBP FX adjustment related to Price Forbes and certain other transactions adjustments including certain UK GAAP to IFRS adjustments. We define “Operating Cash Conversion” as operating and investing cash flow (as further defined as Adjusted EBITDA less working capital movement and maintenance capital expenditure), over Adjusted EBITDA. This excludes one-off costs, other capital expenditure and exceptional costs related to cost saving and income growth initiatives. We define “Organic” as excluding the impact of acquired or exited businesses and other non-recurring items and is set out at actual FX.