Title Slide

JUN 8 – 10, 2015

www.bermudacaptive.bm

Getting Employee Benefits and Getting Employee Benefits and Pension Programs into your CaptivePension Programs into your Captive

HIGHLY RESTRICTED

Captive Financing For Employee

Benefit Obligations

Strategic Overview

▀ Use our captive insurance companies to reinsure employee benefit obligations– US post retirement medical (PRM)– International pension plans (PenCap Program)– International life, disability and medical insurance (IEB Program)

Captive Overview

CCRSL Red Disk Red Re Red Life Re

Established 1992 1994 2006 2013

Type Reinsurance Direct/Reinsurance Direct/Reinsurance Reinsurance

Domicile Dublin Dublin South Carolina Bermuda

GWP PC - 2014 N/A $34 M $90 M N/A

GWP EB / Pensions - 2014 $0* N/A $81 M $0+

Tot PC Assets @ YE 14 N/A $112 M $439 M N/A

Tot EB Assets @ YE 14 $1,294 M N/A Incl. $740 M

Lines of Coverage

• Pensions – UK, Ireland, Germany

• Global Property• Int’l Casualty • EU XS Liability• XS of Integrated• Exec Liability

• US Casualty• WW Terrorism• Int’l EB• TV Wrap Up• US Life

• Pensions – Canada

* Pension premium written in 2011 = $659 M.+ Pension premium written in 2013 = $466 M.

Transaction Structure for PenCap

Consolidated Group

Corporate Pension Plans

Solvency Capital

Reserves Reinsurance

Contract

Coca-Cola

CCRSLCoca-Cola Reinsurance Services Limited

Dividends

Premium

Annuity Contract

Fronter

Premium less charges

Capital Contribution

Strategic Overview – PenCap Program

▀ Increases scale by consolidating plan assets– Generates increased asset returns & lower investment manager fees– Centralizes control of investment strategies – Improves management of investment risk

▀ Allows funding up of pension plans with No risk of trapped assets

International Pension Plans

First 4 international pension plan targets completed

▀ Germany: approved 2009 ($278MM)

▀ UK and Ireland: approved 2010 ($630MM)

▀ Canada: approved 2013 ($595MM)

What now?

▀ Novate from Ireland to Bermuda

▀ Readiness for Sol II

▀ Move to Cash Balance Plans reduces targets

▀ Size matters: can we replicate transactions efficiently?

▀ Monitoring U.S.: discount rates, discount rates, discount rates

Transaction Structure for PRM

Policy payment

VEBA

Stop Loss Policy premium

Insurer

Reinsurance payment

Reinsurancepremium

Red Re

TCCC

Payment to cover member claims

Company Contributionto fund VEBA

Retiree Medical Background

Plan Overview• Medical, dental

and life benefits for retired US and certain globally mobile associates hired prior to 2009

• TCCC currently pays a substantial portion of the premiums (in some case, the entire cost)

What are the

“Caps”?

• In 2007, TCCC announced it was limiting its contributions towards retiree medical and dental premiums

When are the Caps Expected to Apply?

• 2017 for medical• Dental caps are not expected to apply for several years

What will Be the

Impact?• Any medical or

dental cost in excess of their respective limits would be paid by the retirees

• Once the caps apply, retiree premiums will increase substantially

What has TCCC Done

to Help?

• Communication campaign in 2007

• In 2008 retirees received an increase in their pension in order to offset future medical costs

• Reminders in annual open enrollment

• Managed costs, resulting in a delay in the cap applying

What are our financing options?

PRM Financing Considerations

Company sponsoredVS

Exchanges

Manage P&L efficiently

What will be development of healthcare in U.S. with

ACA?

Stop Loss VS

Annutiy

Funding flexibility

Strategic Overview - IEB Program

Finance non-U.S. employee risk benefits in a captive insurance company, leveraging the existing risk management model with the following key objectives: Improve control over the management and financing of risk benefits

Reduced insurance costs by removing or reducing profit margins

Detailed data on experience to better manage the underlying drivers of cost

Potentially leverage opportunities for “system”

Flexibility to offer benefits driven by company philosophy, outside market norms

Improves management of investment risk and provides efficient tax treatment of captive 3rd party business

IEB Program – What have we Done?

Running since 2006

Initial savings: 15 – 20%

169 policies covering 84 operations in 68 countries will cede US$60MM of premiums into the Captive for 2015

Have been able to hold life and disability premiums level

Have been able to hold medical premium increases to at or below local medical inflation

Recent additions: U.S. Life, Mobile population medical/dental

Other considerations: U.S. infinity benefits, U.S. Medical Stop Loss decided not needed

Structure of IEB Program

Program includes Life, Disability, Medical, Accident, Voluntary or employee-paid insurances as well as other benefits, where possible.

Uses two fronting companies to issue local policies and provide local administration – MetLife and Generali.

Captive assumes risk and holds 100% of the premiums and reserves (where legally possible).

Local operations continue to determine benefit design in line with HR philosophies (local and global).

Experience is reviewed periodically based on the coverage.

Benefits Pricing within the IEB Program

The IEB Program is designed to run on a “not for profit” basis, easing or removing insurance profits.

Annual premiums determined by Captive based on experience risk philosophy.

Experience tracked by contract such that each business “pays its own way”.

Insurance pricing is based on local market conditions and plan utilization

IEB Program – Annual Renewal Process Key Dates

September 15 – Local offices receive census data requests from the vendor

October 15 – Census data as of September 30 is due back to the vendors.

November 1 – Renewal rates finalized and communicated during the month

December 1 – Premium invoices issued locally by vendors

January 15 – Annual premiums paid. All invoices must be paid on time and as issued without exception by January 15