GlobeNewswire Inc | Jul 31, 2020 09:05AM EDT

July 31, 2020

NEW YORK, July 31, 2020 (GLOBE NEWSWIRE) -- National General Holdings Corp. (Nasdaq: NGHC) reported second quarter 2020 net income of $157.6million or $1.37 per diluted share, compared to net income of $69.0million or $0.60 per diluted share in the second quarter of 2019. Second quarter 2020 operating earnings (non-GAAP)(1) were $157.6million or $1.36 per diluted share compared to $78.1million or $0.67 per diluted share in the second quarter of 2019.

Second Quarter 2020 Highlights versus Second Quarter 2019*

-- Gross written premium grew by $50.4 million to $1,243.2million compared to the prior years quarter due to our P&C segment growth of 3.2%, driven by the acquisition of National Farmers Union Property and Casualty Company (Farmers Union Insurance) in the third quarter of 2019, and organic growth, largely offset by the premium refund provided due to lower miles driven as a result of the COVID-19 pandemic; and our A&H domestic segment growth of 20.2%, excluding our previously sold A&H international business. -- The overall combined ratio(11,12) was 80.5% compared to 90.9% in the prior years quarter, excluding non-cash amortization of intangible assets. The P&C segment reported an improved combined ratio to 83.6% from 92.6% in the prior years quarter driven by our continued strong underwriting and recent declines in miles driven. The P&C combined ratio includes prior year unfavorable loss development of $8.6 million compared to $10.4 million unfavorable loss development in the prior years quarter, and $35.3million of catastrophe losses related to weather-related events compared to $18.4million of catastrophe losses in the prior years quarter. The A&H segment reported a decrease in the combined ratio to 65.0% from 82.6% in the prior years quarter, driven by strong operating results in our small group self-funded and individual products, absence of our international business which was sold in the fourth quarter of 2019, and growth in service and fee income of 51.3%. The A&H combined ratio includes $11.4 million of favorable loss development compared to $8.1 million of favorable loss development in the prior years quarter. -- Stockholders equity was $3.0 billion and fully diluted book value per share was $22.02 at June30, 2020, growth of 13.0% and 15.5%, respectively, from December31, 2019. Excluding accumulated other comprehensive income, fully diluted book value per share was $20.40 at June30, 2020, growth of 10.7%, from December 31, 2019. Our trailing twelve-month operating return on average equity (ROE)(13) was 18.1% as of June30, 2020. -- Second quarter of 2020 operating earnings (non-GAAP)(1) excludes the following, net of tax: $0.1million loss on equity method investments, $4.4 million or $0.04 per share of net gain on investments and $4.2million or $0.04 per share of non-cash amortization of intangible assets. -- Repurchased 459,083 shares during the second quarter of 2020 as part of our share repurchase program. -- Agreement announced on July 7, 2020 to be acquired by Allstate for expected total consideration of $34.50 per share cash (consisting of $32.00 in cash and an up to $2.50 per share closing dividend), subject to shareholder and regulatory approval and other customary closing conditions.

Barry Karfunkel, National Generals CEO, stated: Our well diversified platform continues to perform well. With our recently announced agreement to be acquired by Allstate, we look forward to contributing to the greater Allstate. I want to personally thank each and every one of the National General team members for their outstanding and continued work during these unprecedented times and for their continuing contribution to the success of the pending acquisition.

*NOTE: Unless specified otherwise, discussion of our second quarter 2020 and 2019 results do not include financial results from the Reciprocal Exchanges, which are presented within our consolidated financial results within this release but are not included in net income available to NGHC common stockholders.

Overview of Second Quarter 2020 as Compared to Second Quarter 2019

-- Property & Casualty - Gross written premium grew by 3.2% to $1,053.5million, net written premium increased by 0.4% to $789.4million, and net earned premium increased by 2.9% to $842.0million. P&C gross written premium growth was driven by $47.7million of added premiums from the acquisition of Farmers Union Insurance, and organic growth, largely offset by the premium refund provided due to lower miles driven as a result of the COVID-19 pandemic. Service and fee income was $112.0million compared to $113.1 million in the prior years quarter. Excluding non-cash amortization of intangible assets, the combined ratio(11,12) was 83.6% with a loss and LAE ratio of 59.8% and an expense ratio(10,12) of 23.8%, versus a prior year combined ratio of 92.6% with a loss and LAE ratio of 72.6% and an expense ratio of 20.0%. The loss and LAE ratio was impacted by pre-tax catastrophe losses of approximately $35.3million primarily related to weather-related events in the second quarter of 2020, compared to $18.4 million of losses in the second quarter of 2019. Unfavorable loss development was $8.6million in the second quarter of 2020 primarily driven by small business auto, compared to unfavorable loss development of $10.4million in the second quarter of 2019. -- Accident & Health - Gross written premium grew by $18.0 million compared to the prior years quarter due to growth in both our small group self-funded and individual products. Excluding our A&H international business, our A&H domestic segment grew by 20.2% to $189.7million. Service and fee income grew 51.3% to $80.1million compared to $52.9million in the prior years quarter. Excluding non-cash amortization of intangible assets, the combined ratio(11,12) was 65.0% with a loss and LAE ratio of 39.5% and an expense ratio(10,12) of 25.5%, versus a prior year combined ratio of 82.6% with a loss and LAE ratio of 52.0% and an expense ratio of 30.6%. The loss and LAE ratio reflects strong performance in both small group self-funded and individual products. Favorable loss development was $11.4 million in the second quarter of 2020, compared to favorable loss development of $8.1million in the second quarter of 2019. -- Reciprocal Exchanges - Results for the Reciprocal Exchanges are not included in net income available to NGHC common stockholders. Gross written premium was $98.4million, net written premium was $57.3million, and net earned premium was $54.8million. Reciprocal Exchanges combined ratio(11,12) excluding non-cash amortization of intangible assets was 83.1% with a loss and LAE ratio of 54.8% and an expense ratio(10,12) of 28.3%.

Second quarter of 2020 net investment income decreased to $30.5million, compared to $35.9million in the second quarter of 2019. Total investments and cash and cash equivalents (including restricted cash) were $5.2billion as of June30, 2020. Accumulated other comprehensive income increased to a $186.9million gain at June30, 2020, from a $74.5million gain at December31, 2019, primarily due to market improvement.

Interest expense was $11.8million, down from $12.9million in the prior years quarter. Debt was $682.3million at June30, 2020, compared to $686.0million at December31, 2019.

The second quarter of 2020 provision for income taxes was $49.0million and the effective tax rate for the quarter was 22.7% compared with income taxes of $22.3million and an effective rate of 22.2% in the second quarter of 2019.

Stockholders equity was $2,995.1 million at June30, 2020, growth of 13.0% from $2,649.5 million at December31, 2019. Fully diluted book value per share was $22.02 at June30, 2020, growth of 15.5% from $19.06 at December31, 2019. Excluding accumulated other comprehensive income, fully diluted book value per share was $20.40 at June30, 2020, growth of 10.7%, from December 31, 2019. Our trailing twelve-month operating return on average equity (ROE)(13) was 18.1% as of June30, 2020.

Year-to-Date P&C Segment Notable Large Losses P&C Notable P&C Loss EPSYear Quarter Event Large Losses and LAE Impact and LAE Ratio After Tax ($ millions) Points*2020 Q2 Weather-related $35.3 4.2% $0.24 Events2020 Q1 Weather-related $8.1 0.9% $0.06 Events 2019 Q2 Weather-related $18.4 2.2% $0.13 Events2019 Q1 Winter Weather $12.1 1.6% $0.08

* Loss and LAE ratio points related to P&C net earned premium in quarter the loss event was recorded.

Additional item -

Homeowners Quota Share - Effective July 1, 2020, we cede 20.0% of net liability and receive a 37.0% ceding commission on in-force, new and renewal business, under our homeowners quota share reinsurance agreement.

About National General Holdings Corp.

National General Holdings Corp. (NASDAQ: NGHC), headquartered in New York City, is a specialty personal lines insurance holding company. National General traces its roots to 1939, has a financial strength rating of A- (excellent) from A.M. Best, and provides personal and commercial automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products.

IMPORTANT INFORMATION FOR INVESTORS

Additional Information and Where to Find It

This communication may be deemed solicitation material in respect of the proposed acquisition of National General Holdings Corp. (the Company) by The Allstate Corporation. In connection with the merger, the Company plans to file with the Securities and Exchange Commission and furnish its stockholders a proxy statement. Additionally, the Company will file other relevant materials with the Securities and Exchange Commission in connection with the proposed transaction.

The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commissions web site at www.sec.gov. In addition, stockholders also may obtain free copies of the proxy statement, when available, from the Company by contacting National General Holdings Corp. Investor Relations at 59 Maiden Lane, 38th Floor New York, New York 10038, telephone number (212) 380-9462 or InvestorRelations@ngic.com.

INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER.

Participants in the Solicitation

The Company and its directors, executive officers and other members of management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Companys stockholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of the Companys executive officers and directors in the solicitation by reading the Companys proxy statement for its 2020 annual meeting of stockholders and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger when and if they become available. Information concerning the interests of the Companys participants in the solicitation, which may, in some cases, be different than those of the Companys stockholders generally, will be set forth in the proxy statement relating to the merger when and if it becomes available. Additional information regarding the Companys executive officers and directors in the solicitation is available by reading the Companys proxy statement for its 2020 annual meeting of stockholders.

Forward Looking Statements

This news release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Companys current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as may, will, plan, expect, project, intend, estimate, anticipate and believe or their variations or similar terminology. There can be no assurance that actual developments will be those anticipated by us. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, plans and expectations related to our proposed merger with The Allstate Corporation (Allstate), including anticipated timing for closing of the merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with Allstate, the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger, the possibility that competing offers will be made, non-receipt of expected payments from insureds or reinsurers, changes in interest rates, a downgrade in the financial strength ratings of our insurance subsidiaries, the potential effect of changes in LIBOR reporting practices, the effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, including our investment portfolio, and the national and global economy generally, the effect of the performance of financial markets on our investment portfolio, our ability to accurately underwrite and price our products and to maintain and establish accurate loss reserves, estimates of the fair value of investments, development of claims and the effect on loss reserves, large loss activity including hurricanes and wildfires, the cost and availability of reinsurance coverage, the effects of emerging claim and coverage issues, the effect of unpredictable catastrophic losses, changes in the demand for our products, our degree of success in integrating acquired businesses, the effect of general economic conditions, state and federal legislation, the effects of tax reform, regulations and regulatory investigations into industry practices, risks associated with conducting business outside the United States, developments relating to existing agreements, disruptions to our business relationships with third party vendors or agencies, breaches in data security or other disruptions involving our technology, heightened competition, changes in pricing environments, and changes in asset valuations. The forward-looking statements contained in this news release are made only as of the date of this release. The Company undertakes no obligation to publicly update any forward-looking statement except as may be required by law. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected, is contained in the Companys filings with the Securities and Exchange Commission.

Income Statement - Second Quarter$ in thousands(Unaudited)

Three Months Ended June 30, 2020 2019 NGHC Reciprocal Consolidated NGHC Reciprocal Consolidated Exchanges ExchangesRevenues: Gross written $ 1,243,165 $ 98,436 $ 1,341,601 $ 1,192,762 $ 121,146 $ 1,313,908 premiumNet written 957,640 57,268 1,014,908 939,178 56,220 995,398 premiumNet earned 1,010,782 54,785 1,065,567 984,021 46,630 1,030,651 premium Cedingcommission 35,530 11,110 46,640 43,346 16,846 60,192 incomeService and fee 192,023 2,336 180,592 ^ 166,049 1,516 148,908 ^income (A) (G)Net investment 30,523 2,012 31,175 ^ 35,949 2,124 35,131 ^income (B) (H)Net gain (loss) 5,511 (353 ) 5,158 (5,274 ) 44 (5,230 ) on investmentsTotal revenues $ 1,274,369 $ 69,890 $ 1,329,132 ^ $ 1,224,091 $ 67,160 $ 1,269,652 ^ (C) (I) Expenses: Loss and lossadjustment $ 570,439 $ 30,007 $ 600,446 $ 680,246 $ 35,289 $ 715,535 expenseAcquisitioncosts and other 219,278 10,100 229,378 185,951 8,175 194,126 underwritingexpensesGeneral and ^ ^administrative 257,318 18,858 262,409 (D) 244,827 21,597 247,767 (J)expensesInterest 11,779 1,360 11,779 ^ 12,925 2,942 12,925 ^expense (E) (K)Total expenses $ 1,058,814 $ 60,325 $ 1,104,012 ^ $ 1,123,949 $ 68,003 $ 1,170,353 ^ (F) (L) Income (loss)beforeprovision $ 215,555 $ 9,565 $ 225,120 $ 100,142 $ (843 ) $ 99,299 (benefit) forincome taxesProvision(benefit) for 48,981 1,526 50,507 22,266 (25 ) 22,241 income taxesNet income(loss) beforenon-controllinginterest and 166,574 8,039 174,613 77,876 (818 ) 77,058 dividends onpreferredsharesLess: netincome (loss)attributable to ? 8,039 8,039 ? (818 ) (818 ) noncontrollinginterestNet incomebeforedividends on 166,574 ? 166,574 77,876 ? 77,876 preferredsharesLess: dividendson preferred 8,925 ? 8,925 8,925 ? 8,925 sharesNet incomeavailable to $ 157,649 $ ? $ 157,649 $ 68,951 $ ? $ 68,951 commonstockholders

NOTES Consolidated column includes eliminations as follows: (A) $(13,767), (B) $(1,360), (C) $(15,127), (D) $(13,767), (E) $(1,360), (F) $(15,127), (G) $(18,657), (H) $(2,942), (I) $(21,599), (J) $(18,657), (K) $(2,942) and (L) $(21,599).

Income Statement - Year To Date$ in thousands(Unaudited)

Six Months Ended June 30, 2020 2019 NGHC Reciprocal Consolidated NGHC Reciprocal Consolidated Exchanges ExchangesRevenues: Gross written $ 2,627,866 $ 190,289 $ 2,818,155 $ 2,596,971 $ 226,715 $ 2,823,686 premiumNet written 2,111,948 112,563 2,224,511 2,054,887 105,175 2,160,062 premiumNet earned 2,028,390 112,383 2,140,773 1,902,520 92,288 1,994,808 premium Cedingcommission 72,121 24,824 96,945 94,346 35,380 129,726 incomeService and fee 383,180 3,493 360,033 ^ 346,437 2,886 314,415 ^income (A) (G)Net investment 60,270 4,195 61,418 ^ 70,232 4,294 68,576 ^income (B) (H)Net gain (loss) (557 ) (1,146 ) (1,703 ) (4,508 ) (700 ) (5,208 ) on investmentsTotal revenues $ 2,543,404 $ 143,749 $ 2,657,466 ^ $ 2,409,027 $ 134,148 $ 2,502,317 ^ (C) (I) Expenses: Loss and lossadjustment $ 1,220,070 $ 72,374 $ 1,292,444 $ 1,290,030 $ 77,314 $ 1,367,344 expenseAcquisitioncosts and other 437,023 20,597 457,620 389,284 16,760 406,044 underwritingexpensesGeneral and ^ ^administrative 518,197 38,421 529,978 (D) 487,660 43,109 495,861 (J)expensesInterest 23,559 3,047 23,559 ^ 25,924 5,950 25,924 ^expense (E) (K)Total expenses $ 2,198,849 $ 134,439 $ 2,303,601 ^ $ 2,192,898 $ 143,133 $ 2,295,173 ^ (F) (L) Income (loss)beforeprovision $ 344,555 $ 9,310 $ 353,865 $ 216,129 $ (8,985 ) $ 207,144 (benefit) forincome taxesProvision(benefit) for 77,222 1,457 78,679 46,495 (1,748 ) 44,747 income taxesNet income(loss) beforenon-controllinginterest and 267,333 7,853 275,186 169,634 (7,237 ) 162,397 dividends onpreferredsharesLess: netincome (loss)attributable to ? 7,853 7,853 ? (7,237 ) (7,237 ) noncontrollinginterestNet incomebeforedividends on 267,333 ? 267,333 169,634 ? 169,634 preferredsharesLess: dividendson preferred 16,800 ? 16,800 16,800 ? 16,800 sharesNet incomeavailable to $ 250,533 $ ? $ 250,533 $ 152,834 $ ? $ 152,834 commonstockholders

NOTES Consolidated column includes eliminations as follows: (A) $(26,640), (B) $(3,047), (C) $(29,687), (D) $(26,640), (E) $(3,047), (F) $(29,687) (G) $(34,908), (H) $(5,950), (I) $(40,858), (J) $(34,908), (K) $(5,950) and (L) $(40,858).

Earnings and Per Share Data$ in thousands, except shares and per share data(Unaudited)

Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019Net incomeavailable to $ 157,649 $ 68,951 $ 250,533 $ 152,834 commonstockholdersBasic netincome per $ 1.39 $ 0.61 $ 2.21 $ 1.35 common shareDiluted netincome per $ 1.37 $ 0.60 $ 2.17 $ 1.33 common share Operatingearningsattributable $ 157,643 $ 78,140 $ 263,402 $ 167,856 to NGHC(non-GAAP)^(1)Basicoperatingearnings per $ 1.39 $ 0.69 $ 2.32 $ 1.48 common share(non-GAAP)^(1)Dilutedoperatingearnings per $ 1.36 $ 0.67 $ 2.27 $ 1.45 common share(non-GAAP)^(1) Dividendsdeclared per $ 0.05 $ 0.04 $ 0.10 $ 0.08 common share Weightedaveragenumber of 113,542,628 113,178,552 113,549,952 113,097,084 basic sharesoutstandingWeightedaveragenumber of 115,720,069 116,050,267 115,898,110 116,062,721 dilutedsharesoutstandingSharesoutstanding, 113,397,545 113,215,632 end ofperiodFullydilutedshares 115,574,986 116,087,347 outstanding,end ofperiodBook value $ 22.44 $ 17.92 per shareFullydiluted book $ 22.02 $ 17.48 value pershare

Reconciliation of Net Income to Operating Earnings (Non-GAAP)(1)(13)$ in thousands, except per share data(Unaudited)

Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019Net incomeavailable to $ 157,649 $ 68,951 $ 250,533 $ 152,834 commonstockholdersAdd (subtract):Equity in(earnings)losses of 160 (731 ) 3,888 203 equitymethodinvestmentsNet (gain)loss on (5,511 ) 5,274 557 4,508 investmentsNon-cashamortizationof 5,343 7,089 11,845 14,305 intangibleassetsIncome taxexpense 2 (2,443 ) (3,421 ) (3,994 )(benefit)Operatingearningsattributable $ 157,643 $ 78,140 $ 263,402 $ 167,856 to NGHC(non-GAAP)^(1) Operatingearnings percommon share (non-GAAP)^(1):Basicoperatingearnings per $ 1.39 $ 0.69 $ 2.32 $ 1.48 common share(non-GAAP)^(1)Dilutedoperatingearnings per $ 1.36 $ 0.67 $ 2.27 $ 1.45 common share(non-GAAP)^(1)

Balance Sheet$ in thousands(Unaudited)

June 30, 2020 December 31, 2019 ASSETS NGHC Reciprocal Consolidated NGHC Reciprocal Consolidated Exchanges ExchangesTotal ^ ^investments ^ $ 4,853,180 $ 340,103 $ 5,085,750 (A) $ 4,632,960 $ 329,494 $ 4,854,998 (H)(2)Cash and cashequivalents,including 334,771 237 335,008 163,480 983 164,463 restrictedcashPremiums andother 1,438,085 49,649 1,487,734 1,373,089 55,859 1,428,948 receivables,netReinsurance 1,614,713 196,005 1,810,718 1,745,036 225,019 1,970,055 balancesIntangible 347,686 3,135 350,821 362,598 3,225 365,823 assets, netGoodwill 179,328 ? 179,328 179,328 ? 179,328 Other ^(3) 776,916 29,364 768,484 ^ 798,675 29,070 792,919 ^ (B) (I)Total assets $ 9,544,679 $ 618,493 $ 10,017,843 ^ $ 9,255,166 $ 643,650 $ 9,756,534 ^ (C) (J)LIABILITIESAND STOCKHOLDERS?EQUITYLiabilities: Unpaid lossand lossadjustment $ 2,626,314 $ 200,270 $ 2,826,584 $ 2,680,628 $ 205,786 $ 2,886,414 expensereservesUnearnedpremiums and 2,102,044 226,403 2,328,447 2,059,688 252,553 2,312,241 other revenueReinsurance 437,989 23,907 461,896 527,155 35,689 562,844 payableAccountspayable and 320,176 45,549 327,929 ^ 306,869 43,323 315,366 ^accrued (D) (K)expensesDebt 682,266 107,533 682,266 ^ 686,006 107,456 686,006 ^ (E) (L)Other 380,766 30,279 411,045 345,366 30,803 376,169 Total $ 6,549,555 $ 633,941 $ 7,038,167 ^ $ 6,605,712 $ 675,610 $ 7,139,040 ^liabilities (F) (M)Stockholders? equity:Preferred $ 450,000 $ ? $ 450,000 $ 450,000 $ ? $ 450,000 stock ^(4)Common stock ^ 1,139 ? 1,139 1,134 ? 1,134 (5)Treasurystock, at cost (8,482 ) ? (8,482 ) ? ? ? ^(6)Additionalpaid-in 1,069,152 ? 1,069,152 1,065,634 ? 1,065,634 capitalAccumulatedother 186,864 ? 186,864 74,548 ? 74,548 comprehensiveincomeRetained 1,296,451 ? 1,296,451 1,058,138 ? 1,058,138 earningsTotal NationalGeneralHoldings Corp. 2,995,124 ? 2,995,124 2,649,454 ? 2,649,454 stockholders?equityNoncontrolling ? (15,448 ) (15,448 ) ? (31,960 ) (31,960 ) interestTotalstockholders? $ 2,995,124 $ (15,448 ) $ 2,979,676 $ 2,649,454 $ (31,960 ) $ 2,617,494 equityTotalliabilities ^ ^and $ 9,544,679 $ 618,493 $ 10,017,843 (G) $ 9,255,166 $ 643,650 $ 9,756,534 (N)stockholders?equity

NOTES Consolidated column includes eliminations as follows: (A) $(107,533), (B) $(37,796), (C) $(145,329), (D) $(37,796), (E) $(107,533), (F) $(145,329), (G) $(145,329) (H) $(107,456), (I) $(34,826), (J) $(142,282), (K) $(34,826), (L) $(107,456), (M) $(142,282) and (N) $(142,282).

Segment Information - Second Quarter$ in thousands(Unaudited)

Three Months Ended June 30, 2020 2019 P&C A&H NGHC Reciprocal P&C A&H NGHC Reciprocal Exchanges ExchangesGross written premium $ 1,053,508 $ 189,657 $ 1,243,165 $ 98,436 $ 1,021,090 $ 171,672 $ 1,192,762 $ 121,146 Net written premium 789,428 168,212 957,640 57,268 786,471 152,707 939,178 56,220 Net earned premium 841,985 168,797 1,010,782 54,785 817,972 166,049 984,021 46,630 Ceding commission 35,059 471 35,530 11,110 39,418 3,928 43,346 16,846 incomeService and fee 111,955 80,068 192,023 2,336 113,112 52,937 166,049 1,516 incomeTotal underwriting $ 988,999 $ 249,336 $ 1,238,335 $ 68,231 $ 970,502 $ 222,914 $ 1,193,416 $ 64,992 revenues Loss and lossadjustment expense ^ 503,784 66,655 570,439 30,007 593,922 86,324 680,246 35,289 (A)Acquisition costs andother underwriting 152,384 66,894 219,278 10,100 137,950 48,001 185,951 8,175 expensesGeneral andadministrative 199,327 57,991 257,318 18,858 183,535 61,292 244,827 21,597 expensesTotal underwriting $ 855,495 $ 191,540 $ 1,047,035 $ 58,965 $ 915,407 $ 195,617 $ 1,111,024 $ 65,061 expenses Underwriting income 133,504 57,796 191,300 9,266 55,095 27,297 82,392 (69 )(loss)Non-cash amortization 4,041 1,302 5,343 30 5,412 1,677 7,089 12 of intangible assetsUnderwriting income(loss) before $ 137,545 $ 59,098 $ 196,643 $ 9,296 $ 60,507 $ 28,974 $ 89,481 $ (57 )amortization andimpairment Underwriting ratios Loss and lossadjustment expense 59.8 % 39.5 % 56.4 % 54.8 % 72.6 % 52.0 % 69.1 % 75.7 %ratio ^(7)Operating expense 24.3 % 26.3 % 24.6 % 28.3 % 20.7 % 31.6 % 22.5 % 24.5 %ratio (Non-GAAP) ^(8)Combined ratio 84.1 % 65.8 % 81.0 % 83.1 % 93.3 % 83.6 % 91.6 % 100.2 %(Non-GAAP) ^(9) Underwriting ratios(before amortization and impairment)Loss and lossadjustment expense 59.8 % 39.5 % 56.4 % 54.8 % 72.6 % 52.0 % 69.1 % 75.7 %ratio ^(7)Operating expenseratio (Non-GAAP) ^ 23.8 % 25.5 % 24.1 % 28.3 % 20.0 % 30.6 % 21.8 % 24.4 %(10)Combined ratio beforeamortization and 83.6 % 65.0 % 80.5 % 83.1 % 92.6 % 82.6 % 90.9 % 100.1 %impairment (Non-GAAP)^(11)

(A) Loss and loss adjustment expenses for the three months ended June 30, 2020 included $8,584 of unfavorable loss development on prior accident year loss and loss adjustment expense reserves in the P&C segment, and $11,430 of favorable loss development in the A&H segment, versus $10,396 of unfavorable loss development in the P&C segment, and $8,135 of favorable loss development in the A&H segment for the three months ended June 30, 2019.

Segment Information - Year To Date$ in thousands(Unaudited)

Six Months Ended June 30, 2020 2019 P&C A&H NGHC Reciprocal P&C A&H NGHC Reciprocal Exchanges ExchangesGross written premium $ 2,251,184 $ 376,682 $ 2,627,866 $ 190,289 $ 2,166,755 $ 430,216 $ 2,596,971 $ 226,715 Net written premium 1,775,520 336,428 2,111,948 112,563 1,701,999 352,888 2,054,887 105,175 Net earned premium 1,694,887 333,503 2,028,390 112,383 1,574,891 327,629 1,902,520 92,288 Ceding commission 71,090 1,031 72,121 24,824 87,827 6,519 94,346 35,380 incomeService and fee 222,588 160,592 383,180 3,493 232,488 113,949 346,437 2,886 incomeTotal underwriting $ 1,988,565 $ 495,126 $ 2,483,691 $ 140,700 $ 1,895,206 $ 448,097 $ 2,343,303 $ 130,554 revenues Loss and lossadjustment expense ^ 1,071,814 148,256 1,220,070 72,374 1,118,957 171,073 1,290,030 77,314 (A)Acquisition costs andother underwriting 301,658 135,365 437,023 20,597 283,435 105,849 389,284 16,760 expensesGeneral andadministrative 400,454 117,743 518,197 38,421 367,730 119,930 487,660 43,109 expensesTotal underwriting $ 1,773,926 $ 401,364 $ 2,175,290 $ 131,392 $ 1,770,122 $ 396,852 $ 2,166,974 $ 137,183 expenses Underwriting income 214,639 93,762 308,401 9,308 125,084 51,245 176,329 (6,629 )(loss)Non-cash amortization 9,228 2,617 11,845 60 10,897 3,408 14,305 23 of intangible assetsUnderwriting income(loss) before $ 223,867 $ 96,379 $ 320,246 $ 9,368 $ 135,981 $ 54,653 $ 190,634 $ (6,606 )amortization andimpairment Underwriting ratios Loss and lossadjustment expense 63.2 % 44.5 % 60.1 % 64.4 % 71.0 % 52.2 % 67.8 % 83.8 %ratio ^(7)Operating expense 24.1 % 27.4 % 24.6 % 27.3 % 21.0 % 32.1 % 22.9 % 23.4 %ratio (Non-GAAP) ^(8)Combined ratio 87.3 % 71.9 % 84.7 % 91.7 % 92.0 % 84.3 % 90.7 % 107.2 %(Non-GAAP) ^(9) Underwriting ratios(before amortization and impairment)Loss and lossadjustment expense 63.2 % 44.5 % 60.1 % 64.4 % 71.0 % 52.2 % 67.8 % 83.8 %ratio ^(7)Operating expenseratio (Non-GAAP) ^ 23.6 % 26.6 % 24.1 % 27.3 % 20.3 % 31.1 % 22.2 % 23.4 %(10)Combined ratio beforeamortization and 86.8 % 71.1 % 84.2 % 91.7 % 91.3 % 83.3 % 90.0 % 107.2 %impairment (Non-GAAP)^(11)

(A) Loss and loss adjustment expenses for the six months ended June 30, 2020 included $13,055 of unfavorable loss development on prior accident year loss and loss adjustment expense reserves in the P&C segment, and $16,238 of favorable loss development in the A&H segment, versus $4,882 of unfavorable loss development in the P&C segment, and $18,987 of favorable loss development in the A&H segment for the six months ended June 30, 2019.

Reconciliation of Operating Expense Ratio (Non-GAAP)(8,10,12)$ in thousands(Unaudited)

Three Months Ended June 30, 2020 2019 P&C A&H NGHC Reciprocal P&C A&H NGHC Reciprocal Exchanges ExchangesTotal underwriting expenses $ 855,495 $ 191,540 $ 1,047,035 $ 58,965 $ 915,407 $ 195,617 $ 1,111,024 $ 65,061 Less: Loss and loss adjustment 503,784 66,655 570,439 30,007 593,922 86,324 680,246 35,289 expenseLess: Ceding commission income 35,059 471 35,530 11,110 39,418 3,928 43,346 16,846 Less: Service and fee income 111,955 80,068 192,023 2,336 113,112 52,937 166,049 1,516 Operating expense (Non-GAAP) ^ 204,697 44,346 249,043 15,512 168,955 52,428 221,383 11,410 (8)Net earned premium $ 841,985 $ 168,797 $ 1,010,782 $ 54,785 $ 817,972 $ 166,049 $ 984,021 $ 46,630 Operating expense ratio 24.3 % 26.3 % 24.6 % 28.3 % 20.7 % 31.6 % 22.5 % 24.5 %(Non-GAAP) ^(8) Total underwriting expenses $ 855,495 $ 191,540 $ 1,047,035 $ 58,965 $ 915,407 $ 195,617 $ 1,111,024 $ 65,061 Less: Loss and loss adjustment 503,784 66,655 570,439 30,007 593,922 86,324 680,246 35,289 expenseLess: Ceding commission income 35,059 471 35,530 11,110 39,418 3,928 43,346 16,846 Less: Service and fee income 111,955 80,068 192,023 2,336 113,112 52,937 166,049 1,516 Less: Non-cash amortization of 4,041 1,302 5,343 30 5,412 1,677 7,089 12 intangible assetsOperating expense beforeamortization and impairment 200,656 43,044 243,700 15,482 163,543 50,751 214,294 11,398 (Non-GAAP) ^(10)Net earned premium $ 841,985 $ 168,797 $ 1,010,782 $ 54,785 $ 817,972 $ 166,049 $ 984,021 $ 46,630 Operating expense ratio beforeamortization and impairment 23.8 % 25.5 % 24.1 % 28.3 % 20.0 % 30.6 % 21.8 % 24.4 %(Non-GAAP) ^(10)

Reconciliation of Operating Expense Ratio (Non-GAAP)(8,10,12)$ in thousands(Unaudited)

Six Months Ended June 30, 2020 2019 P&C A&H NGHC Reciprocal P&C A&H NGHC Reciprocal Exchanges ExchangesTotal underwriting expenses $ 1,773,926 $ 401,364 $ 2,175,290 $ 131,392 $ 1,770,122 $ 396,852 $ 2,166,974 $ 137,183 Less: Loss and loss 1,071,814 148,256 1,220,070 72,374 1,118,957 171,073 1,290,030 77,314 adjustment expenseLess: Ceding commission 71,090 1,031 72,121 24,824 87,827 6,519 94,346 35,380 incomeLess: Service and fee income 222,588 160,592 383,180 3,493 232,488 113,949 346,437 2,886 Operating expense (Non-GAAP) 408,434 91,485 499,919 30,701 330,850 105,311 436,161 21,603 ^(8)Net earned premium $ 1,694,887 $ 333,503 $ 2,028,390 $ 112,383 $ 1,574,891 $ 327,629 $ 1,902,520 $ 92,288 Operating expense ratio 24.1 % 27.4 % 24.6 % 27.3 % 21.0 % 32.1 % 22.9 % 23.4 %(Non-GAAP) ^(8) Total underwriting expenses $ 1,773,926 $ 401,364 $ 2,175,290 $ 131,392 $ 1,770,122 $ 396,852 $ 2,166,974 $ 137,183 Less: Loss and loss 1,071,814 148,256 1,220,070 72,374 1,118,957 171,073 1,290,030 77,314 adjustment expenseLess: Ceding commission 71,090 1,031 72,121 24,824 87,827 6,519 94,346 35,380 incomeLess: Service and fee income 222,588 160,592 383,180 3,493 232,488 113,949 346,437 2,886 Less: Non-cash amortization 9,228 2,617 11,845 60 10,897 3,408 14,305 23 of intangible assetsOperating expense beforeamortization and impairment 399,206 88,868 488,074 30,641 319,953 101,903 421,856 21,580 (Non-GAAP) ^(10)Net earned premium $ 1,694,887 $ 333,503 $ 2,028,390 $ 112,383 $ 1,574,891 $ 327,629 $ 1,902,520 $ 92,288 Operating expense ratiobefore amortization and 23.6 % 26.6 % 24.1 % 27.3 % 20.3 % 31.1 % 22.2 % 23.4 %impairment (Non-GAAP) ^(10)

Premiums by Product Line$ in thousands(Unaudited)

Three Months Ended June 30, Gross Written Premium Net Written Premium Net Earned Premium 2020 2019 Change 2020 2019 Change 2020 2019 ChangeProperty & Casualty Personal Auto $ 612,927 $ 611,312 0.3 % $ 533,242 $ 511,952 4.2 % $ 561,548 $ 542,834 3.4 %Homeowners 205,211 190,037 8.0 % 84,257 108,404 (22.3 ) 99,368 102,008 (2.6 ) % %RV/Packaged 57,801 61,314 (5.7 ) 55,882 58,167 (3.9 ) 46,956 49,411 (5.0 ) % % %Small Business Auto 60,717 83,829 (27.6 ) 46,429 65,420 (29.0 ) 53,733 60,059 (10.5 ) % % %Lender-placed 103,922 58,859 76.6 % 64,674 37,214 73.8 % 71,102 60,278 18.0 %insuranceOther 12,930 15,739 (17.8 ) 4,944 5,314 (7.0 ) 9,278 3,382 174.3 % % %Total Premium $ 1,053,508 $ 1,021,090 3.2 % $ 789,428 $ 786,471 0.4 % $ 841,985 $ 817,972 2.9 % Accident & Health Group 89,467 75,036 19.2 % 69,217 57,960 19.4 % 69,232 57,949 19.5 %Individual 100,190 82,799 21.0 % 98,995 82,652 19.8 % 99,565 83,916 18.6 %Total Premium Domestic $ 189,657 $ 157,835 20.2 % $ 168,212 $ 140,612 19.6 % $ 168,797 $ 141,865 19.0 %International ? 13,837 (100.0 ) ? 12,095 (100.0 ) ? 24,184 (100.0 ) % % % Total National General $ 1,243,165 $ 1,192,762 4.2 % $ 957,640 $ 939,178 2.0 % $ 1,010,782 $ 984,021 2.7 %Total National General $ 1,243,165 $ 1,178,925 5.4 % $ 957,640 $ 927,083 3.3 % $ 1,010,782 $ 959,837 5.3 %(A) Reciprocal Exchanges Personal Auto $ 37,382 $ 43,984 (15.0 ) $ 34,281 $ 18,661 83.7 % $ 31,714 $ 16,093 97.1 % %Homeowners 60,160 76,140 (21.0 ) 22,667 37,211 (39.1 ) 22,741 30,225 (24.8 ) % % %Other 894 1,022 (12.5 ) 320 348 (8.0 ) 330 312 5.8 % % %Total Premium $ 98,436 $ 121,146 (18.7 ) $ 57,268 $ 56,220 1.9 % $ 54,785 $ 46,630 17.5 % % Consolidated Total $ 1,341,601 $ 1,313,908 2.1 % $ 1,014,908 $ 995,398 2.0 % $ 1,065,567 $ 1,030,651 3.4 %

(A) Excludes A&H international product line which was sold in the fourth quarter of 2019.

Premiums by Product Line$ in thousands(Unaudited)

Six Months Ended June 30, Gross Written Premium Net Written Premium Net Earned Premium 2020 2019 Change 2020 2019 Change 2020 2019 ChangeProperty & Casualty Personal Auto $ 1,407,424 $ 1,377,993 2.1 % $ 1,235,549 $ 1,170,872 5.5 % $ 1,141,050 $ 1,053,388 8.3 %Homeowners 370,464 342,079 8.3 % 172,800 193,649 (10.8 ) 190,851 186,066 2.6 % %RV/Packaged 110,929 113,165 (2.0 ) 107,860 109,764 (1.7 ) 96,248 99,716 (3.5 ) % % %Small Business Auto 133,469 169,707 (21.4 ) 105,028 139,606 (24.8 ) 113,158 127,692 (11.4 ) % % %Lender-placed 199,366 134,797 47.9 % 142,143 79,284 79.3 % 140,769 101,996 38.0 %insuranceOther 29,532 29,014 1.8 % 12,140 8,824 37.6 % 12,811 6,033 112.3 %Total Premium $ 2,251,184 $ 2,166,755 3.9 % $ 1,775,520 $ 1,701,999 4.3 % $ 1,694,887 $ 1,574,891 7.6 % Accident & Health Group 177,005 139,974 26.5 % 138,688 111,910 23.9 % 138,702 111,912 23.9 %Individual 199,677 166,991 19.6 % 197,740 166,775 18.6 % 194,801 166,151 17.2 %Total Premium Domestic $ 376,682 $ 306,965 22.7 % $ 336,428 $ 278,685 20.7 % $ 333,503 $ 278,063 19.9 %International ? 123,251 (100.0 ) ? 74,203 (100.0 ) ? 49,566 (100.0 ) % % % Total National General $ 2,627,866 $ 2,596,971 1.2 % $ 2,111,948 $ 2,054,887 2.8 % $ 2,028,390 $ 1,902,520 6.6 %Total National General $ 2,627,866 $ 2,473,720 6.2 % $ 2,111,948 $ 1,980,684 6.6 % $ 2,028,390 $ 1,852,954 9.5 %(A) Reciprocal Exchanges Personal Auto $ 69,191 $ 80,846 (14.4 ) $ 63,355 $ 34,306 84.7 % $ 64,637 $ 31,954 102.3 % %Homeowners 119,396 143,940 (17.1 ) 48,592 70,227 (30.8 ) 47,074 59,716 (21.2 ) % % %Other 1,702 1,929 (11.8 ) 616 642 (4.0 ) 672 618 8.7 % % %Total Premium $ 190,289 $ 226,715 (16.1 ) $ 112,563 $ 105,175 7.0 % $ 112,383 $ 92,288 21.8 % % Consolidated Total $ 2,818,155 $ 2,823,686 (0.2 ) $ 2,224,511 $ 2,160,062 3.0 % $ 2,140,773 $ 1,994,808 7.3 % %

(A) Excludes A&H international product line which was sold in the fourth quarter of 2019.

Fee Income$ in thousands(Unaudited)

Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Change 2020 2019 ChangeProperty & CasualtyService and $ 111,955 $ 113,112 (1.0 ) $ 222,588 $ 232,488 (4.3 )Fee Income % %Ceding ) )Commission 35,059 39,418 (11.1 % 71,090 87,827 (19.1 %IncomeProperty & $ 147,014 $ 152,530 (3.6 ) $ 293,678 $ 320,315 (8.3 )Casualty % % Accident & HealthService and Fee IncomeGroup $ 43,241 $ 32,862 31.6 % $ 83,723 $ 63,236 32.4 %Individual 2,265 1,242 82.4 % 4,482 3,378 32.7 %Medicare 11,078 5,159 114.7 % 22,790 12,260 85.9 %SalesThird Party 23,484 13,674 71.7 % 49,597 35,075 41.4 %FeeTotalService and 80,068 52,937 51.3 % 160,592 113,949 40.9 %Fee IncomeCeding ) )Commission 471 3,928 (88.0 % 1,031 6,519 (84.2 %IncomeAccident and $ 80,539 $ 56,865 41.6 % $ 161,623 $ 120,468 34.2 %Health TotalNational $ 227,553 $ 209,395 8.7 % $ 455,301 $ 440,783 3.3 %General Reciprocal ExchangesService and $ 2,336 $ 1,516 54.1 % $ 3,493 $ 2,886 21.0 %Fee IncomeCeding ) )Commission 11,110 16,846 (34.0 % 24,824 35,380 (29.8 %IncomeReciprocal $ 13,446 $ 18,362 (26.8 ) $ 28,317 $ 38,266 (26.0 )Exchanges % % Consolidated $ 227,232 $ 209,100 8.7 % $ 456,978 $ 444,141 2.9 %Total ^(A)

NOTES (A) Consolidated Total includes eliminations between National General and the Reciprocal Exchanges in Service and Fee Income of $(13,767) and $(18,657) in the three months ended June 30, 2020 and 2019, respectively, and $(26,640) and $(34,908) in the six months ended June 30, 2020 and 2019, respectively.

Additional Disclosures

(1) References to operating earnings and basic and diluted operating earnings per share (EPS) are non-GAAP financial measures defined by the Company as net income/loss and basic and diluted earnings per share excluding after-tax net gain or loss on investments (including credit loss on investments in debt securities and foreign exchange gain or loss), earnings or losses of equity method investments (related parties), deferred tax asset impairment, non-cash impairment of goodwill and non-cash amortization of intangible assets, and any significant non-recurring or infrequent items that may not be indicative of ongoing operations. The Company believes operating earnings and basic and diluted operating EPS are relevant measures of the Companys profitability because operating earnings and basic and diluted operating EPS contain the components of net income upon which the Companys management has the most influence and excludes factors outside managements direct control and non-recurring items. Other companies may calculate these measures differently, and therefore, their measures may not be comparable to those used by National General. Please see the Non-GAAP Financial Measures table within this release for the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

(2) Total investments includes $235,458 and $238,841 from related parties at June30, 2020 and December31, 2019, respectively.

(3) Other includes $2,405 and $2,391 from related parties at June30, 2020 and December31, 2019, respectively.

(4) Preferred stock: $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - June30, 2020; authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - December31, 2019.

(5) Common stock: $0.01 par value - authorized 150,000,000 shares, issued 113,856,628 and outstanding 113,397,545 shares - June30, 2020; authorized 150,000,000 shares, issued and outstanding 113,368,811 shares - December31, 2019.

(6) Treasury stock, at cost: 459,083 shares - June30, 2020.

(7) Loss and loss adjustment expense ratio (loss ratio) is calculated by dividing loss and loss adjustment expense by net earned premium.

(8) Operating expense ratio is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by dividing operating expense by net earned premium. Operating expense consists of the sum of acquisition and other underwriting costs and general and administrative expenses less ceding commission income and service and fee income. The ratio is used as an indicator of the Companys efficiency in acquiring and servicing its business.

(9) Combined ratio is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by adding the loss and loss adjustment expense ratio(7) and the operating expense ratio (non-GAAP)(8) together. The ratio is used as an indicator of the Companys underwriting discipline, efficiency in acquiring and servicing its business, and overall underwriting profit. Management uses operating expense ratio (non-GAAP) and combined ratio (non-GAAP) to evaluate financial performance against historical results and establish targets. A combined ratio under 100% generally indicates an underwriting profit, while over 100% an underwriting loss.

(10) Operating expense ratio before amortization and impairment is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by dividing the operating expense before amortization and impairment by net earned premium. Operating expense before amortization and impairment consists of the sum of acquisition and other underwriting costs and general and administrative expenses less ceding commission income, service and fee income, non-cash amortization of intangible assets and non-cash impairment of goodwill. The ratio is used as an indicator of the Companys efficiency in acquiring and servicing its business. Management believes that this measure provides a more useful comparison to the operating expense ratio of other insurance companies involved in fewer acquisitions.

(11) Combined ratio before amortization and impairment is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by adding the loss and loss adjustment expense ratio(7) and the operating expense ratio before amortization and impairment (non-GAAP)(10) together. The ratio is used as an indicator of the Companys underwriting discipline, efficiency in acquiring and servicing its business, and overall underwriting profit. Management believes that this measure of underwriting profitability provides a more useful comparison to the combined ratio of other insurance companies involved in fewer acquisitions. A combined ratio under 100% generally indicates an underwriting profit, while over 100% an underwriting loss.

(12) Combined ratio (non-GAAP), operating expense ratio (non-GAAP), combined ratio before amortization and impairment (non-GAAP) and operating expense ratio before amortization and impairment (non-GAAP) are considered non-GAAP financial measures under applicable SEC rules. Other companies may calculate these ratios differently, and therefore, their measures may not be comparable to those used by National General. Please see the Non-GAAP Financial Measures table within this release for the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

(13) Trailing twelve month operating return on average equity is the ratio of the previous twelve months operating earnings (non-GAAP) to average shareholders equity for the same twelve-month period. Average shareholders equity is the sum of the shareholders equity excluding preferred stock at the beginning and end of the period divided by two. In the opinion of the Companys management this ratio is an important indicator of how well management creates value for its shareholders through its operating activities and capital management. Other companies may calculate these measures differently, and therefore, their measures may not be comparable to those used by National General. Please see the Non-GAAP Financial Measures table within this release for the reconciliation of net income to operating earnings, which is the Non-GAAP component of the operating return on average equity.

(14) Combined ratio excluding losses from various weather-related events, is calculated by taking the combined ratio as defined in Note 11, and adjusting it to exclude the total net losses of $35.3 million and $18.4 millionfrom these events for the three months ended June 30, 2020 and 2019, respectively. The Company believes this measure enhances investors understanding of our results by eliminating what we believe are volatile and unusual events.

Combined Impact of Combined Ratio ExcludingYear Ratio ^(11) Weather-related Weather-related Events ^ Events (14)2020 P&C 83.6% 4.2% 79.4% Segment 2020 Overall 80.5% 3.5% 77.0% NGHC 2019 P&C 92.6% 2.2% 90.4% Segment 2019 Overall 90.9% 1.2% 89.7% NGHC

(15) Our products in the P&C segment include personal auto, homeowners, RV/Packaged, small business auto, lender-placed insurance and other products. The personal auto product includes policies for standard, preferred and nonstandard automobile insurance. The homeowners product includes multiple-peril policies and personal umbrella coverage to the homeowner. The RV/Packaged product offers policies that include RV automatic personal effects coverage, optional replacement cost coverage, RV storage coverage and full-time liability coverage. The small business auto product offers policies that include liability and physical damage coverage for light-to-medium duty commercial vehicles. The lender-placed insurance product offers fire, home and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. Our products and revenue in the A&H segment include group, individual and third party fees. The group product includes revenue from our small group self-funded product. The individual product line includes revenue from our supplemental products including short-term medical, accident/AD&D, hospital indemnity, cancer/critical illness, dental and term life insurance. Medicare fees include commission and general agent fees for selling Medicare policies issued by third-party insurance companies as well as revenue from our Medicare Supplement product. Third party fees include commission and general agent fees for selling policies issued by third-party insurance companies, fees generated through selling our technology products to third parties.

Investor Contact

Clifford GallantSVP of Capital Strategy and Investor RelationsPhone: 212-380-9462Email: Clifford.Gallant@NGIC.COM