Definity Investment and Insurance Strategy Overview

26 12-MONTH INDUSTRY OUTLOOK Personal Auto We expect the frequency of claims to continue to normalize toward pre- pandemic levels and inflationary pressures affecting vehicle damage claims to remain elevated. We expect to see severity decline slightly in the coming quarters as automotive industry supply challenges ease and government monetary actions to control inflation impact consumer demand. Both frequency and severity trends as well as elevated theft levels are expected to continue to drive firming industry pricing and a focus on disciplined underwriting in the coming 12 months. T Mong Personal Property Due to the volatility of weather events, combined with the ongoing inflationary pressure on building materials and labour, claim costs are expected to increase and should be reflected in firm premium pricing over the next 12 months. We expect this volatility to continue, with commensurate rate actions, coverage and appetite changes, and an enhanced focus on loss prevention and mitigation. We expect the reinsurance market to remain disciplined throughout the remainder of the year, putting greater emphasis on primary insurers to manage catastrophe exposures in the higher catastrophe risk regions of the country. 000 OOO Commercial Insurance The elevated risks for an economic slowdown remain, with inflation moderating but still above central bank targets. This will likely impact industry growth somewhat in the near term. We expect the commercial lines market to remain firm into 2024 as carriers focus on ensuring long-term profitability and sustainable availability of capacity. We expect the firm pricing environment to be influenced by weather events, inflation trends, expected investment returns, and the industry's overall underwriting performance. Elevated reinsurance costs are expected to prolong firm commercial lines market conditions and pricing. definity.

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