U. Ganzorig, Chairman, UMC Group

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2. U. Ganzorig, Chairman, UMC Group
Content
• Mongolia’s domestic insurance and asset
management market
• State of Mongolia’s insurance market
• Assessing the appetite for insurance in the mining,
non-mining and consumer segment
• What role can insurers play in aiding Mongolia’s
growth?
• Opportunities to extend insurance service offering
and future market outlook
• Opportunities for asset management and private
equity deals

3. U. Ganzorig, Chairman, UMC Group
Insurance and Asset management sector snapshot:
Sector assets as percentage of GDP, 2011
0%
20%
40%
60%
80%
100%
120%
Insurance Bank Pension Fund
Chile
USA
Mongolia

4. U. Ganzorig, Chairman, UMC Group
0%
20%
40%
60%
80%
100%
Canada Chile S.Korea USA Mongolia
Insurance
Bank
Pension
Fund
Insurance and Asset management sector snapshot:
Market share in the Financial Sector, 2011

5. U. Ganzorig, Chairman, UMC Group
28%
21%
38% 43%
46%
8%
21%
41%
50%
2007 2008 2009 2010 2011
Insurance Growth % Bank Growth %
Insurance and Asset management sector snapshot:
Sector assets as percentage of GDP, 2011

6. U. Ganzorig, Chairman, UMC Group
Insurance potential: Mandal Insurance
• Market potential is not well
understood
• Professional management is a
scarce commodity
• Insurers will soon allowed to
invest in capital markets
• More compulsory products to
follow-up
• Best Capitalized insurer
• Became strong brand in 12
months
• Serving the biggest companies
• 115 Corporate, 112K Retail
Casualty, 6K Retail Property
• Loss ratio 15%
• Portfolio yield +300bps
• Audited by PwC
Undervalued Sector Case Study

7. U. Ganzorig, Chairman, UMC Group
Asset Management potential:
Mandal Asset Management
• Asset classes: Property, MM, ECM
• MM fund: beating the deposit by 300bps
o Same risk profile as government guaranteed deposits
o Yielding more than 20pct a year
• Create a product that is acceptable by international standards
o MAM is an innovative market leader
o Yield of portfolio under management
Real Estate 33% p.a.
PE 40% p.a.
MM 18-20% p.a.

8. U. Ganzorig, Chairman, UMC Group
Mongolia Alpha: PE
• 4 public companies in top 100 companies
• No local PE institutional investor
PE Fund: Equity Partners LLC, onshore
Founders: Top 20 Mongolian executives from different sectors.
Manager: Mandal Asset Management
Strategy: Macro Value; Event Driven
Horizon: 3 years
Value creation: Added vision, increased efficiency

9. U. Ganzorig, Chairman, UMC Group
Mongolia Alpha: Distressed RE
• Distressed Real Estate Platform
• Local Institutional, Foreign
Institutional
• Pipeline 132 projects

10. About UMC
• UMC represents group of
professionals united by their
passions in 2004, the year of its
establishment.
• Although we come from various
business sectors and
backgrounds, the company puts
business ethics and
professionalism above all.
• Our services include
Investment advisory
Investment management
Market research
Administration
Our business lines include
• Business lines
Insurance group
Asset Management group
Investment Banking group
Real Estate Investment
Banking group
Property Management group

11. U. Ganzorig, Chairman, UMC Group
Financing cost
why it is a killer?
• Capital market
– Institutional investors (financial intermediary is vital source of GDP growth)
• Mutual funds (law, tax)
• Private/State pension funds (creation)
• Insurance companies (law)
• Private funds (tax – hedge fund, PE fund)
– Infrastructure
• Laws/regulations (Securities law, Fund law)
• Technology
• Floating rate
– Benchmark rate (policy rate cant be benchmark)
• Inflation
– Imported inflation (consumption basket)
– Supply shock (infrastructure)
• Deposit Rate
– Competition of banks (lottery, non interest income, foreign money)
• Operational delay
– Time delay, uncertainty (Mid level bureaucracy, Macro uncertainty)