Tenger Insurance LLC 2016, Annual report

2. CONTENTS
Mission 3
To our stakeholders 4
Highlights 6
Economic overview 7
Financial highlights 10
Underwriting 12
Insurance market overview 14
Operational highlights 18
Future strategy 20
Risk management 22
Governing structure 27
Board of directors 28
Independent auditors report 33
Customers’ impressions 38

3. 3-2
To bring world class
financial services to
Mongolia.
Being a lifelong partner
for our customers in
providing value added
financial solutions
embracing the highest
standards of triple bottom
line mission: People,
Planet, and Profit.
Our core values describe
how we should act in
order to accomplish
the tasks leading to
achieving our vision and
mission. They create
desired culture, as they
are the principles that
guide the behaviors of all
employee.
OUR VISION OUR MISSION
CORE VALUES
OUR VALUES
MISSION

4. TO OUR STAKEHOLDERS
OYBEK N. KHALILOV
CEO

5. 5-4
With mid-year parliamentary elections and a tough economic environment, the 2016 year was challenging in
Mongolia but proved to be yet another successful year for Tenger Insurance. The company posted a net profit of
MNT 1.5 billion, a fourfold increase over the prior year 2015, while total assets grew by 22% and return on equity
was 24.7%. These results were achieved through improved underwriting guidelines, favorable claims develop-
ment and savings in operating expenses. Gross written insurance premiums totaled MNT 9.0 billion in 2016, a
4.0% increase compared to the same period last year.
There were changes in the share of premiums written by distribution channel in 2016: premiums through inter-
mediaries decreased, with banc assurance reducing by 12.2% due to more restrictive bank lending activities,
whereas direct sales from head office increased by 10.0% and sales through branches grew by almost 40%
compared to 2015.
During the 2016 year gross written premium by product line increased on average by 10.2% with the exception
of liability insurance, due mainly to the limited insurance budgets of legal entities.
Insurance losses across all types of insurance decreased by MNT 76 million, resulting in a fall in the overall paid
claims ratio by 6%, the loss ratio for 2016 falling to 37.2% compared to 43.0% last year.
Tenger Insurance LLC is acknowledged in Mongolia as the insurer best able to assess risk and technically price
the insurance cover in line with its stated risk appetites. The result has been consistently higher net income than
the average for the Mongolian insurance market. Tenger Insurance has made considerable efforts to develop
the insurance sector, while our insurance services meet international standards including the quality and financial
reliability of reinsurance protection. During the last two years our reinsurance capacity increased from USD 2
million in 2015 to USD 10 million by the end of year 2016. Tenger Insurance is setting the standards for other
insurance companies in terms of technical underwriting ability and innovations in the insurance field, including its
on-line insurance platform.
Tenger Insurance was the first to introduce new accounting policies and to upgrade core IT systems in accor-
dance with the new requirements of the Financial Regulatory Committee. Monthly analysis of data received from
branches has been implemented. The MIIS system finally supported the direct input and import of claims data.
By simplifying the processes and production with the banc assurance channel, we have achieved significant re-
duction in headcount and improved operational risk management, internal reporting and actual expense savings.
More granular analysis are now available on the performance of individual insurance products, including product
value, product awareness, client satisfaction, and service quality feedback. With new analytical capabilities we
are able to recognize trends and leverage those trends to add more value to our customers.
Tenger Insurance provides insurance coverage to 61 corporates from the Top 100 Companies of Mongolia.
In the first quarter of 2016, Tenger Insurance held a one-week training workshop on underwriting and actuarial
practice for all employees, as well as other market practitioners, including representatives from the regulator,
conducted by invited international insurance experts. In May, the company organized the first Financial Insurance
Forum of Mongolia, in cooperation with one of the leading international insurance brokers, Willis Towers Watson.
High priority is given to customer service and claim handling; our fast and efficient service is regarded as the
best in the market, with settlement conducted on average within three working days. At Tenger Insurance the
monitoring of the claim approval and settlement process is based on the principles of clarity and fairness.
During 2016 the company won a number of international awards: Best Insurance Company in Mongolia by
International Finance Magazine and Best Online Insurance Company in Mongolia by Global Banking and Finance
Review.
Oybek N. Khalilov
CEO

6. HIGHLIGHTS

7. 7-6
BALANCE OF PAYMENTS
Proxy loss of the balance of payments as of the year end of 2016 has decreased by USD 249.9 million to USD
-18.2 million. The main reason of this decline was the decrease of current account loss. Specifically, compared
to previous year’s performance, the profit of capital and financial account decreased by USD 58.0 million and
the loss of current account decreased by USD 412.0 million. The decrease of current account loss is explained
by increase of goods balance profit and decrease of income balance loss. Following these improvements, the
exposure on international reserve will be lightened.
INFLATION
Inflation rate (UB) has been decreasing constantly to -0.6% as of August 2016, since August 2014. This defla-
tion continued for 4 months. The reason of decrease in inflation rate is thinner total demand as consequence of
economic difficulty. As of the end of the year 2016, inflation rate was 0.5%.
It is expected that inflation rate will be around 5.0% in the year 2017. This is under the target rate but there are
still risks on importing goods’ inflation and supply-driven (gasoline, meat, wheat etc.) inflation.
ECONOMIC OVERVIEW
Balance of payments (In USD million)
Inflation
Source: XacBank

8. Foreign direct investment
FOREIGN DIRECT INVESTMENT
Due to the domestic and international economic difficulty, there has not been much foreign direct investment
recovery since 2013. As of the end of the year 2016, net foreign direct investment plunged to USD -4,130.5
billion as the result of increasing cash outflow which was caused by big corporations’ loan repayments to foreign
investors.
GROSS DOMESTIC PRODUCT
GDP growth was respectively +7.8% and +2.3% for the year 2014 and 2015. However as of the year end of
2016, it was +1.0%.
The proportion of net tax in GDP growth has been negative for the last 11 months. It is because of the shrinkage
of trade industry and base tax payments which was caused by the economic difficulty and slowness driven by
deficit of balance of payments.
RGDP Consensus AVG forecast (%)
ECONOMIC OVERVIEW

9. 9-8
INTERNATIONAL RESERVES
International reserve is USD 1,296.3 million as of the year end 2016, which is lower than previous year’s perfor-
mance by USD 26.8 million (2.0%). The reasons of comparably stable international reserve are the increase of
gold sold to Bank of Mongolia and increase of currency inflow to Mongolia. The Bank of Mongolia has bought
18.3 tons of gold as of December, 2016. International reserve can cover 4.9 months’ worth of import which is
slightly lower than previous year’s performance.
Foreign exchange reserves
Mongolia: GDP Growth and Commodity Prices, 2000-15
Mongolian RGDP is comparably high volatile and shows same pattern as of the commodity prices index. This
indicates that Mongolian dependence on mining industry should be lowered and changes have to be applied
on budget planning.
It is anticipated that unemployment rate is to increase from 9.4% to 11-13% in 1H2017.
Source: IMF

10. FINANCIAL HIGHLIGHTS
Total Assets +22% YOY
Reserve fund +13% YOY
GWP +4% YOY
Investment +26% YOY
Net income +265% YOY
Earned premium -1% YOY

11. 11-10
Claim +16% YOY
GWP by Lines
GWP by Channels
Opex +6% YOY

12. UNDERWRITING
Tenger Insurance strategy to serve different customer segments with a broad range of products through wide
distribution channels including 19 branches, 9 commercial banks, 13 brokers, 9 partnership companies and
over 350 agents continues to strengthen our competitive position. Since demand for insurance services is
increasing day to day we are delivering our services for individuals and corporates using all potential distribution
channels in order to increase sufficiency and accessibility. Using our broad distribution channels we provided our
services for above 62 thousand individuals and 12 thousand entities which is 20% and 11% increase compare
to the previous reporting year respectively.
In reporting period we focused on the following priorities:
• better serve our customers through innovation, effectiveness and efficiency;
• achieve target economic returns on capital;
• launch new insurance products;
• proactively manage investments;
• build and acquire long-term growth platforms.
We have conducted Risk management, health and safety trainings for over 100 corporate clients. In order
to mitigate fire risk within manufacturing companies fire risk survey and trainings were provided jointly with
professional institutions.
During the reporting period we successfully participated in open bids of international organizations and provided
insurance services. We actively participated in all major exhibitions, conferences and events occurred in
Ulaanbaatar as well as in rural areas. The first financial line forum was organized successfully for corporates,
commercial banks and non-bank institutions, international organizations and government entities jointly with
Mongolian National Chamber of Commerce & Industry and international broker company.
In order to introduce our combined vehicle own damage and drivers liability insurance package we participate
in the largest motor fair as a main sponsor. Vehicle insurance products mainly sold through our branches and
distribution channels such as banc assurance, brokers, agents and partnership companies. It is our strategy to
serve all consumer segments with unique products and in innovative ways while leveraging our claims, pricing
and operational capabilities.

13. 13-12
In order to enhance the capacity building of our underwriters we have conducted several trainings on property,
construction all risk, third party liability, professional indemnity, health and accident insurance and bank’s loyalty
insurance products.
With the purpose to fulfill needs of our clients contracts liability and professional indemnity insurance was
developed according to international standard and introduced to the market.
Bank credit card holders travel accident insurance product which covers medical expenses due to accident
up to USD 50,000 with worldwide coverage was introduced and launched in the market jointly with “A” rated
reinsurance company.
11th season of livestock index based insurance started in April 2016, company’s 10 branches 216 active agents
through more than thousand herders family involved 339 thousand livestock insured accumulating net premium
of MNT 181 million. Tenger Insurance have paid 52 million tugrug for 2016 severe weather disaster recovery for
herder’s family.
DISTRIBUTION CHANNELS
During reporting period new branch was opened at auto complex center to provide combined motor package
and personal accident insurance to reach our remote individuals and clients.
Cooperation agreements signed with additional 6 brokers, 2 nonbanking financial institutions and National
Investment Bank to deliver compulsory property, special purpose and heavy machinery, combined motor and
livestock insurance. Tenger Insurance provided professional training for 109 agents and 66 of them passed
FRC exams in 2016.
FOREIGN RELATIONS AND PARTNERS
Tenger insurance LLC cooperates with reinsurance companies and brokers based on their credit rating,
solvency and financial capability. Within the scope of policy and strategic plan of reinsurance, the company
effectively collaborates with world-class reinsurance companies as well as with professional insurance brokerage
companies according to the ratings of global rating agencies such as Standard and Poor’s, Moody’s, Fitch and
A.M.Best as well as criteria of Financial Regulatory Committee.
In 2016 we established partnership and collaborated with following reinsurance companies as well as brokering
companies such as AIG (Singapore), Sirius International, Trust Re, QBE Australia, Zurich International Programs
Hub Malaysia, Aviva (UK), Mai Reinsurance Brokers and Skala Reinsurance Brokers.

14. INSURANCE MARKET OVERVIEW
There are in total 15 general insurance companies and 1 life insurance company in the market as the end of
2016. Tenger Insurance is one of the market leaders.
Tenger Insurance is among the top 3 companies sharing 10 percent of the market by total assets and it is
second by total equity amounted MNT 6.9 billion.
11,48512,305
16,654
17,309
Tenger Insurance
Tenger Insurance Tenger Insurance
Tenger Insurance
Bodi Insurance
Mongol Insurance Practical Insurance
Ganzam Insurance
MIG Insurance
Bodi Insurance Mongol Insurance
Bodi Insurance
Mongol Insurance
Mandal Insurance MIG Insurance
MIG Insurance
Mandal Insurance
MIG Insurance Bodi Insurance
Mongol Insurance
30,375
5,115
9,578
6,871
5,969
5,137
9,004
24,725
20,148
13,093
11,308 5,9866,466
6,867
10,458
14,174
Total Assets
3rd
5th
2nd
4th
Total premium
Total equity
Net premium
Source: MIA
Source: MIA

15. 15-14
Tenger Insurance is sharing 8 percent and 9 percent of the market by total gross premium and total net premium
respectively, therefore positioning as 6th and 4th premium.
809954
1,023
1,035
1,504
The main factor of company efficiency is net profit after tax. Tenger Insurance leading the whole market by the
net profit of MNT 1.5 billion as well as by the highest ROE of 22 percent.
As for paid claim amount, Tenger Insurance paid in total MNT 2.4 billion, positioning itself 7th in the market. The
lower claim amount is a feature of proper underwriting, sufficient premium and solid risk management internally
and externally.
Tenger Insurance
Bodi Insurance
Khaan Insurance
Ganzam Insurance
Tenger
Insurance
Khaan
Insurance
Bodi
Insurance
Ganzam
Insurance
MIG
Insurance
MIG Insurance
25% 22%
21%
20%
16% 16%
20%
15%
10%
5%
0%
1st
Net income ROE
Source: MIA
Tenger Insurance
MIG Insurance
Mongol Insurance
Mandal Insurance
Practical Insurance
Ard Insurance
Bodi Insurance
6,704
2,386
2,596
2,839
3,153
4,116
4,954
7th
Total paid claim
Source: MIA
17,972
6,286
6,357
8,877
9,697
Tenger Insurance
MIG Insurance
Bodi Insurance
Mongol Insurance
Mandal Insurance
Total reserve
3rd
Source: MIA

16. INSURANCE MARKET OVERVIEW
Sufficient reserves are indicator of ability to meet future liabilities as well as the solvency ratio. Tenger Insurance is
again among top 3 companies by total reserve fund placing almost MNT 9 billion for reserves. For the solvency
ratio, the company kept its solvency ratio above the required level and was constantly increasing it during 2016
reaching 116.3 percent by the end of the year.
Source: MIA
Loss ratio
Combined ratio
Expense ratio
Source: MIA
Tenger Insurance loss and expense ratios at 37% and 44% are comparably low among the market leaders.
loss ratio of 37 percent and expense ratio of 44 percent. Thus, its combined ratio of 81percent is a very good
indicator of our leading position on efficiency and profitability.
116.3%

17. 17-16
As for the market, as shown in the graph above, the main line is Property line. Its total gross premium reached
MNT 31.8 billion and shared 28 percent of the insurance market in 2016. The Compulsory Driver’s Liability
Insurance (CDLI) and Vehicle lines contributed MNT 27.8 billion and MNT 14.5 billion and shared 25 percent
and 13 percent in the market respectively. The 5 product lines shown in the graph above made up 84 percent
in total premium.
The similar picture can be in the premium income split of our company. Vehicle insurance contributed MNT 2.3
billion and made up 25 percent of the company total premium income, whereas Property line and CDLI shared
23 percent and 21 percent respectively. 83 percent in total premium income of the company is contributed by
the top 5 insurance lines of the company: Vehicle, Property, CDLI, CAR and Liability.
Market TOP 5 products, in total premium share
Tenger Insurance’s Top products, in total premium share

18. OPERATIONS
MAJOR CHANGES IN OPERATIONS
Tenger Insurance became fully compliant with the new accounting rules introduced by Financial Regulatory
Committee of Mongolia during Q1, 2016. The new accounting system enables financial reporting in accordance
with IFRS, along with adequate allocation of insurance reserves and pro-rata recognition of insurance premium
related book entries, including acquisition expenses, in alliance with their effective dates.
At the same time our core system HeavenPro went a major upgrade aligned with these accounting changes.
The upgrade involved advancements and automation in several core insurance modules, such as recognition of
commission, receivables, classification of earned premium, reinsurance, claims, policy production and reserving.
The new core insurance system also enabled remote branches to access the system via web. As a result we
reached not only operational efficiency within both back and front offices, which increased staff productivity and
reduced headcount, but also benefited our clients and partner companies. Insurance intermediaries such as
agents and brokers have now greater web access to our system in producing policies and obtaining reports.
Partner companies selling our policies through our system:
• Banks: ХасBank, NIBank
• Brokers: Ersdeliin shiidel, Sureg Kharaatsai, Smart Brokers, Tod Capital, Tsagaan Gerelt
• Partners: XacLeasing
As part of goal to improve operational productivity the IT team succeeded in a number of automation solutions,
including integration of claims part of MIIS - third party platform with our system, implementation of business letter
and document retention system, and internal legal document sharing platform.
As of end of 2016, we continue our cooperation with following IT vendor companies: Infosoft LLC, IT Zone LLC,
Trikom LLC, Mogul Service and Support LLC, MMIA on MIIS, Softline LLC.
IT SYSTEM FAILURES
In 2016, long term system failure occurred twice in the core system:
1. Failure in onsite electrical wiring caused halt in Central server for 20 hours. Operation resumed within 2
hours.
2. Core system migration required shutting down the central server for 4 hours. The data was restored within
2 hours.

19. 19-18
HR MANAGEMENT
Through strategic partnerships and collaboration, we recruit, develop and retain a high performing and diverse
workforce and foster a healthy, safe, and productive work environment for employees in order to maximize
individual and organizational potential and position Tenger Insurance as an Employer of Choice.
CLAIMS SERIVCE
As the purpose of any insurer is to shield its customer from financial losses arisen from probable risks, we aimed
at shortening the loss indemnity approval period, with end result of 3.5 days on average.
Net losses reimbursed to customers amounted to MNT 2.4 billion for 3,524 claims with loss ratio of 37%.
Our effort in making a difference to our customers shows that old standards can be and should be broken in
order to bring out lasting and positive impact in the lives of people.
Under increased digitalization, providing the client with timely information on indemnity progress via emails and
mobile phones was part of natural progress within the technological awareness goal of the company.
APPROVAL PERIOD IN DAYS NUMBER OF CLAIMS
AMOUNT MNT BILLION
APPROVAL PERIOD
IN DAYS
NUMBER OF
CLAIMS
AMOUNT
MNT BILLION
2016 3.5 3524 2.4
2015 5.2 4507 2.8
2014 5.5 4143 2.6

21. 21-20

22. FUTURE STRATEGY
12,000 12,000
28%
9,004
9,004
Actual-16
Actual-16
Property
Directsale
A&H
Broker
Vehicle
Banks
CDLI
Partnership
Liability
Agent
Financaillines
Branches
Budget-17
Budget-17
739
975
758
224
463
1,092
355
113
182
16
2
77
11,500
11,500
0 0
2,000 2,000
4,000 4,000
6,000 6,000
8,000 8,000
10,000 10,000
GWP by lines
Net income
Total assets
GWP by channels
Gross writen premium
Total reserve
4,631
Actual Budget
7,112 6,994
7,846
8,877
9,303

23. 23-22
Tenger Insurance will continue to play the role it has always played – reducing fear and enabling the future – but
only by partnering with clients, collaborating and encouraging diversity of thoughts, investing in innovation, and
using data to help clients achieve better outcomes. Because of our customer-centric approach, we announce
the following motto for 2017: “We are always together to make every moment of happiness!”
In 2017 we will contribute to the improvement in intrinsic value of Tenger Insurance and sustainable profitability
by delivering high growth of gross premium - 28%, improving our technology infrastructure and new on-line
insurance platform, and through simplified cost structure and further empowerment of employees.
Commercial and Consumer priorities are as follows:
COMMERCIAL CONSUMER
• Build a more customer-centric
culture
• Challenging ourselves to make
effective underwriting decisions
• Increase direct sales up to 60
corporates from MNCCI Top
100
• First choice provider in Financial
line
• Secure growth in Health Insur-
ance and Travel Insurance
• Performance management and
employee development plans
• Customer-focused organization
• Culture of teamwork, empowerment to
achieve efficiency, customer intimacy,
and innovation
• Provide customers with differentiated
Best customer experience across
channels in vehicle insurance and
mortgage insurance
• Enhance our business model (i.e. on-
line, mobile, and customer self-service)
• Become absolute leader in banc
assurance
• Performance management and em-
ployee engagement plans

24. Internal control function is embedded in responsibilities of each department with Internal Auditor being the main
monitoring unit directly reporting to the Board of Directors (BOD). Internal audits were performed on HR and
Finance activities covering periods of 2013-2016.
District taxation authority performed inspection of reports for 2011-2015, as well as FRC inspected the company
operations for 2015 and H1 2016. The inspections resulted in improvements of the company operations in areas
of claims, reinsurance, finance and human resources management.
TENGER INSURANCE IMPROVED ITS POLICIES TO AN INTERNATIONAL LEVEL IN FIVE IMPORTANT
AREAS IN 2016.
In the updated Underwriting policy, Tenger Insurance is a step closer to the international underwriting operation
as underwriters’ job functions and work instructions are clearly specified and distinguished from sales staff.
Particularly, underwriters started to study the potential client’s main operations and conduct risk evaluation in
order to offer the most suitable insurance coverage specifically tailored for the client. This approach is also
useful when potential clients are willing to purchase coverage for uninsurable risks. For such cases, skills and
experience of underwriters are crucial in order to come to an optimal solution that is win-win for both sides.
Premium payment by installments is one way of our customer care. However, sometimes delay in payments
means termination of the insurance coverage and this can cause an issue when it comes to claims. This was
recognized as our faults in communication with customers. Therefore, to eliminate this type of misunderstanding
and improve our customer care, we had clearly defined in our procedure the steps to follow when it comes to
partial payments by schedule and payment delays.
Within the above improvements from the risk management side, underwriters will be reporting on policies with
premium partial payments on a regular basis as well as constantly monitoring profitability and risk level of their
respective portfolios or lines. The updated Risk management policy also defines the risks that should be under
observation and within this underwriters came out with appetites for all insurance lines and products.
For insurance, customers evaluate our service when it comes to claims. Therefore, customer care in claims is
more important than customer care in sales. Accordingly, the Claim handling policy was enriched with dedicated
section on customer complaints and defined our responsive actions to be taken if complaints occur.
Another essential part of our operation is information technology as our operations are fully automated and we
are the one of two insurance companies in the market with comprehensive insurance software, which can be
accessed through web from everywhere by our staff. In this case, its safety and emergency backup plans are
crucial for us. Thus, the Information Technology policy was supplied with Emergency response plan procedure
for information catastrophes, Database procedure, Software development and maintenance procedure, Social
media user authorization procedure and Electron mail procedure.
In the beginning of 2016, the Financial Regulatory Committee (FRC) approved the new accounting standard.
Tenger Insurance was the first to implement the new standard by introduce new accounting internal policy in
accordance with the new regulatory requirements.
RISK MANAGEMENT

25. 25-24
INTERNAL CONTROL
Taking risks is an inherent part of entrepreneurial behavior. A structured risk management process allows
management to take risks in a controlled manner. In order to provide a comprehensive view of Tenger
Insurance’s business activities, risks and opportunities are identified in a structured way combining elements
of a top-down and bottom-up approach. Within risk management activities, we have developed company Risk
Appetite, where we identified risks that can affect our day-to-day operations and defined these risks’ measures
and corresponding tolerance levels in order to monitor and report on a regular basis. All relevant risks and
opportunities are prioritized in terms of impact and likelihood, considering quantitative and qualitative aspects and
reported to the top management in a monthly basis.
Within the Risk Appetite we consider the following classes of risks:
2
Indemnities
paid
MNT 1.3
million paid
Out of 3
claim
calls
2 onsite
claim
inspection
1 claim
on each
working hour

26. THE COMPANY’S
Shareholders Meeting (ShM)
Board of Directors (BoD)
Chief Executice Officer (CEO)Risk Management Committee (RMC)
Business Development Committee (BDC)
Sales Department (SD)
Branches Management
Brokers Management
Banc Assurance
Executive Committee Management (ECM)
Chief Underwriting Officer(CUO)
Consumer insurance
Department (CID)
Corporate Insurance Department
(BEID)
Risk Management
Department (RMD)
Reinsurance Unit (RU)
GOVERNANCE
RELATED PARTY TRANSACTIONS
Tenger Insurance had transactions with parent company Tenger Financial Group LLC, and other daughter
companies XacBank, XacLeasing and XacSecurity.
RELATED PARTY TRANSACTIONS SUMMARY REPORT MNT
Total income from related parties 446,738,628
Total expense to related parties 479,513,414
DIVIDEND POLICY AND DISTRIBUTION
The company shareholders have right to declare dividend distribution once retained earnings are audited by the
external auditor, currently by Deloitte Onch Audit LLC. Dividends were not distributed in 2016.

27. 27-26
(ORG CHART) AS FOLLOWS:
The Tenger Financial Group, LLC (the “Shareholder”) become a sole shareholder of the “Tenger Insurance” LLC
(the “Company”) since August 2013 and the company management aim to establish a good governing structure
of the company for the successful business growth and improve this structure time to time as required and
needed.
Tenger Insurance is a wholly-owned subsidiary of TenGer Financial group, one of the leading Mongolian financial
services groups, providing a range of banking and financial services. TenGer Financial Group is majority-owned
by broad base of recognized institutional investors.
Shareholders of TenGer Financial Group are located across the globe, including the largest international financial
institutions, local and foreign reputable companies and investment funds. No other company in the banking
and financial sector of Mongolia has currently such a diverse shareholding structure. It is our competitive
advantage and driving force in growing our banking business leveraging on knowledge, capital and network of
our shareholders.
Risk Management & Audit Committee (RMAC)
Governance, Nomination &Compensation Committee (GNNC)
Lawyer (L)
Marketing (M)
Human Recourses (HR)
Chief Operation Officer (COO)
Internal Auditor (IA)
Business Development
Unit (BDU)
Claim Department (CD)
Global Accounts Unit
(GAU)
Financial Department (FD)

28. The Company’s Board consisted (6) six directors (1) one of it concerning as an independent director. All members
of the Board of Directors have many years of executive management experience in financial services industry.
BOLDOO Magvan
Chairman of Board, Appointment in April 2016
Mr. Bold Magvan was appointed as the Chief Executive Officer of the
XacBank since July 2014 and he has served as non-executive director
on the Board of Directors of XacBank since 2009. Mr. Bold has been
working as the CEO and executive director of TenGer Financial Group
since January 2011. Prior to his current appointment, Mr. Bold worked for
XacBank for 2 years as the CEO and for over 3 years as the President.
Bold is a senior banking professional with more than 20-year expertise
in public and private global financial institutions, including the World
Bank and the International Monetary Fund. From 1996 to 2000, Bold was the Deputy Governor of the Bank of
Mongolia (Central Bank). In his prior professional career, Bold served as Deputy Director at the Market Research
Institute, CEO of the Mongolian Export-Import Bank, member of the boards of the International Investment Bank
and the International Bank for Economic Cooperation in the Russian Federation and advisor for Da Afghanistan
Bank (Central Bank), Islamic State of Afghanistan. Mr.Bold holds a Master’s Degree in International Affairs with
a major in economic policy management from the Columbia University, New York. Bold is the chairman of the
boards of the Credit Information Bureau LLC and Development Solutions NGO in Mongolia. Bold has served as
Vice President of the Mongolian Bankers Association since 2007 and was elected as President in December
2011. Bold has served the Honorary Consul of the Republic of Iceland in Mongolia since 2008.
AMARTUVSHIN Hanibal
Board member, Appointment in September 2014
Amartuvshin Hanibal joined XacBank as President in July 2014 and he
had worked as the Managing Director of Tenger Financial Group for 3
years. Amar has experience on project finance and leveraged finance
for over 10 years and he was the Managing Director and Head of Risk
Management Department at JSC Kazkommertsbank (KKB), the largest
commercial bank in Kazakhstan.
Prior to joining Kazkommertsbank, Amar has worked in ABN AMRO Bank
in various global offices including London, Amsterdam and Chicago. As part of ABN AMRO Bank’s Structured
Debt Unit, Amar worked on several high-profile transactions in the oil and gas, power and telecom sectors
in Europe. Amar has started his career at Cash Management Unit of ABN AMRO and transferred to the Risk
Management Department. Amar holds a bachelor’s degree in business administration from the European
University of Brussels, Belgium and a MBA from the Harvard Business School, Boston, USA.
BOARD OF DIRECTORS

29. 29-28
TSEVEGJAV Gumenjav
Board member, Appointment in August 2014
Tsevegjav Gumenjav was appointed as Chief Executive Officer of
XacLeasing in May 2013. Previously, he worked as the Chief Financial
Officer of TenGer Financial Group and later as Chief Financial Officer of
XacBank. Prior to joining TFG, Tsevegjav worked as a Treasury Manager at
multi-brand premium home furnishing company based in San Francisco,
USA. During his engagement with the Restoration Hardware, Tsevegjav
managed the company’s treasury and risk management functions. He
worked in Bluefin Associates, IT software Development Company in San
Francisco and also worked as an International Accountant at Wagner Equipment Company based in Denver,
USA. Tsevegjav received his M.B.A degree with concentration in Finance and Accounting from Regis University,
USA and Bachelor of Science degree in International Business and Information Systems Management from the
University of Colorado, USA.
ERDENEJARGAL Perenlei
Board member, Appointment in May 2016
Erdenejargal Perenlei was appointed as Non-Executive Member of Board
of Tenger Financial Group in 2005. Since 2004, she has been Executive
Director of Open Society Forum. She also worked at National Committee
of Labor and Social Security as an economist during 1982-1988, at
Institute of Profession Development for Managers as a teacher during
1988-1991, at Government agency, Research Centre for government
and social policies as a specialist and a director during 1991-1992 and
at Institute of Mongolian Development as an Executive Director. During
1997-2004 she worked at Open Society Forum as Vice President and also as Director of education, press and
health programs. She is specialized on research related with ensuring participation of community on decision
making and she has actively participated in related activities for advocacy. In 1982, she was graduated from
University of Rostov-on-Don, Russia as psychologist.

30. YOSHIAKI Matsuoka
Board member, Appointment in May 2014
М. Yoshiaki Matsuoka was appointed as a non-executive director of
XacBank in March 2016. Yoshiaki serves as Managing director, Global
Business Development and Investment Group, Investment and Operation
Headquarters, of ORIX Corporation with the responsibilities for leading
and managing M&A transactions and negotiations and monitoring portfolio
companies as a nominee director of ORIX. Yoshiaki joined ORIX in 1991
as sales associate and has worked since then on different positions
including work with ORIX USA Corporation as Senior Vice President.
Yoshiaki serves at present on the boards of directors of the Mediterranean & Gulf insurance and Reinsurance
Co. B.S.C., DI investment Partners Limited and ORIX Investment and Management Pte. Ltd. Yoshiaki is also a
member of the Advisory Committee of Mongolian Opportunity Fund and Abraaj Turkey Fund. He is received his
bachelor degree in Physics and a graduated of the Kwansei Gakuin University of Japan in 1991.
OYBEK N. Khalilov
Board member, Appointment in December 2016
On September 14, 2015 Oybek joined Tenger Financial Group as the
CEO of Tenger Insurance LLC, and was nominated to represent XacBank
as a Corporate Member at AmCham Mongolia. For 20+ years Mr. Khalilov
has worked in the private insurance market area working with American
International Group, Inc. He has spent five years from 1994 to 1999 with
American International Group, Inc. in London/UK serving as the CEO of
political risk JV. He was in charge of AIG general insurance operations in
Central Asia and Caucasus from 2000 to 2015. His entire professional
career is showcased by major contributions in taking companies to greater levels of financial, competitive, and
operational performance. He has an in in-depth knowledge of property, energy, casualty, and financial lines and
accident insurance and political risk insurance products for 18 years. Oybek served on the Boards of Directors
of American Chamber of Commerce in Kazakhstan and Uzbekistan since 1997. He received his bachelor degree
from the Tashkent State University of Economist at republic of Uzbekistan in 1994, specialized in International
economics relations.
BOARD OF DIRECTORS

31. 31-30
ATTENDANCE OF THE BOARD MEETING IN 2016
In total (17) seventeen Board meetings held in 2016 and (4) four of its concerning as “regular” or scheduled and
(1) one is “un-scheduled” and other (12) twelve is “external online voted”. More detailed info about it can be seen
from the below tables.
Board of Directors attendance (in person/voting ballot) at meetings as “regular” held in 2016 as follows:
No# Meetings:
Names:
14 Mar
2016
(Q1)
21 Apr
2016
(US1)
20 June
2016
(Q2)
05 Oct
2016
(Q3)
19 Dec
2016
(Q4)
Attendance
percentage of each
director:
1 Mr. BOLDOO Magvan (BM) N/A Y Y Y Y 80%
2 Mr. AMARTUVSHIN Hanibal (AH) Y Y Y Y Y 100%
3 Mr. TSEVEGJAV Gumanjav (TG) Y Y Y Y VB 100%
4 Mrs. DELGER JARGAL Buyanjargal (DB) Y - N/A 50%
5 Mrs. ERDENEJARGAL Perenlei (EP) - - Y Y VB 60%
6 Mr. YOSHIAKI Matsuoka (YM) - - Yes - VB 50%
Board meeting quorum 80% 50% 100% 80% 100%
HIGHLIGHTS OF THE BOARD RESOLUTIONS IN 2016
In 2016 a total forty items has been submitted by company’s management to the Board of Directors information,
discussion and its approval and twenty item approved by the Board of Directors resolutions.
In accordance with the Board of Directors resolution No#15/003 enacted on 23 March 2015, the Board
approved “Risk Management Policy “and issuing authority to the management team of the Company, which was
up to MNT 25 million for the insurance claim settlement and MNT 5 million for the write-off stated in clause 6.1
accordingly, due to establish the structure for good internal control and appropriate governance of the Company.
The Board of directors has reviewed “Risk Management Policy” and above mentioned authority and increased
its amount up to 3 billion per year for insurance claim settlement and 25 million to write-off of the bad receivable
and approves it for the management of the Company. In terms of these changes the company management
believes that, this authority will give an opportunity to speed of insurance claim settlements and not losing time
for claim settlement.

32. Tenger Insurance LLC has successfully sponsored the team of
Bayanzurkh Disctrict`s 84th school in the 10th annual competition
“Duulian 2020”. In addition, the accident insurance of all 48 students
during the competition was fully covered by Tenger Insurance LLC.
We participated jointly with Golden Fund for Development Association
we participated in the working community to develop the national
curriculum of financial education program for the youth of Mongolia.
The national curriculum of financial education is successfully
integrated in the general education program for high schools. As
a result of these efforts, in the 2016-2017 academic year, 23,000
students are learning the financial education program in nationwide.
SOCIAL RESPONSIBILITY
In the framework of XacMeadow campaign, Tenger insurance and
companies of Tenger Financial Group has planted 39,000 trees and
created 30 groves in Ulaanbaatar city 21 other aimags.

33. 33-32
To the Shareholder of Tenger Insurance LLC
Opinion
We have audited the financial statements of Tenger Insurance (“the Company”), which comprise the statement of
financial position as at 31 December 2016, the statement of comprehensive income, the statement of changes
in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
of the Company as at 31 December 2016, and its financial performance and its cash flows for the year then
ended in accordance with International Financial Reporting Standards (“IFRS”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (“ISA”). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in Mongolia, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with IFRS and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
The engagement partner on the audit resulting in this independent auditor’s report is Norjinbat Shagdarsuren.
Norjinbat Shagdarsuren
Director, CPA
Deloitte Onch Audit LLC
24 March 2017
INDEPENDENT AUDITORS REPORT

34. INDEPENDENT AUDITORS REPORT
TENGER INSURANCE LLC
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
(IN THOUSAND S OF MONGOLIAN TOGROGS)

35. 35-34
TENGER INSURANCE LLC
STATETMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
(IN THOUSAND S OF MONGOLIAN TOGROGS)

36. INDEPENDENT AUDITORS REPORT
TENGER INSURANCE LLC
STATEMENT OF CASHFLOW
FOR THE YEAR ENDED 31 DECEMBER 2016
(IN THOUSAND S OF MONGOLIAN TOGROGS)

37. 37-36
TENGER INSURANCE LLC
STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2016
(IN THOUSAND S OF MONGOLIAN TOGROGS)

38. Dolgorsuren:
“We are grateful for collaboration and risk management
support we receive from Tenger Insurance”
… Our company is successfully operating in the wool and cashmere
business for over 20 years with our own established brand “Goyo”. As a
major player in cashmere sector we bring our garments near our clients
through 8 branch stores in UB and 10 in provinces.
Besides success as in any business, we encounter obstacles and
challenges. Some of them are sudden danger with little possibility to
predict. For instance, our store counters provide all possibilities to view our
products from anywhere. And even though we place surveillance cameras
through assessing potential shoplifting risks and enroll our customer service staff in suitable risk prevention
trainings, our stores still suffer from inventory shortage from shoplifters. Nevertheless, our main solution for
this risk is certainly an insurance coverage, specifically designed for such risk. As a result, we continue to be
protected from all risks via inventory insurance from Tenger Insurance for 3rd year.
During last year holiday high seasons we encountered inventory shortages, on each occasion Tenger Insurance
was able to provide first class claim handling service and cleared our company from losses within 3 days. Our
surveillance camera records and inventory checklist provide the foundation for compensation of financial losses
in such swift manner. We are grateful for the collaboration and risk management support we receive from Tenger
Insurance.
CUSTOMERS’ IMPRESSIONS
Bolormaa: “I used to wrongly interpret insurance as one form of a tax”
… You ask me, where I spend my indemnity received, well, undoubtedly, I try to invest in my wellbeing, since
this is coverage for what I spent for my health. For example, buy immune boosting vitamins and supplements or
spend on gym membership. The company I work for is a foreign invested company and since I started working
here six years ago, I am covered by Tenger Insurance health insurance, including my family: my husband and
son. Before, I misunderstood personal private insurance as same as state social welfare, with little benefit. Thus,
I had the same opinion as many others – paying insurance premium means the same, as paying one form of a
tax. [I am covered by Tenger Insurance health insurance, including my family: my husband and son for the last
six years.]
There’s a saying that illness comes untold. Therefore, bearing in mind our future, financial expenses and our
wellbeing, in particular, we chose health insurance of Tenger Insurance. Any member of our family, including me,
will be reimbursed in the form of loss indemnity for the expenses spent on treating illnesses.
Tumur: “I’ve been grateful for insuring the health of our entire family”
In my opinion, the core of a family is staying happy in any hardship. Happiness can be defined by love of
husband and wife, by children’s laughter, but most importantly by being healthy and well. And this is the most vital
constituent of a happy family. I was greatly pleased, when my wife, Bolormaa, first told us that we are covered
by Tenger Insurance health insurance.
This insurance policy enabled us, all three of us, to be treated at a clinic of our choice for any illnesses, including
the most “common” ones such as cold or tooth ache. We are proud we could make a valuable investment
towards our health.
We wish all families of Mongolia health, peace and happiness.

40. www.tengerdaatgal.mn
+(976)-1800-1889
insurance@tengerinsurance.mn
/tengerinsurance