PROSPECTUS

Vardia Insurance Group ASA (a public limited liability company organised under the laws of Norway)

A fully underwritten Offering of 375,000,000 New Shares, each with a par value of NOK 0.08, through a Rights Issue and a Private Placement

The listing of up to 275,000,000 Subscription Rights in the Rights Issue for trading on Oslo Brs under the ticker symbol "VARDIA T"

The listing of 375,000,000 New Shares offered in the Rights Issue and the Private Placement on Oslo Brs

Subscription Price: NOK 1.00

Trading period for the Subscription Rights: From and including 13 May 2015 to 16:30 (CET) on 22 May 2015

Subscription and application Period: From and including 13 May 2015 to 16:30 (CET) on 27 May 2015

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This prospectus (the "Prospectus") has been prepared in order to provide information regarding Vardia Insurance Group ASA ("Vardia" or the "Company") and its business in connection with (i) the offering of 375,000,000 new shares in the Company with a par value of NOK 0.08 each (the "New Shares") through (a) the fully underwritten rights issue of 275,000,000 New Shares (the "Rights Issue") and (b) the fully underwritten private placement of 100,000,000 New Shares (the "Private Placement" and together with the Rights Issue collectively referred to as the "Offering"), (ii) the listing of up to 275,000,000 subscription rights in the Rights Issue (the "Subscription Rights") issuable to shareholders who are registered in the Company's shareholder register as at the end of 11 May 2015 (the Company's shareholders as at the end of the date on which this Prospectus was approved, 7 May 2015, as evidenced in the Norwegian Central Securities Depository ("VPS") in accordance with normal T+2 settlement) (the "Record Date") on Oslo Brs, and (iii) the listing of the New Shares on Oslo Brs. All offers and sales in the United States will be made to "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") in a private placement as contemplated under Section 4(a)(2) under the U.S. Securities Act or pursuant to another applicable exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. All offers and sales outside the United States will be made in reliance on Regulation S ("Regulation S") under the U.S. Securities Act. Investing in the New Shares involves a high degree of risks. Prospective investors should read the entire Prospectus and, in particular, consider Section 2 "Risk Factors" when considering an investment in the Company.

The New Shares have not been, and will not be, registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States, and may not be offered or sold within the United States except to QIBs in reliance on an exemption from the registration requirements of the U.S. Securities Act, or outside the United States in compliance with Regulation S. For certain restrictions on transfer, see Section 15 "Selling and Transfer Restrictions".

SUBSCRIPTION RIGHTS NOT USED TO SUBSCRIBE FOR NEW SHARES BEFORE THE END OF THE SUBSCRIPTION PERIOD 16:30 (CET) 27 MAY 2015, OR THAT ARE NOT SOLD BEFORE THE END OF TRADING ON OSLO BRS 16:30 (CET) ON 22 MAY 2015, WILL LAPSE WITHOUT COMPENSATION TO THE HOLDER, AND CONSEQUENTLY BE OF

NO VALUE.

IF THE PRIVATE PLACEMENT IS NOT RESOLVED AT THE COMPANY'S GENERAL MEETING SCHEDULED TO BE HELD ON OR ABOUT 28 MAY 2015, THE OFFERING WILL NOT BE COMPLETED AND THE SUBSCRIPTION RIGHTS

WILL LAPSE WITHOUT COMPENSATION TO THE HOLDER, AND CONSEQUENTLY BE OF NO VALUE ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______

Manager

Pareto Securities

The date of this Prospectus is 7 May 2015

Important information

This Prospectus has been prepared by the Company in connection with the (i) Offering, (ii) listing of the Subscription Rights on Oslo Brs and (iii) listing of the New Shares on Oslo Brs. For the definitions of terms used throughout this Prospectus, see Section 17 "Definitions and Glossary of Terms" of this Prospectus.

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The Company has furnished the information in this Prospectus. This Prospectus has been prepared in compliance with the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the "Norwegian Securities Trading Act") and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as implemented in Norway (the "EU Prospectus Directive"). The Prospectus has been published in an English version only with a Swedish summary. The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) (the "FSA") has reviewed and approved this Prospectus in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The FSA has not controlled or approved the accuracy or completeness of the information included in this Prospectus. The approval by the FSA only relates to the information included in accordance with pre-defined disclosure requirements. The FSA has not made any form of control or approval relating to corporate matters described in or referred to in this Prospectus. Furthermore, the Prospectus has been passported to Sweden through a notification to the Swedish Financial Supervisory Authority (Sw.:Finansinspektionen) in accordance with Section 7-9 of the Norwegian Securities Trading Act.

The Company has engaged Pareto Securities AS (the "Manager") as the manager for the Offering. All inquiries relating to this Prospectus must be directed to the Company. No person other than the Company is authorised to give any information, or make any representation, on behalf of the Company in connection with the Offering and, if given or made, such information or representation must not be relied upon as having been authorised by the Company.

The information contained herein is as of the date hereof and subject to change, completion or amendment without notice. There may have been changes affecting the Company or its subsidiaries (collectively referred to as the "Group") subsequent to the date of this Prospectus. In accordance with Section 7-15 of the Norwegian Securities Trading Act, any new circumstance, material error or inaccuracy relating to information included in the Prospectus, which may have significance for the assessment of the Shares, and arises between approval of the Prospectus and the listing of New Shares, will be presented in a supplement to the Prospectus. Such supplementary prospectus shall be approved by the FSA and be published. Neither the delivery of this Prospectus nor the completion of the Offering, including listing of the New Shares, at any time after the date hereof will, under any circumstances, create any implication that there has been no change in the Groups affairs since the date hereof or that the information set forth in this Prospectus is correct as of any time since its date.

No action to approve, register or file the Prospectus has been made outside Norway and Sweden. The distribution of this Prospectus and the offering and sale of the New Shares may in certain jurisdictions be restricted by law. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions. This Prospectus does not constitute an offer of, or an invitation to subscribe or purchase, any of the New Shares in any jurisdiction in which such offer or sale would be unlawful. No one has taken any action that would permit a public offering of shares to occur outside of Norway and Sweden.

The New Shares have not been and will not be registered under the U.S. Securities Act, or with any securities authority of any state of the United States, and may not be offered or sold except pursuant to an exemption from,

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or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state securities laws. The New Shares are only being offered pursuant to exemptions from, or in transactions not subject to, registration under the U.S. Securities Act, including (i) in the United States only to QIBs in reliance on an exemption from the registration requirements of the U.S. Securities Act and (ii) outside the United States only in offshore transactions (as defined in, and in accordance with, Regulation S). The contents of this Prospectus are not to be construed as legal, business or tax advice. Each reader of this Prospectus should consult with its own legal, business or tax advisor as to legal, business or tax aspects of an investment in the New Shares. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the New Shares.

Neither the Manager, nor any of its advisers, make any representation or warranty, whether express or implied, as to the accuracy, completeness or verification of the information set forth in this Prospectus, and nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation, whether as to the past or the future, by the Manager. Neither the Company nor the Manager, or any of their affiliates, representatives, advisers or selling agents, is making any representation to any offeree or purchaser of the New Shares regarding the legality of an investment in the New Shares.

In the ordinary course of their respective businesses, the Manager and certain of its affiliates have engaged, and may continue to engage, in investment and commercial banking transactions with the Group or companies in the Group.

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TABLE OF CONTENTS 1. SUMMARY .......................................................................................................................................... 4

2. RISK FACTORS ................................................................................................................................ 13

3. RESPONSIBILITY FOR THE PROSPECTUS ................................................................................. 23

4. CAUTIONARY NOTE ...................................................................................................................... 24

5. THE OFFERING ................................................................................................................................ 25

6. PRESENTATION OF THE GROUP ................................................................................................. 44

7. INDUSTRY OVERVIEW .................................................................................................................. 58

8. BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE ................................................................................................................................. 63

9. SELECTED OPERATING AND FINANCIAL INFORMATION .................................................... 77

10. SHARES AND SHARE CAPITAL.................................................................................................... 96

11. REGULATORY ENVIRONMENT ................................................................................................. 104

12. SECURITIES TRADING IN NORWAY ......................................................................................... 108

13. NORWEGIAN TAXATION ............................................................................................................ 111

14. LEGAL MATTERS .......................................................................................................................... 114

15. SELLING AND TRANSFER RESTRICTIONS .............................................................................. 115

16. ADDITIONAL INFORMATION ..................................................................................................... 120

17. DEFINITIONS AND GLOSSARY OF TERMS .............................................................................. 122

18. SAMMANFATTNING .................................................................................................................... 125

APPENDICES APPENDIX 1: SUBSCRIPTION AND APPLICATION FORM ...................................................................... 134

APPENDIX 2: STATEMENT FROM THE COMPANY'S AUDITOR REGARDING PROFIT ESTIMATE 136

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1. SUMMARY

Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A E (A.1 E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of "not applicable".

Section A Introduction and warnings

A.1 Introduction and warnings

This summary should be read as an introduction to the Prospectus.

Any decision to invest in the New Shares should be based on consideration of the Prospectus as a whole by the investor.

Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the relevant European Union member states, have to bear the costs of translating the Prospectus before the legal proceedings are initiated.

Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Consent to the use of the prospectus by financial intermediaries

Not applicable.

Section B Issuer and any guarantor

B.1 Legal and commercial name

The Company's legal name is Vardia Insurance Group ASA and is also sometimes referred commercially to as "Vardia".

B.2 Domicile/ Legal form/ Legislation/ Country of incorporation

Vardia is incorporated in Norway as a Norwegian Public Limited Liability Company (nw. allmennaksjeselskap), and is registered with the Norwegian Register of Business Enterprises with registration number 994 288 962. The Company's registered office is Haakon VII's gate 2, 0161 OSLO, Norway. Vardia is subject to Norwegian law, hereunder inter alia the Norwegian Public Limited Liability Companies Act.

B.3 Key factors of operations and principal activities

The Groups main focus is on the market for property and casualty insurance for the retail and small & medium sized enterprises (SME) segments in Norway, Sweden and Denmark. The Group distributes its products mainly through proactive call centres, in addition to insurance agents, insurance brokers and price aggregators, both as part of white label partner agreements and under the Vardia brand.

B.4a Significant recent trends affecting the Issuer and the

Except for changes in EEA-legislation applicable to insurance companies as further described in this Prospectus, there are no known trends, uncertainties, claims, obligations or occurrences which are likely to have a significant effect on Vardia or the insurance industry.

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industry in which it operates

B.5 Description of group

Vardia is the parent entity in the Group which consists of the following wholly owned subsidiaries:

- Vardia Forsikring AS (Norway) - Vardia Frskring AB (Sweden) - Vardia Forsikringsagentur A/S (Denmark) - Vardia Eksterne Kanaler AS (Norway) - Vardia Agencies AS (Norway) - Rein Forsikring AS (Norway)

B.6 Notifiable voting rights

To the Company's knowledge, Aakvik Holding AS (1,674,733 shares, 5.19% of the share capital) is the only shareholder who directly or indirectly has a notifiable shareholding. Each share yields one vote at the Company's general meetings, regardless of the total number of shares the shareholder owns.

To the Company's knowledge, the Company is not directly or indirectly owned or controlled by anyone person or group.

B.7 Selected historical key financial information

Except for the table included under the heading "Summary of gross turnover" which are not sourced from the Company's consolidated annual accounts, the below tables show condensed versions of Vardia's (i) consolidated income statements, (ii) consolidated balance sheets, and (iii) consolidated cash flow statements for the last three financial years. Please be advised that the figures are mainly extracted from the Company's consolidated annual accounts for 2014 as the Company has amended certain of its accounting principles.

Summary of gross turnover NOK millions (unaudited) 2012 2013 2014 Turnover ................................................................................... 345.1 717.8 1.322.6 Agency business and premiums on sold policies for next year (171.9) (146.1) (156) Gross written premiums ........................................................... 173.2 571.7 1,166.6

Consolidated income statements

(NOK millions) 2012 (IFRS audited)

2013 (IFRS audited)

2013 (IFRS, restated)

2014 (IFRS audited)

Gross written premiums ........................................................... 173.2 571.2 571.7 1,166.6 Premiums reinsured ................................................................ (129.3) (426.9) (426.9) (869.5) Premiums written for own account........................................... 43.9 144.9 144.9 297.1 Premiums earned for own account ........................................... 14.9 98.1 98.1 224.3 Profit/(loss) from technical accounts before changes in security reserve ................................................................ (46.4) (57.9) (149.9) (183.0) Profit/(loss) from technical accounts ................................ (49.5) (68.8) (160.7) (198.2) Profit/(loss) before tax .............................................................. (49.7) (70.0) (162.0) (187.1) Profit/(loss) for the period (36.2) (50.0) (163.0) (188.8)

Gross combined ratio (%)...................................................... 204.4 118.4 141.8 129.8

Combined ratio for own account (%) ................................ 549.9 162.7 256.5 191.2

Consolidated balance sheets

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(NOK millions) 2012 (IFRS

audited) 2013 (IFRS

audited) 2013 (IFRS,

restated) 2014 (IFRS

audited) Total assets ............................................................................. 390.7 1,017.4 852.3 1,632.7 Total equity ............................................................................ 99.5 249.1 41.9 26.7 Total liabilities ................................................................ 291.1 768.3 810.4 1,606.0

Total equity and liabilities 390.7 1,017.4 852.3 1,632.7

Consolidated cash flow statements (NOK millions) 2012 (IFRS) 2013 (IFRS) 2014 (IFRS) Net cash flow from operating activities (54.0) (35.6) (65.6) Net cash flow from investing activities (13.8) (20.8) (42.3) Net cash flow from financing activities 80.1 143.7 160.9

Net cash flow for the period 12.2 87.3 53.0 Cash and cash equivalents at the end of the period 43.8 131.1 185.0

B.8 Pro forma financial information

Not applicable.

B.9 Profit forecast or estimate

The Group's result for Q1 2015 is estimated by the Company to be a total loss of approximately NOK 50-60 million.

B.10 Audit report qualifications

Not applicable.

B.11 Working capital As at the date of this Prospectus, the Group does not have sufficient working capital for its present requirements for the next twelve months. For the purposes of this working capital statement, when using the term "working capital" the Company not only includes the capital required to fulfill its obligations when they fall due, but also the capital required to operate in compliance with the applicable requirements for solvency margin capital and capital adequacy. The Group expects to be able to pay its obligations as they fall due; however, the Company is not guaranteed to be able to fully comply with the capital adequacy requirements and/or solvency margin requirements applicable for the Company for the next twelve months, if the Company continues to grow at its current pace.

Based on the Company's current estimates (which includes the net proceeds from the guaranteed Offering), the Company will if no actions are successfully taken be in non-compliance with its solvency margin requirements (or the applicable capital requirements under Solvency II) during the third quarter of 2015. The Companys shortfall of working capital in order to be in compliance with its solvency margin requirement for the next twelve months is estimated to be approximately NOK 50 million, but will be reduced to the extent that the below counter measures reduce the Company's costs or the Company's solvency margin requirement. The Company's shortfall could also be affected by the introduction of Solvency 2, which will be implemented 1 January 2016, inter alia with respect to the treatment of any subordinated debt obtained by the Company.

In order to secure continued compliance with the Company's solvency margin requirements, the Company plans to raise a subordinated Tier 2 loan of around NOK 75 million. Furthermore, the Company has initiated a number of measures in order to reduce cost and improve performance going forward. The Company expects the placement of a subordinated Tier 2 loan and the abovementioned cost reductions to be sufficient to secure

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that the Company will fulfill its solvency margin requirements for at least the twelve months' following the date of this Prospectus.

Should the above measures prove insufficient to secure the Groups working capital requirements, the Company will evaluate alternative actions such as reducing growth, increased reinsurance, additional equity offerings, sale of assets, corporate reorganization and/or sale of parts of its portfolio.

Based on the above and the information available on the date of this Prospectus, the Company is confident that the above actions will be successful in providing sufficient working capital for its present requirements for the next twelve months.

The Company will have to rely on the above measures to remain compliant with its solvency margin requirements. If none of the above financing measures are carried out or successful, the Company expects to breach the abovementioned requirements by end of the third quarter of 2015. In such event, the implications for the Company may include the FSA impose a stop of new sales, the Company losing its license to be an insurance company or the FSA demanding that the Company's insurance portfolio is sold in part or in full.

Section C Securities

C.1 Description the type and the class of the securities and the security identification code

The Company has one class of shares in issue. The New Shares offered in the Offering will in all respect be equal to the existing Shares of the Company, once the New Shares have been issued and registered with the Norwegian Register of Business Enterprises and the VPS. The Company's Shares are registered in VPS under ISIN NO 0010593544.

C.2 Currency The offer price in the Offering is denominated in Norwegian kroner.

C.3 Number of issued shares and par value

At the date of the Prospectus the issued share capital is NOK 2,579,359.04 divided into 32,241,988 Shares, each with a nominal value of NOK 0.08. All the issued Shares are fully paid.

C.4 Rights attached to the shares

All issued Shares have the same rights. The Shares to be issued under the Offering will have the same rights as the other Vardia Shares as of the registration of the share capital increase with the Norwegian Register of Business Enterprises.

C.5 Restriction on the free transferability of the shares

Except for statutory ownership limitations and approval requirements at certain ownership thresholds, which are applicable to all insurance companies, and any lock up agreements entered into, Vardia's Shares are freely transferable.

C.6 Application for admission to trading on a regulated market

The Company's existing Shares are listed on Oslo Brs.

The Company expects commencement of trading in the New Shares on Oslo Brs on or about 10 June 2015. The Company has not applied for admission to trading of the Shares on any other stock exchange or regulated market.

C.7 Dividend policy Vardia is currently in a growth phase, but expects to distribute dividends in the future. The Company has to date not distributed any dividends since its incorporation.

Section D Risks

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D.1 Key risks relating to the issuer and its business

Vardia is exposed to inter alia risk factors related to: - Market cyclicality - Competition - Legal and regulatory conditions - Regulatory regime - Risks related to changes of applicable accounting principles/standards or

interpretations thereof - Tax and VAT-laws and regulations - Risks related to the recent changes to Vardias accounting principles - Catastrophes, natural disasters and terrorist related events - Change in availability of or cost of reinsurance coverage - Material flaws in the Group's underwriting or operating controls or failure to

prevent fraud - Underwriting and reserve risk - Service providers - Organisational development and terms of employment - Loss of reputation - Risks related to growth and growth management - Risks related to Deferred acquisition costs and liability adequacy test - Litigation - Future dividends - Interest rate risk

D.3 Key risks relating to the shares

The Shares are exposed to inter alia risk factors related to: - Fluctuation in the share price - Existing Shareholders who do not participate in the Offering may experience

significant dilution in their shareholding - An active trading market in the Subscription Rights may not develop on Oslo

Brs and/or the market value of the Subscription Rights may fluctuate - If the Offering is withdrawn, the Subscription Rights will no longer be of value - Future issuances of shares or other securities - Limited liquidity - Nominee accounts and voting rights - Difficulties for foreign investors to enforce non-Norwegian judgements - Limitations on the shareholders' ability to bring actions against the Company - Exchange rate risks - Dilution - Transfer restrictions

Section E Offer

E.1 Net proceeds and estimated expenses

The gross proceeds to the Company from the Offering will be NOK 375 million.

The total costs and expenses in relation to the Offering and the listing of the Subscription Rights and the New Shares are estimated to be approximately NOK 34 million. The costs and expenses will be paid by the Company.

Consequently, the expected net proceeds to the Company from the Offering will be NOK 341 million.

E.2a Reasons for the offer and use of proceeds

In connection with, and shortly before the completion of, the Company's financial audit of its annual accounts for 2014, Vardia had to make changes in the accounts, which lead to a significant weakening of the Companys capital adequacy and solvency margin on group level.

First, the financial audit concluded that in the parent company, Vardia Insurance Group ASA, the activated costs had to be written down as a result of the booked sales cost being

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underestimated. The total impairment for 2012, 2013 and 2014 was NOK 144 million, of which NOK 49 million relates to previous years.

Second, in the opinion of the auditor, the accounting of direct variable sales cost in previous years group annual accounts was not in line with applicable accounting standards. Total impairment of this record is NOK 135.6 million in the Group's consolidated balance sheet, of which NOK 109 million relates to previous years.

Furthermore, IAS 12 pt. 35 sets out strict requirements for recognition of deferred tax assets from tax losses. As at 31 December 2014, these requirements were assessed to not be fulfilled. The tax benefit of NOK 49.0 million in the balance sheet as at 31 December 2013 is therefore not recognized in the restated balance sheet and consequently reduced to NOK 0.

The above matters, came as a surprise both to the board of directors and the management. The Company has been audited by the same auditor since start of operations in 2009, and has received unqualified auditor statements without remarks in all previous accounting years, including 2013, and the group consolidated accounts were also subject to thorough review by other external advisors in connection with the initial public offering in 2014 without any issues raised related to the accounting items in question.

The final conclusion to change the accounts made the board of directors aware that the group would no longer meet the regulatory minimum requirements relating to capital adequacy and solvency margin on a group level.

On a Group level, the Company is in breach of the capital adequacy and solvency margin as at 31. December 2014; however, the Group has obtained an exemption from these requirements from the FSA until 31 May 2015. As at 31 March 2015, Vardia Insurance Group ASA is in breach of the solvency margin on a company level, and the Company has obtained an exemption from this requirement from the FSA until 31. May 2015. The exemptions are conditional upon inter alia that the financial situation of the Group does not deteriorate materially in the relevant period.

On this basis it was immediately established and implemented a plan for restoring the minimum requirements with a buffer. The Company has been in a close and constructive dialogue with the FSA and Oslo Brs regarding the situation. As a consequence of the changes in accounts, the Company has to strengthen its equity with NOK 275 million in new capital.

The reasons for the Private Placement, and consequently the increase of the total gross proceeds from the Offering by NOK 100 million, are as follows:

The audited figures deviated from the preliminary 2014 results with about NOK 12 million. The deviations were due to a stricter interpretation and a correction of the Companys receivables.

The strict interpretation of accounting principles, which will also give a negative effect on the 2015 results due to a larger part of the sales cost having to be accounted for directly instead of amortized.

In order to control cancellations of insurance policies, the Company has changed the basis for its invoicing of sales commissions within the Group. Commissions will be calculated based on written premiums and not sold premiums. This will implicate higher costs in 2015, while the benefit of the change is that

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cancellations will be corrected immediately.

Vardias business model continues to generate growth and it is the Company's board of directors view that as long as Vardia builds portfolio value will be created and the Company will be profitable. The board of directors wants to ensure that the Company has an adequate capital buffer to support the growth going forward.

The net proceeds from the Offering of NOK 341 million will be used to strengthen the Company's equity in order to ensure compliance with the minimum capital adequacy and solvency margin requirements applicable to the Company for the next twelve months.

E.3 Terms and conditions of the offer

The Offering comprises an offering of 375,000,000 New Shares, with a par value of NOK 0.08 each, at a subscription price of NOK 1 per New Share. Shareholders who are registered in the Companys shareholder register as at the end of the Record Date will be granted tradable Subscription Rights for the New Shares offered in the Rights Issue. No separate subscription rights will be issued in relation to the New Shares offered in the Private Placement.

In order to secure the Company sufficient subscriptions in the Rights Issue and sufficient applications in the Private Placement, the Company, together with the Manager, has established two underwriting consortiums consisting of existing shareholders and certain external investors.

The Subscription Period for the Offering commences on 13 May 2015 and expires at 16:30 (CET) on 27 May 2015 and may not be closed prior to this date or extended.

The Subscription Rights will be issued and registered in the VPS under ISIN NO 001 0734031, and will be listed for trading on Oslo Brs under the ticker symbol "VARDIA T" from 13 May 2015 to 16:30 (CET) on 22 May 2015. The Subscription Rights will be delivered free of charge and the recipient will not be debited any charges.

The allocation of New Shares in the Rights Issue will be made by the board of directors of the Company by applying the following criteria:

a) Allocation will be made to subscribers on the basis of granted and acquired Subscription Rights which have been validly exercised during the Subscription Period.

b) If not all Subscription Rights are exercised, subscribers who have exercised Subscription Rights and oversubscribed will be allocated additional shares proportionally based on the number of Subscription Rights exercised by each such subscriber. To the extent that proportional allocation is not possible, the Company will determine the allocation by the drawing lots.

c) Shares not allocated pursuant to sub-items (a) and (b) will be allocated to subscribers who does not hold Subscription Rights and who are participants in the guarantee consortium for the Rights Issue. Allocation will be made pro rata based on the number of shares subscribed for.

d) Shares not allocated pursuant to sub-items (a), (b) and (c) will be allocated to subscribers who does not hold Subscription Rights and who are not participants in the guarantee consortium for the Rights Issue. Allocation will be made pro rata based on the number of shares subscribed for.

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e) Shares not allocated pursuant to sub-items (a), (b), (c) and (d) above, will be subscribed by, and allocated to, the underwriters listed in section 5.19 in accordance with the guarantee commitments of the respective underwriters.

The allocation of New Shares in the Private Placement will be made by the board of directors of the Company by applying the following criteria:

a) Allocation will first be made to subscribers who have (i) exercised subscription rights in the Rights Issue, (ii) oversubscribed in the Rights Issue, and (iii) been allocated less shares in the Rights Issue than their total subscription. Allocation will be made proportionally based on the number of subscription rights exercised by each such subscriber in the Rights Issue. To the extent that proportional allocation is not possible, the Company will determine the allocation by drawing lots.

b) Shares not allocated pursuant to sub-item (a) will be allocated to subscribers who does not hold subscription rights in the Rights Issue and who are participants in the guarantee consortium for the Private Placement. Allocation will be made pro rata based on the number of shares subscribed for.

c) Shares not allocated pursuant to sub-items (a) and (b) will be allocated to subscribers who does not hold subscription rights in the Rights Issue and who are not participants in the guarantee consortium for the Private Placement. Allocation will be made pro rata based on the number of shares subscribed for.

d) Shares not allocated pursuant to sub-items (a), (b) and (c) above, will be subscribed by, and allocated to, the underwriters listed in section 5.19 in accordance with the guarantee commitments of the respective underwriters.

Subscriptions of New Shares in the Offering will first be allocated to the Rights Issue, then to the Private Placement. No distinction will be made between allocated and acquired/purchased Subscription Rights.

The allocation of New Shares will take place after the expiry of the Subscription Period on or about 28 May 2015 and notifications of allocation will be issued by post on or about 28 May 2015.

The payment for the allocated New Shares falls due on 3 June 2015.

The Offering is fully underwritten. Pursuant to the underwriting agreements, the underwriters shall receive an underwriting fee equal to 3% of the aggregate amount underwritten by the underwriters. Certain primary underwriters in the Private Placement may in addition receive an additional 3% underwriting fee for their commitment.

E.4 Interests material to the offer

The Manager or its affiliates have provided from time to time, and will provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager, its employees and any affiliates may currently own Shares in the Company. Further, in connection with the Offering, the Manager, its employees and any affiliate acting as an investor for its own account may receive Subscription Rights (if they are Shareholders) and may exercise their right to take up such Subscription Rights and acquire New Shares, and, in that capacity, may retain, purchase or sell New Shares and any other securities issued by the Company or other investments for their own account and may offer or sell such securities (or other

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investments) otherwise than in connection with the Offering. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager will receive a commission in connection with the Offering and, as such, have an interest in the Offering.

Furthermore, the Underwriters' and the PP Underwriters' obligation to subscribe for New Shares will be determined based on the demand for New Shares in the Offering. Consequently, the Underwriters may as such have an interest in the Offering.

Except for the above, the Company is not aware of any natural or legal person having an interest in the Offering which is material in the context of the Offering.

E.5 Selling entity and lock-up agreements

In connection with their underwriting, the Underwriters and the PP Underwriters have undertaken lock-up obligations until the earlier of (i) the expiry of the Subscription Period in the Offering, and (ii) 31 May 2015.

E.6 Dilution The percentage of immediate dilution resulting from the Offering for the Company's shareholders is expected to be approximately 92.1% based on the issuance of 375,000,000 New Shares.

E.7 Expenses charged to the investor

Not applicable. The expenses related to the Offering will be paid by the Company.

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2. RISK FACTORS

2.1 GENERAL

Investing in the New Shares involves a number of risks. Prospective investors should carefully consider, among other things, the specific risk factors set out in this Section and the information elsewhere in the Prospectus before making an investment decision. The risks described below are risks concerning the Company, the Group, the Companys and/or the Group's industry and the Company's Shares, that are deemed material by the Company and that the Company is aware of as at the date of this Prospectus. If any of the risks described below materialise, individually or together with other circumstances, the Companys and/or the Group's business, financial position, cash flow, results of operations and/or prospects could be materially adversely affected, which may cause a decline in the value and trading price of the Shares that could result in a loss of all or part of any investment in the Shares.

A prospective investor should consult his or her own expert advisors as to the suitability of an investment in the Shares. An investment in the Shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment.

The order in which the below risk factors are presented is not intended to give any indication of the likelihood of their occurrence nor of their severity or significance.

2.2 RISK RELATED TO THE GROUPS BUSINESS AND THE INSURANCE INDUSTRY

2.2.1 Market cyclicality

The Scandinavian general insurance market is historically cyclical with operating results of insurers having fluctuated significantly because of volatile and sometimes unpredictable events, some of which are beyond direct control of any insurance company. Future events may result in adverse fluctuations in the Group's financial position and results of operations.

2.2.2 Competition The Group faces significant competition in each of the Group's lines of business, from both domestic, Nordic and international insurance companies. If the Group is unable or is perceived to be unable to compete efficiently, the Group's competitive position may be adversely affected, which as a result, may have a material adverse effect on its business, results of operations and/or financial condition.

2.2.3 Legal and regulatory conditions The legal and regulatory systems under which the Group operates and potential changes thereto may have a material adverse effect on the business. The Group's ability to conduct business requires the holding and maintenance of certain licenses, permissions and authorisations and compliance with rules and regulations. Failure to comply with any of these rules and regulations could lead to disciplinary action, the imposition of fines and/or the revocation of the license, permission or authorisation to conduct business.

The Groups business depends on the continuing validity of several permits and exemptions and its compliance with the terms of such permits and exemptions. There is a risk that permits and exemptions needed for the Groups business may not be issued or renewed or such issuance or renewal may be delayed, or that such permits and exemptions are revoked. If a company in the Group is unable to obtain, maintain or renew necessary permits and exemptions, the Groups business, results of operations and financial condition could be materially adversely affected.

The insurance acts, regulations and policies, or the interpretation or enforcement thereof, may change at any time, which may have an adverse effect on the business. Vardia cannot predict the timing or form of any future changes or the effect it may have on the Group's financial position or results of operations.

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2.2.4 Regulatory regime

Norwegian authorities may at any time, within the frames of the EEA Agreement, introduce new legislation or implement measures that may affect the income and costs of the Group and the rest of the insurance industry. One example is that the authorities introduce measures that may affect the Group's business, for example through stricter solvency requirements or other specific requirements.

The European Union (EU) is in the process of implementing a new prudential regime for insurance undertakings. As a first step, the Solvency II Directive (2009/138/EC) was adopted by the Council of the European Union and the European Parliament in November 2009. Revisions to the Solvency II Directive are adopted in the Omnibus II Directive and scheduling the application date of the Solvency II Directive for 1 January 2016.

Solvency II is based on a three pillar structure, which can be summarized as follows:

Pillar 1: Quantitative requirements, including valuation of assets and liabilities, technical provisions, and calculation of capital requirements

Pillar 2: Requirements to the governance and risk management of the insurance companies, and supervisory control and review

Pillar 3: Supervisory reporting and public disclosure

The Solvency II Directive is a principle based framework directive which will be supplemented by implementing measures from the EU Commission and technical standards and guidance by the European Insurance and Occupational Pensions Authority (EIOPA). On 10 October 2014 the Commission adopted a Delegated Act containing implementing measures for Solvency II.

The Solvency II Directive will be implemented into Norwegian law in a new act on financial institutions and financial groups, which was adopted by the parliament on 7 April 2015, and the new act will enter into force on 1 January 2016. The FSA has provided the Ministry of Finance with a proposal for new regulations, which was subject to public consultation until 20 March 2015. Due to the delay of the implementation of Solvency II, EIOPA has issued preparatory guidelines for the application of parts of the Solvency II rules from 1 January 2014. The guidelines regards the forward looking assessment of own risks (based on ORSA principles), pre application of internal models, submission of information to the national supervisory authorities and the system of governance. The purpose of the preparatory guidelines is to ensure effective preparation for Solvency II, so that when Solvency II is applicable, the requirements can be fully complied with. The FSA is expecting that the Norwegian insurance companies comply with the guidance from EIOPA.

Further information about the Solvency II regime is available on http://ec.europa.eu/internal_market/insurance/index_en.htm, https://eiopa.europa.eu/ and www.finanstilsynet.no.

2.2.5 Risks related to changes of applicable accounting principles/standards or interpretations thereof The Company prepares its annual accounts (and interim reports) in accordance with International Financial Reporting Standards ("IFRS") which is a set of accounting standards developed by an independent, not-for-profit organization called the International Accounting Standards Board ("IASB"). The IFRS and related rules and regulations are subject to potential changes both in the standards themselves as well as in the interpretation thereof. Furthermore, differences may arise between the Company and its auditor or other advisors with respect to the interpretation of IFRS and/or other applicable rules and regulations. As evidenced by recent events, changes in the Company's accounting principles or the interpretations thereof may have a material adverse effect on the Group's business and its compliance with capital and solvency margin requirements. The Group's ability to conduct business requires the holding and maintenance of certain capital

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and solvency margin requirements on both company and consolidated level. Failure to comply with any of these rules and regulations could lead to disciplinary action, the imposition of fines and/or the revocation of the license, permission or authorisation to conduct business.

Moreover, the preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Uncertainties include impairment reviews, evaluation of useful lives of assets, income taxes and provisions Changes in key assumptions could lead to the recognition of additional impairment losses. Changes in evaluation of the useful lives of assets may change depreciation and amortization going forward.

Vardia cannot predict the timing or form of any future changes of IFRS or its interpretation nor the effect it may have on the Group's financial position or results of operations.

2.2.6 Tax and VAT-laws and regulations Norwegian authorities may at any time, within the frames of the EEA Agreement, introduce new legislation or implement measures related to tax or VAT legislation that may affect the Group's income and costs of the and the rest of the insurance industry. One example is the taxation of dividends. Furthermore, the relevant authorities may interpret the tax- and/or VAT-legislation different than Vardia. Such difference in interpretation could inter alia relate to the Group's structuring of its operations into different subsidiaries and /or intra group services rendered.

A difference in the interpretation of relevant tax and VAT legislation or other future changes to the current tax and/or VAT-regime could potentially have a material adverse effect on the Group's financial position or results of operations.

2.2.7 Risks related to the recent changes to Vardias accounting principles As set out in Section 5.1 "Reasons for the Offering and use of proceeds", Vardia recently had to make changes to the accounting principle related to activated sales cost at a group consolidated basis, leading to a significant weakening of the Companys group equity and also having the effect that the trading price for the Shares fell significantly upon announcement of the change. There can be no assurance that no claims and/or proceedings will be initiated against the Company in relation to the changes to the accounting principles, and such claims and/or proceedings could have a material adverse effect on the Group's financial position and results of operations.

2.2.8 Catastrophes, natural disasters and terrorist-related events, may cause the Group to incur substantial losses

General insurance companies, such as Vardia, frequently experience losses from unpredictable events that affect multiple individual risks covered by them. Such events include among others windstorms, severe hail, severe winter weather, other weather related events, floods, fires, industrial explosions and other man-made disasters, such as terrorist attacks ("Catastrophes"). As a general rule, general insurance covers losses from Catastrophes, as a result of which catastrophic events may imply material adverse effect on the Group's cash flows, business, results of operations and financial position. The extent of losses from Catastrophes is a function of the frequency of catastrophic events and the severity of the individual events and the reinsurance arrangements in place.

In Norway, the Group's exposure to losses on buildings and contents due to natural perils is limited to the overall market share, as general insurance companies operating in Norway are obliged by law to participate in the Norwegian Natural Perils Pool (the "Norwegian Pool") through which losses on buildings and their contents are distributed among the participants. The Norwegian Pool buys natural catastrophe reinsurance on behalf of its

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members and the retention of the Norwegian Pool is distributed among the members in proportion to their market share based on the companies' fire insurance amounts as of July 1 of the claim year. Some Catastrophes, such as explosions, occur in small geographic areas, while others, including windstorms and floods, may produce significant damage to large, heavy populated and/or widespread areas. The frequency and severity of catastrophes are inherently unpredictable, and a single Catastrophe or multiple Catastrophes in any one year could have a material adverse effect on the Group's business, results of operations and financial position.

Losses related to Catastrophe insurances have historically been characterised by low frequency and high severity. In the event that the Group experience losses from Catastrophes, its financial results for any fiscal quarter or year could experience volatility which could have a material adverse effect on the Group's business, results of operations and financial position.

The Group generally seeks to reduce its exposure to Catastrophes through purchasing reinsurance, utilizing selective underwriting practices and monitoring risk accumulation. However, the Group's efforts to reduce exposure may not be successful and claims relating to Catastrophes could have material adverse effect on the business, results of operations and financial position of the Group.

If Catastrophe risks insured by the Group occur with greater frequency or severity than has historically been the case, related claims could have a material adverse effect on the Group's cash flows, business, results of operations and financial position, as well as on its costs of reinsurance.

2.2.9 Change in availability of or cost of reinsurance coverage An important element of the Group's risk management strategy is to purchase reinsurance, thereby transferring parts of the risk the Group underwrites to reinsurers. Under a reinsurance contract, the assuming reinsurer becomes liable to Vardia to the extent of the risk ceded although the Group remains liable to the insured as insurer.

Any decrease in the availability and amount of reinsurance, increase in the cost of reinsurance and/or the inability or refusal of reinsurers to meet their financial obligations could materially adversely affect the Group's results of operation and financial position.

2.3 OPERATIONAL RISK 2.3.1 A material flaw in the Group's underwriting or operating controls or failure to prevent fraud

could increase the frequency of claims and average claim payouts

The Group has operation procedures in place which its management believes are sufficient. However, any mismanagement, fraud or failure to satisfy fiduciary responsibilities or to comply with underwriting guidelines and authorization limits, or negative publicity resulting from these activities or accusations by a third part of such activities, could have material adverse effect on the business, results of operations and/or financial condition.

If the underwriting guidelines or internal control procedures are inefficient or if the employees do not properly follow these guidelines, the pricing policy of a product line may be incorrect and the Group may not have the proper reserves for claims attributable to the relevant product line.

In addition, the Group may not be able to adjust prices to avoid future losses. The Group is at risk both from customers who misrepresent or fail to fully disclose the risks against which they are seeking cover before such cover is purchased, and from employees who undertake or fail to follow procedures designed to prevent fraudulent activities.

If the Group does not train its employees in claims management effectively or fails to implement an adequate counter-fraud strategy, its profits could be adversely affected as the frequency of claims and average payouts could increase. Furthermore, an attempt to recover such costs through increased premiums could result in a decrease in policy sales.

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2.3.2 Underwriting and reserve risk The Group's results depend significantly on whether the Group's claims experience is consistent with the assumptions used in underwriting, setting the prices for the products and establishing the liabilities for the obligations for future claims. To the extent that the Group's actual claims experience is less favourable than the underlying assumptions used in establishing such liabilities, the Group could be required to increase the reserves made for the liabilities, which could result in operating losses. To the extent that the Group prices certain segments/business lines incorrectly this could have negative impact on the Group.

Due to the nature and uncertain timing of the risks which the Group incurs in underwriting general insurance products, it cannot precisely determine the amounts that it will ultimately pay to meet liabilities covered by the insurance policies written. The Group's claims provisions may prove to be inadequate to cover the actual claims, particularly when payments of claims may not occur until well into the future. In accordance with industry practice and accounting and regulatory requirements, the Group maintains provisions to cover anticipated future claims payments (and related administrative expenses) with respect to losses or injuries incurred but not fully settled at the end of any year. These include both losses and injuries that have been reported to the Group ("RBNS" reported but not settled) and those that have not yet been reported ("IBNR" incurred but not reported). Claims provisions represent estimates of the ultimate cost, including related expenses, to bring all pending and incurred but not reported claims to final settlement. These estimates are based on actuarial and statistical projections and assumptions, including the time required to learn of and settle claims, facts and circumstances known at a given time, as well as estimates of trends in claims severity. The estimates are also based on other variable factors, including changes in the legal and regulatory environment, results of litigation, changes in medical costs, the cost of repairs and replacement, and general economic conditions. Earnings depend significantly on the extent to which the Group's actual claims experience is consistent with the projections and the assumptions it uses in setting claims provisions and subsequent premium levels. Changes in these trends or other variable factors, including changes in legislation, could result in claims in excess of the Group's claims provisions, which may require an increase in its reserves with a corresponding reduction of the Group's net income in the period in which the deficiency is identified. To the extent that the Group's current claims provisions are insufficient to cover actual claims or claims adjustment expenses, it will have to increase its claims provisions and incur a corresponding change to its earnings in the period in which the deficiency is identified.

In addition, if the Group's claims provisions are excessive as a result of an over-estimation of risk, it may set premiums at levels too high to be able to compete effectively, which may result in a loss of customers and premium income. If the Group charges premiums that are insufficient for the cover provided, it will suffer underwriting losses, leading to volatility in earnings and unpredictable results.

Vardia monitors liabilities on a continuously basis and adjusts established claims reserves periodically, using the most current information available to the management. Any adjustments resulting from changes in reserve estimates are reflected in the results of operations. Based on the information available to the management as at the date of this Prospectus, management believes that the claims reserves are adequate. However, because claims reserving is an inherently uncertain process, management cannot assure that the ultimate claims will not materially exceed current claims reserves and have material adverse effect on the Group's financial position.

2.3.3 Service providers Vardia has outsourced certain key functions to external partners, including IT, claims handling and accounting services. In the event that our current outsourcing becomes unsatisfactory, or Vardia's third party suppliers are unable to fulfil their obligations to the Group, Vardia may be unable to locate new outsourcing partners on economically attractive terms on a timely basis.

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2.3.4 Distributors Vardia somewhat uses distributors to market and sell the Group's insurance products particularly within SME insurance. Termination of or any change to these relationships may have a material adverse effect on the Group.

2.3.5 Organisational development and terms of employment The Groups senior management team possesses extensive operating experience, industry knowledge and an in-depth understanding of the insurance industry. Vardia depends on its directors, executive officers and senior management for setting the Group's strategic direction and managing the Group's business, which both are crucial to Vardias success. Furthermore, the Groups continued success also depends upon its ability to attract and retain a large group of experienced professionals.

The Group does not maintain any key person insurance on any of the Groups senior management or employees. The Groups ability to retain senior management as well as experienced personnel will in part depend on the Group having appropriate staff remuneration and incentive schemes in place. Vardia cannot give any assurance that the remuneration and incentive schemes it has in place will be sufficient to retain the services of the Groups experienced personnel.

The loss of the services of the Group's senior management or the Group's inability to replace, recruit, train or retain a sufficient number of experienced personnel could have an adverse effect on the Group's operations, business, financial performance and prospects.

2.3.6 Loss of reputation The Group is dependent on the strength of its reputation with customers and distributors. Any negative publicity related to Vardia could adversely affect its reputation and the value of its brand. The Group is exposed, among others, to the risk that litigation, employee's or officer's misconduct, operational failures, disclosure of confidential information, negative publicity, whether or not founded could damage its reputation. Any erosion of Vardia's reputation may have a material adverse effect on its business, revenues, and results of operations or financial conditions.

2.3.7 Risks related to growth and growth management The Company acquired Saga Forsikring AS in December 2013 and Rein Forsikring AS in January 2014. Vardia may acquire or contract additional insurance companies, enterprises or insurance agents in the future. The Company may experience difficulties in integrating these additional assets, businesses and employees into the Groups existing operations. Furthermore, there can be no guarantee that any existing insurance portfolio of acquired insurance companies and/or agents will have the development expected when fixing the value of such portfolio in connection with the acquisition of such insurance company and/or agent.

Vardia has experienced significant growth since its incorporation, and there is a risk that the Company does not have the required competence, capacity, routines and systems to manage its current business and monitor the Companys fulfilment of capital adequacy and other requirements on an ongoing basis and in an efficient manner, and this could have a material adverse effect on the Groups operations, business, financial performance, prospects and quality of its reporting.

The Group's future growth will depend upon a number of factors, both within and outside of the Companys control. It may not be successful in expanding its operations, and any expansion may not be profitable, or may result in losses for the Company. This could ultimately have a material adverse effect on the Groups operations, business, financial performance and prospects.

As the Group's operations continue to expand, the Group may need to increase the number of employees and enhance the scope of operational and financial systems to handle the complexity and expanded geographic area of the Groups operations. Vardia cannot give any assurance that it will be able to retain and attract qualified management and employees or that the Groups current operational and financial systems and controls will be

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adequate as the Group grows. This could ultimately have an adverse effect on the Groups operations, business, financial performance and prospects.

2.3.8 Deferred acquisition costs and liability adequacy test The current principle for recognizing sales costs in the group implies that direct variable sales costs which includes the below costs are being amortized over a period of 12 months. The total amount recognised as an asset per 31 December 2014 was NOK 64 million.

Commissions to internal sales agents above a guaranteed minimum salary level

Telephone costs on a 50% basis and postage expenses on a 78% basis

Commissions to external agents on a 100% basis

Certain other direct sales costs on a 95-100% basis

In the parent company the current principle for estimation of capitalised sales costs treats all commissions paid to the subsidiaries as external costs. The annulation effect (a client terminates the policy before the end of the 12 months period) is estimated based on the relationship between earned premiums written in the year as a percentage of unearned premiums at the end of the period. Based on this, approximately 55% per 31 December 2014 is estimated as the share of paid but unearned premiums which is on risk. The percentage is applied to total provision paid for 2014 risks and provisions paid for later periods are added resulting in a total deferred acquisition costs recognized on the balance sheet of NOK 204 million per 31 December 2014.

Vardia performs a quarterly liability adequacy test to assess whether the recognized insurance liabilities (less related deferred acquisition costs and intangible assets) are adequate using estimates of future cash flows at the end of each reporting period. If required, deferred acquisitions costs will be impaired and expensed in the profit and loss account.

2.3.9 The Group may be subject to litigation Vardias business exposes the Group to litigation and lawsuits. The Group anticipates that it in the future will be involved in litigations and other disputes from time to time. The Company cannot predict with certainty the outcome or effect of any claim or other litigation or dispute. Any future litigation or dispute may have a material adverse effect on the Groups business, operations, financial position or results of operations, because of potential negative outcomes, the costs associated with prosecuting or defending such lawsuits or claims, and the diversion of management's attention to these matters.

2.3.10 Future dividends The Companys ability to pay dividends to its shareholders and service any indebtedness is dependent upon the Company receiving sufficient funds from operations and operating subsidiaries in both Norway and foreign jurisdictions. Funds may be transferred to the Company from subsidiaries by way of dividends, intra-Group loans and/or group contributions, where possible. In several jurisdictions there are restrictions on a companys ability to pay dividends, or otherwise transfer funds, to parent and/or holding companies. Restrictions, by law or regulations can affect the Companys ability to receive funds to pay dividends to shareholders and/or service any indebtedness.

2.4 FINANCIAL RISKS

2.4.1 Interest rate volatility

Investment returns are an important part of the Group's overall profitability. Interest rate volatility may adversely affect the value of the Company's investment portfolios, adversely impact the financial position and the results of operations and result in volatility in the results.

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Vardia has a conservative investment policy and has hired Grieg Investor as financial advisor. The investment portfolio is as at the date of this Prospectus invested in bank deposits. The interest rate risk in the investment portfolio is aligned with Vardia's current capital position.

2.4.2 Asset management risk

The current Norwegian regulation on asset management for non-life insurance companies implies limitations on Vardia's ability to invest in inter alia equities, bonds, security funds and hedgefunds. Equity investments are generally subject to higher returns and greater risk and more volatility than fixed income securities. General economic conditions, stock market conditions and many other factors beyond the Company's control may adversely affect the relevant markets for the Company's investments and thereby impair the value of the Company's investment portfolio.

2.5 RISK FACTORS RELATING TO THE SHARES

2.5.1 The price of the Shares may fluctuate significantly The trading price of the Shares could fluctuate significantly in response to a number of factors beyond the Companys control, including quarterly variations in operating results, adverse business developments, changes in financial estimates and investment recommendations or ratings by securities analysts, significant contracts, acquisitions or strategic relationships, publicity about the Company, the Group, its products and services or its competitors, lawsuits against the Company or a company in the Group, unforeseen liabilities, changes to the regulatory environment in which it operates or general market conditions.

In recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in the same industry. Those changes may occur without regard to the operating performance of these companies. The price of the Companys Shares may therefore fluctuate based upon factors that have little or nothing to do with the Company or the Group, and these fluctuations may materially affect the price of its Shares.

The market price of the Shares could decline due to sales of a large number of the Shares in the market or the perception that such sales could occur. Such sales could also make it more difficult for the Company to offer equity securities in the future at a time and at a price that is deemed appropriate.

2.5.2 Existing Shareholders who do not participate in the Offering may experience significant dilution in their shareholding

Subscription Rights that are not exercised by the end of the Subscription Period will automatically lapse without compensation to the holder. To the extent that an existing shareholder does not exercise its Subscription Rights prior to the expiry of the Subscription Period, whether by choice or due to a failure to comply with procedures set forth in Section Feil! Fant ikke referansekilden. "The Offering", or to the extent that an existing shareholder is not permitted to subscribe for New Shares as further described in Section 15 "Selling and Transfer Restrictions", such existing shareholders proportionate ownership and voting interests in the Company after the completion of the Offering will be diluted. Even if an existing shareholder elects to sell its unexercised Subscription Rights, or such Subscription Rights are sold on its behalf, the consideration it receives on the trading market for the Subscription Rights may not reflect the immediate dilution in its shareholding as a result of the completion of the Offering.

2.5.3 An active trading market in the Subscription Rights may not develop on Oslo Brs and/or the market value of the Subscription Rights may fluctuate

An active trading market in the Subscription Rights may not develop on Oslo Brs. In addition, because the trading price of the Subscription Rights depends on the trading price of the Shares, the price of the Subscription Rights may be volatile and subject to the same risks as described for the Shares elsewhere in this Prospectus. The existing volatility of the Shares may also have an effect on the volatility of the Subscription Rights.

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The sale of Subscription Rights by or on behalf of existing shareholders may result in a reduction in the market price of the Subscription Rights and the Shares and increased volatility in the Shares.

Certain existing shareholders may be unable to take up and exercise their Subscription Rights as a matter of applicable law. The Subscription Rights of such existing shareholders, with the exception of Subscription Rights held through financial intermediaries, may be sold on their behalf in the market by the Manager pursuant to instructions from the Company, as further described in Section 5.8, but no assurance can be given as to whether such sales may actually take place or as to the price that may be achieved. Other holders of Subscription Rights may also choose not to exercise their Subscription Rights and therefore sell them in the market. The sale of Subscription Rights by or on behalf of holders of such rights could cause significant downward pressure on, and may result in a substantial reduction in, the price of the Subscription Rights and the Shares.

2.5.4 If the Rights Issue is withdrawn, the Subscription Rights will no longer be of value The Rights Issue may be withdrawn if the conditions for the Rights Issue are not met or if the underwriting agreements are terminated for any reason. See Section 5.4 for a description of the conditions for completion of the Offering and Section 5.19 for a description of the underwriting agreements.

If the Rights Issue is withdrawn, all Subscription Rights will lapse without value, subscriptions for, and allocations of, New Shares that have been made will be disregarded and any subscription payments made will be returned without interest or any other compensation. The lapsing of Subscription Rights would be without prejudice to the validity of any trades in Subscription Rights, and investors would not receive any refund or compensation with respect to Subscription Rights purchased in the market.

2.5.5 Future issuances of Shares or other securities may dilute the holdings of shareholders and could materially affect the price of the Shares

The Company may in the future decide to offer additional Shares or other securities in order to finance new capital-intensive projects, or in connection with unanticipated capital requirement, liabilities or expenses or for any other purposes. Any such additional offering could reduce the proportionate ownership and voting interests of holders of Shares, as well as the earnings per Share and the net asset value per Share of the Company, and any offering by the Company could have a material adverse effect on the market price of the Shares.

2.5.6 Limited liquidity There can be no assurance as to the liquidity of the Shares on Oslo Brs, the ability of the holders of the Shares to sell their Shares or the price at which the holders would be able to sell their Shares. The liquidity of the trading market in the Shares, and the market price quoted for the Shares, may be adversely affected by changes in the Companys financial performance or prospects or in the prospects for companies in Vardias industry in general. As a result, holders cannot be certain that an active trading market will exist in the future for the Company's shares.

2.5.7 Nominee accounts and voting rights Beneficial owners of the Shares that are registered in a nominee account (e.g., through brokers, dealers or other third parties) may not be able to vote for such Shares unless their ownership is re-registered in their names with the VPS prior to the Companys general meetings. The Company cannot guarantee that beneficial owners of the Shares will receive the notice for a general meeting in time to instruct their nominees to effect a re-registration of their Shares or otherwise arrange for votes to be cast for such Shares.

2.5.8 Difficulties for foreign investors to enforce non-Norwegian judgements The Company is organised under the laws of Norway. As at the date of this Prospectus, all of its directors are residents of Norway, and the vast majority of its assets are in Norway. As a result, it may not be possible for non-Norwegian investors to affect service of process on the Company or the Company's directors in the investor's own jurisdiction, or to enforce against them judgements obtained in non-Norwegian courts. However,

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Norway is party to the Lugano Convention and a judgement obtained in another Lugano Convention state will in general be enforceable in Norway. However, there is no regulation providing for general recognition or enforceability in Norway of judgements of non-Lugano Convention state courts, such as the courts of the United States.

2.5.9 Norwegian law may limit the shareholders' ability to bring an action against the Company The Company is a public limited company incorporated under the laws of Norway. The rights of holders of Shares are governed by Norwegian law and by the Articles of Association. These rights may differ from the rights of shareholders in e.g. typical US corporations or companies incorporated in other jurisdictions. In particular, Norwegian law limits the circumstances under which shareholders of Norwegian companies may bring derivative actions. For instance, under Norwegian law, any action brought by a company in respect of wrongful acts committed against the company takes priority over actions brought by shareholders in respect of such acts. In addition, it may be difficult to prevail in a claim against the Company under, or enforce liabilities predicated upon, U.S. securities laws or related to laws of other jurisdictions. 2.5.10 Shareholders outside of Norway are subject to exchange rate risk The Shares are priced in Norwegian kroner ("NOK"), the lawful currency of Norway, and any future payments of dividends on the Shares will be denominated in NOK. Accordingly, any investor outside Norway is subject to adverse movements in the NOK against their local currency, as the foreign currency equivalent of any dividends paid on the Shares or price received in connection with any sale of the Shares could be materially adversely affected.

2.5.11 Foreign shareholders may be diluted if they are unable to participate in future offerings

Because US investors and investors in other non-Norwegian jurisdictions may be unable to participate in future offerings, their percentage shareholding, if they have been allotted Shares in the Offering, may be diluted. Under Norwegian law, unless otherwise resolved by the general meeting (or the board of directors pursuant to an authorization from the general meeting), shareholders in Norwegian public companies such as the Company have pre-emptive rights proportionate to the aggregate amount of the Shares they hold with respect to new shares issued by the Company for cash consideration. For reasons relating to U.S. securities laws or other factors, U.S. investors and investors in other non-Norwegian jurisdictions may not be able to participate in a new issuance of Shares or other securities and may face dilution as a result.

2.5.12 The transfer of Shares is subject to restrictions under the securities laws of the United States and other jurisdictions

The Shares have not been registered under the U.S. Securities Act or any US state securities laws or any other jurisdiction outside of Norway and are not expected to be registered in the future. As such, the Shares may not be offered or sold except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable securities laws. See Section 15 "Selling and Transfer Restrictions". In addition, there is no assurances that shareholders residing or domiciled in the United States or other jurisdictions will be able to participate in future capital increases or rights offerings.

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3. RESPONSIBILITY FOR THE PROSPECTUS

The board of directors of Vardia Insurance Group ASA hereby declares that, to the best of our knowledge, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect its import.

7 May 2015

The Board of Directors of Vardia Insurance Group ASA

ge Korsvold Chairman of the

Board

Karl Hie Deputy chairman of

the Board

Line S. Bakkevig Board member

Nina C. Gullerud Board member

Nils Aakvik Board member

Ole Erik Alns Board member

(Employee representative)

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4. CAUTIONARY NOTE

4.1 FORWARD-LOOKING STATEMENTS

This Prospectus includes "forward-looking" statements, including, without limitation, projections, estimates, plans and expectations regarding the Groups future financial position, business strategy, plans and objectives. All forward-looking statements included in this Prospectus are based on information available to the Company, and views and assessments of the Company, as at the date of this Prospectus. The Company expressly disclaims any obligation or undertaking to release any updates or revisions of the forward-looking statements contained herein to reflect any change in the Companys expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless such update or revision is prescribed by law.

When used in this document, the words "anticipate", "believe", "estimate", "expect", "seek to", "may", "plan" and similar expressions, as they relate to the Group, or its management, are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group, or, as the case may be, the industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Groups present and future business strategies and the environment in which the Group will operate. Factors that could cause the Groups actual results, performance or achievements to materially differ from those in the forward-looking statements include but are not limited to, the competitive nature of the markets in which the Group operates, technological developments, government regulations, changes in economical conditions or political events. These forward-looking statements reflect only the Companys views and assessment as at the date of this Prospectus. Except for mandatory legal requirements, the Company expressly disclaims any obligation or undertaking to release any updates or revisions of the forward-looking statements contained herein to reflect any change in the Companys expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Factors that could cause the Groups actual results, performance or achievements to materially differ from those in the forward-looking statements include, but are not limited to, those described in Section 2 "Risk Factors" and elsewhere in the Prospectus.

Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements. Forward-looking statements are included in sections 1, 5, 6, 9, 10 and 11.

4.2 INFORMATION SOURCED FROM THIRD PARTIES

The information in this Prospectus that has been sourced from third parties has been accurately reproduced and as far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. The source of third party information is identified where used.

4.3 DISCLAIMER BY THE MANAGER

The Manager assumes no responsibility for the accuracy or completeness or the verification of this Prospectus and accordingly disclaims, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise which it might otherwise be found to have in respect of this Prospectus or any such statement.

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5. THE OFFERING

5.1 REASONS FOR THE OFFERING AND USE OF PROCEEDS

5.1.1 Reasons for the Rights Issue In connection with, and shortly before the completion of, the Company's financial audit of its annual accounts for 2014, Vardia had to make changes in the accounts, which lead to a significant weakening of the Companys capital adequacy and solvency margin on group level. The matters raised by BDO, the Company's auditor at that time, came as a surprise both to the board of directors and the management. The Company has been audited by the same auditor since start of operations in 2009, and has received unqualified auditor statements without remarks in all previous accounting years, including for the financial year 2013. The Group's consolidated accounts were also subject to thorough review by other external advisors in connection with the initial public offering in 2014 without any issues raised related to the accounting items in question.

First, the financial audit concluded that the Company's activated costs had to be written down as a result of the booked sales cost being underestimated in the profit and loss statement meaning that the cancellations of insurance policies sold had been larger than anticipated. The total impairment for 2012, 2013 and 2014 was NOK 144 million, of which NOK 49 million relates to previous years.

Second, in the opinion of the BDO, the accounting of direct variable sales cost in previous years group annual accounts was not in line with applicable accounting standards. The Company has discussed and reviewed the matter related to the relevant accounting rules with several third party auditors. Both the extent of qualifying sales cost has been considered, in addition to the period of amortisation of such activated cost. The board of directors noted that different experts had different opinions regarding the extent of qualifying cost, and that BDOs interpretation was stricter than the interpretation of applicable accounting standards by other experts. Following a thorough assessment, the board of directors approved the annual accounts for the financial year 2014 for the Company and the Group based on BDOs strict interpretation of the accounting standards. Total impairment of this record is NOK 135.6 million in the Group's consolidated balance sheet, of which NOK 109 million relates to previous years.

Total impairment of both these conditions for the financial year 2014 was NOK 279.5 million (NOK 144 million + NOK 135.6 million). The balance sheet item in question has therefore been adjusted by NOK 279.5 million at the Group consolidated level. These amendments are also further described in note 2 to the Company's consolidated annual accounts for 2014 and in the Directors report for 2014.

Furthermore, IAS 12 pt. 35 sets out strict requirements for recognition of deferred tax assets from tax losses. As at 31 December 2014, these requirements were assessed to not be fulfilled. The tax benefit of NOK 49.0 million in the balance sheet as at 31 December 2013 is therefore not recognized in the restated balance sheet and consequently reduced to NOK 0.

The final conclusion made the board of directors aware that Vardia would no longer meet the regulatory minimum requirements relating to capital adequacy and solvency margin on a group level. On this basis it was immediately established and implemented a plan for restoring the minimum requirements with a buffer. The Company has been in a close and constructive dialogue with the FSA and Oslo Brs regarding the situation

The Co