www.sapiens.com

Investor PresentationQ3 2016 Results

November 2016

Roni Al Dor, President and CEO

Roni Giladi, CFO

Yaffa Cohen-Ifrah, CMO

Safe Harbor Statement

Certain statements made in this presentation may be constitute “forward-looking statements” within the meaning of Section

27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private

Securities Litigation Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify

these forward-looking statements (although not all forward-looking statements include such words). These forward-looking

statements, which may include, without limitation, projections regarding our future performance and financial condition, are

made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking

statement is not a guarantee of future performance and actual results could differ materially from those contained in the

forward-looking statement.

These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-

looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment.

New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information

regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors

detailed in Item 3 of Part III of our Annual Report on Form 20-F for the year ended December 31, 2015 and subsequent reports

and registration statements filed from time to time with the Securities and Exchange Commission.

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Who is Sapiens?

3

Leading global provider of software solutions across the insurance industry

Growing presence in the financial services sector

DNA of technology platform & insurance domain expertise

North America: 34%United Kingdom: 24%Israel: 6%Europe: 15%APAC: 11%

Global Footprint

200 Customers

1,900 Employees

114

98

135157

179

2011 2012 2013 2014 2015

1

Revenue Growth

Non-GAAP revenue (USD M); See appendix for Non-GAAP reconciliation1 Revenue of $98.1M in 2011 pro-forma for the FIS and IDIT acquisitions

Sapiens Evolution

2

4

1

Early Days Horizontal Platforms

Customization for select verticals

Rules management

Vertical Pivot Vertical specific

solutions for insurance market

3

Turnaround Focus on

maintaining top line with higher profitability

Modernize Next-generation

insurance and technology portfolio

Expanding to financial services

4

Our Offering

55

Provide core software solutions for insurance and financial services companies:

Innovative platform for business decisions

Core software policy administration solutions

Technology based solutions

Insurance software

Application development platforms

Retirement

Life & Annuities

Decision Management eMerge

Property & Casualty

L&A

P&C

~80% of the business

Run mission critical operations of insurance industry

Provide functionality to support the full life-cycle of insurance carriers

~20% of the business

Includes a disruptive business decision engine

Reinsurance

Sapiens’ Mission

Help our clients keep pace with the dramatic changes ahead and become fully digital.

Allow our clients to offer a personalized, omni-channel experience that puts the customer in the center.

Enable operational efficiency and agility to accelerate growth.

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The Insurance Market

77

The Insurance Markets

Highly regulated industry with accelerating regulatory changes

Competitive markets with little product differentiation

Increased globalization Legacy IT transition challenges

Enterprises are seeking modular, next-gen solutions to ease the transition and transform the consumer experience

WealthLiabilityCatastrophe PropertyMotor Voice

PROPERTY, CASUALTY, REINSURANCE

LIFE, ANNUITY, RETIREMENT

Annuities Retirement LifeInjuries

8

The Insurance Industry

Source: Market size data per Celent. April 2016

Big Market

$5,200,000,000,000 gross written premium (GWP)

11,000 insurance companies globally

Potential

3%-4% of GWP invested in IT

$185B in 2016 Life - $99B; P&C - $86B

IT-related Investment

9

The Insurance IT Opportunity is Large and Growing

Source: * Gartner Verticals Forecast world wide By Insurance, April 2016 and company analysis ** Source: Market size data per Celent. April 2016

Global IT Spending 2016-2017 expected

to increase by

6%

External Software and IT

Services Spending

2016-2017 expected to

grow by

7%**

Sapiens Total Addressable Market*

$30B Highly Attractive Growing Market

Highly Attractive Growing Market

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Today’s Market Challenges & Trends

11

Regulation CompetitionRisk

Mitigation

Customer Experience

Personalization Flexibility

Time to Market Efficiency New Models

Sapiens Today

1212

Diverse and Unique Product Portfolio …

Comprehensive solutions, supporting personal,

commercial and specialty lines

ALIS Retirement

Closed Books

IDIT Reinsurance

Insurance Solutions

P&C

Enterprise-scale platform to centrally author, store and manage

all organizational business logic

Comprehensive software solutions for the management of life,

pension, annuity and retirement

L&A

Technology Solutions

DecisioneMerge

TOPAZ Stingray

13

Our Value Proposition

Large global and expanding footprint

End-to-end solutionsLeading technology Domain expertise

Decades of proven project delivery Award-winning packaged solutions Consultative approach

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Leadership in L&A Solutions

“The ALIS system has a very good user interface. It is simple for the user and flows well...The ALIS system has a graphical policy timeline that is unique and useful for a customer service representative working with a client. Sapiens is releasing new portals,which Celent reviewed, that are among the best we have seen.“...”Going forward, we expect the Sapiens ALIS system to makemost evaluation short lists and Sapiens to expand its already rich customer base in the EMEA region.”

Nov. 2015

XCelent Awards - EMEA Policy Administration Systems for Life, Annuities, Pension and Health, 11/2015

Breadth of Functionality 2015 Breadth of Functionality 2015

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EMEA North America

Leadership in P&C SolutionsTechnology and Breath of Functionality 2015 Technology 2015

“Sapiens IDIT continues to offer a strong digital policy administration system for insurers globally, with strong experience across Europe…customers commented that Sapiens is responsive, committed, and constructive, and can provide creative solutions.”

Feb. 2016Celent research - EMEA Policy Administration Systems, General Insurance, Property & Casualty February 2016, Craig BeattieCelent research – APAC Policy Administration Platform Property & Casualty, 04/2016, KyongSun Kong 16

EMEA APAC

One-Stop-ShopAcross Products and Services

1717

One-Stop-Shop Across Products and Services

Sapiens Retirement

Sapiens P&C

Sapiens L&A

Sapiens Reinsurance

Hosting

Product Upgrades

TrainingSupport Services

Migration

TestingConsulting

Project Implementation

Benefits to Customer

Successful implementations

Opportunity to enhance product functionality

Single point of contact

Ease of future enhancements and maintenance

Benefits to Sapiens Strategic importance to customers Deeper level of customer entrenchment Feedback mechanism to enhance product Opportunities to cross-sell current and

future products and solutions

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Blue-Chip Global Customer-BaseLong term Partnership

Bulgaria

North America

UK

ContinentalEurope

APAC

19

Global Presence

20

Development & Delivery Center

Site

Executive Team

Roni Al-DorPresident & CEO

2005 Roni GiladiCFO

2007

2013Irit NuselManaging DirectorLife, Pension and Retirement

2014Yaffa Cohen-IfrahCMO and Head of Corporate Communications

2016Norman TutnauerHead of Global Sales

2007Rami DoronManaging Director,DECISION

2016Liana GelikasManaging Director Property & Casualty

2013Anat Belluco FeinkuchenVP Global HR

Tal SharonRegional ManagerIsrael

2001 Osnat Segev-HarelHead of Corporate Development

2009

Proven Management Team

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Regional Team

Mike McCurleyVP Sales InsuranceSector North America

Manabu OkadaRegional ManagerJapan

Raj GhumanRegional ManagerUK & Nordics

Ashok Bhavnani Regional ManagerAsia Pacific

Wayne Te PaaRegional ManagerANZ

Henry AinouzeRegional Manager Europe

Proven Management Team

1998

1995 2015

2016

20142011

22

OurStrategy

2323

Focus

InsurTech FinTech

24

Land and Expand Strategy

25

Win New Customers

Grow with Existing Customers

Mergers&

Acquisitions

Customer Base

Geographic Expansion

Complementary Solutions

3 core products

2 off-shore operations

76 new customers

1 patent

INSECO

Completed 8 M&A NEXT STEP

Growth Supported by Focused M&A Strategy

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Financials

2727

Revenue – Continue our Growth

98.1

70.3

135.4

157.5

179.3

2011 2012 2013 2014 2015

(1)

Non-GAAP Revenues (USD millions)

114.2

1 Revenues of $98.1 M in 2011 pro-forma for the FIS and IDIT acquisitions 28

25.9

21.9

12.3

26.7

11.2

35.5

26.6

22.4 23.6

12.5

44.2

31.1

24.923.0

12.2

49.6

35.0

28.4 28.8

15.7

61.3

42.6

26.528.3

20.5

NA UK EU Israel APAC

2011 2012 2013 2014 2015

Annual Revenue by Geography

Non-GAAP Revenues (USD millions)

Focus on NA and Europe

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Year 3 Year 4 Year 5 Year 6-10

Contractual High

Attractive Revenue Model

Ongoing Post-ProductionPre-Production

Year 1 Year 2

Go

-Liv

e

Typical life of product engagement: 10–15 years

Revenue ($mm)

Initial Deal Size

Stage

Stickiness

$7 - $10m$10 - $15m $8 - $10m $3 - $5m $1 - $1.5m

Retirement ReinsuranceL&A P&C Closed Books

30

With Significant VisibilityR

eve

nu

e

≈15%New Customers

≈85% Existing Customers

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

Customer stickiness and layered revenue streams create significant visibility

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$130.6

$159.1

1-9/ 2015 1-9/ 20160

20

40

60

80

100

Consistent Revenue GrowthNon-GAAP Revenue (USD millions)

See appendix for Non-GAAP reconciliation.

$46.1

$56.5

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

Q3 2015 Q3 2016

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Consistent Operating Profit GrowthNon-GAAP Operating Profit (USD millions)

See appendix for Non-GAAP reconciliation.

$7.0 $7.3

15.1%

13.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Q3 2015 Q3 2016

$19.2$22.1

14.7% 13.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0.0

5.0

10.0

15.0

20.0

1-9/ 2015 1-9/ 201633

Strong Cash Flow Generation

$97M Cash

$0M Debt

Annual Non-GAAP Operating Cash Flow ($ M)

Dividend Payments:$9.8m in 2016 $7.2m in 2015 $6m in 2013

Non-GAAP operating cash flow include the cost of capitalized software development

3.7

15.311.9

15.5

34.4

2011 2012 2013 2014 2015

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2016 Guidance

35

14.8%13.5%

0

5

10

15

2015 2016Guidance

14.0%

Revenue and Operational Margin Guidance

179.3

211.0

215.0

2015 2016Guidance

Revenue Guidance Operational Margin Target

36

Investment Highlights

3737

Investment Highlights

Massive market Technology leader One-stop-shop

Top-tier customers Proven management

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www.sapiens.com

Thank You

Contact: Yaffa Cohen-Ifrah, CMO & Head of Corporate Communications

Mobile: +1-201-250-9414 | Phone: +972-3-7902032Email: IR.sapiens@Sapiens.com | Website: www.sapiens.com

Q3 and Nine month – Non-GAAPNine MonthsQ3

2015201620152016

130.6159.146.156.5Revenue

57.067.920.723.6Gross Profit

43.6%42.7%44.9%41.8 %

19.222.17.07.3Operational Profit

14.7%13.9%15.1%13.0%

15.818.25.86.0Net Income

12.1%11.5%12.6%10.6%

20.624.27.58.1Adjusted EBITDA**

0.320.370.120.12Diluted EPS

49,25449,72249,48449,849Diluted Weighted Average Number of Shares

Outstanding Shares: 49,011)as of September 30th , 2016(

** The Company defines Adjusted EBITDA as net Profit, adjusted for stock-based compensation expense, depreciation and amortization, capitalized internal-use software development costs, amortization of internal-use software development costs interest expense, provision for income taxes and other income (expenses).

(in USD Million except per share amount)

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Non-GAAP EBITDA to Adj. EBITDA Reconciliation

Three months ended September 30

20152016

5,7266,591GAAP operating profit

1,2021,172Amortization of capitalized software

585658Amortization of other intangible assets

(1,526)(1,674)Capitalization of software development

148108Compensation related to acquisition and acquisition related cost

346493Stock-based compensation

481-Adjustments of pre-acquisition revenues and expenses accounted under pooling of interest method

6,9627,348Non-GAAP operating profit

15.1%13.0%

531767Depreciation

7,4938,115Adjusted EBITDA1

16.2%14.4%

(in USD thousands)

Note: In accordance with non-GAAP accounting, 2015 includes consolidation of Insseco commencing with the acquisition date, August 18, 20151 See definition of Adjusted EBITDA in Q3 and Nine month - Non GAAP slide 41

CRM LoansERPCredit

Sapiens DECISION

Mortgage

Automated Code

Generation

Centralized Decision Logic

Business Strategy

Market ConditionRegulation

s

Customer RequirementsCompetition

Manages business logic across organizations, for large organizations that operate in highly-regulated and complex decision-making environments, cutting time, cost and risk

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