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($ IN MILLIONS) STATUTORY June YTD 2012 20112010200920082007 GPW $776.7$1,327.4$890.2$865.5$1,025.8$1,244.2 LOSS & LAE RATIO 70.0%73.4%73.0%72.2%80.8%63.6%

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Presentation on theme: "($ IN MILLIONS) STATUTORY June YTD 2012 20112010200920082007 GPW $776.7$1,327.4$890.2$865.5$1,025.8$1,244.2 LOSS & LAE RATIO 70.0%73.4%73.0%72.2%80.8%63.6%"— Presentation transcript:


2 ($ IN MILLIONS) STATUTORY June YTD 2012 20112010200920082007 GPW $776.7$1,327.4$890.2$865.5$1,025.8$1,244.2 LOSS & LAE RATIO 70.0%73.4%73.0%72.2%80.8%63.6% EXPENSE RATIO 31.7%32.7%34.9%37.5%34.3%30.0% AY COMBINED RATIO 101.7%106.1%107.9%109.7%115.1%93.6% NET INCOME $30.0$14.2$107.8$154.0$484.0$191.7 Crum & Forster Holdings

3 2001 GPW: $827M 2006 GPW: $1,353M 2011 GPW: $1,327M Gross Premium Written Mix Specialty vs. Standard Specialty, 75% Specialty, 44% Specialty, 18% Standard, 82% Standard, 25% Standard, 56% Jun YTD 2012 GPW: $776M Standard, 24% Specialty, 76%


5 Ted Camp CoverXSpecialty

6 DepartmentProductsCustomerDistribution Source2011 GPW ($ in millions) Primary CasualtyPrimary GL (average premium of $24K) Contractors, manufacturing, mercantile, hospitality, habitational, owners/landlords/tenants, pharmaceuticals, contract and research organizations Produced through wholly-owned distribution platform (CoverX) and third party wholesalers $220.7M Excess CasualtyExcess & umbrella (average premium of $21K) Contractors, security related, hospitality, habitational, owners/landlords/tenants, entertainment business, special events venues $67.1M SecurityPrimary GL (average premium of $5K) Security guards, alarm installation and monitoring, fire suppression contractors Wholesalers, Retailers$44.3M Binding AuthorityMonoline general liability, package policies (average premium of $2K) Artisan contractors, various mercantile, restaurants, habitational, offices, vacant buildings Wholesalers$16.6M Crisis ManagementGL (average premium of $72K) Consumable products, supplier & component parts (e.g., companies that supply, process, manufacturer, distribute, import/export bottle, etc.) local, regional and fast food restaurants Wholesalers$16.6M

7 Overview We offer specialty commercial insurance products through 11 offices in the United States The E&S casualty operations of Crum & Forster, Seneca, First Mercury and Valiant have been integrated into a $380+ million GPW business unit, referred to as CoverXSpecialty 2011 GPW: $386M

8 2011 GPW by Top 10 States 1 Top five classes in CA are security guards, roofing contractors, manufacturing, concrete/masonry/paving contractors and safety contractors

9 Gary Dubois Seneca

10 Standard lines Commercial Package/BOP General Liability Umbrella Custom Property E & S Property Inland Marine Surety Bail Bonds Contract & Commercial Existing Product Lines

11 DepartmentProductsCustomerDistribution Source2011 GPW ($ in millions) Commercial Package Policy/BOP Standard package policy Average premium size is $12K Commercial real estate Mercantile - Mixed Used Light Manufacturing - Vacancies, foreclosures Distributors Wholesalers Open Brokerage General Liability Standard ISO forms Average premium size is $5K Commercial real estate Mercantile - Mixed Used Light Manufacturing - Vacancies, foreclosures Distributors Wholesalers UmbrellaWritten in support of the General liability or the commercial package limits to $5M Commercial real estate Mercantile - Mixed Used Light Manufacturing - Vacancies, foreclosures Distributors Wholesalers Standard Lines $106.3M Inland MarineAdmitted and non admitted products. Average premium is $25K Builders risk/Installation Motor truck Cargo Warehousemans legal liability Contractors equipment Riggers liability Fine Arts/dealers Fixed and mobile medical equipment Wholesalers$11.4M Custom Property Coverage is provided using ISO forms; In House capacity up to $25,000,000. Primary and excess layers are available. Vacant properties, Association coverage Receiverships, Nursing Homes Manufacturing, Student Housing Mercantile, Hospitality, Residential, Bars, Night clubs, Restaurants, Warehouses Wholesalers$36.1M SuretyBail Bonds Contract & Commercial $5M Single $10M Bonded aggregate General Construction, Paving/Milling, Mechanical, Electrical, Utilities, Excavation, Abatement, Service Contractors Bail Bonds- Managing General Agent Contract & Commercial - Open Brokerage $4.7M

12 Steve Fomchenko Custom Property & Inland Marine

13 Product Lines 2011 GWP -$47.18 M

14 DepartmentProductsClass of BusinessProfit Centers Custom PropertyPrimary Limits - $25,000,000 Excess limits - $10,000,000 Vacant properties, Association Coverage, Receiverships, Nursing Homes, Manufacturing, Student Housing, Mercantile, Hospitality, Residential, Bars and Nightclubs, Restaurants, Office Buildings, and Warehouses Northeast Southeast Midatlantic Central Western Difference In Conditions Earthquake Flood All classesAll Regions except Western Region for California Earthquake Inland MarineBuilders Risk/InstallationNew construction, renovations, rehabsCountrywide Contractors EquipmentCranes, surface mining, oil and gas contractors, equipment dealers Motor Truck Cargo Warehousemans Legal Liability No commodities exempted Dry and Cold Storage

15 Western Region - Ken McClelland Central Region – David Hansen Central Region – David Hansen Northeast- Kathleen Alicks Midatlantic- Tom Diaczynsky Midatlantic- Tom Diaczynsky Southeast- Joe Stanton Inland Marine -Countrywide Jack Moran -

16 Continue to offer participation on Primary/100% basis Expand product capabilities to participate excess of a primary Increase capacity on DIC Product to $10m Expansion into the Western Region Growth Opportunities

17 Gary Dubois MAPS

18 Product Lines - MAPS Division Large Accounts – Lori Marino, SVP Management Liability D&O/EPL/FID Lawyers Professional Accountants Professional Miscellaneous E&O Cyber/Technology Professional Crime & Fidelity 2011 GWP: $15.3M Middle Market Accounts – Don Fischer, SVP Management Liability D&O/EPL/FID Lawyers Professional Miscellaneous E&O Programs Amerinst Accountants & Lawyers Managed Insurance Services (MIS) United Specialty Services (USS) 2011 GWP: $18.9M 2011 TOTAL GWP: $34.2M

19 New head of Crime & Fidelity hired fall of 2012 to support growth potential Cyber Liability resources in place for anticipated demand through 2013 Considering select opportunities within the A&E marketplace Evaluating possibilities of geographic expansion into and through 2013 Looking Forward - MAPS Division

20 Diana Cossetti Umbrella/Excess

21 Internal Goals attained and ongoing: One set of policy forms - E&S One set of guidelines – all Unified file documentation/pricing model – all Field authority - all Looking Ahead: Growth goals for both admitted and non-admitted Expand our writings in our Targeted Segments area Increase our physical presence in marketplace Umbrella/Excess

22 Chris Pluchino Marine & Energy

23 DepartmentProductsCustomerDistribution Source2012 GPW Q1&2 ($ in millions) Ocean MarineProperty, liability, cargo and hull (average premium of $12K) Cargo, commercial vessels excluding blue water, ship repairers, terminals, marine contractors, vessels under construction Regional brokers, National brokers, Wholesalers and MGU $9.3M Exploration & Production Property, control of well, liability and business interruption (average premium of $170K) Companies engaged in the exploration and production of Oil & Gas with operations principally located offshore, offshore commercial construction Wholesalers, National brokers, Regional brokers $7.7M Onshore Energy (future segment) Property focused including business interruption and construction Product launch delayed due to overly competitive market conditions/prohibitive underwriting environment for a start up. Wholesalers, National brokers, Regional brokers $0.0M

24 Underwriting strategy Focus on differentiating risks via an engineering informed underwriting process Underwriting appetite reflects an expertise-based segment avoidance strategy For example, in ocean marine – blue water hull not written owing to undervaluation of exposures/inadequate rates; in energy and production – drilling contractors avoided due to, among other things, high value of moveable assets (aggregation concerns) Superior on-staff expertise via market leading underwriters, qualified risk engineers and claims professionals trained in maritime law Typically focused on small to midsized clients, avoiding major corporations Market entry for targeted classes via partnership strategy (MGU) Look to maintain portfolio balance by keeping maximum policy limit offered within annual premium volume Overview

25 Catastrophe management strategy Line setting guidance in place based on specific account criteria such as client size, maximum loss potential and cat exposure Maintain portfolio balance – per risk and portfolio / NAT CAT capacity NAT CAT monitored by region / segment / occupancy, set against pre- determined loss thresholds Platforms scored based on probability of failure in major wind event Aggregate exposures measured, deterministically as the sum of all limits and coverages, captured using industry software; Exploration and Production: Open Xposure/Static Marine: Risk Browser/RMS PMLs, storm tracks, Lloyds Realistic Disaster Scenario run nightly and/or as needed in real time Overview (cont.)

26 Second year of operation for C&F under the leadership of individuals with a combined 27 years marine and energy underwriting experience Ocean Marine Exploration & Production 2012 GPW: $9.3M (Q1&2) 2012 GPW: $7.7M (Q1&2)

27 Mark Brown Environmental Casualty

28 ProductsCustomerDistribution Source GPW ($ in millions) Environmental Package with up to four coverage parts (Pollution Legal Liability, Contractors Pollution Liability, Environmental E&O and Commercial General Liability) (average premium of $22K) Environmental contractors or consultants, environmental facilities, environmental products such as containment equipment, innovative technologies such as waste recyclers Wholesale (Closed Selected) 2011 $12.1 M YTD Sept. $20M Pollution Legal Liability (average premium of $20K) Waste management facilities, resource conservation facilities, treatment storage and disposal facilities, manufacturers, distributors, warehouses, above ground storage tanks, real estate portfolios Contractors Pollution Liability (average premium of $13K) Environmental remediation contractors, engineers, storage tank operations, emergency response contractors; non-environmental general/Artisan contractors, masonry, roofing, paving contractors Environmental E&O (average premium of $22K) Environmental professionals such as engineers and consultants Environmental Follow Form Excess (average premium of $18K) Coverage only written on supported basis in excess of the products mentioned above

29 Mark LeBlanc Crisis Management

30 recallPROTECT+ Consumable Products (food, cosmetics) Consumer Goods & Products (hard goods, appliances, etc.) Supplier & Component Parts (tech and auto) restaurantPROTECT+ Restaurants Chains (fast food, chains, franchises) Coverage: First and third party recall costs (consumable, component) First Party Business Interruption Customer Loss of Profit Brand Rehabilitation Replacement Costs Consultant Costs What do we do?

31 Restaurant Accounts:Solutions: High per account premium Targeted Marketing No diversitySpread the word Consumables: Competitive landscapeMind the gap: avoid pitfalls Coverage Constantly evolvingFlexible terms, know your competition Mature market placeThere are good accounts, find them Knowledgeable buyersThere are good buyers, find them Knowledgeable brokersUnderwriter beware Components: Adverse SelectionDetermine the real need Contract RequirementsIs the coverage being used correctly? Heavy severity, light frequencyKnow your exposure Lonely landscape Know when to compete Consumer More frequency than severityAvoid chasing down attachments Limited exposurePotential for balance Limited needManage Capacity Growth Opportunities

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