2. Liberty International Underwriters University of Houston Energy Panel Steven P. Weiss, CPCU, AMIM, NAMS-CMS Vice President – Marine Risk Engineering and Project Cargo

3. Liberty International Underwriters A little humor

4. Liberty International Underwriters Energy Case Study Discussion of how the pieces fit together –Assured –Agent/Broker/Wholesale Broker –Insurance Company –Reinsurance Company Liberty Mutual Willis Loss Data base

5. Liberty International Underwriters Insurance Flow Assured Broker/ Agent Wholesale Broker Underwriter Reinsurer Reinsurance Broker

6. Liberty International Underwriters Assured The Assured is the purchaser of the insurance Normally through Broker or Agent Pays Commission or fee for services to Broker Pays premium to Underwriter

7. Liberty International Underwriters Broker/Agent One who for commission or fee, brings parties together and assists in negotiating contracts between them Representative of the Assured Receives Fee for service from Assured or commission from Underwriter Many are very well trained and knowledgeable Also know as the Retail Broker/Agent

8. Liberty International Underwriters Wholesale Broker Intermediary between retail Broker/Agent and Underwriters if the B/A does not have the proper market Normally commission paid by Underwriter Represents the Insured sort of as well as the retail broker

9. Liberty International Underwriters Underwriter Reviews the risk as presented by the broker If the risk is within appetite then assumes the risk for the loss of life, property or finances of another Pays commission to the Broker if agreed up front

10. Liberty International Underwriters Reinsurance Broker One who for commission or fee, brings parties together and assists in negotiating contracts between them Places insurance for insurance companies Normally commission paid by reinsurer

11. Liberty International Underwriters Reinsurer Insures who insure other Insurance companies Pay commission to Reinsurance Broker Often pay override to the ceding insurer

12. Liberty International Underwriters Liberty Mutual Agency Markets LM SuretySafeco Regional Companies Commercial Markets Personal Markets Liberty International Underwriters

13. Liberty International Underwriters LM by the Numbers - 2007 2007 Actual Commercial Markets$6,489,000,000 Personal Markets5,829,000,000 Agency Markets5,569,000,000 Liberty International6,148,000,000 Other1,926,000,000 Total$25,961,000,000

14. Liberty International Underwriters Financial Highlights LIU LIU 2007 Premium – over $2.5B Liberty Mutual 2007 Worldwide Revenue of $25.5 Billion up from $23.5 Billion in 2006 Statutory Surplus - $14.0B (7.0% increase) Total Assets – Over US$85 billion World-class Fortune 100 (# 94) financial standing 1.AM Best – A (Excellent) 2.Moody’s – A2 (Good) 3.Standard & Poor’s – A- (Strong)

15. Liberty International Underwriters Willis Data base Collection of losses in excess of USD 1,000,000 at time of loss since 1972 May or may not have been insured Does not account for sublimits 8,011 losses since 2008 124 plus billion in dollars

16. Liberty International Underwriters Willis Loss Database - uses Project comparing premium vs losses to see how tight margins actuall are Can specify OEE – operators extra expense –Blow outs and well control costs –Operational What insurance is rated on –Can also compare CAT to operational

17. Liberty International Underwriters Examples Willis losses.pdf https://online1.willis.com/sites/EL/W_E LViewer.aspxhttps://online1.willis.com/sites/EL/W_E LViewer.aspx

18. Liberty International Underwriters Other Resources http://www.iii.org/ http://www.aicpcu.org/ http://www.libertymutual.com

19. Liberty International Underwriters Summary A bit on Insurance operations A bit on Liberty Mutual A bit of the Willis loss data base What questions do you have for me?