1. University of Houston Bauer College of Business April 13, 2006 presentation by: Robert B. Hixon

2. Take-Away Concepts  Agent vs. Broker – Is there a difference?  Salesmen or Professional Service provider?  What services are offered  Where is the brokers value added  Where does your allegiance reside?  Contractual Issues with the Insured and the Insurer  Compensation Issues  Commission  Fee

3. Sample Broker Presentation Response to Request for Proposal

4. Discussion Items  The Wortham Difference  Insurance Market Update  Available Services  Team Selection & Support  Casualty and Energy Claim Handling Services  International Capabilities  Cost of Risk and Retention Analysis  Energy, Liability and Casualty Insurance Renewal Strategies  Employment Practices Liability  Alternative Programs  Broker Relationship & Compensation  Closing Comments

5. The Wortham Difference

6. The Wortham Partnership  Houston based  Continuous operation since 1915  Over $1 billion in annual premiums  Client focused  No bias in recommendations  No outside stockholders (partnership)  Transparent and open communication

7. The Wortham Difference  76 Managing Directors or “owners” of the Firm  Depth and experience of technical staff  Distinction is superior service to customers  High retention ratio  Continuity of staff  Employees’ tenure averages over 12 years  Managing Directors’ tenure is over 20 years

8. Mission Statement Service – to handle our client’s insurance business as if it was ours Quality Coverages – to develop coverages and risk management tools that allow clients to better compete in their business Price – to forge relationships between carriers and our clients that will add value and be long term

9. The Wortham Difference  Partnership – We have no outside stockholders, so we focus on serving you  Reputation – Underwriters trust us, giving you a competitive edge  Innovation – We partner you with markets to develop new solutions to your unique risk profile  Independence – We also have no ownership in other insurance providers, so we find you unbiased options with transparent compensation arrangements

10. Available Services

11. Service Differentiation Risk Management Support  Partner in risk management problem solving  Provide presence when required  Administrative consultation  Underwriter meetings  TPA/claims support meetings  Trigger technical support  Submitting frequent “open items” lists  Advise as insurance market conditions change

12. Critical Wortham Services  Risk Management Information Systems (RMIS) support  Internet portal  Electronic certificates  Contract review  Retention analysis  Exposure survey  Loss control / safety support  Alternative risk products

13. Team Selection & Support

14. Goals in Team Selection  Experience in industry, very significant accounts and specialization requirements  Availability to deliver Wortham’s standard of service  Depth to provide appropriate and timely solutions

15. Service Team  Primary account service team members chosen to meet Your needs  Access to Wortham’s 425+ member team of experts  Continuity – the average tenure of our partners and professionals is over 20 years

16. Your Wortham Team Partner Account Executive Partner Risk Mgmt. Services Partner RMIS Loss Control Partner Alternative Risk Partner Prof. Indemnity Partner Crime/Bond Manager Partner Marine Partner Marine Partner Casualty International Casualty Partner Casualty Claims Partner Energy Partner Energy Assistant

17. Casualty and Energy Claim Handling Services

18. Casualty Claim Services  Assistance in selecting claim service providers  Monitoring of insurance company or independent claims services  Review of claims prior to statistical filings  Monitoring of “questionable” claims and active involvement in “large” claim settlements  Resolution of coverage questions/disputes  Assistance in locating qualified defense counsel  Claim/reserve audits as needed  Periodic status reports with action recommendations  Self-insured program design and implementation  Structured settlement and portfolio transfer consulting services, as requested

19. Energy, Well Control and Property Claims  Wortham’s Energy and Property Departments have successfully collected over $1,000,000,000 in claims, which have resulted from upstream oil and gas operations during the past five years.  Our technicians handle all physical damage and control of well claims personally. Wortham believes that the client’s interest is best served when the individual that negotiated the terms of coverage pays an integral role in the collection of a claim. We believe this approach provides a better service to the client.

20. International Capabilities

21. WorthamNet  Business partnerships with 179 successful brokerages in 134 countries worldwide  In-country knowledge and expertise  Wortham quality, service and standards of coverage

22. Cost of Risk and Retention Analysis

23. Risk Retention Factors  Materiality of extraordinary losses  Frequency and severity of expected losses  Cost and availability of insurance excess of various retention levels  Company’s degree of risk aversion

24. Renewal Strategies

25. Alternative Programs

26. “Outside the Box” Ideas  Risk Financing Programs  Captive and finite risk programs could be considered for retention management purposes  Potential tax planning opportunities  Retention Adjustment Structures  Structures allow for adjustment of retention based on current economic / business indices – rig count, for instance  Provides for lower retentions and greater risk transfer when business is soft

27. “Outside the Box” Ideas  Loss Portfolio Transfer (LPT)  Reduction of balance sheet reserves  Reduction of required collateral  Environmental Cost Caps  Funding vehicle plus risk transfer for overruns  Reduction of balance sheet reserves  Potential tax planning opportunities

28. Broker Relationship & Compensation

29. Closing Comments

30. Why Wortham?  Our partnership business model is dedicated to providing very broad, high quality, meaningful service to our customers with long- term view  Our strategy is to lower your overall cost of risk  You would be an important energy related account for Wortham and would be handled with a sense of urgency  We invite you to check our reputation with clients, underwriters and service providers

32. THANK YOU