2010 Houston Marine Insurance Seminar Westin Galleria Hotel September 20 th, 2010 Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited1

Evolutionary Change at OIL Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited2

Genetic Evolution Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited3

Corporate Evolution & Adaptation It is unlike genetic evolution Brought about by internal and external forces Can be slow or fast In OILs case, the forces have been both monumental and subtle Ivan, Katrina, Rita & Ike:$3.3 billion in claims Rating & Premium Plan:Leaks, shifts & others Deepwater Horizon:TBD Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited4

Windstorm Changes 5Oil Insurance LimitedMarine Insurance Seminar - Sept 20, 2010

Ivan, Katrina, Rita & Ike In hindsight, Ivan, Katrina & Rita Demonstrated that the mutual did not adequately allocate premium based upon Atlantic Named Windstorm (ANWS) risk Onshore and Offshore ANWS Sectors were introduced in 2007 Ike Demonstrated that the ANWS Sector Weightings were very difficult to properly calibrate and that large losses still produced scaling of limit New Windstorm Plan in 2010 Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited6

Windstorm losses have contributed over 58% of OILs total losses during the past 5 years and 49% over the past 10 years From 1999 to 2003, windstorm losses only accounted for 6% of OILs total losses 7 Historical Losses (10 yrs) Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited

New Windstorm Plan Summary $150M part of $250M Quota Share per occurrence limit Per shareholder annual aggregate limit = twice the per occurrence limit Losses up to an annual aggregate retention of $300M are mutualized among all members in the Standard Pool Losses above the $300M retention are mutualized among windstorm members in two new pools (onshore & offshore) ANWS Sectors are eliminated No losses flow through the Flat Pool Oil Insurance Limited8Marine Insurance Seminar - Sept 20, 2010

New Windstorm Plan Summary New deductible discount curves No deductible scaling Premium weighting for high vs. low windstorm activity areas Rest of the World coverage Differs from ANWS Other features New Retro coverage & pricing mechanism for both windstorm and non-windstorm losses Oil Insurance Limited9Marine Insurance Seminar - Sept 20, 2010

Loss to Premium Flows Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited $150MQ/S Deductible $300M Per Shareholder Annual Aggregate Limit $750M Per Event Aggregation Limit $300M WS Pools Annual Aggregate Retention (8 Business Sectors & Standard Pool Only) Onshore Excess Pool Offshore Excess Pool Multiple events are added together at years end before allocation to the WS Pools Annual Aggregate Retention and Excess Pools 10 LimitsPremium

Rating & Premium Plan (R&PP) Changes 11Oil Insurance LimitedMarine Insurance Seminar - Sept 20, 2010

Oil Insurance Limited12 Old R&PP – What was bad? Changes in WGAs can shift premium from one group of members to another Immediate & Automatic System is subject to surprises The use of Current WGA to calculate Current Premium & TWP Optionality Complexity APS discourages deductible changes Members must account for future obligations to OIL (TWP)

New Lock-In Method It maintains the same 5 year post loss funding method of the Old R&PP The new plan is designed to: Eliminate significant swings in premium and TWP Simplify the R&PP formula Eliminate the periodic and unintended shifting of premium and TWP from one or more members to others Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited13

Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited14 New Lock-In Method WGA calculation and Sector Weightings remain independent of this method Pool % N =Weighted Gross Assets N Total Weighted Gross Assets N Final Pool % in any given year is calculated using the Gross Assets reported as of December 31 from the prior year Premium is only affected in the year following a new loss year and new Pool %s Asset Year Pool % Year Premium Year

Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited15 New Lock-In Method Current Premium (separate calculations for Standard and Flat Premium) 20% of Losses 1 * Pool % 1 20% of Losses 2 * Pool % 2 20% of Losses 3 * Pool % 3 20% of Losses 4 * Pool % 4 20% of Losses 5 * Pool % 5 Expenses 1 * Pool % 1 Risk Premium Factor (+ or -), if any

Deepwater Horizon 16Oil Insurance LimitedMarine Insurance Seminar - Sept 20, 2010

OILs Response OIL will likely wait for final legal, regulatory & financial requirements to be established before contemplating change. Marine Insurance Seminar - Sept 20, 2010Oil Insurance Limited17 ?

Thank You 18Oil Insurance LimitedMarine Insurance Seminar - Sept 20, 2010

Oil Casualty Insurance, Ltd.

Marine Insurance Seminar September 20, 2010

Oil Casualty Insurance, Ltd.Marine Insurance Seminar - September 20, 2010 Hurricanes Katrina & Rita 21 Hurricanes Katrina & Ritas impact on OCIL: –Speculative reaction by rating agencies –Exposure analysis –Executed new underwriting strategy Increased attachments Reduced maximum limits Reduced expected losses and volatility Growth and diversity

Oil Casualty Insurance, Ltd.Marine Insurance Seminar - September 20, 2010 Significant Changes Since the Hurricanes Reduced the minimum limit required for membership to $25 million from $50 million 2008 Shareholders approved amendments to the Shareholders Agreement to provide for Non-Shareholder Policyholders and to allow OCIL to act as a reinsurance company Maximum Policy Limit reduced to $100M Policy form flexibility (claims made and occurrences reported) 2009 Wrote first assumed treaty reinsurance contract 2010 Shareholders Agreement was amended permitting other lines of insurance subject to ¾ approval by the Board of Directors

Oil Casualty Insurance, Ltd.Marine Insurance Seminar - September 20, 2010 Where we are today! & 2010 saw significant growth and wider spread of business from direct writings and assumed reinsurance transactions 60 Shareholders and 10 Policyholders headquartered in U.S., Canada, South America, Europe & Africa. 4 Treaty Reinsurance Programs

Oil Casualty Insurance, Ltd.Marine Insurance Seminar - September 20, 2010 Who we are today! 24 S&Ps May 2010 report states that OCILs capital adequacy ratio is above S&Ps minimum for the AAA range Strong reinsurance program provided by quality reinsurance companies

Oil Casualty Insurance, Ltd.Marine Insurance Seminar - September 20, 2010 Impact from Deepwater Horizon 25 OCILs exposure to the event is minimal Questions remain on how the conventional market will react in maintaining capacity Awaiting outcome of government drilling ban and amendment to OPA OCIL has seen an increase in submissions and requests for increased limits since the explosion OCIL is responding promptly to inquiries

THANK YOU!