Property and Casualty Insurance Marketplace Update November 2009 Tim de Jonge BComm, CIP, CRM Account Executive Aon Global Energy

1 1 Agenda  Marketplace Overview  Industry Results ― 2008  Industry Forecast ―  Line of Coverage Review  Property  Casualty

Insurance Marketplace Overview  Rates  Insurable losses  Investment environment  Global economic recession  Property losses ― risk and natural catastrophe events  Industry Surplus YE 2008 = $438 billion, -16% from $518 billion YE 2007  Net Written Premium -1.4%  Treaty or portfolio reinsurance ― 2009 increases 10%-20%  2008 combined loss ratio = 105.1%

3 3 Insurers overall capital losses 2008 reflects developments in financial markets and insurers’ need to write-down investments that became impaired as a result of the recession, foreclosures, and the crisis in the financial system  S&P %,  NASDAQ & NYSE composite indexes -40 %  ISO estimates $26.9 billion in pretax capital losses on impaired investments.  1Q 2009 S&P %

4 4 Industry Results 1 st Half of 2009 Resilience demonstrated: Record catastrophe losses 100% combined loss ratio 9.5% return on surplus Sluggish growth in net written premium: 1.3% Profitability returns

— Forecast Small underwriting profit Net written premiums growth of up to 5% –Hardened Property market –Difficult market for coastal/cat –Spillover into Casualty? Demand for underwriting discipline to lift returns Combined Ratio of under 100%

6 6 Property — Average Rate Change

7 7 Property Capacity Industry surplus lower than a year ago, particularly in Nat/Cat areas; Capacity appears adequate and stable Market Outlook: The Remainder of 2009 and Beyond Upward rate pressure through the active Atlantic Storm Season Modest downward pressure on rates in the late fourth quarter and into 2010

8 8 Primary Casualty — Average Rate Change

9 9 Casualty Capacity Competition remains very strong in the primary casualty marketplace Few changes in the number and quality of carriers actively writing large primary casualty business with at least 12 viable markets competing for this business, Excess casualty capacity is at record levels Significant new and additional excess casualty capacity entering the marketplace in the last 14 months. Casualty insurance carriers continue to try to maintain incumbent relationships and aggressively pursue new business opportunities.