1. What Factors Determine Your Premium? John Scudella SVP Underwriting and Alternative Risk August 2014 ©

2. Factors Affecting Policy Premium 1 Specialty Coverage Claims Practice Location Years in Practice Hours Working Limits No Surgery Minor Surgery Major Surgery Retroactive Date Risk Management Activities Tort Reform Indemnity and Defense costs ©

3. What is the purpose of developing a rate? 2 Establish a rate, reflective of anticipated costs for a specific exposure, coverage and time period. ©

4. Emerging Risks © Aging Population Aging Physicians Patient Volume Telemedicine New Technology Clinical Integration Revenue Drug Shortages Fraud Investigations Social Media Regulatory Compliance EHR Mobile Health Consolidation Aging Population Aging Physicians Telemedicine Mobile Health Consolidation Patient Volume Clinical Integration Drug Shortages Fraud Investigations EHR Social Media Revenue New Technology Regulatory Compliance 3

5. Anticipated Costs 4  Loss costs −Payments to plaintiffs (indemnity) −Defense attorney and expert witness fees −Claims handling  Expenses −General and administrative −Acquisition −Premium taxes ©

6. Average Premium (January 2009 to July 2014) 5

7. Premium Dollar -- Where does it go? 6

8. $1,000,000 Limited Indemnity & Defense Costs – Annual Totals 7

9. Reported Claims Frequency 8

10. $1,000,000 Limited Indemnity & Defense Costs - Severity 9

11. Effect of the Patient Protection & Affordable Care Act © Coverage Expansion Medicaid Expansion Insurance Exchanges Increased Regulations Different ACO Models No Tort Reform More Demand Less Access Reimbursement Declining Volume to Value Consolidation on All Fronts Measure Quality Measure Satisfaction Increased Regulations Different ACO Models Less Access Volume to Value Medicaid Expansion Insurance Exchanges Reimbursement Declining Consolidation on All Fronts Measure Quality No Tort Reform More Demand Measure Satisfaction Coverage Expansion 10

12. Impact to your insurance  Traditional physician business is changing  Vicarious liability  Tail coverage issues  Diversification of products and services  Captives, risk retention groups, affiliations  Metadata  Cost of standing still 11

13. Where do we insure physicians today? GA VA NC © 12

14. Where do we insure physicians today? GA IL SC TN VA AL AZ CO FL IN MS NC PA TX WV CA © 13

15. Questions?