1. Sony Pictures Entertainment Inc.
March 13, D-R-A-F-T 8

2. SONY PICTURES ENTERTAINMENT
MISSION STATEMENT
PROTECT THE ASSETS OF
SONY PICTURES ENTERTAINMENT

3. II. RISK MANAGEMENT STRUCTURE
Janel Clausen
Vice President,
Risk Management
Aaron Au
Coordinator
Work Comp Claims &
Admin Support for Dept.
Kate Calabrese
Claims/Systems,
Administrator
Media Liab. Claims
EPL Claims
Dept. Budget
Risk Mgmt Systems Mgr.
Douglas Hastings
Claims Manager
GL, Auto, Property & Production Claims
Donna Tetzlaff
Director
Corporate Risks including Distribution Activities
Dawn Luehrs
Director
Production Risks
Britianey Barnes
Administrator
Production Risk Support

4. III. Key Risk Management Functions
Risk Identification
Understanding SPE and identifying its unique risk characteristics
Assessing Film & TV Production Risks
Risk Treatment Working with Internal and External Partners
Developing a policy on risk to optimize risk retention/transfer methods (Finance)
Negotiating and implementing insurance risk transfer program (Insurance Companies)
Fixed asset protection and catastrophic risk assessment (Finance & Administration)
Liability and litigation control (Legal)
Employee and public safety, security & crime control (SEHS)
Risk Administration
Claims Management for Studio and offsite Productions
Maintain insurable asset inventory
Allocate risk costs to Studio and each Production
Management Reports

5. IV. SPE Risk Management: The Day-To-Day
Contract reviews
Corporate (200)
Productions Domestic and Foreign(1,500 per year)
Coverage Requests (600 per year)
Scope, limits, extensions, amendments
Ongoing Cross-Team communication
Outgoing Certificates Reviewed (5,000 per year)
Same Day Issuance
Notice of Cancellation Compliance
Incoming Certificates Reviewed (600)
Endorsements (3,000 per year)
Policy Renewals
Policies reviewed to verify terms and conditions match quotations received
Policies summarized updated and maintained
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6. Production Risk Management Workflow – A Dynamic Process
Pre-Production
Initial Production Notice to Risk Management – Weekly Production & Business Affairs Meetings, Online Publications, Phone Calls
Script Review, Exposure and Location Analysis – Domestic/International determination
Budgeting –Finalize Insurance line, Identify special insurance extensions – cast (age, medical etc.), marine, aviation, railroad, automobile, stunting, international, disability, duration of production
SEHS Coordination
Production
Adapt to changes in pre-production schedule
Location changes
Contract Review – Standard SPE/Non-Standard, Vendor, Supplier and amendments to Insurance Policies and Insurance Certificates as needed
Claim activities
Cast declarations, medicals, stop dates and cast multi-production utilization
Special Hazard Identification and Insurance treatment
Watercraft
Aviation
Stunting
Railroad
Automobile
SEHS Coordination
Post-Production
Additional and Re-Shoots
Claims Finalization
Annual Production Renewal Process

7. Corporate Risk Management – A Dynamic Process
Risk Management Analysis and Administration
Identify corporate risk exposures
Review contracts, leases, agreements
Monitor changes to locations, human resources and physical plant
Assess impact of insurance laws and requirements by country of operation
Analyze insurance solutions for new/changing exposures
International
Media
Terrorism
Cyber Risk
Respond to internal SPE inquiries (e.g. clearance procedures, claims, legal, SEHS)
Coordinate insurance responses for promotions, sales & marketing
Ongoing claim management
Manage annual insurance budget
Insurance Renewal Process
Activities begin 120 days before renewal and varies by coverage (Property, Casualty, E&O, D&O, Marine, Aviation, etc.)
Collect exposure data from SPE entities (values, payrolls, productions costs, sales, vehicles)
Update claim summaries/status by line of coverage
Partner with broker to finalize submission and renewal program design and negotiation strategy
Meet with insurers as necessary
Monitor renewal progress and respond to insurer requests
Analyze insurer proposals and make recommendations to SPE management
Implement renewal and coordinate certificate issuance
Manage ongoing relationships with brokers and insurers until subsequent renewal cycle (e.g. Tokio Marine – major strategic partner)

8. Annual Total Property & Casualty Premium/Retained Losses vs
Annual Total Property & Casualty Premium/Retained Losses vs. Total Annual Revenues – 2006 thru 2012

9. Annual Workers’ Comp Premium/Retained Losses vs
Annual Workers’ Comp Premium/Retained Losses vs. Annual Payroll – 2006 thru 2012

10. Risk and Insurance Strategy: SPE Risk Management Achievements – What have we done lately
Casualty, Property and Executive Risk
Financial
4 Year Program Results
Cumulative savings of $2,600,000
Collateral reduction of $900,000 in 2012
Work Comp Medical Bill Review pricing shifted from percentage (25%) of savings to per bill ($12.50). Estimated cost savings in excess $100,000
Major Insurance Claim Settlements
Grouper - $15MM
Pinewood - $15MM
Crime and Employment Claims – Cher Simon $1.4MM
Program Enhancements
Workers’ Compensation program moved from ACE to Tokio Marine in 2010
Lowered Workers’ Compensation deductible from $750K to $500K
Negotiated Workers’ Compensation Aggregate Deductible
Implemented flexible audit swing provisions for General and Auto Liability
Expanded CA Earthquake Coverage from $70MM to $100MM

11. Risk and Insurance Strategy: Sampling of SPE Risk Management Achievements
Program Enhancements (cont.)
Expanded Property Program Loss Limit from $400MM to $500MM
Multimedia/Technology policy limit was increased from $50MM to $80MM
Cyber Liability program was separated from the Multimedia/Technology program and now has a separate $20MM limit with expanded coverage
Cyber Liability amended to provide coverage for the care, custody and control of Third Party Intellectual Property Assets
Analysis of Who is An Insured wording to address the LLC concerns
Terrorism Coverage - Expanded Policy Form to include Coverage For Political Violence; Secured Coverage For $193MM International Office Schedule at No Charge; Expanded Policy To Provide $1MM in Coverage For Previously Excluded Territories

12. Risk and Insurance Strategy: Sampling of SPE Risk Management Achievements
Program Enhancements (cont.)
Expanding relationship with Tokio Marine on P/C Coverages
Regular testing of Broker Offerings with RFP's in 2007 and 2011
Maintaining experienced staff while developing new staff assuring quality service continuity with regular staff evaluations and goal setting
Unique claim settlements (Pinewood property claim, certain E&O claims, 9/11 Civil Authority)
Implementation of Risk Management Information System (RMIS)
Reduction of Cost of Risk over the last few years despite upward cost pressure from insurers
Production Program
Redesign in 2011 reduced overall costs by $ 1 MM+ annually              
Cast clearance extensions negotiated for higher risks                   
Anna Nicole Smith                    
Grown ups 2                      
London Calling and Michael J. Fox Project                
Claim Negotiated on Casino Royale : 5.7 MM                
Increased coverage for Ingress/ Egress ( relevant for Hurricane Sandy claims)                
2013 renewal enhancements:                    
  Additional premium savings of $  600,000                     
  Increased sub- limits                       
Increased covered artists from 20 to 25

13. Risk and Insurance Strategy: Sampling of SPE Risk Management Achievements
Administrative
Oversee timely and thorough responses to requests for production specific requests:
Production specific endorsements
Stand-alone policies (OCP’s, Railroad Protective etc.)
Specialty certificates of insurance
Broker assists in contracts reviews to ensure SPE compliance with stated insurance / indemnity provisions
Broker administer stand-alone FearNet. Increased Umbrella limit from $1MM to $5MM
Policy wording has and continues to be amended to fit SPE’s Risk Profile

14. SPE Business Partners & Resources
Internal
External
Finance
Security
Adjusters
Treasury
Real Estate
Artists
Accounting
Procurement
Attorneys
Tax
Int’l Admin & Finance
Physicians/Nurses
People & Organization
Distribution
Rehab Counselors
Labor Relations
Events
Studio Risk Managers
Legal
Promotions/Marketing
Ins Brokers & Carriers
Litigation
Transportation
Business Managers
Business Affairs
Production Offices
Appraisers
Facilities Admin
Post Production
Vendors/Contractors/
Studio Operations
SEL/SME Risk Mgmt
Consultants
Medical
Safety/Environmental
Investigators
Digital Group
Worldwide Production
Muni/Govt Agencies
Home Entertainment
Finance Companies

15. SPE Business Partners & Resources
Procurement
Legal
Studio Operations
Studio Facilities – East & West Coast
Real Estate
Corporate Safety/Security & Environmental Affairs
Information Security
Compliance
Corporate Communications
Information Technology
EIS Infrastructure
Marketing & Publicity for MPG/TV and HE
Digital Group – SPI, SPII, SPA, SP Technology
Production Acquisitions for Sony Pictures Classis, Worldwide
Corporate Acquisitions and Mergers
Corporate Events
Sony Sister Companies involved with SPE or its subs
Consultant Agreements
Medical Department
People & Organization
Transportation

16. SPE - A Specialized Risk Profile
Studio Property Assets
Fire and Earthquake
Business Interruption
 Off-Site Production Risks
International
Marine
Aviation
 Intellectual Property Risks
Media
Cyber/Technology
 Mergers, Acquisitions & Divestitures
Claim legacy (e.g. Grouper)
 Employee and Third Party Safety

17. Risk and Insurance Total Cost of Risk – Fiscal Year UPDATED WITH CURRENT FIGURES-DRAFT PER ROGER 2/19/13
Premiums: $15.5 Million
(includes all U.S./Canada and Master International)
Retained Losses: $5.2 - $6.7 Million Estimated
(includes: auto, general liability, workers compensation, errors & omissions/
media and cyber)
Exposures
Revenue: $9 Billion
Property Assets (Total Insured Values): $1.92 Billion
(Replacement Cost inc. Bus. Intrp + Extra Exp.)
Workers Compensation Payroll (subject payroll): $722.3 Million
Production Cost: $900 + Million
(TV, MP, Home Entertainment, Digital and Studio)
Protection
16 Major Lines of Coverage
Over 50 Underwriters providing over 70 Policies plus numerous local and international policies for non-US production offices

18. Program Structure – Major Coverage Limits

19. SPE Risk Management Insurance Broker Service Deliverables
Risk Assessment – conduct annual review of SPE’s risk profile, highlighting changes which could impact coverage requirements.
Quantitative Analysis – assess recent and historical loss trends. Emphasize improvements which can result in deductible / structure improvements
Marketing – annual marketing is undertaken to identify best-in-class insurers capable of responding to the SPE Risk Management Standards.
Program Negotiation – negotiate optimal program structure with cost effective balance between deductibles and premiums. Program must provide the most comprehensive coverage with the flexibility to respond quickly to SPE’s inherent and contractual exposures.
Day-to-Day Administration – timely and accurate responses to SPE’s unique day to day requirements.

20. SPE Risk Management Insurance Broker Service Deliverables
Review, analyze and negotiate claim service pricing and agreements with Third Party Administrator and carriers
Assist Productions in claim reporting and in resolving difficult or unusual claims
Coordinate bi-annual claims review with ESIS and with Tokio Marine
Review statistical loss runs and claim status on legacy CNA and current Chartis Insurance Services programs
Review claim reserves and evaluate the accuracy of reserve levels on casualty programs
Procure annual claim data files for actuary utilization and loss forecasting
Monitor claim status and disposition plans on legacy programs
Evaluate bi-annual Workers' Compensation Trend & Loss Analysis reports
Review carrier position on any denied claims for challenge to coverage applications

21. SPE Risk Management Insurance Company Relationships
Identify insurance company partners that will provide long term stability
Production Package market is limited and Fireman’s Fund has been identified as a preferred partner
Tokio Marine has been a preferred partner since the Sony acquisition and participates on major portions of the property & casualty programs
Hiscox has emerged as a strategic partner for the specialized Media Liability risks of SPE
Insurance Company providers are continually assessed for their financial stability and a long term commitment to the Entertainment Industry

22. Risk Management Insurance Program Development
MARKETING SPE’s: Property, Casualty, Executive/Professional Risks
Working with our Risk Management Partners, establish desired program options, limits, retentions, structure, pricing and terms
Assess market relations and leverage existing partnerships and facilitate new competitive alliances
Establish a Renewal Timeline
Build the SPE Marketing and Risk Story
Deliver a best-in-class submission
Drive the market through knowledge, leverage and competition
Direct interaction with underwriters to tell “The SPE Story”
Update Insurer Security Status
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23. Risk Management and Insurance Strategy
Central to our role as SPE’s Risk Management Department is the rigorous process utilized to assess SPE’s exposure to risk on a long term strategic basis and day-to-day project basis.
Inherent to anticipating and proactively addressing SPE’s risk exposures, we:
Understand SPE’s objectives in designing and implementing a superior insurance program, using specialized professional resources as needed, in formulating cost efficient risk management and insurance solutions.
Formulate action plans to leverage SPE’s strengths and opportunities of SPE’s risk techniques relative to overall financial and operational conditions, the business environment as well as insurance market conditions.
In partnership with External Risk Management Professionals, we continually identify / evaluate opportunities and threats which arise and implement processes and procedures to address them.