1. © Lloyd’s 1 © Lloyd’s 1 Update on Underwriting US risks Tom Bolt - Director, Performance Management 25 th September 2014

2. © Lloyd’s 2 2 Agenda  Market results  North America business  Delegated Authority strategy  Key issues for the market

3. © Lloyd’s 3 3 Results at a glance 3 Source: Lloyd’s pro forma financial statements, Jun 2014 1 Profit before tax 2 Actual in first six months. FY 2013: 1.6% 3 RoC calculated on an annualised basis 30 June 201430 June 2013 Profit 1 £1.67bn£1.38bn Gross premiums£14.86bn£15.50bn Combined ratio88.2%86.9% Investment return 2 1.3%0.5% Return on capital 3 16.5%14.0%

4. © Lloyd’s 4 LLOYD’S - 2013 Global premium Source: Market Intelligence based on Lloyd’s Annual Reports: http://www.lloyds.com/Lloyds/Investor-Relations) Europe (including UK) 33% Other Americas 8% Central Asia & Asia Pacific 12% Rest of the World 4% US (including Canada) 43% US & Canada 41% 2012 44% 2011 43% 2010 45% 2009 Other Americas 8% 2012 8% 2011 7% 2010 6% 2009 UK + Europe 15% + 18% = 33% 2012 16% + 18% = 34% 2011 16% + 20% = 36% 2010 16% + 20% = 36% 2009 Central Asia & Asia Pacific 13% 2012 12% 2011 10% 2010 9 % 2009

5. © Lloyd’s 5 North America figures in 2013 ► Lloyd’s total Gross net premium (GNP): £20.22Bn ($33.76Bn) ► Lloyd’s total US GNP: £8.14Bn ($13.6Bn) ► Lloyd’s total MGA GNP: £6.22Bn ($10.4Bn) ► Total Lloyd’s US MGA GNP: £2.12Bn ($3.54bn) ► Total number of Lloyd’s Coverholders: 3,912 ► Lloyd’s US Coverholders: 1,025 ► Total numbers of Lloyd’s binders: 8,127 ► Lloyd’s US binders: 2,853 (35% )

6. © Lloyd’s 6 49% 62% 55% 84% 64% 25% 52% 71% 37% 39% 547 572 617 732 777 805 1,072 1,440 4,832 7,099 Source: Market Intelligence based on: SNL Financials, (June 2014) and U.S Reporting System (June 2014)  Berkshire Hathaway continue to expand their presence in the E&S market, which they entered in May 2013 Premiums in US$ m and apply to Lloyd’s and domestic US companies only 13% -4% 15% 5% 4% -24% 10% 36% -3% 15% 2013 Loss Ratio % change from 2012 Please Note: Loss ratios are on a calendar year basis for 2013 THE MARKET – 2013 E&S Top 10

7. © Lloyd’s 7 Source: Market Intelligence based on SNL financial and Lloyd’s US reporting system (May 2014) Please Note: These figures do not include Reinsurance premiums Gross Signed Premiums as registered by the US reporting system in 2013 LLOYD’S - Top 10 E&S states Property Energy Liability Prop + Liab 2013 Lloyd’s Market Share of E&S Premium by State 39%23%28%21%32%25%29% 17% 46%

8. © Lloyd’s 8 Source: Market Intelligence based on: Lloyd’s US reporting system, RAA Reinsurance Underwriting report, SNL Financial, (June 2014) USLLOYD’S LicencedReinsuranceExcess & Surplus lines (E&S) Note – 1) The figures above for the market include only US based entities plus Lloyd’s figures 2) The above analysis does not include exempt business US$ 499bn 2012 vs 2013 +5% US$ 47.3bn 2012 vs 2013 -2% US$ 34.3bn 2012 vs 2013 +8% US$ 212m 2012 vs 2013 +5% US$ 5.2bn 2012 vs 2013 +6% US$ 7.1bn 2012 vs 2013 +13% THE MARKET - 2013 Not shown: $1.1 billion Exempt business (interstate railroads, marine builder’s risk, vessels, etc.)

9. © Lloyd’s 9 LLOYD’S - 2013 US profile Source: Market Intelligence based on Lloyd’s US reporting system (May 2014) Total US$ 13.6bn

10. © Lloyd’s 10 Source: Market Intelligence based on Lloyd’s US reporting system (May 2014) LLOYD’S – US premium distribution

11. © Lloyd’s 11 LLOYD’S - Premium trends by segment

12. © Lloyd’s 12 LLOYD’S – Coverholders in the US  Total premium written by Lloyd’s coverholders (MGA’s) in 2013 was US$ 2.9bn  Joint outreach to this critical distribution force by London and Lloyd‘s America remains a priority in 2014. Activities include participation in AAMGA and NAPSLO conferences and support of their member education efforts (AAMGA University, NAPLSO E&S School) 20 (MD) 11 (RI) 4 (DC) 2 (DE) 25 (CT) 26 (MA) 64 (NJ) Source: Market Intelligence based on Lloyd’s Delegated Authority Team and country manager (May 2014) Total Coverholders = 1025 (May 2014)

13. © Lloyd’s 13 © Lloyd’s 13 Class of business % of MGA premium GlobalUS A&H£0.59Bn10%£0.09Bn4% Aviation£0.08Bn1%-0% Casualty£1.70Bn27%£0.56Bn26% Casualty Treaty£0.02Bn0%- Energy£0.13Bn2%£0.04Bn2% Marine£0.65Bn10%£0.05Bn3% Overseas Motor£0.23Bn4%£0.08Bn4% Property (D&F)£2.37Bn38%£1.30Bn61% Property Treaty£0.07Bn1%0.01Bn0% UK Motor£0.38Bn6%-0% Total£6.22Bn100%2.12Bn100%

14. © Lloyd’s 14 By class of business (Licenced, E&S, Exempt and Reinsurance) Property Treaty Property (D&F) Overseas Motor Marine Energy Casualty Treaty Casualty Aviation Accident & Health Gross Signed Premiums in US$ m Source: Market Intelligence based on Lloyd’s US reporting system (May 2014)  Total Written Premium grew by 11% (US$ 1.4bn) in 2013 LLOYD’S – All lines premium trends

15. © Lloyd’s 15 © Lloyd’s 15 Planned acquisition cost remained reasonably constant by method of placement…. Source: SBFs 164 2008 – 2014 approved plans

16. © Lloyd’s 16 © Lloyd’s 16 …..however change in business profile causes overall planned acquisition cost to increase Source: SBFs 164 2008 – 2014 approved plans

17. © Lloyd’s 17 © Lloyd’s 17 Delegated Underwriting strategy highlights ► Audit coordination ► Compliance coordination ► Straight through processing

18. © Lloyd’s 18 © Lloyd’s 18 Key issues for the market ► Capital ► Investment Income ► Underlying Economy ► Broker concentration ► Benign Nat Cat ► Frequency and severity – Casualty ► Portfolio versus Subscription approach ► Regulatory pressure – Localisation – Solvency II – Conduct Standards

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