1. Texas Workers’ Compensation Insurance Market Presentation for the Workers’ Compensation 2012 Biennial Rate Hearing Texas Department of Insurance Property and Casualty Actuarial Office December, 2012

2. 2 Market and Profitability

3. 3 Texas Workers' Compensation Direct Written Premium in Billions Source: TDI Compilation of Texas Statutory Page 14 of the NAIC Annual Statements prepared by the Texas Department of Insurance.

4. 4 Texas Workers' Compensation Change in Direct Written Premium from Prior Year Source: TDI Compilation of Texas Statutory Page 14 of the NAIC Annual Statements prepared by the Texas Department of Insurance.

5. 5 Texas Workers' Compensation Projected Ultimate Calendar/Accident Year Loss and Combined Ratios Source: Texas Workers’ Compensation Financial Data Call, Texas Compilation of Statutory Page 14, Texas Compilation of the Insurance Expense Exhibit.

6. 6 Rates and Premiums

7. 7 Texas Workers' Compensation Summary of Companies Indications Filed in August 2012 Based on Experience Through 12/31/2011 Source: Company rate filings received by the Texas Department of Insurance in response to Commissioner's Bulletin B-0015-12.

8. 8 Texas Workers' Compensation Average Premium per $100 of Payroll Source: Texas Workers’ Compensation Financial Data Call, and the Department's 2011 Classification Relativity Study.

9. 9 Texas Workers' Compensation Average Premium, Loss, and Expense per $100 Payroll Source: NCCI Financial Data Call, NCCI Financial Data Package, TX Compilation of Statutory Page 14, TX Compilation of IEE.

10. 10 Texas Workers' Compensation Comparison of Relative Change in Average Premiums, Schedule Rating Factors and Rate Levels Source: Texas Workers’ Compensation Financial Data Call, and insurance company rate filings.

11. 11 Certified Healthcare Networks

12. 12 Texas Workers' Compensation Undeveloped Incurred Loss Ratios for Network and Non-Network Experience Source: Texas Department of Insurance Workers’ Compensation Network Data Call.

13. 13 Summary