Reinsurance Market Overview June 2003. Non-life and Life Premiums by Country $U.S. Billions (2001) North America485.0464.4949.439.4% Western Europe284.1455.6739.730.7%

Reinsurance Market

Overview

Reinsurance Market

Overview

June 2003

Non-life and Life Premiums by Country$U.S. Billions (2001)Non-life and Life Premiums by Country$U.S. Billions (2001)

North America 485.0 464.4 949.4 39.4%

Western Europe 284.1 455.6 739.7 30.7%

Japan 89.1 356.7 445.8 18.5%

Australia & Nz 14.4 21.2 35.6 1.5%

Subtotal 872.6 1,297.9 2,170.5 90.1%

South & East Asia 41.7 96.8 138.5 5.8%

Latin America & Caribbean 27.6 13.6 41.2 1.7%

Central & Eastern Europe 13.9 8.8 22.7 .9%

Middle East/Central Asia 7.0 3.9 10.9 .5%

Africa 6.3 18.2 24.5 1.0%

Subtotal 96.5 141.3 237.8 9.9%

World 969.1 1,439.2 2,408.3 100%

Non-LifePrem

LifePrem

TotalPrem

MktShareDeveloped Countries

Emerging Countries

Source: Sigma

Worldwide P & C Reinsurance Demand Worldwide P & C Reinsurance Demand

Other11%

Japan12%

Western Europe

34%

North America

43%

Source: A.M. Best

$107 Billion

Market Share of Global Reinsurance IndustryMarket Share of Global Reinsurance Industry

France4%

Germany29%

Japan 5%

U.K.9%

Switzerland9%

Bermuda8%

U.S.27%

Other6%

Ireland3%

Source: Standard & Poor’s

Top 10 Largest Global ReinsurersRanked by 2001 Net Premiums Written Top 10 Largest Global ReinsurersRanked by 2001 Net Premiums Written

Munich Re Group

Swiss Re Group

Berkshire Hathaway

Employers Re Group

Lloyd’s of London

Hannover Ruck Group

$16,610,700

5,746,100

8.7

6.6

16.3

-11.1

45.4

7.1

30.0

-16.3

74.7

25.9

Company 2001%

Change

Source: Standard & Poor’s (Oct 2002) (000’s)

2000

$15,276,600

14,478,800

8,591,000

7,924,000

3,952,900

4,117,000

2,809,800

3,726,500

1,424,700

4,994,300

SCOR Re Group

Axa Re Group

Gerling Global Re Group

Allianz Re Group

15,429,100

9,991,000

7,047,000

4,408,300

3,651,300

2,489,100

6,287,200

3,118,500

Top 10 Largest Global ReinsurersShareholders’ Funds Top 10 Largest Global ReinsurersShareholders’ Funds

Munich Re Group

Swiss Re Group

Berkshire Hathaway

Employers Re Group

Lloyd’s of London

Hannover Ruck Group

$14,920,200

6,140,500

-23.2

-4.5

-25.35.6

-25.7

-53.2

-3.7

-2.9

-19.7

0.0

Company 2001%

Change

Source: Standard & Poor’s (Oct 2002) (000’s)

2000

$19,437,000

14,139,400

39,580,000

6,025,000

8,268,400

1,452,300

1,212,800

53,414,300

1,628,200

1,481,500

SCOR Re Group

Axa Re Group

Gerling Global Re Group

Allianz Re Group

13,505,900

29,549,000

6,362,000

680,100

1,167,500

1,307,800

1,481,100

51,886,300

Top 10 Largest Global ReinsurersCombined Ratio’s Top 10 Largest Global ReinsurersCombined Ratio’s

Munich Re Group 122.4% 135.1% 115.3%

Swiss Re Group 104.0 124.0 117.0

Berkshire Hathaway 100.0 138.0 110.7

Employers Re Group 163.6 139.3 115.8

Lloyd’s of London 98.6 140.0 N/A

Hannover Ruck Group 103.0 107.8 106.6

Company 2002 2001 2000

Source: Standard & Poor’s (Oct 2002)

SCOR Re Group 120.1 124.0 121.0

Axa Re Group 127.1 120.6

Gerling Global Re Group 131.5 112.7

Allianz Re Group 127.3 108.9

Combined RatioU.S. P & C vs. Reinsurance IndustryCombined RatioU.S. P & C vs. Reinsurance Industry

100

105

110

115

120

125

130

135

140

145

'80

'81

'82

'83

'84

'85

'86

'87

'88

'89

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

Per

cent

P&C Ind Re Ind

U.S. Reinsurance Composite-One Year Loss Development / NPEU.S. Reinsurance Composite-One Year Loss Development / NPE

-4-202468

1012141618202224262830

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02

Per

cen

t

Worldwide Property Catastrophe LossesWorldwide Property Catastrophe Losses

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02

USA Non-US

Source: Sigma

S&P Rating Migrations Among theTop 150 Reinsurers*

S&P Rating Migrations Among theTop 150 Reinsurers*

0

5

10

15

20

25

30

AA

A

AA

+

AA

AA

-

A+ A A-

BB

B+

BB

B

BB

B-

BB

+

BB

BB

-

B+ B-

CC

C

Rating as at Dec. 31, 2001 Rating as at Feb. 2003

* Ranked by net premiums written.

No. of reinsurers

AM Best Rating Distribution-2001Domestic Property/Casualty AM Best Rating Distribution-2001Domestic Property/Casualty

Personal Lines

47%

47

6

Reinsurers

Source: AM Best Co. data as of December 2001.

Commercial Lines

10%

53

23

A++, A+

A, A-

B++, B+

Rating Category

11%

44

27

10087Secure 82

013Vulnerable 18

100%

30

Mixed

100%

577

Negative

Total

Rating Outlook

Total Group Ratings

100%

433

Negative

Total P/CTotal P/C

12%12%

4949

2525

8686

1414

100%100%

10401040

NegativeNegative

AM Best Rating Distribution-2002Domestic Property/Casualty AM Best Rating Distribution-2002Domestic Property/Casualty

Personal Lines

30%

54

13

Reinsurers

Source: AM Best Co. data as of December 2002.

Commercial Lines

7%

57

23

A++, A+

A, A-

B++, B+

Rating Category

11%

47

23

Total P/CTotal P/C

9%9%

5353

2323

9787Secure 81 8585

313Vulnerable 19 1515

100%

30

Mixed

100%

551

Mixed

Total

Rating Outlook

Total Group Ratings

100%

417

Mixed

100%100%

998998

MixedMixed

2002 US Reinsurance Recoverables 2002 US Reinsurance Recoverables

Reinsurance Recoverables on: Paid Losses $18,205 M Unpaid Losses 89,303 M IBNR Losses 95,831 M Unearned Premiums 32,861 M Sub-total 236,200 M Funds Withheld -28,106 M Total Recoverable $208,591 M

Source: A.M. Best Co.

2002 US Reinsurance Recoverables 2002 US Reinsurance Recoverables

Reinsurance Recoverables $209 B

Admitted Assets $1,034 B Reins. Recov / Ad. assets 20%

Industry Surplus $287 B Reins. Recov / Surplus 72%

Source: A.M. Best Co.

Security AssessmentSecurity Assessment

Trend orientedcompared to peer norms

Quantitative FactorsQuantitative Factors

Profitability Liquidity Leverage Capital adequacy Ratings

Qualitative FactorsQualitative Factors

Management experience Spread of risk — catastrophic exposure Asset quality & diversity Adequacy of reinsurance program Exposure to uncollectible reinsurance Adequacy of loss reserves Capital structure

Profitability MeasuresOne & Five YearProfitability MeasuresOne & Five Year

Combined ratio Operating ratio Pre-tax income to NPE Investment yield Return on PHS Unassigned funds to assets Long term capital growth

Reinsurance Combined Ratios WorldwideReinsurance Combined Ratios Worldwide

80

90

100

110

120

130

140

1995 1996 1997 1998 1999 2000

BER FRA GER SWTZ UK US

US Reinsurance CompositeReturn on Equity (Surplus)US Reinsurance CompositeReturn on Equity (Surplus)

-17

-12

-7

-2

3

8

13

18

23

'83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02E

Per

cent

Fortune 500 Median U.S. P&C U.S. Reins

Liquidity Measures Liquidity Measures

Quick liquidity Current liquidity Overall liquidity Operating cash flow High risk assets to PHS

U.S. Reinsurance CompositeInvested Assets / LiabilitiesU.S. Reinsurance CompositeInvested Assets / Liabilities

20

40

60

80

100

120

140

160

180

200

220

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02

Per

cen

t

Quick Current Overall

U.S. Reinsurance CompositeNonaffiliated Invested AssetsU.S. Reinsurance CompositeNonaffiliated Invested Assets

60

70

80

90

100

110

120

130

140

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '01

Per

cent

Inv. Assets / Liab Inv. Assets / Total Assets

Leverage Measures Leverage Measures

Net premiums to surplus Liabilities to surplus Net leverage Reinsurance recoverables to surplus Gross leverage Capital Adequacy Ratio Financial leverage

U.S. Reinsurance Composite Leverage U.S. Reinsurance Composite Leverage

0

50

100

150

200

250

300

350

400

450

500

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02

Per

cent

Gross Lev Net Lev NPW

Source: AM Best

U.S. Reinsurance CompositeRBC Composite Weighted AverageU.S. Reinsurance CompositeRBC Composite Weighted Average

449.1472.8

436 424 427

364329

278245

0

100

200

300

400

500

600

'94 '95 '96 '97 '98 '99 '00 '01 '02

U.S. Reinsurance RBCComposite Companies - 2002U.S. Reinsurance RBCComposite Companies - 2002

02468

1012141618202224262830

Reinsurance Market

Overview

Reinsurance Market

Overview

June 2003