Bermuda Financial Services Conference

1. Bermuda Financial Services Conference Convergence in 2009 and Beyond Panel Discussion Kathleen Faries, Tokio Millennium Re Ltd. David Cash, Endurance Specialty Holdings Ltd. Jonathan Kim, MontpelierRe Holdings Ltd. The Harvard Club, New York City September 30, 2009

2. 30 Years of Bermuda Startups 1993-94 2001-04 1985-87 Class of 1993: Cat Ltd. Global Re IPC Re Mid-Ocean Re Partner Re Renaissance Re Tempest Re Class of 2001: Arch Aspen AXIS AWAC Endurance Montpelier Platinum Class of 2005: Ariel Flagstone Harbor Point Ironshore Lancashire = = = = = = = Cat Bonds Side Cars Class of 1985: ACE XL Change in Annual Real Net Written Premium Excess Casualty Property Catastrophe Multiline Diversified Convergence Note: Shaded areas denote hard market periods. Real NWP is adjusted for inflation. Source: A.M. Best, Insurance Information Institute.

3. The Impact of the Financial Crisis on Convergence Cat Bonds TRS Counterparty credit risk – there is risk! Transparency on underlying assets Top Ups LIBOR verses Treasury Side Cars Better returns elsewhere for investors Hedge Funds Redemptions/Liquidity/De-leveraging Cat Funds performed but multi-strats forced to liquidate Investments dry up due to wait-and-see approach Cedants see much of this capacity pull out

4. New Cat Bond Issuances 2009 / Collateral Management

5. Post KRW Capital Raising : – In the aftermath of Katrina, Rita and Wilma Bermuda companies raised capital in a number of forms: New Ventures [Private Equity] Common Equity Preferred Equity Senior Debt Side Cars [Hedge Funds] Rating Agencies subsequently allowed companies to use contingent capital structures [Contingent Equity Forwards] to further augment their capital structures. Key point is that the capital markets were very liquid and as a consequence many different forms of capital were used by companies. Post Wall Street Capital Raising : – Through the second half of 2008 and 2009 capital raising has been very limited and share “buy backs” almost non-existent. A limited number of catastrophe bonds and side cars were issued. Most companies have reduced their most capital intensive exposures [catastrophe] and looked to retained earnings to bolster their balance sheets Companies explored M&A as a capital source Key point is that emerges is that re/insurers are less dependent on third party capital than in 2006 and that companies will use catastrophe bonds and side cars only when they are cost effective. Capital Raising Then and Now 5

6. The Future – What Reinsurance Business Model Emerges ? Decision Framework • Line Size / Capacity • Cycle Management • Return on Equity Decision Framework Line Size / Capacity Cycle Management Return on Equity