MarketReView Newsletter

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1 MarketReView Newsletter Issue #7 July 2015 Welcome to the latest edition of Aon Benfield s monthly MarketReView newsletter. The team continues to update the reinsurer profiles on MarketReView as financials become available a list of all the reports published this month can be found on page 4. Reinsurers 2Q 2015 reporting season has begun; all earnings releases have been distributed and published on MarketReView. A summary can be found on page 2. Year-on-Year Comparison of 2Q Net Income 1,200 2Q 2014 Net Income 2Q 2015 Miss vs Consensus 2Q 2015 Beat vs Consensus 1, USD million Source: Company reports, SNL Market Commentary M&A Update It has become apparent that a major shift in the insurance landscape is underway. ACE s agreed acquisition of Chubb for $28.3bn, announced on July 1, represents the largest ever transaction in the P&C sector. The key details are summarized on MarketReView see Other Attachments on the company detail page for ACE / Chubb entities. On 27 July White Mountains announced it had signed a definitive agreement to sell Sirius to China Minsheng Investment Corp for just over $2.2bn. The following day, Zurich confirmed it was evaluating a potential offer for RSA. The showdown between AXIS and EXOR appears finally to have come to an end, with PartnerRe today announcing a definitive sale agreement with EXOR. Look out for further details in the August newsletter and on MarketReView. M&A Activity in 2015 Completion Date Acquirer Target Feb 2015 BTG Pactual Ariel Re Mar 2015 RenRe Platinum Apr 2015 Hamilton Sportscover May 2015 XL Catlin Jun 2015 Fairfax Brit July 2015 Endurance Montpelier 4Q 2015* Fosun Ironshore 4Q 2015* Tokio Marine HCC 1Q 2016* China Minsheng Sirius 1Q 2016* ACE Chubb 1Q 2016* EXOR PartnerRe *Subject to regulatory and / or shareholder approval MarketReView Newsletter July

2 Latest Market News The following press releases were posted to MarketReView during July 2015: M&A Activity Endurance Announces Completion of Acquisition of Montpelier Re 31 July: Endurance Specialty Holdings Ltd announced the completion of its acquisition of Montpelier Re Holdings Ltd, originally announced on 31 March Montpelier shares have now ceased trading. White Mountains to Sell Sirius to China Minsheng 27 July: White Mountains announced a definitive agreement to sell Sirius International Insurance Group Ltd to the Singaporebased investment arm of China Minsheng Investment Corp Ltd for approximately $2.2 billion in cash. The transaction includes all operations of Sirius, including Sirius International Insurance Corporation, Sirius America Insurance Company, Lloyd's Syndicate 1945 and Sirius Bermuda Insurance Company Ltd, and is expected to close within six months. Fairfax Completes Brit Acquisition 8 July: Fairfax announced that it completed its cash purchase of Brit plc; and subsequent sale of 29.9% of Brit shares to Ontario Municipal Employees Retirement System (OMERS). ACE to acquire Chubb for $28.3bn 1 July: ACE Limited announced a definitive agreement to acquire The Chubb Corporation for approximately $28.3 billion, representing a premium of approximately 30% to Chubb s closing value on 30 June. The proposed deal was unanimously approved by the boards of both companies and is expected to close during the first quarter of 2016, after which the combined company will trade under the Chubb brand. Earnings Results Key figures have been summarized in the table below. All are in USD millions unless otherwise stated. Company Earnings Release Date Gross Premiums Written GPW Growth % Combined Ratio Annualized Return on Equity Total Equity at 30 June 2015 Total Equity YTD Growth % ACE 21 July 11, % 88.0% 11.0% 29, % Allied World 22 July 1, % 94.0% 7.2% 3, % Arch 29 July 2, % 89.2% 12.4% 6, % Aspen 27 July 1, % 91.2% 10.3% 3, % Axis 28 July 2, % 95.3% 8.0% 5, % Beazley 24 July 1, % 86.0% 19.8% 1, % Everest 27 July 2, % 84.1% 15.1% 7, % Fairfax 30 July 4, % 91.6% 1.1% 11, % Hiscox (GBPm) 27 July 1, % 82.5% 18.0% 1, % Lancashire 29 July % 75.1% 14.0% 1, % Mapfre (EURm) 24 July 12, % 99.1% 10.1% 10, % PartnerRe 27 July 3, % 86.7% 4.4% 7, % RenaissanceRe 28 July 1, % 66.7% 13.3% 4, % SCOR (EURm) 29 July 6, % 90.9% 10.6% 6, % Swiss Re 30 July 17, % 89.4% 12.7% 33, % Validus 28 July 1, % 77.9% 14.2% 4, % White Mountains 27 July n.d. n.d. 88.9% 3.6% 4, % Source: SNL MarketReView Newsletter July

3 Ratings Companies covered on MarketReView that were affected by rating actions from and/or Standard & Poor s during July 2015 were as follows: Company Date Rating Action S&P ACE American Insurance Company ACE Bermuda International Insurance (Ireland) Ltd ACE European Group Ltd ACE INA Insurance ACE Property & Casualty Insurance Company ACE Tempest Life Reinsurance Ltd ACE Tempest Reinsurance Ltd ACE American Insurance Company ACE Bermuda International Insurance (Ireland) Ltd ACE European Group Ltd ACE Property & Casualty Insurance Company ACE Tempest Life Reinsurance Ltd ACE Tempest Reinsurance Ltd 1 July A++ / Under 1 July AA / Negative S&P ACE INA Insurance 1 July AA- / Negative S&P Ironshore Insurance Ltd Sirius America Insurance Company Sirius International Insurance Corporation Sirius America Insurance Company Sirius International Insurance Corporation 31 July 27 July A / Under A / Under 29 July A- / Negative S&P Renaissance Reinsurance U.S. Inc (fka Platinum) 13 July A+ / Stable S&P Pozavarovalnica Sava d.d. 29 July A- / Stable S&P Triglav Re, Reinsurance Co. Ltd. 29 July A- / Positive Ratings placed under review with Ratings affirmed; negative outlook Rating affirmed; negative outlook Rating placed under review with Ratings placed under review with Ratings affirmed; negative outlook Upgraded from A-, removed from CreditWatch Upgraded from BBB+ / Stable following upgrade of sovereign rating Rating affirmed; positive outlook Source: ; Standard & Poor s Latest Research The following Market Analysis research was added to MarketReView during July 2015: Reinsurers Reporting Dates A list of 2Q/ earnings release dates of the major reinsurers. Market Analysis M&A Update: PartnerRe / AXIS / EXOR A document containing links to all press releases relating to the ongoing discussions and activity between the three companies. MarketReView Newsletter July

4 Market Profiles The following profiles were updated by the Market Analysis team during July 2015 and are attached to the respective company/syndicate records: Companies - International (FY 2014): Allianz Global Corporate & Specialty Allianz Risk Transfer (Bermuda) Limited Allianz SE Allied World Assurance Co (Europe) Amlin AG Aspen Insurance UK Ltd Catlin Insurance Company (UK) Ltd CCR E+S Rück Faraday Re General Reinsurance AG Great Lakes Reinsurance (UK) PLC Hannover Re (Bermuda) Ltd. Inter-Hannover JRG Reinsurance Company, Ltd. Lancashire Insurance UK Lloyd's Insurance Company (China) Ltd Markel Bermuda Ltd Markel International Insurance Munich Reinsurance Company of Canada Nacional de Reaseguros New Re Partner Reinsurance Company Limited Partner Reinsurance Europe SE Polish Re QBE Insurance (Europe) Ltd QBE Re (Europe) Ltd SCOR UK Company Ltd Swiss Re Europe Swiss Re International SE Swiss Reinsurance Company Tokio Millennium Re (UK) Ltd TransRe London Trust Re Validus Reinsurance Ltd. WR Berkley Insurance (Europe) Ltd Companies - US (1Q 2015): ACE American Insurance Company ACE Property & Casualty Insurance Company Alterra Reinsurance USA Inc. Arch Reinsurance Company Dorinco Reinsurance Company Evanston Insurance Company Everest Reinsurance Company Markel Insurance Company National Union Fire Ins Co Odyssey Reinsurance Company SCOR Reinsurance Company Sirius American Insurance Company Transatlantic Reinsurance Company XL Reinsurance America Inc Lloyd s Syndicates (FY 2014): Syndicate 0318 (Beaufort) Syndicate 1176 (Chaucer) Syndicate 1206 (Sagicor) Syndicate 1218 (Newline) Syndicate 1882 (Chubb) Syndicate 1897 (Skuld) Syndicate 1910 (Ariel) Syndicate 1919 (Starr) Syndicate 2012 (Arch) Syndicate 2015 (SCOR) Syndicate 2232 (AWAC) Syndicate 2488 (ACE) Syndicate 2791 (MAP) Syndicate 3010 (Cathedral) Syndicate 3210 (Mitsui) Syndicate 4711 (Aspen) Groups (1Q 2015): Everest Re Group Ltd MarketReView Newsletter July

5 Stock Movements Share Price Movements 1 July July % 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% Source: Bloomberg Next month group profiles MarketReView August version release Contact Information Aon Benfield clients can access MarketReView from any web-enabled device 24/7 via For queries and subscription enquiries, please contact marketanalysis@aonbenfield.com, or: Mike Van Slooten Head of Market Analysis (International) mike.vanslooten@aonbenfield.com Mike McClane Head of Market Analysis (Americas) michael.mcclane@aonbenfield.com About Aon Benfield Aon Benfield, a division of Aon plc, is the world s leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com. Aon UK Limited trading as Aon Benfield (for itself and on behalf of each subsidiary company of Aon Plc) ( Aon Benfield ) reserves all rights to the content of this report. This document is intended as a courtesy to the recipient for general information and marketing purposes only and should not be construed as giving advice or opinions of any kind (including but not limited to insurance, tax, regulatory or legal advice). The contents of this document are based on publicly available information and/or third party sources in respect of which Aon Benfield has no control and which have not necessarily been verified. The content of this document is made available without warranty of any kind and without any other assurance whatsoever as to its completeness or accuracy. Aon Benfield disclaims any legal or other liability to any person or organization or any other recipient of this document (together a "Recipient") for loss or damage caused by or resulting from any reliance placed on this document or its contents by such Recipient. MarketReView Newsletter July