THE PC REINSURANCE VALUE CHAIN IS IN PLAY

THE P/C (RE)INSURANCE VALUE CHAIN IS “IN PLAY” June 10 th 2015 Young Professionals' Global Forum Vincent J. Dowling, Jr.

THE PENSION FUND “MARTINI” Pension Fund Capital Under Management $30 trillion Global insurance sector capital (including life) $2. 5 - $3 trillion Global property cat limit $341 billion Global retro capital <$30 billion Source: Guy Carpenter The P/C (Re)Insurance Value Chain Is “In Play” | 2

“ALTERNATIVE CAPACITY” GAINS MARKET SHARE ALTERNATIVE CAPACITY AS A % OF GLOBAL PROPERTY CAT REINS. LIMIT 20% Guy Carpenter estimates nontraditional capacity at ~18% of total world wide cat limits. Ultimately, GC predicts alternative capacity could reach $115 -150 by 2018. Doubles In 5 Years 18% 16% 14% 12% 10% 8% 6% 4% 8% 9% 11% 12% 14% 15% 18% 2014 GLOBAL P/CAT REINSURANCE CAPACITY BY SOURCE TOTAL = $60 B Cat Bonds; $23 2% 0% Side-cars; $7 2008 2009 2010 2011 2012 2013 2014 As of Year-End Industry Loss Warranties; $3 Collateralized Re, $27 Source: Guy Carpenter; *As Of Jan-2015 The P/C (Re)Insurance Value Chain Is “In Play” | 3

PROPERTY CAT PREMIUMS = ~ 10% OF GLOBAL NON-LIFE REINSURANCE $144. 9 B $12. 3 B ~$25 B+ ~$4 B+ $21. 5 B $0. 8 B $84. 4 B $3. 5 B $47. 1 B $2. 0 B Florida Remains The Global Cat Market “Peak Zone” $28. 3 B $1. 9 B 2015 Global Cat Market: $341 B Limit; $21 B Premium Source: Guy Carpenter estimates (as of 3/1/15) The P/C (Re)Insurance Value Chain Is “In Play” | 4

JUNE 1 ST 2012: PRICE TAKER BECOMES PRICE MAKER = 3 RENEWALS IN FLORIDA Florida Property Cat Pricing Florida ROL Index (Base = June 2011) 120 100 103 Impact of FL P/Cat Rate On "Expected" C. Ratio Expected Rate Increases Muted 87 80 90% 82% 85% 70 80% 65 60 40 95% 70% 60% 59% 65% 67% 60% 20 Assumes Rates Off 5 -10% At Jun-15 55% 0 50% June 2011 June 2012 June 2013 June 2014 June 2015 Note: “Expected” c. ratio assumes a loss and G&A expenses are held constant. 2011 base c. ratio considers a 45% loss ratio, 10% commission ratio and 5% G&A. ratio. Source: D&P Analysis The P/C (Re)Insurance Value Chain Is “In Play” | 5

THE P/C (RE)INSURANCE VALUE CHAIN IS IN PLAY The (Re)Insurance Value Chain Moving Further From The “Customer” = More Pressure On Returns The P/C (Re)Insurance Value Chain Is “In Play” | 6

HEDGE FUND REINSURANCE MODELS “Hedge Fund 1. 0” $1. 2 B (David Einhorn) “Hedge Fund 2. 0” Capital ($, B) $0. 5 B (John Paulson) $1. 5 B (Dan Loeb) $1. 1 B (Highbridge Capital) $1. 2 B “Content” Is King Model (Two Sigma) $0. 8 B* (Pine River Capital) $1. 0 B Potential New Sponsors ? (Golub Capital) Pine River Re (Black. Rock) $0. 8 B* Where Will The Premium Come From ? * Press reports suggested target capital of $750 M for Golub Capital and Pine River Re The P/C (Re)Insurance Value Chain Is “In Play” | 7