Pierre Laurin

Reinsurance Buying Process Very centralized approach Subject to overall goals and direction Very formalized process Get our authorities from Group Reinsurance Committee, then from ZNA’s Reinsurance Charter, then to ZNA’s Reinsurance Sub-committee Security Committee Business Units do not have the authority to purchase reinsurance treaties Very strict approved list of reinsurers

Structure of team Two major teams: Marketing team responsible to market management, internal and external Underwriting team responsible for reviewing, underwriting, and approving purchase of treaties

Marketing team Client relationship – Internal Clients External Client General discussions on needs and objectives of the BUs Data gathering Creation of submission, narrative Market the transaction and placement of treaty External Client Market management Broker selection, when needed Contact with reinsurers

Underwriting Team Responsible to underwrite and approve treaties Help design treaty structure, with regards to goals and objectives Help Marketing team to put best presentation forward Review submission from a reinsurer’s perspective Underwrite program Participate in claims and underwriting audits Benchmark pricing from the actuarial team Set retention, inclusive of co-participation Help marketing in setting firm order terms and conditions Design contract according to standard clauses

Placement philosophy Prefer Excess of Loss Typically, high retentions with co-participation in upper layers Co-participation is preferred to eliminating layers altogether Keep markets involved Allows for market pricing More flexibility in placement Prefer large treaties with economy of scale with panel of reinsurers Reinsurers prefer smaller treaties with targeted portfolios, small number of reinsurers preferred Need to reconcile the two opposite needs.

Placement Philosophy Contracts Two sections of contracts Signed within 90 days Initial contract with submission Final contract with firm order terms Two sections of contracts Business terms Standard clauses

Placement Process Total 9 month process 180 days -> review of goals and objectives 150 to 120 days -> data collection, loss experience and BU underwriting reviews 90 days -> account manager review of data, narratives, start of building of submission, contact with markets on goals and objectives, initial wording 60 days -> reinsurance underwriting reviews, data analysis and pricing benchmarking, discussions with markets 45 days -> submission out to market

Placement Process Total 9 month process (cont’d) 30 days -> Negotiations with markets, finalization of benchmarking, contract wording, final review of markets against approved list 15 days -> firm order terms with final contracts, receive authorization, sign lines 0 -> transaction completed +7 days -> internal notification, accounting systems feed + 15 days -> issuance of I&Ls, premium allocation between units +30 to 90 days -> contracts signed, close final issues, take remedial action on non-performing reinsurers

Summary Very formalized process Very technical with involvement of underwriters, actuaries, marketing, BUs management Successful in achieving our goals Process never stops