1 Casualty Actuarial Society May 17, 2005 MMC Capital

2 Source: Insurance Information Institute, Fortune Property/Casualty Industry’s ROE is Lower than All Industries’ ROE

3 Asset Management Investment Banks Credit Cards Brokerages Commercial Banks Source: McKinsey & Company Property/Casualty Industry’s ROE is Lower than Other Financial Services Industries’ ROEs P&C Life

4 Insurance Industry can be an Attractive Sector for Investments Large, growing and profitable Investment opportunities created by market dislocations, restructuring and outsourcing trends Very complex, diversified and highly regulated Few private equity investors focus on this sector Wide disparity between best and worst performers

5 Top Performing Quintile Second Quintile Third Quintile Fourth Quintile Fifth Quintile Source: McKinsey & Company Performance of Property/Casualty Companies Varies Widely

6 The Insurance Industry Is Made Up Of Winners And Losers CategoriesWinnersLosers Commercial LinesAIGReliance/Kemper ReinsuranceRenaissance ReTrenwick/Gerling Re Personal LinesProgressiveAmerican Horizon Start-UpsAXISESG Re ServicesSedgwick CMSMRM

7 Components of Surplus Growth Averages by Surplus Growth Quintile Average Annual Growth Rate Top Quintile Second Quintile Third Quintile Fourth Quintile Bottom Quintile Surplus Growth from Operations17.1%8.5%5.5%2.0%-8.9% Net Income15.3%7.6%4.8%2.7%-7.5% Underwriting Contribution5.8%-1.6%-5.1%-8.5%-23.0% Investment Contribution14.0%12.6%11.9%13.4%15.6% Other Income Contribution1.9%0.7%1.1%0.3%0.8% Dividends to policyholders-0.6%-0.8%-1.0%-1.3%-0.9% Income Taxes-5.7%-3.3%-2.1%-1.3%0.1% Non-income Sources of Generated Surplus1.7%0.9%0.7%-0.7%-1.5% Underwriting Performance is the Key to Book Value Growth Source: Dowling & Partners

8 Source: A.M. Best. The U.S. P/C Insurance Industry Is Large U.S. P/C premiums were $423bn in 2004 (3.6% of U.S. GDP)

9 Source: Bureau of Economic Analysis, A.M. Best and Insurance Information Institute. U.S. Property/Casualty Premiums Have Grown Faster Than The U.S. Economy U.S. P/C Insurance Premiums were $423bn in 2004 U.S. Property & Casualty NPW CAGR:6.6% U.S. Nominal GDP CAGR:5.6%

10 Source: Insurance Services Office and Insurance Information Institute. Net income includes realized capital gains. Average ROE is represents average ROE for 1986 – 2004 period. P/C Industry Has Earned $337 Billion In Net Income Since 1985 U.S. P/C net income Average ROE = 8.6%

11 P/C Insurance Underwriting Fundamentals Are Not Correlated With Equity Markets Source: Goldman Sachs Research and Bloomberg. Change in commercial lines rates versus change in S&P 500

12 The Private Equity Industry Is Under-Invested In The Insurance Industry (1)Source: A.M. Best and Bureau of Economic Analysis 2002 Data. (2)Source: Sigma Research 2001 Data. (3)Source: PricewaterhouseCoopers/Venture Economics/NVCA MoneyTree Survey and MMC Capital.Excludes venture capital investments. (4)Excludes AXIS, Allied World, Endurance, Montpelier Re, Arch and Olympus. ($ in billions) Contribution of Insurance Premiums to GDP U.S. (1) Global (2) Insurance Premiums$ 890$ 2,408 GDP$10,446$30,757 % of GDP 8.5% 7.8% Private Equity Capital Invested (’93 – ’02) (3) Total Ex. 9/11 (4) Insurance Investments$ 8.9$ 5.6 Total Investments$ 174.5$ % of Total 5.1% 3.3%

13 Periodic Market Dislocations 1985Liability CrisisACE, XL Property Catastrophe ReinsuranceRen Re, Partner Re, etc /11AXIS, Endurance, etc.

14 Post 9/11 Start-ups have Generated Attractive Investment Returns Return to Initial InvestorsReturn to IPO Investors Arch26%16% AXIS25%16% Aspen26%14% Endurance22%27% Montpelier32%34% Platinum---13%

15 Consolidation/Entering New BusinessesDivestitures/Exiting Businesses Outsourcing Market Dislocations  Citigroup – Travelers  Zurich – Converium  St. Paul – Platinum  CNA – personal lines  Multi-lines: –Aetna – P/C, Reinsurance –Cigna – P/C –Lincoln Financial – P/C  Liability crisis – ACE, XL  Property Catastrophe reinsurance – Mid Ocean, Partner Re, Renaissance Re, IPC Holdings, LaSalle Re  9/11 – AXIS, Arch, Allied World, Endurance, Montpelier Re  Claims Administration – CMS, Gallager Basset, Crawford, Cambridge  Warranty Servicing – Signal, Asurion, Lock/line, NEW  Software & Information Services – AMS, Applied, A.M. Best, ISO  Run-off Management – Castlewood, East Gate, Resolution Group (Fairfax)  Investment management – Wellington, BlackRock, New England, PIMCO  HR / Benefits – Hewitt, Towers Perrin  Travelers – Aetna P/C  AIG – Sun America, American General  Chubb – Executive Risk, Hiscox  St. Paul – USF&G, MMI  Berkshire Hathaway – General Re  ACE – Tempest Re, CIGNA P/C  XL – Mid Ocean, NAC Re  Fairfax Financial – Crum & Forster, Seneca, Odyssey Re P/C Industry Undergoes Constant Business Realignments

16 Number of Ownership Charges Year of Change in Ownership Ownership Changes – Top 50 Property/Casualty Groups in 1985

17 MMC Capital Investment Considerations Market Size Supply / demand imbalance Rate adequacy Historical profitability Management track record Key success factors Distribution Capital/rating Exit

18 Trident Has Invested Successfully In A Variety of Underwriting Situations Valuations as of 3/31/2005