Directors & Officers Liability Survey 2000 Results and Historical Trends Casualty Actuaries of Greater New York November 28, 2001 Lisa Gattel Chanzit, FCAS, MAAA, ARM

2 Directors & Officers Liability Survey Background Formerly conducted by Watson Wyatt. Conducted by Tillinghast as of 1998 Survey. Self-selecting nonprobability sample of claim and insurance purchasing patterns. Responses submitted primarily in second half of calendar year. Not every participant answers every question, even though there is substantial follow-up. Over 2,050 usable responses in 2000 Survey, including Canadian responses.

3 Directors & Officers Liability Survey Changes for 2000 Other nonprofits reintroduced, after Health Services in 1998 and Education in Biotechnology & Pharmaceuticals industry group. More high technology firms (again). More small firms (again). More detailed analysis of coverage features and claims experience.

4 Directors & Officers Liability Survey Participation by Business Class

5 Directors & Officers Liability Survey Claim Topics Claim Frequency Claimants Claim Severity Indemnification Insurance Coverage Disclosure Claims and other Shareholder Claims

6 Directors & Officers Liability Survey Claim Frequency by Business Class

7 Directors & Officers Liability Survey Claim Frequency by Asset Size - For-Profit

8 Directors & Officers Liability Survey Claim Frequency by Ownership

9 Directors & Officers Liability Survey Claim Frequency by Merger/Acq./Div. - For-Profit

10 Directors & Officers Liability Survey Claim Frequency by After-Tax Losses - For-Profit

11 Directors & Officers Liability Survey Claimant Distribution - For-Profit * Adjusted

12 Directors & Officers Liability Survey Claimant Distribution Source: 2000 D&O Liability Survey

13 Directors & Officers Liability Survey Average Severity for Closed Claims - For-Profit Note: Excludes claims closed w/o payment.

14 Directors & Officers Liability Survey Average Indemnity Severity by Business Class Note: Excludes claims closed w/o payment.

15 Directors & Officers Liability Survey Average Defense Severity by Business Class Note: Excludes claims closed w/o payment.

16 Directors & Officers Liability Survey Average Indemnity Severity by Asset Size Note: For-profit only. Excludes claims closed w/o payment.

17 Directors & Officers Liability Survey Average Defense Severity by Asset Size Note: For-profit only. Excludes claims closed w/o payment.

18 Directors & Officers Liability Survey Average Indemnity Severity by Claimant Note: Excludes claims closed w/o payment

19 Directors & Officers Liability Survey Average Defense Severity by Claimant Note: Excludes claims closed w/o payment

20 Directors & Officers Liability Survey Indemnification by Firm for D&O Claims Source: 2000 D&O Liability Survey Note: Excludes claims where the entity is the only defendant

21 Directors & Officers Liability Survey Insurance Coverage of D&O Claims - Closed Note: Excludes uncertain responses

22 Directors & Officers Liability Survey Disclosure Claim Incidence

23 Directors & Officers Liability Survey Shareholder Claim “Win” Ratios

24 Directors & Officers Liability Survey Prevalence by Business Class

25 Directors & Officers Liability Survey Prevalence by Asset Size - For-Profit

26 Directors & Officers Liability Survey Prevalence by Full-Time Employees

27 Directors & Officers Liability Survey Prevalence by Ownership - For-Profit

28 Directors & Officers Liability Survey Entity Coverage Prevalence by Asset Size

29 Directors & Officers Liability Survey Main Reason for Not Purchasing D&O Insurance

30 Directors & Officers Liability Survey D&O Premium Index - U.S., For-Profit Only

31 Directors & Officers Liability Survey Full D&O Limits Capacity (Millions)

32 Directors & Officers Liability Survey Average Total Limit by Asset Size - For-Profit

33 Directors & Officers Liability Survey Average Deductible by Asset Size - For-Profit