The Energy Insurance Marketplace. A North American perspective.

The Energy Insurance Marketplace. A North American Perspective.

Significant Oil Company Mergers Pre-Merger BP Arco Amoco Union Texas Petroleum Exxon Mobil Total Fina Elf Aquitane Post-Merger BP Amoco Exxon Mobil Total Fina Elf

Significant Oil Company Mergers (cont.d) Pre-Merger Saga Statoil Repsol UPF Amerada Hess Triton Conoco Phillip Post-Merger Statoil Repsol Amerada Hess ConocoPhillips

Significant Oil Company Mergers (cont.d) Pre-Merger Chevron Texaco Kerr McGee ORYX Burlington Resources Canadian Hunter Pan Canadian Petroleum Alberta Energy Corp. Post-Merger Chevron Texaco Kerr McGee Burlington Resources Encana

Significant Oil Company Mergers (cont.d) Pre-Merger Anadarko Union Pacific Resources El Paso Coastal Shell Enterprise Dominion Energy Louis Dreyfus Natural Gas Post-Merger Anadarko El Paso Shell Dominion Energy

Significant Oil Company Mergers (cont.d) Pre-Merger Ocean Energy Pennzoil Devon Andex Mitchell Energy Santa Fe Snyder Post-Merger Devon

Offshore Energy Physical Damage: Loss Ratio Development * * * % loss Ratio NB:Loss ratio is expresses before underwriting expenses *9 months as of October 2002 Source: Lloyd’s *

Energy Control of Well: loss ratio development * * * % loss Ratio NB:Loss ratio is expresses before underwriting expenses *9 months as of October 2002 Source: Lloyd’s * *

The Energy Insurance Marketplace. A North American Perspective.

J. Peter Connors President and CEO Zurich Global Energy

$2.3bn Offshore Property Capacity 2002

$2.49bn Offshore Property Capacity 2003

$1.25bn Offshore Property Capacity in Use 2003

Number of Offshore Energy Insurers Worldwide

Market Trends - Capacity/Rate

billions 1.5bn 1.0bn 0.75bn 0.80bn Offshore Global Premium Levels 1.2bn '00'01 1.3bn 1.2bn 0.80bn 0.81bn '02 1.5bn

Aggregate Losses per annum versus premium Losses xs $1m 1, ,119 1,670 1,179 1,235 1, '00'01 millions 1142 '02 Premium

Offshore Construction Claims Excess of US$1M $435 $122 $248 $263 $287 $279 $668 $479 $457 $275 $0 $100 $200 $300 $400 $500 $600 $700 Millions Amount $435$122$248$263$287$279$668$479$457$268 No of Incidents Total:US$ 3,738,000,000 Average:$6,871, $ $247

$0 $100 $200 $300 $400 $500 $600 $ Millions $435 $122 $248 $263 $287 $279 $668 $479 $457 $275 $ Offshore Construction Claims Estimated Annual Premium Volume

–History will repeat itself if you do nothing to prevent it. –Customers do not want to do business with losers. –Capital is King…Too much is a waste of resources and too little will limit opportunities. –If the hard market stops short for P & C companies, it will end badly for some insurers. –If all you have to offer is pricing, your customers will soon be mine. “GOOD LUCK” CONCLUSIONS

Commonwealth Insurance Company HOUSTON MARINE INSURANCE SEMINAR State of the Energy Market - A “Domestic” View Monday, September 22, 2003 Presented by Robert R. Smith Sr. Vice President, Energy & International

Commonwealth Insurance Company HOUSTON MARINE INSURANCE SEMINAR State of the Energy Market - A “Domestic” View Monday, September 22, 2003 Presented by Robert R. Smith Sr. Vice President, Energy & International

Corporate Information Commonwealth Insurance Company was incorporated by an act of the Canadian Parliament on July 17, 1947 and has operated as a federally registered insurer since April, In April of this year, the ownership of Commonwealth and three sister, Canadian insurance companies was transferred to Northbridge Financial Corporation, a Canadian holding company. An Initial Public Offering of Northbridge shares was completed in June. At year-end 2002, the Northbridge Companies had Written Premiums of $1.78 billion. The group’s Shareholders’ Equity stands at $686 million.

Approx.. US $182 Million Capital and Surplus (CDN$255 Million); 89.45% Combined Ratio in 2002; 89.3% Combined Ratio in 1st half 2003; The company is eligible to write insurance on an excess and surplus lines basis in 44 U.S. states plus the District of Columbia. Corporate Information cont...

Commonwealth Capital & Surplus 255 mm 160 mm 104 mm 76 mm 40 mm 10 mm <1 mm TODAY 5 Years Ago 10 Years Ago 15 Years Ago 20 Years Ago 25 Years Ago 30 Years Ago

Composition E&I Offshore/Marine Book Premium Income: 50 million

Location

Commonwealth Insurance Company 595 Burrard Street, Suite 1500 Box 49115, Bentall Tower Three Vancouver, B.C., V7X 1G4 Telephone: (604) Facsimile: (604) Commonwealth Insurance Company 595 Burrard Street, Suite 1500 Box 49115, Bentall Tower Three Vancouver, B.C., V7X 1G4 Telephone: (604) Facsimile: (604)