1. Subprime Issues for D&O: Claims, Capacity and Pricing
CAS Spring Meeting
June 17, 2008
Copyright 2008, Advisen Ltd
Copyright 2008, Advisen Ltd.

2. (Range: $2.6 billion - $4.4 billion) Against $6.25 billion NEP (U.S.)
Subprime D&O Losses
How bad can it be?
Advisen forecast:
$3.6 billion
(Range: $2.6 billion - $4.4 billion)
Against $6.25 billion NEP (U.S.)
Copyright 2008, Advisen Ltd

3. Subprime D&O Losses Who has the exposure?
Financial Institution D&O Market Share
1. AIG
19.42%
6. ACE
4.72%
2. Lloyd's
16.82%
7. Hartford
2.72%
3. XL
11.42%
8. Arch
2.65%
4. Chubb
9.66%
9. AXIS
2.06%
5. Travelers
5.93%
10. CNA
1.96%
Source: Advisen
Based on $420 million of financial institution D&O premium written in 2006 – 2007.
Copyright 2008, Advisen Ltd

4. Impact of Subprime Losses on D&O Pricing
Most likely will not be enough to turn D&O cycle overall
Pricing impact localized
Impact will be short-lived
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5. Impact of Subprime Losses on D&O Pricing
Advisen survey of 110 financial sector risk managers
90% renewed at expiring or lower past 12 months
14% with coverage enhancements
However, trends indicate more increases in coming months
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6. Impact of Subprime Losses on D&O Pricing
Changes in Renewal Premiums
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7. Impact of Subprime Losses on D&O Pricing
% Programs Renewing with Increases
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8. Impact of Subprime Losses on D&O Pricing
SCAS Filed
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9. Impact of Subprime Losses on D&O Pricing
ADVx™ D&O v. Composite
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10. Impact of Subprime Losses on D&O Pricing
Surplus as % GDP
Source: AM Best, USBLS
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11. Impact of Subprime Losses on D&O Pricing
Policyholders’ Surplus as % GDP v. ADVx™ D&O
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Copyright 2008, Advisen Ltd