1. PCS, Cat Activity, Technology May 29, 2015 Joe Louwagie AVP Property Claim Services

2. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Mission Statement PCS is committed to serving our customers and supporting the global insurance industry through the identification and provision of reliable, accurate, objective, and timely catastrophe loss estimates. Core Values Service Integrity Objectivity Confidentiality Transparency Reliability Consistency Operating Principles We will achieve our mission by:  Exceeding service and quality expectations  Facilitating an ease of doing business  Consistently producing a high quality product  Innovating within a culture of continuous improvement  Providing value in corporate citizenship Who We Are

3. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.  U.S. catastrophe claim information since 1950  PCS formed at request of insurance industry  Loss development surveys started in 1998  Estimates based on retrospective claims review  PCS Canada since 2010  Continual improvement amid consistency w/past Aggregating Actual Claims Data for 63 Years PCS History Serving the insurance industry

4. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.  Homeowners and the public  Primary insurance carriers  Independent Claims Adjuster firms  NOAA and governmental economists  Industry quarterly and annual reports  Catastrophe modelers  Reinsurers and reinsurance brokers  Capital markets Providing a Service to Support the Insurance Mechanism PCS Data Users Broad benefit across industry and in various sectors

5. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. PCS Cat Activity 2014 Winter storms and thunderstorms 20142014 AverageAverage Thunderstorms Drive 2014 Activity ``  32 designated cats  $15.4B in insured loss  6 winter storms, 1 EQ  25 Thunderstorms  27 designated cats  $21B in insured loss  More peril diversity # ofCats# ofCats (In $B)

6. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat No.PeriodStatesPerilsStatusPersonalAutoCommercialTotal insured Loss 63 Feb 14 - 15 CT, DE, MA, MD, NH, NJ, NY, PA, RI, VA Freezing, Ice, Snow, Wind Open$327,230,000$4,240,000$134,730,000$466,200,300 64 Feb 16 - 17 GA, NC, SC, TN, VAFreezing, Ice, Snow, Wind Closed$47,960,000$3,718,000$18,670,000$70,348,000 65 Jan 26 - 28 CT, MA, ME, NH, NY, RIFreezing, Ice, Snow, Wind Closed$31,320,000$2,119,000$9,570,000$43,009,000 66 Feb 1 - 4 CT, IL, IN, MA, MI, NYFreezing, Ice, Snow, Wind Closed$78,680,000$1,607,000$20,630,000$100,917,000 67 Feb 7 - 11 CT, MA, NH, NY, RIFreezing, Ice, Snow, Wind Closed$187,850,000$1,969,000$37,603,000$227,422,000 68 Feb 16 - 22 CT, DC, DE, IL, KY, MA, MD, ME, MI, NC, NH, NJ, NY, OH, PA, RI, SC, TN, VA, VT Freezing, Ice, Snow, Wind Open$1,074,700,000$9,235,000$268,150,000$1,352,085,000 69 Mar 3 - 5 AR, KY, NY, PA, WVFlooding, Freezing, Ice, Snow, Wind Closed$96,600,000$1,656,000$20,850,000$119,106,000 70 Mar 25 - 26 AR, KS, MO, OKHail, Tornadoes, Wind Open$188,080,000$58,860,000$55,640,000$302,580,000 71 Mar 31 - Apr 1 AL, AR, GA, MS, OK, TN, TXFlooding, Hail, Wind Closed$92,650,000$39,254,000$3,757,000$135,661,000 1st Qtr. $2,125,070,000$122,658,000$569,600,000$2,817,328,000 72 Apr 2 - 3 KS, KY, MOFlooding, Hail, Tornadoes, Wind Closed$105,800,000$24,600,000$51,800,000$182,200,000 73 Apr 7 - 10 AR, IA, IL, IN, KS, KY, MI, MO, NC, OH, OK, PA, TN, TX, WI, WV Flooding, Hail, Tornadoes, Wind Open$529,590,000$142,510,000$107,850,000$779,950,000 74 Apr 16 - 17 KS, OK, TXFlooding, Hail, Tornadoes, Wind Closed$42,480,000$56,345,000$3,330,000$102,155,000 75 Apr 18 - 21 AL, AR, FL, GA, KS, LA, MS, NC, OK, PA, SC, TN, TX Flooding, Hail, Tornadoes, Wind Open$570,870,000$164,938,000$46,140,000$781,948,000 76 Apr 24 - 28 AL, FL, GA, KY, LA, MS,TXFlooding, Hail, Tornadoes, Wind Open$434,480,000$122,058,000$75,600,000$632,138,000 77 Apr 27 - 28 MDRiot; Civil Disorder OpenTBD 78 May 3 - 4 IA, KS, MN, NE, WIFlooding, Hail, Tornadoes, Wind OpenTBD 79 May 6 - 11 CO, IA, KS, NE, OK, TXFlooding, Hail, Tornadoes, Wind OpenTBD 2nd Qtr. $1,683,220,000$510,451,000$284,720,000$2,478,391,000 2015 Total $3,808,290,000$633,109,000$854,320,000$5,295,719,000 2015 PCS Cats Overview Driven by Winter Storms and Thunderstorms

7. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Challenging 2014 and 2015 CATS Winter storms  Heavy snow and/or low temps  Multiple fronts  Cumulative snow effect OverviewOverview PCS PCS  The date range challenge  Reviewing past PCS  Aligning to our role Winter storm dates & damages oftentimes don’t align

8. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat Planning and New Technology Property claim technology awareness When I was an adjuster in Sioux Falls, South Dakota  Camera  Tape measure  Notepad  Dictaphone  Calculator  Estimating worksheets When I managed a property claims region  Digital camera to upload from home  Tape measure  Scoping notes  Pre-mobile cell phone  Dictaphone  Calculator  Laptop 20 years ago 6 years ago

9. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Dimension roomsDiagram structures Technology presented in 2014 as “years away” has become a reality by 2015 Cat Planning and New Technology Property claim technology is changing the industry Mobile Device Thermal Imaging

10. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat Planning and New Technology Remote diagramming and remote adjusting Drone diagramming Exterior and Interior remote diagramming available in 2015 or 2016; race then begins to apply and use it  Multiple companies racing to patent this  Will be combined with thermal imaging  Can record video and download to file  Mobile device maps interior for XACTIMATE  Video file created and downloaded to file  Estimate written and submitted to insured Mobile diagramming

11. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat Planning and New Technology Existing challenges Drone diagramming Exterior and Interior remote diagramming available in 2015 or 2016…..race then begins for how to apply and use it  Strict FAA issues for line of sight and airports  Unresolved privacy and civil liability issues  Drone training needs to be extensive  Significant cost to operationalize  Capability and willingness of policyholders  Changing skills needed for Adjusters Mobile diagramming

12. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat Planning and New Technology The big question.....what is the impact to insurance carriers?  How will companies use the technology and how fast?  What will be the impact to staff field adjusters?  What will be the impact to IA field adjusters? Drone operational skills Broad use of IAs instead of staff or less use? Centralized estimating with mobile inspection? Post-event cat site logistics and management  How will loss prevention and mitigation change?

13. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Claims Technology Emerging SMART Homes - Convenience  House temperature  Ceiling fans  Washer / Dryer  Yard Fixtures  Watering of lawn  Water heater  Stereo  Security Alarm  Lamps and lights

14. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Claims Technology Emerging SMART Homes – Loss Mitigation  Water detection  Doors opening  Motion detection  Smoke detection  Carbon monoxide detection  Wifi Cameras  Remote video monitoring  Refrigerator spoilage alerts  Freezer thawing

15. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Claims Technology Emerging SMART Homes – Impact on Insurance  Data kings will be manufacturers of SMART items  New models needed for premium calculation  Significant discounts (25%) for SMART devices  Slow companies at a competitive disadvantage  SMARTER homes generate fewer claims  Claim frequency reduction impacts staffing needs “SmartThings wants to eviscerate the Home Insurance Industry” – Forbes magazine 8/14/14

16. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat Planning and New Technology Leveraging mapping technology  Quickly Identify extent of probable damage  Matching claim size to skill level  Improves accuracy, customer service  Reduces cycle time  Overlays claims to damage  Matches before/after visuals  Improves ability to quickly assess

17. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. PCS Turkey Launching service in Turkey PCS Turkey aligns with IUC and PCS mission to serve the Turkish insurance market  Industry index supports reserving accuracy  Ability to use for risk transfer  Supports retrocession risk transfer  Calibrates and enhances cat modeling  Facilitates sharing of global best practices  Shares global trends with Turkish market Benefits to Turkish Insurance Industry Active for any catastrophe after May 28, 2015

18. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. PCS Commitment Confidentiality and document destruction  Restricted information to ten names at IUC and PCS  Quarterly signed confidentiality agreements  NDAs in place where requested Confidentiality  180 days after event close  Includes drives, email folders, and printed  Audited to ensure completed Document Destruction Core Values Service Integrity Objectivity Confidentiality Transparency Reliability Consistency

19. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.  Residential: Building and Contents  Auto: Personal and Commercial  Commercial: Building, Contents, and BI/CBI PCS Turkey purpose is to serve Turkish insurance market PCS Turkey Development of an insured loss estimate after catastrophes Categories  Includes entire country  Estimates by CRESTA zone Geography

20. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. PCS Turkey purpose is to serve Turkish insurance market  Includes all perils resulting in PD / BI  Natural perils resulting in insured loss  Man-made perils resulting in insured loss  Catastrophe designation threshold is $10M Perils  Bulletin issued within 48 hours after event  Preliminary estimate at 30 days (asap w/eq)  First resurvey at 60 days  Every 60 days until finalized Reporting timeframe PCS Turkey Development of an insured loss estimate after catastrophes

21. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. PCS Turkey purpose is to serve Turkish insurance market  USGS alerts within minutes of all EQs  Cat designation bulletin  Survey / re-survey bulletins  Quarterly reports Reports  Committed to free service for data contributors  Program maintained by international sales  Aggregated data used for loss estimates Business Model PCS Turkey Development of an insured loss estimate after catastrophes

22. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Cat Planning and Response Sharing with Turkey industry prevention/mitigation trends

23. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.  Commenced in April “PCS Benchmarking” Service  Launch/analyze/distribute catpay report in July 2015 Providing industry benchmarking data and reports to support informed decision making  Personal cat claims management (publish by 11/15/15)  Commercial cat claims management (2 nd qtr. 2016)  Cat vendor management  Independent Adjuster cat management PCS Turkey Benefits PCS Benchmarking reports free to data contributors 2015-2017 Reports

24. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.  Earthquake claims handling  Training best practices  Loss development trends with earthquakes  Earthquake pricing  Earthquake catastrophe modeling  Earthquake catastrophe mgmt.  Property claims severity  Vendor Management  Managing flooded vehicle salvage  Business continuity after earthquakes  Policyholder education/loss mitigation  Managing an earthquake cat  Claims technology PCS Turkey Benefits Supporting global speakers for local conferences

25. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. PCS Turkey Looking forward to serving the Turkish industry  Thank you for attending today  With any questions, reach out:  Menekşe Uçaroğlu at menekse@iucre.com  Joe Louwagie at jlouwagie@verisk.com  We welcome your thoughts and suggestions  Questions and answers now or at any time

26. © Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission. Objectivity Integrity Service Transparency Reliability Consistency