1. Principal Issues for Investment Strategy Evaluation The Underwriting Environment The Investment Markets Going Concern Considerations Optimization vs. Maximization of Results Tax Considerations Regulatory and Other Constraints

2. The Underwriting Environment Plausible Future Scenarios Mix of Business; e.g., long tail vs. short tail Growth Cash Flows/Profitability Market Turns Contingencies; e.g., Catastrophes and Reserve Adjustments

3. The Investment Markets Returns Available/Yield Curves Risk Factors Desirability of Hedging Short-Term vs. Longer Term Scenarios

4. Going Concern Considerations Rational Expectations Cash Flows From Future Business Growth How Important is Asset/Liability Matching? Interest Rate Forecasts Going Concern Cash Flows

5. Optimization vs. Maximization of Results Maximization May Involve Risk Factors Unacceptable to Investors, Management, or Rating Agencies Optimization Considers The Above Subjective Factors Which Would You Choose? A. Annual Guaranteed Return of 8% B. Returns of 0%, 8%, or 22%, Averaging 10%

6. Tax Considerations Total After Tax Return is the Critical Variable Short-Term vs. Long-Term; e.g., NOLs Differentials Between Taxable and Tax-Exempt Yields Dynamics of Underwriting Income, Taxable Investment Income, and Tax-Exempt Investment Income

7. Regulatory and Other Constraints State Regulators Investment Mix Investment Concentration Risk-Based Capital Effects Asset/Liability Matching Rating Agencies S.E.C. Auditors Wall Street