1. Casualty Actuarial Society Seminar on Reinsurance June 7, 1999 Peter Kellogg Chubb Re Inc. Problems of the Past, Lessons Learned Chubb Re

2. Discussion Outline Where Have We Been What Has Occurred What Have We Learned Current Market Dynamics Where Do We Go From Here Chubb Re

3. Where Have We Been Returns below Cost of Equity Since 1989 Over 120 Domestic Reinsurers in 1990 Premium to Surplus Levels 1.5 to 1 in 1985 Uncapped Quota Shares High Expenses Undifferentiated Products Multiple Reinsurer Participation Chubb Re

4. What Has Occurred Hurricane Andrew/Northridge EarthQuake Bermuda Numerous Public Offerings Lloyds Restructuring Substantial Capital Appreciation Premium to Surplus Levels Decline Competition Increases Consolidation Chubb Re

5. What Have We Learned Improved Exposure Modeling 1 Co. plus 1 Co. does not equal 2 Perception Capital and Franchise Value is Critical Distribution/Relationships are Key Competition Comes Not Only From Within Chubb Re

6. Current Market Dynamics Excess Capacity Ever Increasing Competition Mature Markets Consolidation yet Global Expansion Primary and Reinsurance Capabilities Irrational Pricing/Uncapped Q.S. Returns Deteriorating Operating Results Chubb Re

7. Where Do We Go From Here Further Consolidation Several Failures/Shut Downs Expense Reductions Free Flowing Distribution Specialty Markets Evolve Reinsurance Market Cycle Slow To Turn Successful Companies will have Security, Strong Relationships, Flexibility, Creativity Chubb Re