Pierre Laurin

1. Pierre Laurin

2. Reinsurance Buying Process • Very centralized approach • Subject to overall goals and direction • Very formalized process • Get our authorities from Group Reinsurance Committee, then from ZNA’s Reinsurance Charter, then to ZNA’s Reinsurance Sub-committee • Security Committee • Business Units do not have the authority to purchase reinsurance treaties • Very strict approved list of reinsurers

3. Structure of team • Two major teams: • Marketing teamresponsible to market management, internal and external • Underwriting teamresponsible for reviewing, underwriting, and approving purchase of treaties

4. Marketing team • Client relationship – Internal Clients • General discussions on needs and objectives of the BUs • Data gathering • Creation of submission, narrative • Market the transaction and placement of treaty • External Client • Market management • Broker selection, when needed • Contact with reinsurers

5. Underwriting Team • Responsible to underwrite and approve treaties • Help design treaty structure, with regards to goals and objectives • Help Marketing team to put best presentation forward • Review submission from a reinsurer’s perspective • Underwrite program • Participate in claims and underwriting audits • Benchmark pricing from the actuarial team • Set retention, inclusive of co-participation • Help marketing in setting firm order terms and conditions • Design contract according to standard clauses

6. Placement philosophy • Prefer Excess of Loss • Typically, high retentions with co-participation in upper layers • Co-participation is preferred to eliminating layers altogether • Keep markets involved • Allows for market pricing • More flexibility in placement • Prefer large treaties with economy of scale with panel of reinsurers • Reinsurers prefer smaller treaties with targeted portfolios, small number of reinsurers preferred • Need to reconcile the two opposite needs.

7. Placement Philosophy • Contracts • Signed within 90 days • Initial contract with submission • Final contract with firm order terms • Two sections of contracts • Business terms • Standard clauses

8. Placement Process • Total 9 month process • 180 days -> review of goals and objectives • 150 to 120 days -> data collection, loss experience and BU underwriting reviews • 90 days -> account manager review of data, narratives, start of building of submission, contact with markets on goals and objectives, initial wording • 60 days -> reinsurance underwriting reviews, data analysis and pricing benchmarking, discussions with markets • 45 days -> submission out to market

9. Placement Process • Total 9 month process (cont’d) • 30 days -> Negotiations with markets, finalization of benchmarking, contract wording, final review of markets against approved list • 15 days -> firm order terms with final contracts, receive authorization, sign lines • 0 -> transaction completed • +7 days -> internal notification, accounting systems feed • + 15 days -> issuance of I&Ls, premium allocation between units • +30 to 90 days -> contracts signed, close final issues, take remedial action on non-performing reinsurers

10. Summary • Very formalized process • Very technical with involvement of underwriters, actuaries, marketing, BUs management • Successful in achieving our goals • Process never stops