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Presentation to analysts and investors June 2007

Presentation to analysts and investors June 2007. Welcome. 14.30 - 15.15 Introduction Robert Hiscox Hiscox Global Markets Richard Watson Hiscox Bermuda Rob Childs Questions 15.15 - 15.45 Coffee 15.45 - 17.00 Hiscox USA Ed Donnelly Hiscox Europe Marc van der Veer

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Presentation to analysts and investors June 2007

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  1. Presentation to analysts and investors June 2007

  2. Welcome 14.30 - 15.15 Introduction Robert Hiscox HiscoxGlobal Markets Richard Watson HiscoxBermuda Rob Childs Questions 15.15 - 15.45 Coffee 15.45 - 17.00 Hiscox USA Ed Donnelly HiscoxEurope Marc van der Veer HiscoxUK Steve Langan Conclusion Bronek Masojada Questions 17.00 Drinks and canapés

  3. Hiscox 2002 2002 gross written premium £677 million Hiscox plc Hiscox International Hiscox UK and Hiscox Europe Hiscox Guernsey Hiscox UK Hiscox Europe Hiscox Global Markets • Three locations • Art and Private Client • PI and Specialty Commercial • One location • Art and Private Client • Kidnap and Ransom • One location • Reinsurance • Property • Marine and Energy • Specialty • Space • Technology and Media PI • Four locations • Art and Private Client • PI and Specialty Commercial • Technology and Media PI • Direct

  4. Hiscox 2007 2006 gross written premium £1,126 million Hiscox Ltd Hiscox UK and Hiscox Europe Hiscox International Hiscox Bermuda Hiscox Guernsey Hiscox USA Hiscox UK Hiscox Europe Hiscox Global Markets • One location • Reinsurance • Group Capital Support • One location • Art and Private Client • Kidnap and Ransom • Ten locations • Art and Private Client • PI and Specialty Commercial • Regional Media and Technology • Three locations • Art and Private Client • PI and Specialty Commercial • Regional Media and Technology • Nine locations • Art and Private Client • PI and Specialty Commercial • Regional Media and Technology • Direct • Four locations • Reinsurance • Property • Marine and Energy • Specialty • Space • Technology and Media PI

  5. Business growth Gross written premium for the five months to May % 2007 £m 2006 £m IFRS Hiscox Group share

  6. Hiscox Global Markets Richard Watson

  7. What do we do? Characteristics of what we do • Larger individual risks • Bundles of small risks • Catastrophe exposed risks • Specialist lines Characteristics of what we do not do • Process orientated • High volume, small margin • Direct to consumer Offices in London, Paris and New York

  8. An experienced underwriting team

  9. Rates Hiscox Global Markets - divisional 12 month rolling rate since 1998 Specialty and other Marine and Energy Professional Indemnity Reinsurance Property 900% 800% 700% 600% 500% Rolling 12 month index of rates 400% 300% 200% 100% 0% Sep-02 to Aug-03 May-03 to Apr-04 May-05 to Apr-06 Sep-01 to Aug-02 Jan-99 to Dec-99 Sep-99 to Aug-00 May-01 to Apr-02 Jan-02 to Dec-02 Jan-04 to Dec-04 Sep-04 to Aug-05 Jan-06 to Dec-06 Sep-98 to Aug-99 May-04 to Apr-05 Jan-01 to Dec-01 Jan-03 to Dec-03 Sep-03 to Aug-04 Sep-00 to Aug-01 Jan-05 to Dec-05 Sep-05 to Aug-06 May-99 to Apr-00 Jan-00 to Dec-00 May-00 to Apr-01 May-06 to Apr-07 Jan-88 to Dec-98 May-02 to Apr-03 May-98 to Apr-99

  10. Reinsurance - Panther Re Panther Re created with W L Ross & Company • Special purpose reinsurer, capitalised at $360m, $144m of equity and two debt tranches totalling $216m, rated BBB+ and BB+ by Standard and Poor's • Underwrites a 40% pro-rata quota share of property catastrophe account • Hiscox Syndicate 33 receives an over-rider and profit commission • Arrangements cover 2007 and 2008, but with appropriate mid-term protections Good opportunities at January renewals • May 07 GWP £224m • May 06 GWP £168m • June renewals went well Market share for reinsurance business in Lloyd's increased from 6.0% to 10.9% Good prices and volume in Florida

  11. Looking ahead • Across the board reductions • Reduction of Syndicate capacity for 2008 • First cut business plan for Lloyd's sets capacity for 2008 at £700 million (2007: £875 million) • Trimming of exposure of less profitable classes • Maintain exposure in well rated catastrophe business • Continue to develop hub offices in Paris and New York

  12. Hiscox Bermuda Rob Childs

  13. Established team Rob Childs Chief Executive Officer, Hiscox Bermuda; Chairman, Hiscox USA; Chief Underwriting Officer, Hiscox • 21 years at Hiscox, active underwriter of Syndicate 33 from 1993 to 2005 Chris Sharpe Senior Vice President • Ten years at Hiscox as a treaty reinsurance underwriter, writing catastrophe and risk excess of loss and pro rata reinsurance worldwide Robin Mehta Chief Financial Officer and Chief Operating Officer; Company Secretary, Hiscox Ltd • Joined Hiscox in 2006, 17 years with the Munich Re group of companies Krystalle Tobin Financial Controller and Treasurer • Joined Hiscox in 2006 with nine years experience in the reinsurance industry, previously worked with the Munich Re group of companies

  14. Hiscox Bermuda written premium 2006 Gross written premium 2006 - $310 million Kidnap and Ransom Hiscox Insurance Company (Guernsey) Limited 23% Reinsurance 56% 9% UK errors and omissions Hiscox Insurance Company Limited 8% Share of Hiscox Syndicate 33 Hiscox Dedicated Corporate Member 4% Fine Art Hiscox Insurance Company (Guernsey) Limited External business Internal Group business $137 million $173 million

  15. 2000 - 2006 Syndicate 33 rating catastrophe exposed index 350% 300% 250% 200% 150% 100% 50% 0% May 2002 Nov 2001 Aug 2004 Jan 2004 Apr 2007 Oct 2006 Apr 2001 Dec 2002 Mar 2006 Nov 2007 Sep 2005 Jun 2003 Feb 2005

  16. Hiscox Bermuda written premium 2007 YTD External reinsurance Proportional treaties 18% 17% Risk excess of loss Industry loss warranty 2% 60% Aggregate excess of loss 1% Catastrophe excess of loss Stop loss 1% Total $239 million

  17. Where we get our business from Gross written premium by broker 2007 YTD Guy Carpenter Aon 29% 25% 13% 20% Other Benfield 13% Willis

  18. Looking ahead • Future prospects • Maintain underwriting discipline • Internal quota shares depends on my colleagues! • External: catastrophe market firm in 2007, will it continue in 2008? • Bermuda under no pressure to follow market down

  19. Questions

  20. Coffee

  21. Hiscox USA Ed Donnelly

  22. The intellectual capital Edward Donnelly President • Over 24 years insurance experience • Formally with AIG • Started and grew professional lines with Houston Casualty Company • Underwrote on behalf of Lloyd's for 17 years as a PI coverholder Gavin Watson CFO • Joined Hiscox in 1998, FD of Hiscox Insurance Company for four years Eric Pruss COO • Ten years in the insurance industry, five years of management consulting, most recently with Chubb

  23. $470 billion market Intense regulation of rates and wordings, less flexibility State guarantee funds available No individual risk filings More direct client and broker relationships More cost-efficient at the right scale $33 billion market Less regulation of rates and wordings No guarantee funds Heavy administration/ documentation on heavy risks Must deal through surplus brokers Less cost-efficient Admitted vs. surplus lines Admitted Surplus lines

  24. Phased approach to growth Phase 2 Phase 3 Phase 1 • Scale through reputation of staff • Small wholesale surplus lines business • Rollout products into the admitted market • More surplus lines business • Entry to the admitted market • Build reputation of Hiscox

  25. Non-profit Directors and Officers' Liability Public Officials' Liability Terrorism Professional Indemnity (E&O) Allied Healthcare Architect and Engineers Miscellaneous Media and Broadcasters' Liability Technology and Privacy Liability Core Hiscox products

  26. American Live Stock Insurance Company Acquired, subject to regulatory consents (closing expected in July) • Purchase price of $55m: net tangible assets of $45m • 2006: GWP of $16.9m, combined ratio of 80.9% Admitted in all 50 states • Licences for all livestock products • Application process for Hiscox products will begin immediately Presence in the important mid-west market • Located just outside Chicago, a key insurance hub Strong brand and complimentary business • Recognised as a leading livestock insurer in the USA • Hiscox active in bloodstock insurance for 15 years

  27. Looking ahead • Roll out admitted PI products across the whole of US • Kidnap and Ransom product coming • Hiscox Global Markets integration • Extend geographic spread • New office in Chicago

  28. Hiscox Europe Marc van der Veer

  29. European management team Marc van der Veer Managing Director • 13 years' insurance experience, previously with XL Capital Marianda Quadakkers European Operations Manager • Previously with Deutsche Asset Management managing the start up of new operations in Europe and the UK Heino Hovingh Head of Sales and Marketing • Previously with Axa and Coca-Cola Paul Cooper Finance Director • Previously with Ernst and Young

  30. Changing business mix Business split 2000 Business split 2007 27% 3% 73% 97% Art and private client Professions and specialty commercial

  31. Focus within core countries Regional offices to get closer to local brokers and leverage scale Distribution partnerships with other insurers and private banks 20% YTD growth Growing distribution

  32. Quote volume 2006 2007 Quote volume YTD 5012 Europe 5966 2504 France 2876 1633 Germany 2088 520 Netherlands 605 355 Belgium 397 1000 4000 6000 5000 2000 3000

  33. Improving the expense ratio Difference in growth between GWP and expenses YTD 2007 12.7% 12.6% 11.4% 11.1% 10% 7.5% 0% France Germany Netherlands Belgium Europe total

  34. Pricing environment Europe property Europe rate index for Europe Europe PI 180% 160% 140% Rolling 12 month index of rates 120% 100% 80% Jul-00 to Jun-01 Jul-04 to Jun-05 Nov-05 to Oct-06 Mar-01 to Feb-02 Jul-02 to Jun-03 Mar-05 to Feb-06 Nov-01 to Oct-02 Mar-03 to Feb-04 Nov-03 to Oct-04 Moy-06 to Apr-07

  35. GWP and combined ratio Gross written premium: million Combined ratio: % 119.4 107.4 111.3 103.2 111.1 120 85 99.7 98.7 81 80 64 41 60 29 20 0 2000 2004 2001 2002 2003 2004 2005 2001 2003 2005 2000 2002 2006 2006

  36. Hiscox UK Steve Langan

  37. Hiscox Insurance Company Gross written premium: £million Combined ratio: % 118.0 242.4 231.3 232.8 107.9 218.7 102.6 97.8 97.9 97.7 120 250 93.6 92.6 88.5 87.2 176.4 163.9 127.3 97.8 60 90.0 74.7 100 2002 1997 1998 1999 2000 2003 2004 2005 2006 2001 2002 1997 1998 1999 2000 2003 2004 2005 2006 2001 Core Non-core

  38. Brand and underwriting experience Steve Langan Managing Director and Group Marketing Director • Ten years with Diageo and Coca-Cola Gary Head UK Underwriting Manager • Ten years broking, 11 years at Hiscox Austyn Tusler Head of Art and Private Client • 17 years in the insurance industry, three years with AIG Glenn Caton Commercial Director • Ten years with Proctor and Gamble Alan Millard Chief Operating Officer • Ten years with GSK, previously with JP Morgan Paul Cooper Finance Director • 12 years at PWC and Ernst and Young

  39. Market leading products Focus on: emerging wealth and high net worth individuals Professions/Specialty Commercial SMEs 250 employees in nine locations Nine underwriting offices plus Colchester (underwriting and claims processing) Retail distribution model complete

  40. Market opportunities - personal lines UK contents > £75k The facts • 2.8m M/HNW households in UK: c17% of total • 39% of all household sums insured • Only 25% of these households have a specialist policy • Hiscox = market leaders 1,000,000 750,000 Policy volume 500,000 250,000 0 £1m + £75k Contents sum insured Source: Hiscox, Datamonitor, ABI

  41. Market opportunities - commercial lines SMEs in the UK (2005) The facts • 95%+ UK companies employ <250 people • Explosive growth in insurance opportunity • Cost effective service is key 3,500,000 3,000,000 2,500,000 No. of businesses 2,000,000 1,500,000 1,000,000 500,000 Medium Self employed Micro Small Large 1-9 employees 10-49 employees 250+ employees 50-249 employees Source: DTI SME stats 2005

  42. Rates UK PI Retail rates UK Personal Lines (inc. DPD) 180% 160% 140% 120% Rolling 12 month index of rates 100% 80% 60% Jul-00 to Jun-01 Jul-04 to Jun-05 Oct-00 to Sep-01 Jul-05 to Jun-06 Jul-02 to Jun-03 Jul-03 to Jun-04 Jan-01 to Dec-01 Jul-01 to Jun-02 Jan-05 to Dec-05 Apr-02 to Mar-03 Apr-04 to Mar-05 Oct-04 to Sep-05 Apr-05 to Mar-06 Apr-01 to Mar-02 Oct-01 to Sep-02 Oct-02 to Sep-03 Oct-03 to Sep-04 Jan-02 to Dec-02 Jan-03 to Dec-03 Jan-04 to Dec-04 Oct-05 to Sep-06 Apr-03 to Mar-04 Jan-06 to Dec-06 Apr-06 to May-07

  43. Building the brand Direct Direct marketing cost per sale total brand awareness growth and policy count (Jan-06 to May-07) 350% 55,000 300% 50,000 45,000 250% 40,000 35,000 200% Index Policy count 30,000 150% 25,000 20,000 100% 15,000 10,000 50% 5,000 0% 0 Jul-06 Oct-06 Jan-07 Apr-06 Jan-06 Apr-07 Mar-06 Feb-06 Sep-06 Feb-07 Jun-06 Mar-07 Dec-06 Nov-06 May-06 May-07 Aug-06 Home Direct policy count Brand awareness index Commercial Direct policy count Cost per sale index

  44. Outlook: choppy! • New marketing campaign • Steady growth of regions • Grow commercial lines • Walk away from unprofitable business • Ongoing management of costs

  45. Conclusion Bronek Masojada

  46. Hiscox 2007 2006 gross written premium £1,126 million Hiscox Ltd Hiscox UK and Hiscox Europe Hiscox International Hiscox Bermuda Hiscox Guernsey Hiscox USA Hiscox UK Hiscox Europe Hiscox Global Markets • One location • Reinsurance • Group Capital Support • One location • Art and Private Client • Kidnap and Ransom • Ten locations • Art and Private Client • PI and Specialty Commercial • Regional Media and Technology • Three locations • Art and Private Client • PI and Specialty Commercial • Regional Media and Technology • Nine locations • Art and Private Client • PI and Specialty Commercial • Regional Media and Technology • Direct • Four locations • Reinsurance • Property • Marine and Energy • Specialty • Space • Technology and Media PI

  47. Business growth Gross written premium for the five months to May % 2007 £m 2006 £m IFRS Hiscox Group share

  48. Current debt facilities: Syndicated Letter of Credit (LoC) Facility - £137.5 million Revolving Credit Facility - $91 million Term Loan - $91 million Gearing at 31/12/06 (including LoC) - 25% Looking to extend Facility duration Balance sheet Current debt arrangements Capital management • Announced 2007 target dividend of 12p (2006:10p) • Gained shareholder approval to buy back up to 10% of shares into treasury • Capital management decision dependent on 2007 performance

  49. Group rating index Catastrophe exposed index Group composite index Non cat exposed index 300% 250% 200% 150% Rolling 12 month index of rates 100% 50% 0% Jul-00 to Jun-01 Jul-01 to Jun-02 Jul-04 to Jun-05 Jul-06 to Jun-07 Jul-02 to Jun-03 Jul-03 to Jun-04 Jul-05 to Jun-06 Jan-01 to Dec-01 Jul-99 to Jun-00 Jan-06 to Dec-06 Jan-05 to Dec-05 Jan-07 to Dec-07 Jan-02 to Dec-02 Jan-04 to Dec-04 Jan-00 to Dec-00 Jan-99 to Dec-99 Jan-03 to Dec-03

  50. Clear strategic focus 100% = £1,407m Total group controlled income for 2006 TMT London Market 6% Art and Private Client 27% 14% Professions and Specialty Commercial 6% 30% 17% Reinsurance and Major Property Specialty Regional London Market Syndicate 33, Hiscox Insurance Company, Hiscox Guernsey and Hiscox USA Syndicate 33 and Hiscox Bermuda

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