Paul Schiavone CUO Management Liability and Head of M&A/PE Insurance Group Zurich GC

1. Paul Schiavone CUO Management Liability and Head of M&A/PE Insurance Group Zurich GC 20 April 2010 ASTN-003970-2010

2. Global D&O Market Place State of the Insurance Market Emerging Risks Hard or Soft D&O Market International Programs New Products and Covers Initial Public Offerings Claims Environment M&A TEM11(V1)Oct/28/09GC/ZCA

3. State of the Insurance Market Market highly Competitive Broker compensation pressure Expected upturn In Pricing in 2010 Customers reducing procurement spend Focus on underwriting Results not GWP Regulatory & Compliance Burden Inflation as a potential long-term problem Competitors’ financial strength challenges TEM17(V1)Oct/28/09GC/ZCA

4. Will we see a hard market in 2010? Commercial v FI Competition Pricing Financial Crisis Terms and Conditions Loss Ratios (ROE) Underwriting Discipline Cost of Capital TEM22(V1)Oct/28/09GC/ZCA

5. D&O PRICING CYCLE ADVISEND&O Premium Change Index Rates Likely to Dip before steadying Title to go in here… Price increases will be gradual in 2010 Certain industries and financially distressed No Spikes Impact of FI increases Q1-Q3 09 No Hard Market in Pricing in 2010 TEM34(V1)Nov/23/09GC/ZCA

6. Terms and Conditions Fines and Penalties Coverage No Bodily Injury Exclusion Company Investigations Company EPL Coverage No IvI Exclusion (Safeway Case) Coverage C No Pollution Exclusion Lower and Lower Deductibles TEM20(V1)Oct/28/09GC/ZCA

7. Competition Over 50 carriers writing D&O Highly Competitive Increased Capacity New Wordings and Covers D&O Insurers Focus an AP & Europe New Hirers with GWP Expectations Perceived Profitability Broad Underwriting Appetite TEM11(V1)Oct/28/09GC/ZCA

8. A 100 Combined Ratio Isn’t What it Used to Be: 95 is Where It’s At Title to go in here… 95 combined provides ROE of 16% Insufficient Investment Returns Compressed Operating Margins Underwriting results are key TEM34(V1)Nov/23/09GC/ZCA

9. New Products and Covers A-Side DIC Portable D&O IDL Excess Policies Pollution Liability Non-Rescindable Language Global Fines and Penalties Separate Coverage C Tower TEM12(V1)Oct/28/09GC/ZCA

10. Claims Environment Globalization of D&O Claims Bankruptcy Shareholder M&A Employment US Exposure Regulatory Non-US Exposure TEM21(V1)Oct/28/09GC/ZCA

11. Globalization of D&O Claims Source Aon’s “International Executive Liability Advisor” Volume 1 Winter 2009 • Intl companies face • Litigation and Exposures • From multiple sources Countries with a large number of non-US D&O Claims include Australia, Canada, China, UK, Hong Kong, India, Italy, Malaysia and Russia 307 non-US D&O claims 1/07-12/08 Most are criminal and regulatory actions • Claims brought against • D&Os of subsidiaries TEM13(V1)Oct/28/09GC/ZCA

12. US Exposure Securities Bankruptcy Employment Derivative Regulatory Competitor M&A Customers TEM14(V1)Oct/28/09GC/ZCA

13. Globalization of US Securities Class Actions(Without IPO/Analyst/Mutual Fund Claims) $37M Average ($8M Med) Settlement Average Dismissal Rate 40% f3.5 Years from Filing to Settlement 2009 Main Industry - Financial 4 Law firms Handle apr. 70% of all cases ADR I, II and III and 144A Source: Stanford Class Action Clearinghouse TEM34(V1)Nov/23/09GC/ZCA

14. Non-US Exposure Bankruptcy Securities Regulatory Employment Derivative ivi Competitor M&A Customers TEM14(V1)Oct/28/09GC/ZCA

15. Emerging Risks Shareholder Activism Bankruptcies due to Debt Loads Pollution/Climate Change Litigation Funding Extraterritorial jurisdiction Regulators F-Cubed Litigation Legislation Affecting D&Os Personal Finances Class Action Statutes TEM18(V1)Oct/28/09GC/ZCA

16. Extraterritorial Jurisdictions of Regulators US FCPA and Similar Anti-Bribery Laws EU Directive 2003/6/EC – Market Abuse Directive – US SEC Cross Boarder Actions Dutch Prosecutors UK FSA More Active – Shell 17M, CitiG 13.9M US IRS TEM19(V1)Oct/28/09GC/ZCA

17. Global Class Action Statutes US Representative Actions Sweden Class Actions Australia Representative Actions The Netherlands Class Actions UK Group Actions China Class Actions France Contemplating Such Legislation Canada Class Actions TEM15(V1)Oct/28/09GC/ZCA

18. US Class Action System Representative Actions Contingency Fees Opt Out Active Plaintiffs Bar (4 Law Firms Control 70% of actions) Jury Trials No Loser Pay Rule Excessive Awards and Fees Broad Discovery Rights TEM15(V1)Oct/28/09GC/ZCA

19. Large US Securities Class Action Awards 15 Mega Settlements in 2009 Royal Ahold $1.1B Enron $7.2B Royal Dutch Shell $400M+ WorldCom $6.1B Daimler Chrysler $300M Biovail $138M Tyco $3.2B TEM15(V1)Oct/28/09GC/ZCA

20. International Programs Is My Global D&O Policy Truly Global? Focus on Main “Problematic” Countries Ensuring Global Cover and Global Compliance Key Differentiator Govt Closely Examining Premium Tax Payments Service Customers Acceptance Varies FL Industry Still Needs Training on the Issues Regulated Industries Kean to Adopt Intl Programs are Here to Stay TEM24(V1)Oct/28/09GC/ZCA

21. Initial Public Offerings 2009 Lowest Number of IPOs Globally POSI or D&O Policy Expecting 2010 to Pick up Cover for Additional Insureds HK becoming main exchange for listings Pricing for non-US Listed Very competitive HK SFO Becoming More Active 25% of US Securities Class Actions in 09 IPO related TEM24(V1)Oct/28/09GC/ZCA

22. M&A Update 2009/2010 M&A at lowest volumes since 2004 • Asia Pacific PE has • doubled since 2008 “Restructuring/DivestmentM&A” Record Levels (Govt. 15%) Debt still remains scarce for Global PE Deals • USA and UK reside in usual • No1 & No 2 slot Top Industries - Finance, Healthcare and Telecom Australia, China and Japan in top 10. Larger deals coming back Pets at Home (KKR $1.54bn), Spotless (BC Partners $816m) TEM24(V1)Oct/28/09GC/ZCA

23. Paul Schiavone CUO Management Liability and Head of M&A/PE Insurance Group Zurich GC 20 April 2010 For copies of our literature please visit our virtual literature rack at www.zurichvir.com CDO14(V1)Nov/23/09GC/ZCA