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The OIL Group of Companies. www.oil.bm www.ocil.bm. “Tools for Risk Transfer” Presentation to University of Houston April 11, 2013. The Evolution of Energy Mutuals. TOPS 1993-99. sEnergy 2002-2011. OIL 1972. Traditional Insurance Market. AEGIS 1975. OCIL 1986. EIM 1986.

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The oil group of companies

The OIL Group of Companies

www.oil.bm

www.ocil.bm

“Tools for Risk Transfer”

Presentation to

University of Houston

April 11, 2013


The evolution of energy mutuals
The Evolution of Energy Mutuals

TOPS

1993-99

sEnergy

2002-2011

OIL

1972

Traditional

Insurance

Market

AEGIS

1975

OCIL

1986

EIM

1986

NEIL

1980


Insurance crisis 1 why was oil formed in 1971
Insurance Crisis # 1 Why was OIL Formed in 1971?

  • Inability of petroleum companies to purchase all-risk property damage coverage at realistic rates and capacity.

    • Incident – 1967 Explosion and Fire at Cities Service Oil Co. refinery in Lake Charles , Louisiana.

  • Unwillingness of the commercial insurance industry to sell third party pollution liability to petroleum companies at any price.

    • Incident – 1969 Union Oil Co. oil spill in Santa Barbara Channel, California.

  • Realization on the part of 16 oil companies that the combined capital & surplus of the petroleum industry greatly exceeded that of the insurance industry.


Insurance crisis 2 1985 86
Insurance Crisis # 2 (1985-86)

  • Oil Casualty Insurance, Ltd. (OCIL)

  • Energy industry-owned company insuring

    • Excess General Liability

    • D&O Liability (now discontinued)

    • Assumed Reinsurance (Energy Industry Risks)

  • Formed in 1986 by 14 interested members of OIL.

  • Lack of D&O capacity was key driver in OCIL’s formation.

  • Today – 99 Shareholders and Policyholders headquartered around the world with total gross assets in excess of $3.5 Trillion.


And again in 1993
…and again in 1993

  • TOPS(Total Loss Only Platform Structures)

  • Petroleum industry-owned company providing high-level Excess Property Damage coverage for large production structures located in the North Sea.

  • Established in response to commercial insurance market’s overpricing of coverage specifically related to such structures.

  • Formed in 1993 by 16 petroleum companies headquartered in Europe and North America.

  • No losses in entire history of operations.

  • Liquidated in 1999 when rational pricing returned to the commercial market.


And once again in 2002
…and once again in 2002!

sEnergy Insurance Limited (sEnergy)

  • Energy industry-owned company providing

    • Business Interruption

    • Property Damage (excess of OIL)

  • Lack of affordable, long-term and stable commercial market capacity was key driver in sEnergy’s formation.

  • Formed in 2002 by 12 energy companies.

  • sEnergy operated with an “OIL-like” Rating & Premium Plan.

  • Closed down in 2011.


Oil insurance limited

OIL INSURANCE LIMITED

A Case Study….


The oil group of companies1
The OIL Group of Companies

  • Two energy industry mutual insurance companies:

  • Headquartered in Hamilton, Bermuda.

  • Established when commercial market:

    • Ceased to provide adequate coverages/limits.

    • Priced high risk energy operations at unacceptable levels.

  • The two companies have a total combined membership of over 121 different Shareholders/Policyholders who are world-class energy companies headquartered around the world.


Why mutualize
Why Mutualize?

  • Industry ownership ensures fair treatment of Policyholders.

  • Being a mutual or member owned provide ‘hedge’ against a frequently volatile commercial insurance market.

  • Shareholders maintain active control of the coverages available to them.

  • Highly cost-effective catastrophe insurance facility.

  • Generates long-term benefits for Policyholders.


Who is oil

Over $2 trillion in assets insured globally for 52 members

$300 million broad and stable “cornerstone” capacity

$6 billion in assets

Over $3.0 billion in shareholder’s equity

Over $11 billion in claims paid over 40 years

S&P A- rating (stable outlook)

Expense ratio = approx. 3-6 %

Not dependent upon reinsurance

Who is OIL?

World’s Largest Energy Mutual

–by the numbers


Who is oil1

OIL is an Energy Industry Mutual Insurance Company headquartered in Hamilton, Bermuda

Formed by 16 major energy companies in 1972 after two incidents in the late 60’s that resulted in inadequate coverage / pricing

Today, OIL is a world leader in global energy insurance

52 Shareholders / Policyholders - medium to large public / private world-class energy companies headquartered around the world

46% of membership has been with OIL for over 20 years

Who is OIL?

World’s Largest Energy Mutual


Why bermuda
Why “Bermuda”? headquartered in Hamilton, Bermuda

  • Bermuda is one of the three largest insurance markets in the world (London and New York being the others.)

  • More than 1,600 international insurers and 1,200 captive insurers are registered in Bermuda.

  • Favorable tax/regulatory/legal environment.

  • Highly developed markets in all lines of insurance coverage.

  • Sophisticated on-Island business infrastructure.


Why bermuda1

Second largest insurance / reinsurance market in the world headquartered in Hamilton, Bermuda

Over 1200 international insurers and reinsurers listed on its books

Writes nearly $108 billion in gross written premium

Capital & Surplus nearly $185 billion

Total assets of approximately $525 billion

World’s largest captive domicile

Home to 600+ licensed captives

Total assets over $86Bn and $21Bn in annual gross premium

Location: quick access from main hubs (East Coast / London)

Friendly regulatory environment

Why Bermuda?

Source:

Bermuda Monetary Authority 2011 Annual Report


The oil group of companies mutual member owned structure
The OIL Group of Companies headquartered in Hamilton, Bermuda“Mutual/Member Owned” Structure

Basic structure similar to any other corporations:- Shareholders, Board of Directors, Board Committees, Officers & Staff.

Major differences: Shareholders are the Customers (Insureds.)

Directors are elected from the Shareholder Body.

The Investment companies are directed by a separate Board of Directors, which includes senior financial officers from major Shareholder companies.

In case of OIL, no “Underwriting” per se - each Policyholder treated equitably; premiums are formula-based—”Post lost funding”.


Corporate governance
Corporate Governance headquartered in Hamilton, Bermuda

SHAREHOLDERS

(Annual Meeting)

Elects Board Annually

BOARD OF

DIRECTORS

(3-5) Meetings per year)

Chairman Nominates Committee members and Board Approves

Executive

Committee

Governance

Committee

Audit

Committee

Compensation

Committee

OMSL

MANAGEMENT

All Officers and

Support STAFF reside

in Management Company


The oil group of companies operational structure
The OIL Group of Companies headquartered in Hamilton, BermudaOperational Structure

OCIL and OIL have no employees, The Companies are administered by Oil Management Services Ltd.

Oil Management Services Ltd.

(“OMSL”)

Oil Casualty

Insurance, Ltd.

(112* members)

Oil Insurance Limited

(52 members)

Oil Casualty

Investment Corp. Ltd.

(OCICL)

Oil Investment

Corp. Ltd.

(OICL)

Excess General Liability

Excess Property

Facultative Reinsurance

Property Damage

Well Control, Pollution

  • *112 Members at December 31, 2012

  • 58 Shareholders.


Oil an alternative insurance solution
OIL: An Alternative headquartered in Hamilton, BermudaInsurance Solution

  • Today, OIL continues to be a very real and attractive option to many insurance buyers in the energy industry.

  • OIL’s $300 Million limit is one of the largest net line capacity insurers currently available to the energy industry.

  • OIL does not buy reinsurance so it is not subject to annual changes in conditions or restrictions on terms offered – in this way full terrorism coverage continued to be offered after September 11th.

  • Any rate increase in OIL is due to increased losses by the membership - not internal or external pressures - and hence is transparent.


Who are oil s 52 members
Who are OIL’s 52 Members? headquartered in Hamilton, Bermuda

  • Big Companies, such as:

  • ConocoPhillips

  • TOTAL

  • Chevron

  • Small Companies, such as:

  • Tesoro Petroleum LOOP LLC

  • Murphy Oil

  • Electric Utility/Power Generation Companies, such as:

  • Electricity de France (EDF), DTE Energy

  • Other members of varying sizes and business focus

  • within the broadly-based Energy Industry.


Apache Corporation headquartered in Hamilton, Bermuda

Arkema*

BASF SE*

BG Group plc*

BHP Billiton Petroleum (Americas) Inc.

Buckeye Partners, L.P.

Canadian Natural Resources Ltd*

Canadian Oil Sands Limited

CEPSA*

Chevron Corporation

Chevron Phillips Chemical Company LLC

CITGO Petroleum Corporation*

ConocoPhillips*

DONG Energy A/S*

Drummond Company Inc.

DTE Energy Company

EDF Group*

Energy Transfer Partners, L.P.

ENI S.p.a.*

GalpEnergia S.A.*

Hess Corporation*

Hovensa LLC

Husky Energy Inc.

LOOP LLC.

Lyondell Chemical Company*

Marathon Oil Company

Current OIL Members

Marathon Petroleum Corporation

MOL Hungarian Oil and Gas Company*

Murphy Oil Corporation

Nexen Inc.*

Noble Energy, Inc.

Nova Chemicals Corporation*

Occidental Petroleum Corporation*

OMV Aktiengesellschaft*

Paramount Resources

Phillips 66 Company

Puerto Rico Electric Power Authority

Repsol YPF, S.A.*

Royal Vopak N.V.*

Santos Ltd.*

Sempra Energy

Sinclair Companies (The)

Statoil ASA *

Suncor Energy Inc.

Talisman Energy Inc.*

Tesoro Petroleum Corporation

TOTAL*

Valero Energy Corporation*

Westlake Chemical Corporation

Williams Companies, Inc. (The)

Woodside Petroleum Limited.*

Yara International ASA*


Membership “Count headquartered in Hamilton, Bermuda”*

* Year-end member count, net year on year change.


2012 2013 membership changes
2012- 2013 Membership Changes headquartered in Hamilton, Bermuda


2013 membership by industry segment
2013 Membership headquartered in Hamilton, Bermudaby Industry Segment


OIL Shareholders by Headquarter headquartered in Hamilton, BermudaLocation

12-31-2013

Globally diversified membership with an increasing interest from non-US companies.


Oil risks insured
OIL: Risks Insured headquartered in Hamilton, Bermuda

  • Eight Business Sector Coverages

    • Physical damage to first party property.

    • Well Control, including Restoration and Redrilling.

    • Third party Pollution Liability, (non-gradual).

    • Limits = $300 million per occurrence, no annual aggregate.

    • Single Event Limit = $900 Million.

    • Deductibles = $10 Million minimum, increasing in $5 million increments.

  • WinstormCoverages: Onshore and offshore (ANWS only)

    • Coverage Grants same as 1, 2, and 3 above.

    • Limits= $150 Million p/o $250 million per occurrence

    • Single Event Limit = $750 Million.

    • Coverage is automatic for exposed assets, but member can effectively opt out of the coverage.


What s covered

Automatic coverage for: headquartered in Hamilton, Bermuda

Worldwide Coverage for an Energy Company and its Consolidated Subsidiaries / Affiliates

A member’s interest in a JV or other non-consolidated affiliate (if interest equates to less than 1% of Gross Assets)

Coverage for non-owned assets where a member has a contractual obligation to repair / replace

What’s Covered?


Oil vs commercial market

Membership is exclusive to energy companies headquartered in Hamilton, Bermuda

Members are all shareholders / policyholders and have vested interests

“Mutualized” sharing of losses

Easy annual renewal.

Premiums are formula and performance based i.e. no underwriting

One policy form for all members per the OIL Shareholders’ Agreement

OIL uses gross assets from audited balance sheets while the market uses insured values

OIL vs. Commercial Market


Oil limits 8 business sectors

No Annual Aggregate. headquartered in Hamilton, Bermuda

Joint Ventures – full Limits available. Limits do not scale for working interest but deductibles scale for interest.

Aggregation Limit – maximum payout of $900 Million (non-windstorm) on multiple shareholder claims arising out of one occurrence.

Reduced limits are available (minimum limit is $100M) subject to a warranty as respects the absence of other insurances (warranty does not apply to windstorm).

Limits can apply as primary, excess, quota share, ventilated and different limits may be elected by sector.

Oil Limits – 8 Business Sectors


Rest of the world row

For windstorm coverage outside of the ANWS zone (i.e. South China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

ROW coverage, by geographic region, will be restricted only after incurring a Loss Trigger Event:

A single loss event of $750M

Cumulative losses of $1B over a 5 year rolling basis

After a threshold trigger is met, windstorm coverage and pricing will automatically change in the next policy year unless the Board of Directors determines otherwise

Rest of the World (RoW)


Oil rating premium plan
OIL Rating & Premium Plan China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Formula basis – no traditional “underwriting.”

Premiums paid by Policyholders is a function of their Gross Assets.

Gross Assets = Gross value (historic cost) of property, plant & equipment before deprecation, depletion, and amortization, plus inventories, materials, and supplies.

Gross Assets are then adjusted for operational risk and coverage profile (i.e., sector and deductible weightings) = Weighted Gross Assets.

Eight Business Sector Coverages only


Net incurred losses since 1972
Net Incurred Losses Since 1972* China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

By Geographic Region of Physical Loss

As at December 31, 2012

Expressed in billions of U.S. dollars

* untrended


Repayment Schedule for Losses Incurred China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.2007-2011


Sector weighting for risk
Sector Weighting for Risk China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Policyholders’ Gross Assets are adjusted to recognize differences in operational risk between Business Sectors:

Offshore E&P -- Pharmaceuticals

Onshore E&P -- Mining

Pipelines -- Other

Electric Utilities

Refining & Marketing/Chemicals

ANWS-Onshore

ANWS-Offshore

Weighted Gross Assets are used to calculate individual Policyholders premiums.


8 business sector pricing non windstorm

Utilizes sector and deductible weightings. China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Gross Assets are adjusted for operational risk (sector weighting) and coverage profile (limit/deductible weighting) to generate Weighted Gross Assets which is used to determine pool % and calculate individual premiums.

8 Business Sector Pricing(Non-Windstorm)

  • ELECTRIC UTILITY

  • PIPELINES*

  • MINING

  • OTHER*


8 Business Sector Gross Assets China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Unmodified Gross Assets by Industry Segment

($2,214 Bn)*

Weighted Gross Assets by Industry Segment

($1,166 Bn)*

* as of December 31, 2011


Premium Calculator Example China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

- 8 Business Sector

GROSS ASSETS

BY BUSINESS

SECTOR

SECTOR / DEDUCTIBLE / LIMIT WEIGHTINGFACTORS

WEIGHTED

GROSS ASSETS (WGA)

X

X

Weighting Factors

Offshore E&P = 1.50

Pipelines = 0.25

Weighted Gross Factors

Offshore E&P = $37.50B

Pipelines = $1.25B

Total = $38.75B

Gross Assets

Offshore E&P = $25B

Pipelines = $5B

Total = $30B

WGA =

38.75B / $1,046B

(GROUP WGA) = 3.7%

MEMBERSHIP

ANNUAL LOSSES

(20%)

ANNUAL

PREMIUM

X

=


Oil s history 40 years
OIL’s History: 40 Years China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

1972

16

$160 Thousand

$160 Thousand

$48 Billion

12/31/2012

52

$3.6 Billion

$5.5 Billion

$2.3 Trillion

Membership

Shareholders’ Equity

Assets

Gross Assets Insured

Inception To Date:

Net Premiums Earned

Net Losses & Loss Expense *

Investment Income **

Dividends Paid ***

Preference Shares

Operating, Financing & Other Costs

* Includes IBNR/IBNE

** Net of Interest Expense

*** Excluding Preference Share dividends paid

  • +$13.5 Billion

  • - $13.8 Billion

  • +$ 5.2 Billion

  • - $ .8 Billion

  • +$ .4 Billion

  • $ .9 Billion

  • $ 3.6 Billion


Consolidated balance sheet
Consolidated Balance Sheet China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Consolidated balance sheet1
Consolidated Balance Sheet China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Consolidated income statement
Consolidated Income Statement China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


The oil group efficiency control
The OIL Group: China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.Efficiency & Control

Why we are different from the Commercial Market…

Commercial

Market

~30-40% Expense Ratio

PREMIUM

Insured

(Buyer)

LOSS PAYMENT

PREMIUM

“OIL Group”

~ 5%

Expense Ratio

Member

  • LOSS PAYMENT

  • OWNERSHIP

  • CONTROL

  • RETURN ON

  • CAPITAL


Marketing
Marketing China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

  • Broker Consulting Agreements

    • OIL has signed global service agreements with 4 key brokers to assist OIL in its efforts to attract “Quality” new members.

    • The services include:

      • Prospect Identification & Qualification.

      • Market Intelligence/Research

      • Product Development

      • Member opportunities/issues

      • Training

    • These agreements do not include any contingent compensation arrangements.


Marketing1
Marketing China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

In 3rd year of a global marketing plan

Building global broker network capabilities

Oil has been “on the road” globally engaging brokers

Delivering new global marketing materials

Web site

Brochures

Tools

Launching the OTA (Oil Technical Accreditation)

Launched in December 2012


New On-Line Tutorial & Official Accreditation China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Register @ www.oil.bm

“OTA”

Oil Technical Accreditation


Investment management

Investment Management China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Investment objectives
Investment Objectives China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

  • Investment objectives are to provide adequate liquidity to meet OIL’s future obligations, and endeavor to both preserve and enhance value over a market cycle.

  • The Investment Board reviews the investment objectives, investment policy, and asset allocation strategy at least annually.


Current asset allocation as at december 31 2012
Current Asset Allocation China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.as at December 31, 2012

Update: as approved by the Investment Board, 25% of Global Bonds (benchmark and portfolio) were shifted to short duration on October 1, 2012. This shift was made to reduce interest rate risk, locking in gains following a period of declining interest rates and protecting against potential losses from future interest rate rises.


Investment portfolio returns as at december 31 2012
Investment Portfolio Returns China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.as at December 31, 2012


Current events natural catastrophes

Current Events: China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.Natural Catastrophes


Historical hurricane tracks impacting oil
Historical Hurricane “Tracks” Impacting OIL China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Ivan $581M

121-132mph

Gustav

109-115mph

Ike

$750M

104-109mph

Rita $1,000M

121-138mph

Katrina $1,000M

127-161mph


Hurricanes past payout patterns as of 31 dec 2012
Hurricanes – Past Payout Patterns China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.As of 31 Dec 2012


Net incurred losses since 1972 by geographic region of physical loss
Net Incurred Losses since 1972* China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.by Geographic Region of Physical Loss

As at December 31, 2011

Expressed in millions of U.S. dollars

* untrended


Net incurred losses by industry 1972 2011 39 yrs
Net Incurred Losses by Industry China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.1972-2011 (39 yrs)

*Aggregate Value = $11.8Bn (untrended)

* Pure Loss—Excludes loss expense


Net incurred losses
Net Incurred Losses China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

By Industry Sector – 2012 only

Aggregate Value = $599M*

  • *$294M – North Sea Blowout Loss


Oil capital structure summary
OIL Capital Structure Summary China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Oil capital structure
OIL Capital Structure China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

  • In June 2006, OIL issued 600,000 Series A perpetual preferred shares (“Series A preference shares”) and received proceeds from the issuance, net of direct issuance costs, of approximately $586,842,000. Upon dissolution of OIL, the holders of the Series A preference shares are entitled to receive a liquidation preference of $1,000 per share, plus accrued unpaid dividends. 

  • Dividends on the Series A preference shares from the date of original issuance through June 30, 2011 are payable semi-annually in arrears in cash, when and if declared by the Board of Directors, out of funds legally available for the payment of dividends under Bermuda law. Such dividends are payable on June 30 and December 30 of each year, at the annual rate of 7.558% per $1,000 liquidation preference until June 30, 2011. 

  • After June 30, 2011 if the shares are not called, dividends will accrue at an annual rate of 3-month LIBOR plus a margin equal to 298.2 basis points per $1,000 liquidation preference, payable quarterly in arrears. The Company may redeem the Series A preference shares on or after June 20, 2011, at a redemption price of $1,000 per share.

  • During 2012, the Company repurchased and retired 59,100 of the Series A preference shares. As of December 31, 2012, OIL had 352,382 Series A shares outstanding.


Theoretical withdrawal premium twp
Theoretical Withdrawal Premium (TWP) China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

  • Both Standard & Poor’s and the Bermuda Monetary Authority now give OIL capital credit for TWP

  • Credit is calculated as follows:

    • Remove all sub-investment grade TWP amounts for individual members from the aggregate TWP amount

    • Discount future premium flows by 5% for 3 years

    • Discount each member’s TWP amount by their credit default risk factor (S&P Capital Model)


What about OCIL: China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


The Evolution of Energy China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.Mutuals

TOPS

1993-99

sEnergy

2002

(in runoff)

OIL

1972

Traditional

Insurance

Market

OCIL

1986

AEGIS

1975

EIM

1986

NEIL

1980


Ocil s historical mission and value proposition
OCIL’s Historical Mission and Value Proposition China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

OCIL = historically significant

Founded at a time when capacity was scarce

Hedge against commercial market “knee-Jerk” reactions, irrational underwriting and erratic pricing

Owned and controlled by Shareholders

OCIL’s original mission

To provide its policyholders with Directors & Officers Liability coverage on policy forms that were comparable to or broader than coverage available in the commercial market

To offer substantial limits at reasonable prices, which are reliable over the long-term in lines (Excess General Liability and D&O) that are often volatile or restrictive by commercial markets

To maintain capacity, pay claims that arise, and ensure fair treatment of members


Major differences ocil vs oil
Major Differences: OCIL vs. OIL China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Financial ratings
Financial Ratings China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

OIL

Financial Strength A- A2

OCIL

Financial Strength BBB+ A- Stable

Moody’s

A.M. Best

Standard & Poor’s


Consolidated balance sheet2
Consolidated Balance Sheet China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Consolidated balance sheet3
Consolidated Balance Sheet China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Consolidated income statement1
Consolidated Income Statement China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Ocil asset allocation as at november 30 2011
OCIL Asset Allocation China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.as at November 30, 2011


Portfolio returns by asset class fiscal year ended november 30
Portfolio Returns By Asset Class China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.Fiscal Year Ended November 30

Update: 3 Months ended February 29, 2012

Global Equity Benchmark 11.6%

Hedge Fund Benchmark 2.8%

Global Bond Benchmark 3.2%


Investment portfolio returns fiscal year ended november 30
Investment Portfolio Returns China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M. Fiscal Year Ended November 30


Cat bond definition
Cat Bond Definition China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

Cat Bond is short for Catastrophe Bond:

A corporate bond with special language that requires the bondholders to forgive or defer some or all payments of interest or principal if actual Catastrophe losses surpass a specified amount, or trigger.

Cat Bonds were originally developed by insurance companies in the early to mid 1990’s who were looking for additional capacity to reinsure natural Catastrophes, ie: earthquakes, wind storms, hurricanes.

Historically, Cat bonds have provided risk securitization for purely Catastrophic events – Avalon Re, Ltd. was the FIRST (and probably last) company to issue a Casualty Catastrophe Bond


Conclusions

Conclusions China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


Oil business model
OIL Business Model China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

  • Business model that has worked successfully to service the energy industry for over 30 years.

  • Insurance facility is tailored to the needs of the energy industry.

  • Mutualization of losses assures fairness and recovery of losses.

  • Among the largest limits available in the world market.

  • Highest form and reliability of coverage.

  • Strong access to capital markets when necessary.

  • Investment strategy promotes capital growth, as well as, security.

  • Low cost, most efficient vehicle for managing major risk transfer.

  • Biggest Challenge: Natural Catastrophes. How do we insure them? How do we allocate premium for them in a mutual setting?


Thank you
Thank you! China Sea, North Sea, Australia etc.), the windstorm limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.


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