Broker Presentation | January 2009

Welcome to Arista Insurance

• Current business environment

• UK commercial insurance market

• Arista vision and approach

• Opportunities

• Insurer results deteriorating – CEO departures

• Cost reduction > downsizing regional operations

• Service – static or reduced

• Commission decreases are coming

• Insurers’ resolve to improve results hardening

• No major insurer has a focus on independent brokers in their business model

UK Market Trends

• Consolidator/Insurer deals > commission subsidy paid for by independents?

• Technology > i-market - the web - direct - automation - aggregators

• Distribution channel not customer focus

• Insurers buying brokers

• Consolidation among brokers may slow down

• Direct Line threat

All insurers have room for improvement

What UK brokers told us they wanted from insurers• Accuracy

• Speed of delivery

• Consistency of delivery

• Understanding of individual brokers business needs

• Access to smart, professional, technically knowledgeablepeople

• People with authority and desire to address brokers issues

• Transparency – of processes and of brokers positions

• Integrity and reliability

• Application of modern technology and processes

Providing the best response to these needs is at the heart of Arista

Broker Research

Arista Business Model

Canopius and Equity as long term investors AND insurersLloyd’s financial strength rating – A+A business aligned to the broker commercial lines market

Equity

Arista

Arista Trading Model

Strong financial backing – insurer and investorOutsourcing for expertise not cost savingRange of insurer solutions to meet full breadth of brokers needs

Brokers

Outsourcedexpert services

Arista

Canopius Equity HSB ARAG Futurepartners

• £250m GWP in five years

• 150 underwriting staff in UK regions

• 250 to 300 exclusive independently minded broker relationships

• Professional intervention in medium/high complexity risk market

• Appropriate automation in simpler risk market

Arista in the Future

Arista PrinciplesUnderwriting and products

• Wide range of commercial underwriting capacity• Modern products with added value propositions• Pricing and acceptance consistency and sustainability

Effective and efficient business delivery• Broker input to process design and delivery• Modern flexible technology focused on brokers needs• Automation of routine tasks• Improved profit margins for select broker panel

Delivery through quality staff• Experienced professionals – in knowledge and attitude• Local and accessible relationships and decisions• Culture of customer service accountability

2009 Arista Segment Strategy‘The Underwriting Box’

Recovery Operators

High % of work on HGV’s, Risks without proper

premises, such as portacabins or

railway arches

Road Risks only

Large Main Dealers

Young Drivers

Vehicles sales (new or used)

Mechanical Repairs

and servicingBody Repairs

and paint spraying

Target vehicle types

are Cars and CV’s up to 7.5T

Motor Trade

Civil EngineersDemolition

RoofingScaffolding

Steel ErectorsWelders

Use of HeatHeight

Work at Depth

BuildersBricklayersCarpentersElectricians

PaintersPlasterers

Construction

CarsVans (Carriage of own goods

only)Special Types

Target vehicle types

are Cars and CV’s up to 7.5T

Public and Private Hire

Young Drivers

HaulageCoachesCouriers

Agricultural Implements &

Machinery Dealers (ex

vehicles)

Agriculture

Growing Crops and TimberAbbatoirs

AgriculturalProduce storage

Market Gardeners

Industrial & Manufacturing

Saw MillsCotton Mills

Woollen MillsIndustries with

disease exposureChemical Risks

Mining and Extraction

Scrap Metal Merchants

Exposure to USA Exports

Use of Heat Away

Carpet and RugsPaper products

Food Risks (Combustible

Linings)

PlasticsElectronics

PrintersBrewers

Metals and Engineering

ClothingFood Risks (Ex Linings)Wood Goods

Leisure & Well-being

Theme ParksInner City PubsWood floored

Hotels

Bingo and CinemaHalls

Seaside Guest Houses

Hospitals and Care Homes

Country Pubs and Restaurants

Purpose built hotels

Owner occupied Guest Houses

Fancy Goods Warehouse

Hauliers or TransitWarehouses

High Street Retail premises

Storage of goods acceptable in

other segments

Retail, Wholesale

& Distribution

Fish and ChipsAdult themedWaste Paper,

Foamed Plastics StorageTimberTyres

General Schools and

CollegesThe Supply

Industry (power/ water/ electricity/

telecom

Film StudiosPrivate Schools and Colleges

Services

Office risks ofProfessionals

Fleet

All processes – an entirely integrated legacy free model

• Modern technology and web delivery

• Self service – what you need when you need it

• Broker input to process design

Risk control and survey – integrated specialist supplier

• Desktop based survey – integrated with Arista systems

• Onsite survey – targeted against exposure

Claims – outsourced to achieve full national coverage

• Service level management by in house team

• All information, including workflow, posted on our systems

Less process induced frictional cost leading to better broker margins

Process

• Our customer led strategy is working

• Passionate about our business and service

• Brokers have responded to Arista

• In excess of £4m GWP per month

• Over 200 independent regional brokers

• Continuing to build on our success

• Product range in place

• Online trading

• Great staff, delivering great service

• 5 regional offices

• Employ 85 across the UK

Arista Progress So Far

• Major insurers are toughly reviewing

• Focus on shareholder value

• Consolidator commission reduction

• Staff reductions and service deterioration

• Quality and rating levels of their underwriting book

State of Our Market

• Deterioration in service levels forcing up brokers’ costs

• Rates will rise

• Some Insurers will scale down or withdraw

• Insurers will be forced to toughen all their actions

• Commission rates and profit commission under scrutiny

• Quality brokers will be better able to cope and indeed prosper.

• Consolidators will have to grow organically and reduce costs. Can they be successful?

2009 Scenario

• Establish Leeds and Midlands offices

• On track to achieve our goal of £250m premium income

• Passion to be successful

• Work extremely hard to deliver what our Brokers need

• No underwriting problems to solve

• Build on our sound foundations, and grow

• An appetite to open further Regional Offices

• Recruit high quality new staff who share our passion.

• Remain flexible and agile

• Give real advantage by providing exclusivity against consolidators and nationals.

• Develop further products

Arista Outline Plans for 2009

Northern Team Structure 2009 North West

Paul Dooley

Regional Manager

North & Scotland

Senior Development Underwriter

David MatthewsSenior Underwriters

Martin Hyde

Peter Howard

Pauline Spencer

Dave Carroll

Gary Armstrong

Regional Underwriting Manager

Jim Morrison

Broker Development Manager

Mike Shallcross

Underwriters

Richard Beedie

Declan Kinsella

2 x Vacancies

Underwriting Assistant

Joan Morrison (Temp)

Northern Team Structure 2009 Leeds

Paul Dooley

Regional Manager

North & Scotland

Senior Underwriters

2x Vacancies

Regional Underwriting Manager

Jim MorrisonBroker Development Manager

Sue Speight

Underwriters

1 x Vacancy

Arista – being the best through people and organisations working together