AGENDA

REINSURANCEAND THE FLORIDA

INSURANCE MARKET Presented by John Auer

President & CEOAmerican Strategic Insurance Group

AGENDA

• Overview of ASI

• General timeline of reinsurance placement

• Reinsurance program considerations

• Structure of the 2011 ASI reinsurance program

• Participating reinsurance companies

• Factors affecting the price of reinsurance

• Premium impact

OVERVIEW OF ASI

• American Strategic Insurance group (ASI), headquartered in St. Petersburg, Florida, is the fourth largest property insurer in Florida and currently insures over 350,000 Floridians.

• ASI is rated A- Excellent by A.M. Best.

• ASI was founded in 1997 to provide a voluntary insurance market for Florida residential property.

• In 2003, ASI expanded into commercial lines of property insurance.

• ASI currently writes approximately $650 million of business in 16 states and D.C.

• Florida currently represents 56% of ASI’s total nationwide premium volume.

Placement complete

February March April May

Firm order

to market

Proposal to market

Quotes received

GENERAL TIMELINE

Visit reinsurers

REINSURANCE PROGRAM CONSIDERATIONS

• Solvency

– Ensure financial ability to keep our commitments to insureds

– PML

– Multiple events

• Pricing

• Rating Agencies

REINSURANCE PROGRAM CONSIDERATIONS

• Modeling Data– Managing exposure is a priority at ASI and many departments are

involved, including Product Development, Underwriting, Finance, Marketing and Agents.

– ASI licenses two hurricane models in an effort to better estimate hurricane risk.

– ASI gradually incorporates model revisions into rates and overall portfolio management strategies.

– ASI focuses on maintaining quality data to ensure that our rates and modeling results are accurate.

REINSURANCE STRUCTURE

AIR v11 – 1:361 Year RMS v10 – 1:485 Year


(Top of 2010 program –$ 975M)



REINSURANCE PARTICIPANTS

•The 2011-2012 ASI catastrophe reinsurance program has 42 participating reinsurers

•No reinsurer participates on more than 15% of the ASI catastrophe reinsurance program

A.M. Best S&P A.M. Best S&PDomestic Markets Bermuda Markets

Everest Reinsurance Company A+ A+ ACE Tempest Reinsurance Ltd A+ AA-General Reinsurance Corporation A++ AA+ Allied World Assurance Company Limited A AMunich Reinsurance America, Inc. A+ AA- AlphaCat Re Ltd. Swiss Reinsurance America Corporation A A+ Alterra Bermuda Limited A A-Odyssey America Reinsurance Corporation A A- Arch Reinsurance Limited A A+

Ariel Reinsurance Company Ltd A- A-International Markets Aspen Insurance Limited A A

Allianz Risk Transfer AG A AA- Axis Specialty Limited A A+Flagstone Reassurance Suisse SA A- NR Catlin Insurance Company Limited A AHannover Ruckversicherung A AA- DaVinci Reinsurance Ltd A A+Munchener Ruckverischerungs-Gessellschaft AG A+ AA- Endurance Specialty Insurance Limited A AR+V Versicherung AG NR A+ Hannover Re (Bermuda) Ltd A AA-SCOR Switzerland AG A A Hardy Bermuda Limited (on behalf of Syndicate 0382) A A+

Hiscox Insurance Company (Bermuda) Limited A NRLondon Markets Partner Re A A+

Lloyd's of London A A+ Renaissance Reinsurance Limited A+ AA-HCC A A+ Tokio Millennium Re Ltd A+ AAHIS 33 A A+ Torus Insurance (Bermuda) Limited A- NRKLN 510 A A+ Validus Reinsurance Ltd A- A-AFB 623 A A+ XL Re Ltd A AAFB 2623 A A+GSC 958 A A+AUL 1274 A A+RNR 1458 A A+TMK 1880 A A+SJC 2003 A A+MMX 2010 A A+

Collaterlized

RatingsRatings

REINSURANCE PRICING

Company Specific Price Determinants

Reinsurers’ evaluation of the company:

•Amount of insurance to home value

•Claims handling practices

•Underwriting guidelines

•Quality of data

Concentration of business

Marketwide Price Determinants

Worldwide catastrophe activity

Catastrophe models

Supply and demand

Investment yields

CONCENTRATION OF BUSINESS

2010 Market Share by County

*FHCF TIV as of 12/31/10** ASI data as of 12/31/10

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3

4 5

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8

910

ASI ASI % FHCF FHCF % ASICounty TIV (000s) of Total TIV (000s) of Total Mkt Share

Sumter 4,340.5 5.4% 13,695.9 0.7% 31.7%Osceola 3,824.3 4.8% 29,310.6 1.5% 13.0%Wakulla 293.9 0.4% 2,343.0 0.1% 12.5%Dixie 72.6 0.1% 657.5 0.0% 11.0%Flagler 1,651.9 2.1% 15,586.0 0.8% 10.6%Nassau 934.0 1.2% 9,650.0 0.5% 9.7%Lake 3,658.1 4.6% 38,379.6 2.0% 9.5%Marion 3,394.4 4.2% 35,747.5 1.8% 9.5%Alachua 1,714.1 2.1% 20,630.0 1.1% 8.3%Franklin 107.1 0.1% 1,491.5 0.1% 7.2%Sub Total 19,991.0 25.0% 167,491.6 8.6% 11.9%

Tri CountyMiami-Dade 234.0 0.3% 141,788.1 7.3% 0.2%Broward 1,229.8 1.5% 147,101.5 7.5% 0.8%Palm Beach 3,244.3 4.1% 172,043.3 8.8% 1.9%Grand Total 80,056.6 1,949,637.8 4.1%

4.1%

1.5%

0.3%

8.8%7.5%

7.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

Miami-Dade Broward Palm Beach

ASI % of Total Industry % of Total

PREMIUM IMPACT

2011 - 2012 ASI Catastrophe Reinsurance Program (Florida Only)

% of Premium

Projected premium in force, August 31, 2011 301,731,901$

Projected private catastrophe reinsurance costs 84,270,598 27.9%Projected Florida Hurricane Catastrophe Fund costs 18,855,600 6.2%Total projected catastrophe reinsurance costs 103,126,198 34.2%

Breakout of Premium by Peril

Hurricane38.4%

All Other Perils61.6%

Breakout of Hurricane PremiumFlorida Hurricane

Catastrophe Fund16%

Taxes and Other Costs

11%

Private Reinsurance

73%

* A 10% increase in private reinsurance costs would result in an additional need of approximately 2.8% of premium plus expenses.

Documents

AGENDA