AMRISC OVERVIEW

2018

3/23/2018

Executive Summary

AmRisc is the largest wind MGA in the US. According to Business Insurance, we are the 4th largest MGA in the country. Established in late 2000, AmRisc is an underwriting manager focused on middle-market, E&S commercial property wind risks as well as admitted residential condominium business in Florida. We are honored to be Lloyd’s largest wind coverholder, and a direct insurance Program Manager with QBE Specialty, Steadfast (Zurich), Indian Harbor (XL), Lexington (AIG), General Security (SCOR), United Specialty, Safety Specialty Insurance Company, and Hannover. AmRisc is the exclusive MGA for American Coastal Insurance Company (ACIC), which insures Florida condominium associations on an admitted basis.

For Producers, AmRisc delivers the “100% Solution” for their CAT-exposed clients via market-leading per risk and portfolio capacity, specialized underwriting, and a high level of responsiveness.

For Carriers, AmRisc’s multi-model approach provides turnkey production, exceptional underwriting execution, policy issuance, inspection, regulatory compliance, portfolio management and catastrophe control. Insurers can participate on a portfolio with an attritional loss ratio under 15% and industry-leading CAT metrics for PML and expected loss ratios.

For Insureds, AmRisc provides $350M+ per risk of top-rated wind capacity covering their unique property insurance coverages in a single policy customized to deliver that “100% Solution”. Claims management is via a single TPA, which is time-tested and structured for the high volume claim count that is inherent in catastrophe property insurance.

Production Growth and Capacity

AmRisc finished 2017 with $878 million written premium with the catastrophes of Harvey, Irma, and Maria stabilizing and firming market pricing by year end.

55 80 100 125 125255 287

214 332 380 365

475 548 603 643 595 643

106

163 204 231

260

302 311

307 250

235

0100200300400500600700800900

1000E&S Admitted

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Performance

AmRisc writes predominantly US wind and has produced an inception to date loss ratio of 12.9% for Non-CAT and 15.4% for windstorm for its E&S carriers. All insurance results are highlighted below:

NonCAT L/R CAT L/R Total L/R $B Earned Premium

E&S and Admitted Insurance 12.9% 15.4% 28.3% 7.99 E&S Insurance 15.0% 18.7% 33.6% 5.59

ITD from 2001 - 31-Dec-16

AmRisc results have trended 50% better than our competition.

Portfolio Statistics

With current market conditions and pricing trends, AmRisc expects to grow written premium by approximately 12-14% in 2018. 95% of our accounts and 80% of our premiums are written full value, with the remainder being primary or quota share accounts. The premium and TIV split are shown below:

Underwriting

AmRisc currently manages over 40 contracts, the majority focused on writing the E&S portfolio on an All Risk basis. There are approximately 65 underwriters and 100 support staff, organized into eight underwriting teams. Underwriting is organized around products within AmRisc’s CAT specialization, which enables underwriters to stay one step ahead of the market. Division Presidents and Team Managers have loss prevention engineering experience and / or are veteran E&S underwriters averaging over 17 years underwriting experience. Brief bios of the management team are included herein.

Underwriting is controlled using a proprietary, computerized rating system called RisCalc and a proprietary database software called RiscTrack. Tools also include RMS and AIR CAT modeling, internet data gathering resources, SLOSH storm surge modeling and online flood mapping. Our foundational risk measurement is the RisCalc Model Price, which measures technical price adequacy for each account based on premium, deductibles, coverage, and terms & conditions in lieu of rate or changes in catastrophe modeling outputs. The RisCalc Model Price on the entire book has been measured and trended across all contracts since 2003.

In the hands of the AmRisc Underwriter, each account’s RisCalc model “tells the story of the risk” capturing the individual risk pricing for all covered perils, as well as showcasing critical CAT metrics and Return on Capital for each account. This quantitative benchmark, coupled with the experience-informed judgement of the AmRisc Underwriter, better evaluates where we are in the CAT market cycle and allows us to more effectively manage an individual account’s risk transfer.

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AmRisc focuses on the capture of quality data including secondary risk characteristics. While this would seem relatively basic, general execution by competitors in the market is weak. Our quote, binder and policy documentation standards are stringent. The proper execution of these basic underwriting steps, combined with experienced specialists and market-leading capacity, enables AmRisc to outperform its peers by a significant margin.

Inspections

AmRisc developed customized inspection forms and then worked with several inspection companies to implement a comprehensive inspection routine focused on the wind characteristics of a risk. With our entry into the DIC-EQ market, we have now implemented a similar routine for the unique earthquake characteristics. Recently, these inspection forms were updated and now utilize a state of the art web platform tied to our systems for immediate ordering, receipt, review and status tracking. All inspection data is directly connected to our exposure database and automatically updated. AmRisc inspects 95% or more of the exposed TIV in the portfolio, and geocoding for the entire portfolio is 100% street resolution or better. Inspections are designed to pick up secondary construction characteristics important to wind resistance that the market often ignores. As secondary characteristics are then captured in our catastrophe modeling software, the model results are significantly more accurate than the industry average.

RiscTrack, our proprietary database system creates various reports that identify differences between submitted information and inspected information. AmRisc can determine if underwriting action is needed, warn Insureds if they appear not to be in compliance with warrants or subjectivities, and/or take proper cancellation measures. Producers understand that AmRisc’s execution of the underwriting & inspection process is strict, and undesirable risks are best placed with companies less stringent in their underwriting/inspection routine.

Portfolio Optimization

Catastrophe underwriting involves both individual account underwriting as well as portfolio management. Using Risk Link, Classic/2, RisCalc and RiscTrack, AmRisc can optimize the portfolio parameters most important to companies. AmRisc offers a class-leading balance of premium to PML to enable companies to minimize the capital dedicated to the portfolio.

Distribution

AmRisc’s market position creates a competitive advantage when competing for the best accounts. Our Elite Producer Program (EPP) is the central platform for managing appointments, targeting production and rewarding all of our Elite Producers. The Elite Producer Program helps producers focus on target business, binder hit ratios and renewal retention while also balancing incentives between higher demand business (such as Tri-county Florida and Harris/Galveston area wind) and all other business.

Our Brokerage (wholesale) producers’ performance within the EPP is based not just on written premium, but also a point calculation taking into account several components including premium, hit ratio, and product written. For program rules, including the details of this EPP point calculation, the list of appointed producers and their Elite Status, please see our website at http://www.amrisc.com/elite_producer.shtml.

Historically, distribution has emphasized the Brokerage (wholesale) channel with some exceptions: select Florida retail appointments for American Coastal business that were part of the late-2007 insurance company startup and select national retailer appointments for E&S business in 2009. In both cases, underwriters were working on both retail and wholesale accounts that, while effective, were not maximizing the deployment of our carriers’ PML. For this reason, and to improve our overall product delivery, CHRONOS Underwriters was hard-branded as a separate company division at the end of 2017. This was a natural progression in the development from AmRisc Agency Group, which was originally formed in 2015 with staff dedicated to the agency space and serving that segment exclusively.

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Eighty percent (80%) of total production comes from our top 10 Producer companies. The current overall distribution split between channel and account type is shown below:

Conclusion

AmRisc is the largest wind MGA in the US.

In the E&S segment, AmRisc delivers $350M Per Risk Capacity and deploys nearly $3B of PML for our E&S Syndicate and Carrier partners.

Our ITD (Yearend 2017) Non-CAT loss ratio is 12.9% and windstorm loss ratio is 15.4% for E&S business.

We achieved this result during a challenging timeframe beginning with the eight land-falling hurricanes of 2004 and 2005 and extending through the active 2008, 2012, and 2017 seasons; a result that far exceeds that of its industry peer group.

For commercial property insurers, we believe the middle-market offers the best combination of rate adequacy and profitability. These strengths, combined with strong execution of the basics and instantaneous market penetration, make AmRisc the MGA of choice for middle-market commercial catastrophe portfolios.

If you have any questions or would like to discuss whether AmRisc might be a good fit with your commercial wind or earthquake capacity, please visit our website at www.amrisc.com.

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Leadership Team Bios Dan Peed, Group CEO of AmRisc, has a B.S. degree in Petroleum Engineering and an M.B.A. in Insurance. In addition, he has CPCU and ARe designations, a Professional Engineering designation in Fire Protection, and loss prevention engineering experience within the Factory Mutual system. Dan has over 30 years’ experience in the insurance industry, which includes both insurance and reinsurance underwriting focused on commercial property risks. He was a Director & SVP of Fulcrum Insurance Company, CEO of American Underwriting Managers, and SVP and Manager of Direct & Facultative Property for Sorema N.A. Dan is a founding member of AmRisc.

Laura Beckmann, Group President and Chief Operating Officer, has a B.A. degree in Broadcast Journalism and a background in banking and business administration. With over 17 years’ experience in the financial services and insurance industry, her background includes time at Bank One and Regions Bank as an Account Executive on both the banking and lending side. Prior to joining AmRisc, Laura also spent time in broadcasting and film production for various networks. She is responsible for AmRisc’s financial, operational, personnel, administrative and reporting procedures and controls.

Brian Reid, Interim Chief Capacity Officer, has a B.S. degree in Chemical Engineering with a background in loss prevention engineering (Factory Mutual), facultative reinsurance including CAT Property (Sorema N.A.), and lastly, was Regional Manager of the Fulcrum Specialty Chemical Risk Division for Fulcrum and Rampart (both Sorema N.A. companies). Brian has over 20 years’ experience in the insurance industry.

John Horton, Chief Marketing Officer, has a B.S. degree in Chemical Engineering and an ARe professional designation. His 30-year insurance career began with FM Global as a loss prevention engineer moving to account executive with Arkwright (FM Global) where he marketed both in the U.S. and in the Asia-Pacific region. In the late 1990’s he held senior underwriting positions with Sorema North America producing in the facultative reinsurance and E&S markets. In addition to the CMO responsibility, John serves as CEO of National & Specialty Products which includes National Accounts, AmRisc Online, and DIC-Earthquake.

Bill Hopkins, Chief Claims Officer, has a B.S. degree in Petroleum Engineering and has over 20 years’ experience in the insurance and claims industry. In addition, he holds both a Professional Engineering and A.I.C. designation. He was formerly a Director with the U.K. consulting firm of Charles Taylor, and prior to that was Managing Director of Rush Johnson Associates. Bill joined AmRisc in June 2007 and is responsible for claims and strategic development within the group.

Lisa Norwood, Chief Administrative Officer, has a B.B.A. in Business Management and holds CPCU and CISR insurance designations. Her pre-insurance background includes 6 years at McKinsey & Company as a consultant recruiter. In addition, she holds a teaching certificate in Special and Physical Education and has spent over 25 years as a trainer and coach. Lisa joined AmRisc in 2009, worked as Marketing Manager and Underwriter, and is now responsible for AmRisc’s regulatory and compliance efforts and producer-facing marketing efforts.

Billy Hammond, Product Development Manager, received his B.B.A. in Risk Management and Insurance. His early career included time in law enforcement before working 6 years at Peachtree Special Risk Brokers as a surplus lines broker. He transitioned to underwriting at Hiscox USA before joining AmRisc in 2014. While at AmRisc, he served as an underwriter in the National Accounts and Public Entity practice.

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Candice Ludwig, Chief Underwriting Officer of General Property, has a B.S. in Industrial Engineering with a minor in Mathematics. She began her career in insurance over 14 years ago at Energy Technical Underwriters, evaluating energy and chemical related property risks. Upon joining AmRisc, Candice has worked in both the General Property and Technical risks underwriting teams and currently develops and oversees underwriting guidelines for general property risks.

Steve Tschirhart, Chief Underwriting Officer of American Coastal, has a B.S. in Maritime Administration and over 15 years’ experience in insurance. Steve began his career as a marketing technician with Wortham, spent 2 years as an underwriter at Deep South Surplus, and was a Business Developer for Great American Insurance Company. Upon joining AmRisc in 2009, he spent time on the National Accounts team before transitioning to underwriting and team management in the high-rise condo space. He currently oversees the underwriting direction and portfolio management for American Coastal.

Scott Hornsby, Chief Underwriting Officer, National Specialty Group has a B.S. degree in Finance. His 30 year insurance career began with Aetna Life & Casualty as a property specialist underwriter in the South East and Hartford CT. Scott continued his career in the Atlanta area with various senior underwriting positions at Excess & Surplus lines companies including a property brokerage intermediary assignment. Scott has performed in both underwriting and management duties for AmRisc over the last 10 years and currently establishes underwriting guidelines and assists in building insurance products.

Angela Matthews, Chief Underwriting Officer of Technical Risks, has a B.B.A. in Finance and holds CPCU and CPL insurance designations. She began her career as a teacher but transitioned to AmRisc in 2008. Her career consists of time on both the Tech and National Accounts underwriting team. In addition, she has become an integral part of carrier contract maintenance and development.

Molly Nickoles, Chief Underwriting Officer of Builders Risks, has a B.A. in Mathematics with a minor in General Business. She began her career in insurance over 15 years ago, working as an actuarial analyst for 3 years. Upon joining AmRisc in 2003, her focus was builders risk, municipalities, and small general property accounts. Over the years, she progressed to a team manager role focusing on builders’ risk accounts. She now serves as CUO in this product space, providing underwriting direction and contract management.

General Property

Brian Reid, CEO, has a B.S. degree in Chemical Engineering with a background in loss prevention engineering (Factory Mutual), facultative reinsurance including CAT Property (Sorema N.A.), and lastly, was Regional Manager of the Fulcrum Specialty Chemical Risk Division for Fulcrum and Rampart (both Sorema N.A. companies). Brian has over 20 years’ experience in the insurance industry.

Eric Powell, President, has a B.S. degree in Chemical Engineering with a background in loss prevention engineering (Factory Mutual) and risk engineering at AON Risk Services. Eric joined AmRisc in 2007, and in addition to leading a general property team, has spearheaded construction training for underwriters.

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National Specialty

John Horton, CEO, has a B.S. in Chemical Engineering and an ARe professional designation. His 30-year insurance career spans time with FM Global as a loss prevention engineer, moving to account executive with Arkwright, and eventually, holding senior underwriting positions with Sorema North America, producing in the facultative reinsurance and E&S markets. In addition to his role as Chief Marketing Officer, he has responsibility for development of National Accounts, AmRisc Online, and DIC-Earthquake products.

Gordon Forbes, President, has a B.A degree. With 26 years’ experience in the industry, his background includes underwriting at CNA, Allianz and Lexington in the Los Angeles area. Gordon was the Property Underwriting manager for the Lexington underwriting operations in Los Angeles and then in Houston. He joined AmRisc in 2009 and is currently responsible for underwriting and management of the National Accounts team, along with oversight of AmRisc Online and DIC Quake teams.

Technical Risks

Brett Dupre, CEO, has a B.S. degree in Petroleum Engineering and has over 25 years’ experience in the insurance industry. His background consists of loss prevention engineering at FM Global where he managed the High Hazards division and was in charge of establishing corporate pricing, capacity and coverage guidelines for high hazard occupancies. Brett spent time in the UK, Texas and the East Coast throughout his career with FM Global and joined AmRisc in 2008.

Marcus Kelley, President, has a B.S. in Mechanical Engineering. After working at Alcatel as a Mechanical Engineering design college intern, Marcus began his career at FM Global as a Consultant Engineer. From there, he spent 5 years with Chartis (formerly AIG Commercial Insurance) as a Property Senior Loss Control Consultant before joining AmRisc in 2011.

CHRONOS

John Allen, CEO, CHRONOS Underwriters, has a B.B.A. in Business Administration and holds an ARM insurance designation. With 30 years’ in the insurance industry, John’s experience spans companies such as The Travelers Insurance Company, Continental Insurance Company, General Reinsurance Corporation, Royal Specialty Underwriting, Inc., Axis Insurance Company, Peachtree Specialty Risk Brokers, and Aspen Specialty. He joined AmRisc in 2011.

David Howard, President, CHRONOS Underwriters, was a Distinguished Military Graduate with a B.S. from Central Michigan University. After 4 years in the U.S. Army, he built 25 years’ experience in the insurance industry. David held high-level management positions with Bankers Insurance Group, Insurance Management Solutions Group, and Paragon Strategic Solutions (Benfield) before starting Edison Insurance Group.