insurance monthly - oracle€¦ · house republicans succeeded in pushing through a bill aimed at...

Insurance Monthly

December 2015

Sources: Bloomberg, Capital IQ, SNL FinancialDisclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed.Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department.The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offeror a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.

� House Republicans succeeded in pushing through a bill aimed at repealing and replacing the Affordable Care Act, President Barack Obama'ssignature legislation passed in 2010. The House narrowly adopted the measure in a 217-213 vote, with 20 Republicans voting against the bill.No Democrats voted in favor. Several Republican members of the Senate, including Sens. Susan Collins of Maine and her co-sponsors, BillCassidy of Louisiana and Rand Paul of Kentucky, stand ready with their ACA repeal-and-replace bills in hand. But shares of major healthinsurance companies hardly blinked after the House passed the bill, known as the American Health Care Act.

� Bondholders rejected Puerto Rico's last debt-structuring proposal before a stay on litigation against the commonwealth expired, BloombergNews reported. The commonwealth reportedly offered as much as 77 cents on the dollar to holders of general obligation bonds, but no dealwas signed. Ambac Financial Group Inc. filed multiple lawsuits against Puerto Rico after the stay on litigation was lifted. The company, in onesuit, argued that Puerto Rico's plan to recycle sales tax revenue supporting a debt agreement called COFINA, which is insured by thecompany, violates both the commonwealth and U.S. constitutions. Assured Guaranty Ltd. filed an adversary complaint in the Federal DistrictCourt in Puerto Rico.

� Intact Financial Corp.'s agreement to buy OneBeacon Insurance Group Ltd. gives Canada's largest property and casualty insurer the entry tothe U.S. small to midsized commercial lines market; Intact agreed to buy OneBeacon on May 2 for $1.71 billion in an all-cash deal.

� UnitedHealth Group Inc. is still pushing Washington lawmakers to repeal the ACA, as it believes certain health reform laws are adverselyaffecting insurers and patients alike, according to CEO Stephen Hemsley.

� Property and casualty rates were generally flat to down slightly during the first quarter, according to Brown & Brown Inc. President and CEOJ. Powell Brown. However, coastal property and commercial auto remained exceptions to the broader rule, with rates in the former linedeclining by between 2% and 10% and rates in the latter rising by up to 5% for most accounts.

Recent Insurance Industry News

Performance of Market Indices

-15.00%

-5.00%

5.00%

15.00%

25.00%

35.00%

45.00%

Apr-16 May-16 Jun-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Feb-17 Mar-17

S&P 500 S&P 500 Insurance (^IUX)

S&P 500 P&C S&P 500 L&H

SPDR S&P Insurance ETF (^KIE)

May 1.79% 2.03% 1.53% 1.39% 1.50%

6-Month 15.06% 18.16% 17.78% 18.80% 18.32%

LTM 15.11% 21.21% 14.04% 28.64% 21.78%

SPDR S&P

Insurance ETFS&P 500

S&P 500

Insurance

S&P 500

P&C

S&P 500

L&H

Insurance Monthly

December 2015

2

Mid Cap

Sources: Capital IQ, SNL Financial

Note: All data is denoted in millions, except stock price information and financial ratios

Life & Health: Trading Statistics

Small Cap

Stock Price Price Price

Company Name Ticker as of Market Enterprise to LTM to Dividend

4/28/2017 Cap. 1 month 3 months 1 year Value EPS Book Value Yield

Citizens Inc. CIA $7.05 $353 (6.6%) (22.7%) (12.4%) $318 47.3x 1.2x 0.0%

FBL Financial Group Inc FFG 66.50 1,657 3.9% (2.7%) 10.4% 1,724 15.3x 1.4x 5.0%

Fidelity & Guaranty Life FGL 28.45 1,678 3.5% 7.0% 8.0% 1,607 9.6x 0.9x 0.9%

Genworth Financial, Inc. GNW 4.04 2,016 (1.0%) (1.2%) 41.3% 6,577 NM 0.1x 0.0%

Horace Mann Educators HMN 38.65 1,567 (3.5%) (7.8%) 23.8% 1,798 21.3x 1.2x 2.9%

Independence Holding Co IHC 18.95 323 (3.1%) 4.4% 21.9% 285 28.3x 0.7x 0.7%

Kansas City Life Insurance Company KCLI 45.50 482 (0.9%) (4.6%) 8.3% 472 19.3x 0.6x 2.4%

National Western Life Insurance NWLI 306.24 1,114 1.5% (3.7%) 39.1% 1,062 0.0x 0.0x 0.1%

StanCorp Financial Group SFG 60.00 721 1.8% 5.3% (4.8%) 719 NM 1.1x 0.0%

Maximum $2,016 3.9% 7.0% 41.3% $6,577 47.3x 1.4x 5.0%

Minimum $323 (6.6%) (22.7%) (12.4%) $285 0.0x 0.0x 0.0%

Mean $1,101 (0.5%) (2.9%) 15.1% $1,618 20.2x 0.8x 1.3%

Median $1,114 (0.9%) (2.7%) 10.4% $1,062 19.3x 0.9x 0.7%

Stock Performance




American National Insurance Co. ANAT $116.92 $3,148 0.6% (2.6%) 1.1% $3,004 16.4x 0.7x 2.8%

American Equity Investment Life Holding Co. AEL 23.72 2,105 1.2% (11.9%) 65.5% 2,052 11.4x 0.9x 1.0%

Assurant AIZ 96.24 5,329 0.8% (2.8%) 13.8% 5,364 12.7x 1.4x 2.0%

CNO Financial Group Inc CNO 21.07 3,626 3.9% 0.8% 13.3% 7,291 9.9x 0.8x 1.5%

Kemper Corporation KMPR 39.35 2,018 (0.4%) (7.3%) 26.9% 2,654 133.3x 1.0x 2.6%

Primerica Inc. PRI 83.80 3,821 3.2% 3.8% 68.5% 4,559 17.7x 3.1x 0.9%

Reinsurance Group of America Inc. RGA 125.04 8,051 (0.6%) (3.9%) 30.6% 10,487 10.5x 1.1x 1.3%

Torchmark Corp. TMK 76.71 9,033 (0.3%) (1.1%) 32.2% 10,355 17.0x 1.9x 0.8%

Maximum $9,033 3.9% 3.8% 68.5% $10,487 133.3x 3.1x 2.8%

Minimum $2,018 (0.6%) (11.9%) 1.1% $2,052 9.9x 0.7x 0.8%

Mean $4,642 1.1% (3.1%) 31.5% $5,721 28.6x 1.3x 1.6%

Median $3,724 0.7% (2.7%) 28.8% $4,961 14.6x 1.0x 1.4%

Stock Performance

Insurance Monthly

December 2015

3



Life & Health: Trading Statistics

Large Cap




AFLAC Inc. AFL $74.88 $29,802 3.6% 3.5% 8.5% $35,052 12.0x 1.4x 2.3%

Ameriprise Financial Inc. AMP 127.85 19,561 (0.4%) (2.8%) 30.3% 22,836 15.7x 3.2x 2.6%

Lincoln National Corporation LNC 65.93 14,869 2.7% (6.0%) 50.8% 18,711 11.3x 1.0x 1.7%

MetLife, Inc. MET 51.81 55,978 (1.3%) (1.2%) 13.3% 100,147 NM 0.8x 3.1%

Principal Financial Group Inc. PFG 65.13 18,764 3.4% 4.1% 51.9% 20,579 14.3x 1.7x 2.9%

Prudential Financial, Inc. PRU 107.03 46,063 1.2% (3.2%) 37.3% 65,424 10.9x 1.0x 2.8%

Unum Group UNM 46.33 10,573 0.4% (5.1%) 34.9% 13,458 11.4x 1.2x 1.7%

Sun Life Financial Inc. TSX:SLF 48.21 29,585 (1.6%) 0.0% 12.1% 36,285 12.1x 1.3x 3.4%

Maximum $55,978 3.6% 4.1% 51.9% $100,147 15.7x 3.2x 3.4%

Minimum $10,573 (1.6%) (6.0%) 8.5% $13,458 10.9x 0.8x 1.7%

Mean $28,149 1.0% (1.3%) 29.9% $39,061 12.5x 1.5x 2.6%

Median $24,573 0.8% (2.0%) 32.6% $28,944 12.0x 1.2x 2.7%

Stock Performance

Insurance Monthly

December 2015

4

Mid Cap

Life & Health: Operating Statistics

Small Cap



Excludes companies with < $100mm market cap

Total Debt Return Most Recent Year Total

Company Name Ticker Total Total LTM Total Investments to to Total on Net Insurance Net Premiums Loss Statutory Surplus

Assets Equity Revenue Investments Total Assets Capitalization Equity (ROE) Losses Earned Ratio and Capital

Citizens Inc. CIA $1,610 $254 $250 $1,242 77.2% 0.0% 2.5% $81 $198 41.1% $35

FBL Financial Group Inc FFG 9,663 1,183 729 8,403 87.0% 7.6% 9.1% 416 309 134.6% 617

Fidelity & Guaranty Life FGL 27,897 1,908 1,292 21,448 76.9% 17.5% 9.9% 791 70 NM 1,320

Genworth Financial, Inc. GNW 104,686 14,716 8,755 71,177 68.0% 25.2% 0.3% 5,224 4,160 125.6% 5,575

Horace Mann Educators HMN 0 1,294 1,145 0 0.0% 16.1% 0.0% 541 759 71.3% 912

Independence Holding Co IHC 1,251 442 354 521 41.6% 8.0% 5.6% N/A 480 N/A N/A

Kansas City Life Insurance Company KCLI 4,449 686 445 3,490 78.4% 0.0% 3.3% 212 172 123.3% 323

National Western Life Insurance NWLI 12,033 1,749 758 10,593 88.0% 0.0% 6.3% 66 183 35.9% 1,251

StanCorp Financial Group SFG 235 89 339 0 0.0% 31.6% (11.2%) N/A N/A N/A N/A

Maximum $104,686 $14,716 $8,755 $71,177 88.0% 31.6% 9.9% $5,224 $4,160 134.6% $5,575

Minimum $0 $89 $250 $0 0.0% 0.0% (11.2%) $66 $70 35.9% $35

Mean $17,980 $2,480 $1,563 $12,986 57.5% 11.8% 2.9% $1,047 $791 88.6% $1,433

Median $4,449 $1,183 $729 $3,490 76.9% 8.0% 3.3% $416 $254 97.3% $912




American National Insurance Co. ANAT $24,851 $4,738 $3,243 $21,048 84.7% 2.9% 4.2% $1,726 $1,997 86.5% $2,986

American Equity Investment Life Holding Co. AEL 57,549 2,436 2,730 37,618 65.4% 23.2% 7.8% 52 44 119.9% 2,727

Assurant AIZ 29,568 4,159 6,936 11,454 38.7% 20.4% 11.2% 1,808 5,007 36.1% 1,684

CNO Financial Group Inc CNO 32,427 4,607 4,095 26,086 80.4% 47.7% 8.5% 2,391 2,463 97.1% 1,957

Kemper Corporation KMPR 8,307 1,984 2,562 6,668 80.3% 27.5% 0.7% 1,781 2,220 80.2% 1,333

Primerica Inc. PRI 11,670 1,246 1,581 2,460 21.1% 44.5% 18.7% 368 844 43.6% N/A

Reinsurance Group of America Inc. RGA 53,806 7,420 12,018 39,143 72.7% 32.9% 10.9% 7,993 9,249 86.4% 11,653

Torchmark Corp. TMK 20,021 4,745 3,981 14,643 73.1% 23.5% 11.9% 2,129 3,119 68.3% 1,335

Maximum $57,549 $7,420 $12,018 $39,143 84.7% 47.7% 18.7% $7,993 $9,249 119.9% $11,653

Minimum $8,307 $1,246 $1,581 $2,460 21.1% 2.9% 0.7% $52 $44 36.1% $1,333

Mean $29,775 $3,917 $4,643 $19,890 64.6% 27.8% 9.2% $2,281 $3,118 77.3% $3,382

Median $27,209 $4,383 $3,612 $17,845 72.9% 25.5% 9.7% $1,795 $2,342 83.3% $1,957

Insurance Monthly

December 2015

5



Life & Health: Operating Statistics

Large Cap




AFLAC Inc. AFL $133,650 $20,340 $22,702 $115,859 86.7% 24.9% 12.5% $12,919 $19,225 67.2% $10,417

Ameriprise Financial Inc. AMP 140,857 6,227 11,876 40,823 29.0% 50.8% 20.3% 2,646 1,491 177.5% N/A

Lincoln National Corporation LNC 267,468 14,973 13,527 107,642 40.2% 27.7% 9.6% 4,692 8,231 57.0% 8,218

MetLife, Inc. MET 914,687 68,108 61,206 489,237 53.5% 47.1% (0.8%) 40,804 39,153 104.2% 25,122

Principal Financial Group Inc. PFG 235,496 10,780 12,407 76,783 32.6% 23.2% 12.7% 6,913 5,299 130.5% 4,644

Prudential Financial, Inc. PRU 797,365 46,974 59,923 450,255 56.5% 42.1% 9.2% 33,632 30,964 108.6% 17,008

Unum Group UNM 62,525 9,107 11,128 51,527 82.4% 24.7% 10.5% 6,942 8,358 83.1% 3,627

Sun Life Financial Inc. SLF 261,099 22,811 26,800 133,248 51.0% 16.0% 11.8% N/A N/A N/A N/A

Maximum $914,687 $68,108 $61,206 $489,237 86.7% 50.8% 20.3% $40,804 $39,153 177.5% $25,122

Minimum $62,525 $6,227 $11,128 $40,823 29.0% 16.0% (0.8%) $2,646 $1,491 57.0% $3,627

Mean $351,643 $24,915 $27,446 $183,172 54.0% 32.1% 10.7% $15,507 $16,103 104.0% $11,506

Median $248,298 $17,657 $18,115 $111,751 52.3% 26.3% 11.2% $6,942 $8,358 104.2% $9,318

Insurance Monthly

December 2015

6

Sources: A.M. Best, Bloomberg, Fitch, Moody’s, S&P

Note: ICR is the Issuer Credit Rating; an independent opinion of an issuer’s ability to meet its ongoing senior financial obligations

Mid Cap

Life & Health: Debt Ratings

Small Cap

American Equity Investment Life Holding Co. AEL NR BBB- BBB- bbb-

Citizens Inc. CIA NR NR NR NR

FBL Financial Group Inc FFG NR NR NR bbb

Fidelity & Guaranty Life FGL NR NR NR NR

Genworth Financial, Inc. GNW NR B * NR bb- *-

Horace Mann Educators HMN Baa3 BBB BBB+ bbb

Independence Holding Co IHC NR NR NR NR

Kansas City Life Insurance Company KCLI NR NR NR a

National Western Life Insurance NWLI NR NR NR bbb

Company Name Ticker Moody's S&P Fitch

A.M.

Best ICR

American National Insurance Co. ANAT NR A NR a+

Assurant AIZ Baa2 BBB+ Withdrawn bbb+

CNO Financial Group Inc CNO Ba1 BB+ BBB- bbb-

Kemper Corporation KMPR Baa3 BBB- BBB bbb-

Lincoln National Corporation LNC Baa1 A- A- a-

Primerica Inc. PRI Baa2 A- NR NR

Reinsurance Group of America Inc. RGA Baa1 A- BBB+ a-

StanCorp Financial Group SFG Baa1 BBB+ A- bbb+

Torchmark Corp. TMK Baa1 A A- a-


A.M.

Best ICR

Insurance Monthly

December 2015

7



Life & Health: Debt Ratings

Large Cap

AFLAC Inc. AFL A3 A- A a-

Ameriprise Financial Inc. AMP A3 A NR a-

MetLife, Inc. MET A3 A- A a-

Principal Financial Group Inc. PFG (P)Baa2 BBB+ A a-

Prudential Financial, Inc. PRU Baa1 A A a-

Sun Life Financial Inc. TSX:SLF Baa2 (hyb) A A NR

Unum Group UNM Baa2 BBB BBB+ bbb


A.M.

Best ICR

Insurance Monthly

December 2015

8




Property & Casualty: Trading Statistics

Small Cap




Amerisafe, Inc. AMSF $57.55 $1,107 (9.7%) (10.5%) 5.4% $1,067 15.8x 2.3x 7.4%

Argo Group AGII 65.95 1,989 0.2% (1.5%) 30.8% 2,270 13.0x 1.1x 1.6%

Baldwin & Lyons Inc. BWIN.B 24.50 368 2.9% 2.9% (0.1%) 325 16.9x 0.9x 4.5%

Conifer Holdings, Inc. CNFR 7.30 60 1.4% 3.5% 7.2% 66 NM 0.9x 0.0%

Donegal Group Inc. DGIC.A 16.66 448 (3.2%) 0.3% 8.9% 489 0.0x 0.0x 0.0%

EMC Insurance Group Inc. EMCI 28.68 609 3.3% 3.2% 9.6% 634 14.7x 1.0x 3.2%

Employers Holdings Inc. EIG 40.00 1,291 7.2% 6.4% 37.8% 1,265 12.3x 1.5x 1.5%

Global Indemnity Limited GBLI 40.55 713 7.9% N/A N/A 813 12.4x 0.8x 0.0%

Hallmark Financial Services Inc. HALL 10.51 195 (5.2%) (4.6%) (3.8%) 201 30.6x 0.7x 0.0%

Homeowners Choice Inc. HCI 47.69 490 4.7% (3.3%) 61.1% 358 13.1x 1.8x 3.1%

Horace Mann Educators HMN 38.65 1,567 (3.5%) (7.8%) 23.8% 1,798 21.3x 1.2x 2.9%

Infinity Property and Casualty Corp. IPCC 99.25 1,093 4.6% 5.3% 25.5% 1,317 23.2x 1.5x 2.4%

James River Group Holdings, Ltd. JRVR 43.56 1,277 5.2% 1.3% 40.2% 1,360 15.6x 1.7x 6.1%

MBIA Inc. MBI 8.40 1,132 2.7% (18.6%) 7.1% 6,691 NM 0.3x 0.0%

Navigators Group Inc. NAVG 54.05 1,576 (0.9%) (1.8%) 31.1% 1,775 19.0x 1.2x 0.4%

OneBeacon Insurance Group Ltd OB 15.95 1,511 5.5% (2.3%) 27.3% 1,719 18.8x 1.7x 4.6%

PartnerRe Limited PRE 3.69 1,592 (8.1%) (22.0%) (15.7%) 3,364 0.0x 0.0x 0.0%

Safety Insurance Group Inc. SAFT 72.40 1,102 3.9% 2.0% 29.3% 1,082 16.1x 1.5x 4.1%

State Auto Financial Corp. STFC 26.87 1,128 (3.0%) 0.1% 36.7% 1,199 76.2x 1.2x 1.6%

Stewart Information Services STC 47.44 1,125 7.9% 6.8% 35.7% 1,129 17.9x 1.7x 2.7%

United Fire Group Inc UFCS 44.00 1,119 3.3% 4.2% (1.7%) 1,009 23.6x 1.1x 2.3%

Universal Insurance Holdings Inc. UVE 26.05 914 8.8% (3.3%) 51.8% 767 8.4x 2.2x 2.8%

Maximum $1,989 8.8% 6.8% 61.1% $6,691 76.2x 2.3x 7.4%

Minimum $60 (9.7%) (22.0%) (15.7%) $66 0.0x 0.0x 0.0%

Mean $1,019 1.6% (1.9%) 21.3% $1,395 18.5x 1.2x 2.3%

Median $1,113 3.1% 0.1% 25.5% $1,105 15.9x 1.2x 2.4%

Stock Performance

Insurance Monthly

December 2015

9





Mid Cap




Alleghany Corp Y $610.70 $9,415 (1.6%) (5.4%) 18.6% $10,372 19.8x 1.1x 0.0%

American Financial Group AFG 97.31 8,523 2.9% 3.5% 41.3% 8,659 12.4x 1.6x 2.3%

AmTrust Financial Group AFSI 16.05 2,746 (13.9%) (30.2%) (35.7%) 4,853 7.4x 0.9x 5.3%

Aspen Insurance Holdings Ltd AHL 52.35 3,138 (0.4%) (6.6%) 12.7% 2,925 22.2x 1.0x 1.9%

Assured Guaranty AGO 38.13 4,731 3.5% (7.2%) 46.3% 5,919 4.5x 0.7x 1.5%

AXIS Capital Holdings Limited AXS 65.90 5,675 (1.9%) (4.9%) 25.1% 6,629 13.3x 1.1x 2.4%

Enstar Group Limited ESGR 194.80 3,784 4.9% 0.5% 23.0% 3,966 14.2x 1.3x 0.0%

Erie Indemnity Company ERIE 123.82 6,475 2.7% 4.4% 35.4% 6,254 28.7x 7.3x 2.7%

Fidelity National Financial Inc. FNF 40.95 11,149 5.2% 6.8% 29.0% 14,149 17.3x 1.8x 2.5%

First American Financial Corporation FAF 43.41 4,798 11.2% 11.1% 19.9% 4,491 13.3x 1.5x 3.3%

Hilltop Holdings Inc HTH 27.81 2,740 4.5% (2.0%) 37.3% 4,676 18.7x 1.4x 0.9%

Kemper Corporation KMPR 39.35 2,018 (0.4%) (7.3%) 26.9% 2,654 133.3x 1.0x 2.6%

Mercury General Corporation MCY 61.49 3,401 2.6% 4.9% 14.8% 3,501 39.3x 1.7x 4.6%

MGIC Investment Corp. MTG 10.54 3,599 4.7% (1.0%) 44.4% 4,501 11.5x 1.4x 0.0%

National General Holdings Corp. NGHC 22.74 2,422 (1.1%) (6.6%) 8.0% 3,492 18.4x 1.5x 0.7%

Old Republic International ORI 20.68 5,338 2.3% (0.1%) 11.1% 6,863 12.5x 1.1x 3.8%

ProAssurance Corp. PRA 61.90 3,297 3.7% 4.7% 28.1% 3,628 18.3x 1.7x 10.0%

Radian Group Inc. RDN 16.88 3,631 (6.0%) (9.3%) 29.9% 4,562 11.7x 1.2x 0.1%

Reinsurance Group of America RGA 125.04 8,051 (0.6%) (3.9%) 30.6% 10,487 10.5x 1.1x 1.3%

RenaissanceRe Holdings Limited RNR 142.17 5,809 (2.5%) (3.7%) 28.9% 7,913 13.0x 1.3x 0.9%

RLI Corp. RLI 57.22 2,516 (2.5%) (2.1%) (7.6%) 2,637 24.0x 2.9x 1.5%

Everest RE Group Limited RE 251.71 10,335 7.7% 7.0% 36.5% 10,500 9.1x 1.2x 2.1%

Selective Insurance Group Inc. SIGI 52.80 3,076 12.5% 19.2% 53.3% 3,514 17.2x 1.8x 1.3%

The Hanover Insurance Group Inc. THG 88.27 3,767 (1.8%) (1.9%) 2.6% 4,271 29.2x 1.2x 2.4%

Validus Holdings Limited VR 55.28 4,375 (2.1%) (4.1%) 24.6% 7,129 15.3x 1.1x 2.8%

W.R. Berkley Corporation WRB 67.98 8,240 (4.1%) (4.3%) 21.4% 9,967 14.0x 1.5x 0.8%

White Mountains Insurance Group WTM 858.94 3,928 (2.8%) (8.3%) 4.3% 4,198 265.6x 1.1x 0.1%

Maximum $11,149 12.5% 19.2% 53.3% $14,149 265.6x 7.3x 10.0%

Minimum $2,018 (13.9%) (30.2%) (35.7%) $2,637 4.5x 0.7x 0.0%

Mean $5,073 1.0% (1.7%) 22.6% $6,026 30.2x 1.6x 2.1%

Median $3,928 (0.4%) (2.1%) 25.1% $4,676 15.3x 1.3x 1.9%

Stock Performance

Insurance Monthly

December 2015

10



Large Cap





Arch Capital Group Ltd. ACGL $96.97 $11,928 2.9% 2.5% 37.2% $17,178 16.2x 1.9x 0.0%

The Allstate Corporation ALL 81.29 29,687 (0.7%) (1.1%) 25.2% 37,344 14.3x 1.6x 1.8%

American International Group AIG 60.91 59,503 (1.5%) (4.7%) 9.1% 89,105 116.0x 0.8x 2.1%

Chubb Limited CB 137.25 64,138 (0.5%) (0.7%) 17.1% 77,055 13.4x 1.3x 2.0%

CNA Financial CNA 45.26 12,249 3.3% 5.6% 42.1% 14,688 11.6x 1.0x 6.7%

Cincinnati Financial Corp. CINF 72.09 11,872 (0.6%) (1.2%) 9.0% 12,171 19.0x 1.6x 2.9%

The Hartford Financial Group HIG 48.36 17,766 1.4% (1.1%) 10.5% 22,879 20.0x 1.1x 1.9%

Loews Corp. L 46.62 15,696 0.3% (0.8%) 17.3% 31,345 18.5x 0.8x 0.5%

Markel Corp. MKL 969.60 13,520 1.0% (1.0%) 8.7% 14,334 40.0x 1.6x 0.0%

Progressive Corp. PGR 39.72 23,073 (0.3%) 1.4% 22.1% 26,679 19.7x 2.7x 1.7%

The Travelers Companies, Inc TRV 121.66 33,994 (0.1%) (0.5%) 11.5% 40,183 11.8x 1.4x 2.4%

XL Group PLC XL 41.85 11,039 3.5% 3.4% 27.8% 12,360 20.2x 1.0x 2.1%

Maximum $64,138 3.5% 5.6% 42.1% $89,105 116.0x 2.7x 6.7%

Minimum $11,039 (1.5%) (4.7%) 8.7% $12,171 11.6x 0.8x 0.0%

Mean $25,372 0.7% 0.2% 19.8% $32,943 26.7x 1.4x 2.0%

Median $16,731 0.1% (0.7%) 17.2% $24,779 18.8x 1.4x 1.9%

Stock Performance

Insurance Monthly

December 2015

11



Small Cap

Property & Casualty: Operating Statistics


Company Name Ticker Total Total LTM Total Investments to to Total on Expense Loss Combined Statutory Surplus

Assets Equity Revenue Investments Total Assets Capitalization Equity (ROE) Ratio Ratio Ratio and Capital

Amerisafe, Inc. AMSF $1,537 $467 $392 $1,107 72.1% 0.0% 14.2% 24.8% 61.8% 86.6% $394

Argo Group AGII 8,020 1,835 1,620 4,566 56.9% 23.9% 8.8% 40.5% 58.6% 99.1% 2,614

Baldwin & Lyons Inc. BWIN.B 1,178 413 323 712 60.4% 4.6% 5.3% N/A N/A N/A N/A

Conifer Holdings, Inc. CNFR 204 68 94 129 63.1% 20.7% (11.6%) 45.3% 73.4% 118.7% 62

Donegal Group Inc. DGIC.A 1,663 447 701 961 57.8% 14.2% 5.5% N/A N/A N/A N/A

EMC Insurance Group Inc. EMCI 1,592 564 646 1,487 93.4% 4.2% 6.9% 33.9% 66.6% 100.5% 527

Employers Holdings Inc. EIG 3,834 868 784 2,582 67.4% 3.6% 12.9% 32.7% 62.2% 94.9% 829

Global Indemnity Limited GBLI 2,072 815 527 1,503 72.5% 26.7% 7.0% 41.1% 55.3% 96.4% 323

Hallmark Financial Services Inc. HALL 1,173 271 383 663 56.5% 24.0% 2.4% 29.3% 69.3% 98.6% 248

Homeowners Choice Inc. HCI 788 232 269 301 38.2% 54.0% 14.9% 36.6% 40.5% 77.1% 183

Horace Mann Educators HMN 0 1,294 1,145 0 0.0% 16.1% 0.0% 28.3% 77.2% 105.5% 912

Infinity Property and Casualty Corp. IPCC 2,439 709 1,546 1,523 62.4% 31.2% 6.6% 17.3% 79.3% 96.6% 669

James River Group Holdings, Ltd. JRVR 2,411 708 631 1,139 47.2% 21.4% 11.3% 29.1% 68.1% 97.2% 604

MBIA Inc. MBI 11,137 3,239 288 7,868 70.6% 63.9% (9.7%) N/A N/A N/A 2,969

Navigators Group Inc. NAVG 4,957 1,206 1,211 3,183 64.2% 17.9% 6.9% 37.1% 59.3% 96.4% 1,208

OneBeacon Insurance Group Ltd OB 3,572 1,037 1,176 2,525 70.7% 20.9% 9.2% 37.0% 57.5% 94.5% 625

PartnerRe Limited PRE 4,262 1,937 995 0 0.0% 49.4% (7.9%) N/A N/A N/A N/A

Safety Insurance Group Inc. SAFT 1,761 678 825 1,272 72.2% 0.0% 9.6% 31.5% 67.7% 99.2% 605

State Auto Financial Corp. STFC 2,979 901 1,411 2,558 85.9% 11.9% 1.5% 35.4% 73.8% 109.2% 844

Stewart Information Services STC 1,308 649 2,016 688 52.6% 13.4% 13.1% N/A 4.9% N/A 510

United Fire Group Inc UFCS 4,097 960 1,154 3,305 80.7% 0.0% 5.0% 30.3% 66.2% 96.5% 771

Universal Insurance Holdings Inc. UVE 1,060 399 696 666 62.8% 3.4% 29.6% 35.2% 43.7% 78.9% 331

Maximum $11,137 $3,239 $2,016 $7,868 93.4% 63.9% 29.6% 45.3% 79.3% 118.7% $2,969

Minimum $0 $68 $94 $0 0.0% 0.0% (11.6%) 17.3% 4.9% 77.1% $62

Mean $2,820 $895 $856 $1,761 59.4% 19.3% 6.4% 33.3% 60.3% 96.8% $802

Median $1,917 $709 $743 $1,206 63.0% 17.0% 6.9% 33.9% 64.2% 96.6% $605

Insurance Monthly

December 2015

12



Mid Cap





Alleghany Corp Y $23,939 $8,258 $6,185 $18,297 76.4% 15.1% 5.7% 33.8% 57.8% 91.6% $6,700

American Financial Group AFG 57,464 5,195 6,440 40,783 71.0% 30.1% 14.2% 32.7% 59.6% 92.3% 5,173

AmTrust Financial Group AFSI 21,520 3,467 5,630 7,571 35.2% 31.1% 0.0% 26.9% 68.7% 95.6% 4,322

Aspen Insurance Holdings Ltd AHL 12,248 3,594 2,795 7,996 65.3% 15.6% 5.2% 40.5% 56.5% 97.0% 3,863

Assured Guaranty AGO 14,675 6,637 1,663 11,341 77.3% 16.5% 17.9% N/A N/A N/A 10,441

AXIS Capital Holdings Limited AXS 21,247 6,230 4,129 13,115 61.7% 13.7% 8.0% 37.4% 64.7% 102.1% 6,451

Enstar Group Limited ESGR 14,883 3,347 1,121 6,846 46.0% 17.9% 9.7% 83.1% 52.7% 135.8% 3,885

Erie Indemnity Company ERIE 1,490 830 1,621 0 0.0% 2.9% 26.3% N/A N/A N/A 0

Fidelity National Financial Inc. FNF 14,178 7,234 9,736 3,655 25.8% 27.3% 9.7% N/A 5.0% N/A 1,469

First American Financial Corporation FAF 8,874 3,078 5,691 5,071 57.1% 19.3% 11.8% N/A N/A N/A 1,200

Hilltop Holdings Inc HTH 12,338 1,889 1,638 1,761 14.3% 0.0% 8.0% N/A N/A N/A N/A

Kemper Corporation KMPR 8,307 1,984 2,562 6,668 80.3% 27.5% 0.7% 23.1% 91.9% 115.0% 1,333

Mercury General Corporation MCY 4,864 1,746 3,251 3,600 74.0% 17.6% 4.3% 26.3% 76.8% 103.1% 1,442

MGIC Investment Corp. MTG 5,904 2,648 1,065 4,660 78.9% 33.4% 14.6% 17.0% 12.2% 29.2% 1,506

National General Holdings Corp. NGHC 7,757 1,960 3,841 3,836 49.4% 27.6% 9.6% 30.9% 67.0% 97.9% 2,041

Old Republic International ORI 18,905 4,597 5,961 13,168 69.6% 24.9% 10.5% 51.4% 43.3% 94.7% 4,371

ProAssurance Corp. PRA 4,873 1,826 900 3,621 74.3% 19.7% 9.1% 31.2% 65.1% 96.3% 1,403

Radian Group Inc. RDN 5,828 2,920 1,214 4,438 76.1% 25.7% 11.4% 27.1% 21.3% 48.4% 1,554

Reinsurance Group of America RGA 53,806 7,420 12,018 39,143 72.7% 32.9% 10.9% N/A N/A N/A 11,653

RenaissanceRe Holdings Limited RNR 13,320 6,049 1,756 9,460 71.0% 13.5% 9.8% 35.7% 52.7% 88.4% 4,213

RLI Corp. RLI 2,778 848 812 2,084 75.0% 14.9% 12.0% 41.9% 51.0% 92.9% 860

Everest RE Group Limited RE 22,193 8,348 6,037 17,655 79.6% 7.1% 13.8% 27.3% 58.7% 86.0% 6,338

Selective Insurance Group Inc. SIGI 7,404 1,593 2,333 5,309 71.7% 21.6% 11.2% 34.6% 56.6% 91.2% 1,584

The Hanover Insurance Group Inc. THG 14,491 2,914 4,979 8,530 58.9% 21.3% 4.2% 34.7% 64.8% 99.5% 2,173

Validus Holdings Limited VR 12,137 5,900 2,422 8,688 71.6% 17.4% 7.5% 36.3% 46.9% 83.2% 4,935

W.R. Berkley Corporation WRB 23,547 5,219 7,717 17,368 73.8% 32.3% 12.2% 33.3% 62.4% 95.7% 5,493

White Mountains Insurance Group WTM 6,517 3,758 1,382 5,343 82.0% 7.0% 0.5% 37.2% 57.3% 94.5% N/A

Maximum $57,464 $8,348 $12,018 $40,783 82.0% 33.4% 26.3% 83.1% 91.9% 135.8% $11,653

Minimum $1,490 $830 $812 $0 0.0% 0.0% 0.0% 17.0% 5.0% 29.2% $0

Mean $15,388 $4,055 $3,885 $10,000 62.6% 19.8% 9.6% 35.4% 54.2% 91.9% $3,776

Median $12,338 $3,467 $2,795 $6,846 71.6% 19.3% 9.7% 33.8% 57.5% 94.7% $3,863

Insurance Monthly

December 2015

13



Large Cap





Arch Capital Group Ltd. ACGL $30,092 $9,680 $4,696 $18,561 61.7% 23.7% 10.8% 31.9% 49.5% 81.4% $14,640

The Allstate Corporation ALL 110,243 21,158 37,097 78,780 71.5% 23.1% 11.2% 25.6% 68.0% 93.6% 16,819

American International Group AIG 500,162 74,667 52,093 311,754 62.3% 29.2% 1.4% 34.5% 65.2% 99.7% 47,361

Chubb Limited CB 160,967 49,224 32,146 100,157 62.2% 23.8% 10.1% 30.1% 57.4% 87.5% 39,240

CNA Financial CNA 55,201 11,693 9,501 45,279 82.0% 18.8% 9.1% 35.2% 62.0% 97.2% 10,748

Cincinnati Financial Corp. CINF 20,753 7,256 5,608 16,094 77.6% 10.4% 8.6% 31.3% 68.4% 99.7% 5,711

The Hartford Financial Group HIG 225,388 17,009 18,482 71,987 31.9% 24.3% 5.4% 29.8% 67.7% 97.4% 14,283

Loews Corp. L 77,114 23,734 13,232 51,022 66.2% 31.1% 3.9% 35.2% 62.0% 97.2% 10,748

Markel Corp. MKL 26,401 8,739 5,648 17,223 65.2% 22.8% 4.3% 38.0% 62.3% 100.0% 2,761

Progressive Corp. PGR 34,811 9,017 24,181 24,308 69.8% 25.7% 14.4% 21.0% 70.7% 91.7% 8,560

The Travelers Companies, Inc TRV 101,246 23,612 27,755 71,257 70.4% 21.4% 12.3% 30.7% 65.3% 96.0% 20,759

XL Group PLC XL 61,025 13,001 10,884 37,030 60.7% 16.9% 5.3% 31.5% 62.8% 94.3% 19,898

Maximum $500,162 $74,667 $52,093 $311,754 82.0% 31.1% 14.4% 38.0% 70.7% 100.0% $47,361

Minimum $20,753 $7,256 $4,696 $16,094 31.9% 10.4% 1.4% 21.0% 49.5% 81.4% $2,761

Mean $116,950 $22,399 $20,110 $70,288 65.1% 22.6% 8.1% 31.2% 63.4% 94.6% $17,627

Median $69,069 $15,005 $15,857 $48,151 65.7% 23.4% 8.9% 31.4% 64.0% 96.6% $14,462

Insurance Monthly

December 2015

14



Small Cap

Property & Casualty: Debt Ratings

Amerisafe, Inc. AMSF NR NR NR bbbArgo Group AGII NR NR NR bbb

Baldwin & Lyons Inc. BWIN.B NR NR NR NRConifer Holdings, Inc. CNFR NR NR NR NRDonegal Group Inc. DGIC.A NR NR NR bbb

EMC Insurance Group Inc. EMCI NR NR NR bbbEmployers Holdings Inc. EIG NR NR NR bbb-Global Indemnity Limited GBLI NR NR NR NR

Hallmark Financial Services Inc. HALL NR NR NR bbb-Homeowners Choice Inc. HCI NR NR NR NRHorace Mann Educators HMN Baa3 BBB BBB+ bbb

Infinity Property and Casualty Corp. IPCC Baa2 BBB NR bbbJames River Group Holdings, Ltd. JRVR NR NR NR a-MBIA Inc. MBI Ba1 A- NR NRNavigators Group Inc. NAVG NR BBB NR bbb+

OneBeacon Insurance Group Ltd OB NR BBB- BBB+ bbbPartnerRe Limited PRE (P)A3 A- A- bbb+Safety Insurance Group Inc. SAFT NR NR NR bbb+

State Auto Financial Corp. STFC NR NR NR bbb-Stewart Information Services STC NR NR BBB NRUnited Fire Group Inc UFCS NR NR NR a

Universal Insurance Holdings Inc. UVE NR NR NR NR

FitchCompany Name Ticker Moody's S&P

A.M.

Best ICR

Insurance Monthly

December 2015

15



Mid Cap


Alleghany Corp Y Baa1 BBB+ A- a-American Financial Group AFG Baa1 BBB+ Withdrawn a-AmTrust Financial Group AFSI NR NR NR bbbAspen Insurance Holdings Ltd AHL Baa2 BBB+ NR bbbAssured Guaranty AGO Baa2 A NR NRAXIS Capital Holdings Limited AXS (P)Baa1 A- A- a-Endurance Specialty Holdings Ltd ENH Baa1 BBB+ WD bbb *+Enstar Group Limited ESGR NR BBB- BBB NRErie Indemnity Company ERIE NR NR NR NRFidelity National Financial Inc. FNF NR NR NR NRFirst American Financial Corporation FAF Baa3 BBB- BBB+ bbbHilltop Holdings Inc HTH NR NR BBB NRKemper Corporation KMPR Baa3 BBB- BBB bbb-Mercury General Corporation MCY Baa2 NR A- a-MGIC Investment Corp. MTG Ba3 (hyb) BBu NR NRNational General Holdings Corp. NGHC NR NR NR a-Old Republic International ORI Baa2 BBB+ WD NRProAssurance Corp. PRA Baa2 BBB+ A- a-Radian Group Inc. RDN Ba3 BB NR NRReinsurance Group of America RGA Baa1 A- BBB+ a-RenaissanceRe Holdings Limited RNR (P)A3 A A a-RLI Corp. RLI Baa2 BBB+ WD aEverest RE Group Limited RE (P)Baa1 A- NR a-Selective Insurance Group Inc. SIGI Baa2 BBB A- bbb+The Hanover Insurance Group Inc. THG Baa3 BBB BBB+ bbbValidus Holdings Limited VR Baa1 BBB+ A- bbbW.R. Berkley Corporation WRB Baa2 BBB+ A- *- a-White Mountains Insurance Group WTM NR BBB BBB+ bbb


A.M.

Best ICR

Insurance Monthly

December 2015

16



Large Cap


Arch Capital Group Ltd. ACGL Baa1 A- A- *- a- *The Allstate Corporation ALL A3 A- A- a-American International Group AIG Baa1 BBB+ A- bbb *-

Chubb Limited CB NR NR A+ a+CNA Financial CNA Baa2 BBB BBB+ bbbCincinnati Financial Corp. CINF A3 BBB+ A a-The Hartford Financial Group HIG Baa2 BBB+ WD a-Loews Corp. L A3 A+ A NR

Markel Corp. MKL Baa2 BBB+ A- bbb+Progressive Corp. PGR A2 A A+ aThe Travelers Companies, Inc TRV A2 A A+ a+XL Group PLC XL NR NR NR NR

FitchCompany Name Ticker S&PMoody's

A.M.

Best ICR

Insurance Monthly

December 2015

17




Trading Statistics

Operating Statistics

Debt Ratings

Insurance Brokers

Aon plc AON Baa2 A- BBB+Arthur J. Gallagher & Co. AJG NR NR NRBrown & Brown, Inc. BRO Baa3 BBB- NRCrawford & Company CRD.B NR NR NRMarsh & McLennan Companies, Inc. MMC Baa1 A- A-Patriot National, Inc. PN NR NR NRWillis Towers Watson Public Limited Company WLTW Baa3 BBB BBB-





Aon plc AON $119.84 $31,470 0.8% 3.6% 16.2% $37,093 24.8x 5.7x 1.2%

Arthur J. Gallagher & Co. AJG 55.81 10,019 (2.1%) (2.0%) 25.6% 12,464 23.3x 2.7x 2.8%

Brown & Brown, Inc. BRO 42.90 6,018 0.8% (0.5%) 22.8% 6,510 22.8x 2.5x 1.3%

Crawford & Company CRD.B 10.91 551 12.2% 0.8% 61.4% 663 15.6x 3.3x 2.1%

Marsh & McLennan Companies, Inc. MMC 74.13 38,115 (1.1%) 0.9% 18.0% 43,163 20.7x 5.8x 1.8%

Patriot National, Inc. PN 2.89 78 9.9% (37.0%) (66.2%) 224 NM 6.4x 0.0%

Willis Towers Watson Public Limited Company WLTW 132.62 17,963 0.5% 0.5% 6.8% 21,127 37.4x 1.9x 1.5%

Maximum $38,115 12.2% 3.6% 61.4% $43,163 37.4x 6.4x 2.8%

Minimum $78 (2.1%) (37.0%) (66.2%) $224 15.6x 1.9x 0.0%

Mean $14,887 3.0% (4.8%) 12.1% $17,320 24.1x 4.0x 1.5%

Median $10,019 0.8% 0.5% 18.0% $12,464 23.1x 3.3x 1.5%

Stock Performance

Company Name Ticker Total Total LTM Gross Gross EBITDA EBITDA Net Debt /

Assets Equity Revenue Profit Margin Margin EBITDA

Aon plc AON $26,982 $5,826 $11,710 $4,680 40.0% $2,338 20.0% 2.4x

Arthur J. Gallagher & Co. AJG 11,781 3,727 5,650 1,644 29.1% 881 15.6% 2.7x

Brown & Brown, Inc. BRO 5,197 2,416 1,785 838 46.9% 572 32.0% 0.9x

Crawford & Company CRD.B 784 174 1,099 320 29.1% 101 9.2% 1.7x

Marsh & McLennan Companies, Inc. MMC 18,969 6,619 13,378 5,826 43.5% 3,187 23.8% 1.6x

Patriot National, Inc. PN 418 14 233 93 39.8% 32 13.6% 4.6x

Willis Towers Watson Public Limited Company WLTW 32,232 10,457 7,862 3,221 41.0% 1,614 20.5% 2.0x

Maximum $32,232 $10,457 $13,378 $5,826 46.9% $3,187 32.0% 4.6x

Minimum $418 $14 $233 $93 29.1% $32 9.2% 0.9x

Mean $13,766 $4,176 $5,960 $2,375 38.5% $1,246 19.3% 2.3x

Median $11,781 $3,727 $5,650 $1,644 40.0% $881 20.0% 2.0x

Insurance Monthly

December 2015

93 bps

18

Investment Grade Market Overview

Sources: Bloomberg, KBCM, Morgan Markets

� Rate volatility and trade policy uncertainty are countered by an optimistic business outlook and the potential for corporate-friendlyregulation and tax policy

� 2016 issuance volume finished at a new record total of $1.29 trillion (through 827 deals and 1,470 tranches), just beating the 2015record volume of $1.25 trillion

� Q1 volume hit a new record for the largest quarter on record for over $370 billion in volume (after a record January)

� 2016 net fund flows were positive, totaling more than $44.8 billion, and the trend of strong inflows has continued into 2017

� Average weekly new issue concessions currently stand at 2 bps and have remained in the low single digits in 2017

� Credit spreads of 145 bps are at the tightest levels of the past 24 months, 114 bps tighter than the highs of February 2016

Investment Grade New Issue Volume

Debt Capital Markets Update

Investment Grade Corporate Credit Spreads

50 bps

100 bps

150 bps

200 bps

250 bps

300 bps

350 bps

Jul-1

2A

ug-1

2S

ep-1

2O

ct-1

2N

ov-1

2D

ec-1

2Ja

n-13

Feb

-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14F

eb-1

4M

ar-1

4A

pr-1

4M

ay-1

4Ju

n-14

Jul-1

4A

ug-1

4S

ep-1

4O

ct-1

4N

ov-1

4D

ec-1

4Ja

n-15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15Ju

l-15

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Dec

-15

Jan-

16F

eb-1

6M

ar-1

6A

pr-1

6M

ay-1

6Ju

n-16

Jul-1

6A

ug-1

6S

ep-1

6O

ct-1

6N

ov-1

6D

ec-1

6Ja

n-17

Feb

-17

Mar

-17

Apr

-17

Life Insurance P&C Insurance IG - All AA A BBB

117 bps

172 bps

142 bps

142 bps142 bps

$87.2

$177.9

$79.2 $95.3

$113.7

$144.7

$102.2

$75.8

$40.2

$172.2

$88.0

$128.5

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

$200.0

Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17

Insurance Monthly

December 2015

19

Forward LIBOR RateYield Curve

Sources: Bloomberg

Current Interest Rate Environment

10-yr UST

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

3 Mo 6 Mo 12 Mo 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 30 Yr

Forward Yield Curve - May 31

Yield Curve - April 30

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

May-17 May-18 May-19 May-20 May-21 May-22

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Jan-2011 Jul-2011 Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014 Jul-2014 Jan-2015 Jul-2015 Jan-2016 Jul-2016 Jan-2017

Insurance Monthly

December 2015

20

Sources: Bloomberg

Current Interest Rate Environment

% of Time the 10-yr UST was Below a Yield Since 1962

4.44%

8.78%

12.41%14.74%

20.82%

30.82%

37.71%

43.15%

50.06%

57.33%

63.54%

70.71%

77.43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00%

Insurance Monthly

December 2015

21

Sources: Thomson Reuter’s “Loan Pricing Corp.” (LPC)

Investment Grade Issuance

Investment Grade Deals in the Last Six Months

Amount Coupon

Date Issued Issuer ($MM) Type Security Maturity (%) Price Yield Spread Moody's S&P Sector

3-May-17 Teachers Insurance & Annuity $2,000.0 144a Sub-Notes 5/15/2047 4.270% 99.680% 4.289% 130 bp Aa3 AA- Life & Health

3-May-17 Guardian Life Global Funding 400.0 144a FA-backed 5/8/2022 2.500% 99.874% 2.527% 70 bp Aa2 AA+ Life & Health

17-Apr-17 Athene Global Funding 500.0 144a FA-backed 4/20/2020 2.750% 99.817% 2.814% 140 bp --- A- Life & Health

17-Apr-17 Athene Global Funding 300.0 144a FA-backed 4/20/2020 2.296% 100.000% 3mL+114 3mL+114 --- A- Life & Health

10-Apr-17 MassMutual Global Funding II 500.0 144a FA-backed 4/13/2022 2.500% 99.553% 1.570% 70 bp Aa2 AA+ Life & Health

6-Apr-17 New York Life Global Funding 500.0 144a FA-Backed 9-Apr-20 2.000% 99.934% 2.023% 57 bp Aaa AA+ Life & Health

6-Apr-17 New York Life Global Funding 300.0 144a FA-Backed 9-Apr-20 1.428% 100.000% 3mL+27 3mL+27 Aaa AA+ Life & Health

5-Apr-17 Protective Life Global Funding 300.0 144a FA-Backed 8-Apr-20 2.262% 100.000% 2.262% 83 bp A2 AA- Life & Health

3-Apr-17 Metropolitan Life Global Funding I 500.0 144a FA-Backed 8-Apr-22 2.650% 99.963% 2.658% 78 bp Aa3 AA- Life & Health

3-Apr-17 The Progressive Corp 850.0 Pub Sr Notes 4/15/2047 4.125% 99.879% 4.132% 115 bp A2 A Property & Casualty

20-Mar-17 Massachusetts Mutual Life Insurance Co 475.0 144a Sub-Notes 4/1/2077 4.900% 99.099% bp 185 bp A1 AA- Life & Health

7-Mar-17 Enstar Group 350.0 Pub Sr Notes 3/10/2022 4.500% 100.000% 4.500% 245 bp --- BBB- Property & Casualty

1-Mar-17 Mercury General Corp 375.0 Pub Sr Notes 15-Mar-27 4.400% 99.847% 4.419% 195 bp Baa2 --- Property & Casualty

21-Feb-17 Manulife Financial Corp 750.0 Pub Sub Notes 24-Feb-32 4.061% 100.000% 4.061% 163 bp --- A- Life & Health

30-Jan-17 USAA Capital Corp 350.0 144a Sr Notes 2/1/2019 1.251% 100.000% 3mL+23 3mL+23 Aa1 AA Property & Casualty

24-Jan-17 Jackson National Life Global Funding 400.0 144a FA-backed 1/30/2020 2.200% 99.890% .0224 bp 75 bp A1 AA Life & Health

24-Jan-17 Jackson National Life Global Funding 500.0 144a FA-backed 1/30/2024 3.250% 99.925% 3.262% 100 bp A1 AA Life & Health

18-Jan-17 Athene Global Funding 600.0 144a FA-backed 1/25/2022 4.000% 99.969% 4.007% 213 bp --- A- Life & Health

17-Jan-17 Guardian Life Insurance Company of America 350.0 144a Sub Notes 1/24/2077 4.850% 99.035% 4.900% 195 bp A1 AA- Life & Health

9-Jan-17 Marsh & McLennan Companies 500.0 Pub Sr Notes 1/30/2022 2.750% 99.863% 2.779% 90 bp Baa1 A- Insurance Brokers

9-Jan-17 Marsh & McLennan Companies 500.0 Pub Sr Notes 1/30/2047 4.350% 99.366% 4.388% 140 bp Baa1 A- Insurance Brokers

9-Jan-17 New York Life Global Funding 450.0 144a FA-backed 7/6/2018 1.203% 100.000% 1.203% 3mL+18 Aaa AA+ Life & Health

9-Jan-17 New York Life Global Funding 750.0 144a FA-backed 1/17/2024 2.900% 99.912% 2.914% 73 bp Aaa AA+ Life & Health

3-Jan-17 Principal Life Global Funding II 500.0 Pub Sr Notes 1/10/2020 2.150% 99.861% 2.198% 72 bp A1 A+ Life & Health

12-Dec-16 Metropolitan Life Global Funding I 500.0 144a FA-backed 12/19/2018 1.750% 99.912% 1.795% 65 bp Aa3 AA- Life & Health

12-Dec-16 Metropolitan Life Global Funding I 500.0 144a FA-backed 12/19/2018 1.423% 100.000% 3mL + 43 3mL + 43 Aa3 AA- Life & Health

12-Dec-16 Metropolitan Life Global Funding I 1,000.0 144a FA-backed 12/18/2026 3.450% 99.933% 3.458% 97 bp Aa3 AA- Life & Health

8-Dec-16 AIG Global Funding 350.0 144a FA-backed 12/15/2021 2.700% 99.879% 2.726% 90 bp A2 A+ Property & Casualty

5-Dec-16 Lincoln National Corp 400.0 Pub Sr Notes 12/12/2026 3.625% 99.882% 3.640% 125 bp Baa1 A- Life & Health

1-Dec-16 Allstate 550.0 Pub Sr Notes 12/15/2026 3.280% 99.864% 3.296% 85 bp A3 A- Property & Casualty

1-Dec-16 Allstate 700.0 Pub Sr Notes 12/15/2046 4.200% 99.576% 4.225% 110 bp A3 A- Property & Casualty

RatingIssuance

Insurance Monthly

December 2015

22

Sources: KBCM, Thomson Reuter’s “Loan Pricing Corp.” (LPC)

Investment Grade Loan Market Overview

Lack of M&A Activity Drives Quarterly Volume to a Three Year Low

� Despite a solid 4Q16, 1Q17 volume was down 45% QoQ and 15% YoY to $140.1 billion

� Given the lack of new deal flow, refinancings accounted for the bulk (84%) of the activity. Refinancing volume was up 5% YoY but down 32% QoQto $117.2 billion

� Lack of M&A activity was driven by uncertainty surrounding the new administration’s policies. After a record high in 4Q16, M&A volume dropped83% QoQ and 69% YoY to $11.0 billion – the lowest level since the 4Q12

� The average deal size dropped to $1.66 billion from $1.9 billion driven by a lack of jumbo bridge loans – only one in 1Q17

� Utilities led issuance in 1Q17 ($30.8 billion), followed by REITs ($18.1 billion) and Manufacturing ($14.2 billion). Healthcare, 2016’s largest issuing sector, wasdown to $10.0 billion compared to $23.0 billion a year ago

Undrawn Spreads Reach Multi-Year Low; Drawn Spreads Remain Flat

� Relevant to Investment Grade issuers, undrawn fees reached 14.2 bps for triple-B issuers, a low not seen since 3Q08. Similarly, Single-A spreads were downto 7.2 bps a level last seen in 1Q08

� Drawn spreads for Triple-B credits remained flat QoQ and YoY at 125.0 bps. Spreads for single-A credits were also relatively flat QoQ, but down to 91.7 bpsfrom 100 bps YoY

� Notable transactions matching triple-B and single-A current drawn / undrawn spreads and fees include: Air Products & Chemicals ($2.5B), Dollar General($1.2B), Clorox ($1.1B) and Advance Stores Co. ($1.0B)

2Q17 Outlook (as of 4/17/2017)

� A strong technical environment warrants a pick up in M&A activity. While organic growth remains challenging, ample liquidity continues to build while ratesremain low. In addition, new money opportunities could arise as the new administration’s policies become more clear

� If M&A fails to accelerate in 2Q17, refinancing activity should continue to dominate in the current low rate environment

� Banks diverging sentiment around funded vs. unfunded tranches may continue to impact current market dynamics

Investment Grade Loan Market New Issue Volume

($ in billions)

Loan Market Overview

$179.1

$140.8

$174.8

$125.3

$171.0

$225.9 $226.5

$121.1

$254.8

$195.5

$266.7

$178.0

$197.4

$248.3$249.2

$164.2

$287.7

$156.7

$252.8

$140.2

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

Refinancing M&A Other New Money

Insurance Monthly

December 2015

23

Sources: Thomson Reuter’s “Loan Pricing Corp.” (LPC)

Loan Market Issuance

Loan Market Issuances in Previous Six Months

28-Apr-17 Asurion LLC Term Loan B $1,372.0 79 3-Nov-23 300 General Purpose

27-Apr-17 Assiteca SpA Revolving Credit Facility 32.6 36 27-Apr-20 General Purpose

27-Apr-17 Assiteca SpA Term Loan 16.3 72 27-Apr-23 General Purpose

25-Apr-17 Edgewood Partners Insurance Center Revolving Credit Facility 60.0 47 16-Mar-21 475 General Purpose

25-Apr-17 Edgewood Partners Insurance Center Term Loan B 275.0 71 16-Mar-23 500 General Purpose

21-Apr-17 Asurion Corp 79 20-Nov-23

21-Apr-17 Edgewood Partners Insurance Center Term Loan B 71 31-Mar-23

5-Apr-17 USI Holdings Corp Term Loan 84 5-Apr-24 325 General Purpose/Refinance

5-Apr-17 USI Inc (USI Insurance Services) Term Loan B 1,795.0 84 5-Apr-24 275 General Purpose

27-Mar-17 Safe-Guard Products International LLC Revolving Credit Facility 15.0 275 General Purpose

27-Mar-17 Safe-Guard Products International LLC Term Loan 70.0 96 27-Mar-25 675 General Purpose

27-Mar-17 Safe-Guard Products International LLC Term Loan B 200.0 84 27-Mar-24 General Purpose

23-Mar-17 Principal Life Insurance Co Revolving Credit Facility 200.0 60 24-Mar-22 175 Dividend Recapitalization

23-Mar-17 Principal Life Insurance Co Revolving Credit Facility 600.0 60 24-Mar-22 175 Dividend Recapitalization

20-Mar-17 MGIC Investment Corp Revolving Credit Facility 200.0 36 20-Mar-20 175 Dividend Recapitalization

17-Mar-17 Digital Insurance Inc Revolving Credit Facility 200.0 60 17-Mar-22 325 General Purpose

17-Mar-17 Hub International LTD Term Loan B 375.0 43 2-Oct-20

17-Mar-17 Orchid Underwriters Agency LLC Term Loan 72.0 60 17-Mar-22 550 Dividend Recapitalization

17-Mar-17 Orchid Underwriters Agency LLC Revolving Credit Facility 8.0 60 17-Mar-22 400 Dividend Recapitalization

17-Mar-17 The Hilb Group Term Loan 156.4 51 17-Jun-21 400 Dividend Recapitalization

17-Mar-17 The Hilb Group Revolving Credit Facility 10.0 51 17-Jun-21 125 General Purpose

17-Mar-17 The Hilb Group Term Loan 48.3 51 17-Jun-21 275 General Purpose

17-Mar-17 The Hilb Group Delay Draw Term Loan 71.8 24 17-Mar-19 275 General Purpose

27-Feb-17 Black Knight Financial Services LLC Term Loan B 394.0 63 27-May-22 325 General Purpose

25-Jan-17 AmWINS Group Revolving Credit Facility 125.0 60 25-Jan-22 162.5 Spinoff

25-Jan-17 AmWINS Group Term Loan 200.0 96 25-Jan-25 162.5 Spinoff

25-Jan-17 AmWINS Group Term Loan B 1,050.0 84 25-Jan-24 525 General Purpose

20-Jan-17 Privilege Underwriters Inc Delay Draw Term Loan 20.0 60 20-Jan-22 475 Acquisition

20-Jan-17 Privilege Underwriters Inc Revolving Credit Facility 15.0 60 20-Jan-22 475 Management Buyout

20-Jan-17 Privilege Underwriters Inc Term Loan 55.0 60 20-Jan-22 475 Management Buyout

18-Jan-17 Asurion LLC Term Loan B 2,653.5 67 5-Aug-22 450 Management Buyout

Spread

(bps)Use of ProceedsBorrower

Deal Active

Date

Tranche

($ millions)Tranche Type

Tenor

(months)Maturity

Insurance Monthly

December 2015

24

LTM Insurance Follow-On Offerings ($ in millions, except offer price)

LTM Insurance Initial Public Offerings ($ in millions, except offer price)

Source: Dealogic

Equity Capital Markets: Recent Insurance Pricings

LTM Insurance Convertible Offerings ($ in millions)

Insurance IPO Backlog

Filing Expected ExpectedDate Date Issuer Ticker Value Sector Issuer Description

7/22/16 TBA Ironshore Inc N/A N/A Insurance-Multi-line Provider of property and casualty insurance services.

Filing Pricing Deal Market Shares % Filing Offer Pricing

Date Date Issuer Ticker Value Cap Offered Secondary Range Price Range 1 Day 1 Week 1 Month Insurance Sector

1-Jul-16 27-Jul-16 Kinsale Capital Group Inc KNSL $121 $336 7,590,000 NA NA $16.00 NA 14.7% 14.1% 27.9% Insurance-Property

& Casualty

Mean $121 $336 7,590,000 14.7% 14.1% 27.9%

Median $121 $336 7,590,000 14.7% 14.1% 27.9%

% Change in Price

Filing Pricing Convert Rule Deal Market Years to Call

Date Date Issuer Ticker Type 144a Value Cap Coupon Premium Maturity Provision Insurance Sector

2/28/17 2/28/17 HCI Group Inc HCI CONV - Debt Y $144.0 $506.0 N/A N/A N/A N/A Property & Casualty

6/21/16 6/21/16 Universal American Corp UAM Debt Y $115.0 685.0 N/A N/A N/A N/A Accident & Health

Mean $129.5 $595.5 $0.0 $0.0

Median $115.0 $685.0 0.0% 0.0%

Filing Pricing Deal Market Shares % Offer Discount to Discount to

Date Date Issuer Ticker Value Cap Offered Secondary Price Filing Last 1 Day 1 Week 1 Month Insurance Sector

7-Mar-17 8-Mar-17 Health Insurance Innovations Inc HIIQ $42 $325 3,000,000 0% $14.00 (19.3%) NA 11.8% 0.0% 0.0% Brokers

24-Jan-17 26-Jan-17 Kingstone Companies Inc KINS 35 128 2,950,000 1,525% 12.00 (2.4%) NA (0.4%) (0.4%) 24.6% Brokers

15-Nov-16 30-Nov-16 Kinsale Capital Group Inc KNSL 106 598 3,864,000 10,000% 27.50 (3.5%) NA (1.2%) 8.7% 23.7% Property &

Casualty

21-Nov-16 21-Nov-16 James River Group Holdings Ltd JRVR 135 1217 3,450,000 10,000% $39.00 (6.7%) NA (0.0%) 0.4% 5.5% Property &

Casualty

Mean $92 $648 3,421,333 (0.6%) 2.9% 17.9%

Median $106 $598 3,450,000 (0.4%) 0.4% 23.7%

% Change in Price

Insurance Monthly

December 2015

25

LTM Initial Public Offerings LTM Follow-On Offerings

LTM Aftermarket Follow-On Performance (%)Relative IPO Aftermarket Performance

Sources: Capital IQ, Dealogic, Lipper

FO Pricings by Month

($ in millions) ($ in millions)

Equity Capital Markets: Deal Volume & Aftermarket Performance Trends

IPO Pricingsby Month

$0.0

$2.5

$5.0

$7.5

$10.0

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Dea

l Val

ue

Prior Period

Current Period

13 7 10 7 13 15 1 6 8 5 7 14

$0.0

$10.0

$20.0

$30.0


Dea

l Val

ue

Prior Period

Current Period

58 54 32 50 57 29 60 65 61 45 80 43

(5.0%)

(2.5%)

0.0%

2.5%

5.0%

7.5%

10.0%


1-Day 1-Week 1-Month

70

80

90

100

110

120

130

140

Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17

Renaissance IPO Index

Russell 2000 Index

NASDAQ Composite

Insurance Monthly

December 2015

26

Sources: Capital IQ, Thompson Reuters

Completed M&A Deals in the Last Two Months

M&A Activity

Date Target Name Target Business Description Acquiror Name Acquiror Business Description

Transaction

Value ($ mm)

31-Mar-17 Ameriway Insurance LLC Insurance agents, brokers, and service Moran Ins & Finl Solutions Insurance agents, brokers, and service -

29-Mar-17 Fleet Risk Management Inc Insurance agents, brokers, and service AssuredPartners Inc Insurance agents, brokers, and service -28-Mar-17 Chaparral Insurance Agency Insurance agents, brokers, and service RightSure Insurance Group Insurance agents, brokers, and service -

27-Mar-17 Star & Shield Insurance LLC Insurance agents, brokers, and service K2 Insurance Services LLC Insurance agents, brokers, and service -

27-Mar-17 Terrell Insurance Services Inc Insurance agents, brokers, and service Risk Strategies Co Inc Insurance agents, brokers, and service -

24-Mar-17 MassMutual Sthrn New England Life insurance Commonwealth Financial Group Life insurance -24-Mar-17 MassMutual Nrthn New England Life insurance Commonwealth Financial Group Life insurance -

24-Mar-17 PetPartners Inc Insurance carriers, nec Independence Holding Co Life insurance -

23-Mar-17 Farallone Pac Ins Svcs LLC Insurance agents, brokers, and service Arthur J Gallagher & Co Insurance agents, brokers, and service -22-Mar-17 New England Mail Order Pharmaceutical preparations Serve You Rx Vermont LLC Insurance agents, brokers, and service -

22-Mar-17 ICDC Ltd Insurance agents, brokers, and service RQIH Ltd Accidental and health insurance -

21-Mar-17 Illinois RE Svcs Inc Title insurance Title Professionals Inc Title insurance -20-Mar-17 Nicoud Insurance Services Insurance agents, brokers, and service Arthur J Gallagher & Co Insurance agents, brokers, and service -

20-Mar-17 M.F. Irvine Companies LLC Management consulting services AssuredPartners Inc Insurance agents, brokers, and service -

17-Mar-17 BCI Group Inc Business consulting services, nec Hub International Ltd Insurance agents, brokers, and service -13-Mar-17 Burkhardt Consulting LLC Business consulting services, nec Alliant Insurance Services Inc Life insurance -

13-Mar-17 ICC Holdings Inc Fire, marine, and casualty insurance Employee Stock Ownership Plan Investors, nec 4

10-Mar-17 Associated Agency Group LLC Insurance agents, brokers, and service NFP Corp Insurance agents, brokers, and service -

10-Mar-17 The Capacity Group Inc Insurance agents, brokers, and service Edgewood Partners Insurance Fire, marine, and casualty insurance -10-Mar-17 Prepared Holdings LLC Surety insurance Patrick L White Investors, nec -

7-Mar-17 Hole-in-One USA Amusement and recreation svcs NFP Corp Insurance agents, brokers, and service -

6-Mar-17 Synergy Title Agency LLC Title insurance Weichert Realtors Real estate agents and managers -6-Mar-17 Cassco Insurance Inc Insurance agents, brokers, and service Hub International Ltd Insurance agents, brokers, and service -

3-Mar-17 Tri-Star Ins Professionals Insurance agents, brokers, and service Hub International Ltd Insurance agents, brokers, and service -

2-Mar-17 A La Carte Healthcare Ltd Hospital and medical service plans International Medl Grp Inc Life insurance -2-Mar-17 Blakestad Inc Fire, marine, and casualty insurance Marsh & McLennan Agency LLC Insurance agents, brokers, and service -

2-Mar-17 PopHealthcare LLC Health and allied services, nec GuideWell Mutual Holding Corp Insurance agents, brokers, and service -

2-Mar-17 Leavitt Ins Svcs of Sthrn Insurance agents, brokers, and service Hub International Ltd Insurance agents, brokers, and service -1-Mar-17 Walker Ins & Finl Svcs Inc Insurance agents, brokers, and service Acentria Inc Insurance agents, brokers, and service -

1-Mar-17 Fairway Finl Ins Grp Inc Insurance agents, brokers, and service The Plexus Groupe LLC Fire, marine, and casualty insurance -

1-Mar-17 Amer Truck Ins Exchange LLC Insurance agents, brokers, and service Hilb Group LLC Insurance agents, brokers, and service -

Insurance Monthly

December 2015

27

127 Public Square

Cleveland, OH 44114

301 East Fourth StreetSuite 2900

Cincinnati, OH 45202

For additional information on KeyBanc Capital Markets,

please contact any of the individuals listed below

Financial Services Investment Banking Team

Bob MontgomeryManaging Director & Group Head

Financial Services Group

(216) 689-4229

[email protected]

Wayne GuessfordDirector


(513) 830-1041

[email protected]

Taylor DyeAnalyst


(216) 689-5576

[email protected]

Kevin BrickmanManaging Director

Syndications

(216) 689-0362

[email protected]

Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed.Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department.The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offeror a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.

Select Financial Services Group Transactions

June 2016

$500,000,000

Senior Credit Facility

Co-Documentation Agent

June 2016

$400,000,000

Senior Notes

Co-Manager Participant

May 2016

$600,000,000


Co-Manager

March 2016

$300,000,000

Junior Subordinated Notes

$1,250,000,000


April 2016

Participant

$215,000,000


Joint Lead Arranger,Joint Bookrunner &

Administrative Agent

December 2016

April 2016

$525,000,000


Documentation Agent

January 2017

$350,000,000

Senior Notes

Co-Manager

Joint Lead Arranger, Joint Bookrunner, &

Co-Syndication Agent

December 2016

$650,000,000


December 2016

$500,000,000


Joint Lead Arranger, Joint Bookrunner, &

Co-Syndication Agent

December 2016

$1,500,000,000

Senior Notes

Co-Manager

March 2017

$1,350,000,000

Senior Notes

Co-Manager

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