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Vol. 24, No. 7 Oct. 4, 2010

NATIONAL CARRIERS MAP OUT ROUTES FOR 2011

National carriers will chase a common goal of increasing profitability and improving underwriting results
during 2011 with strategies that widely vary. The big unknown in every insurer’s game plan is the stability
of the U.S. commercial lines market. Nearly every carrier counts on the market to remain modestly soft
going into the New Year, with rates declining no more than 2 percent and as little as 1 percent. This hope
will rely on a marked change as rates were down an average of 4 percent during August.

Despite of an ongoing mushiness of the marketplace, not two carriers seem to agree on how to craft a
strategy for growth, whether that entails policy count or profits. Some put more stock in product
development while others dabble in expanding agency-carrier technology platforms, growing commercial
lines overseas or merely recruiting additional independent agents. Travelers, Fireman’s Fund, Hartford
and CNA might be ranked as the most bullish carriers in the $67 billion commercial P&C market, as they
collectively look to once again post strong numbers next year.

Big Hopes for Small Business

At Travelers, the national insurer sets sights on growing its Select Accounts tailored for small businesses
accounts with less than 50 employees and where premiums average $3,400 per policy. But achieving that
objective might be difficult because after the first six months of 2010, Select Accounts had $1.42 billion net
premiums written compared to $1.46 billion a year ago no thanks to the soft market conditions. For 2009,
Select Accounts had pulled in $2.8 billion. Even then Travelers Select Accounts has aggressively gone
about recruiting additional independent agents. At mid-year, the carrier had appointed 1,275 new agents to
sell Select Accounts products such as the businessowner’s policy, workers’ compensation and commercial
auto covers. The carrier now has 7,900 Select Accounts agents nationwide, and the prospects are bright
that it will recruit more producers next year too.

Going into 2011, look for Travelers to also unveil an improved commercial umbrella liability policy that
will allow its agents to submit more profitable Select Accounts umbrella liability policies via the insurer’s
enhanced quote-to-issue TravelersExpress agency platform. The insurer has previously rolled out
improved BOP, workers’ comp, and commercial auto covers tailored for the predictive rating features
inherent in TravelersExpress.

Looking Near and Far

CNA has been pursuing a double-barrel game plan to ramp up commercial lines business both domestically
and internationally. The carrier is betting its game plan to boost international and U.S. business will help
turn around slumping mid-year 2010 results where commercial lines business was down to $2.9 billion in
comparison to $3.2 billion a year ago. On a bright note, CNA’s combined ratio improved to 95.7 percent
during the first half this year versus 98.1 percent in 2009.

CNA plans to grow its book of U.S.-based corporations with overseas operations through its new
partnership with international insurer RSA. RSA provides CNA with the market access to domestic
companies with operations in 34 countries and the capacity to cover risks in an additional 98 countries in
Latin America, India, South Africa and Australia. CNA will continue its relationship with Assicurazioni
Generali of Italy. Assicurazioni Generali has represented CNA since 1994 in 108 nations. Moving
forward, CNA will now have the potential of increasing overseas commercial lines business in
142 countries. Continued on Next Page
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 Page 2 Crittenden’s Insurance Markets
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COMMERCIAL LINES
CNA INSURANCE COS. (A): Mike Coyne, SVP, Business Insurance, 333 S. Wabash Ave., Chicago, IL 60600,
(312) 822-5000, mike.coyne@cna.com.
HANOVER INSURANCE CO. (A): Michael Keane, president, small commercial, 440 Lincoln St., Worcester, MA
01653, (508) 855-1000, michael.keane@hanover.com.
HARTFORD FIRE INSURANCE CO. (A): Juan Andrade, president and CEO of Property and Casualty Operations,
1 Hartford Plaza, Hartford, CT 06155, (860) 547-5000, juan.andrade@thehartford.com.
TRAVELERS PROPERTY CASUALTY INSURANCE CO. (A+): Marc Schmittlein, president and CEO,
1 Tower Square, Hartford, CT 06183, (860) 277-0111, marc.schmittlein@travelers.com.
NATIONAL CARRIERS
CNA INSURANCE COS. (A): Michael Dower, VP of underwriting — international, and John Angerami, SVP,
CNA Select Risk, 333 S. Wabash Ave., Chicago, IL 60604-4107, (312) 822-5000, michael.dower@cna.com and
john.angerami@cna.com.
FIREMAN’S FUND INSURANCE CO. (A): Mike LaRocco, president and CEO, 777 San Marin Drive, Novato, CA
94945, (214) 220-4000, mike.larocco@firemansfund.com.
HARTFORD FIRE INSURANCE CO. (A): Ron Gendreau, EVP, 1 Hartford Plaza, Hartford, CT 06155, (860) 547-5000,
ron.gendreau@thehartford.com.
TRAVELERS PROPERTY CASUALTY INSURANCE CO. (A+): Marc Schmittlein, president and CEO,
1 Tower Square, Hartford, CT 06183, (860) 277-0111, marc.schmittlein@travelers.com.

NATIONAL CARRIERS MAP OUT ROUTES FOR 2011...

Continued from Previous Page
Back home, CNA Select Risk in September expanded its surplus lines non-catastrophe property
underwriting appetite. CNA Select Risk can now consider a wider array of property exposures including
unprotected properties, properties with limited public protection, vacant buildings and risks with a history
of losses. The unit’s occupancy classes include light manufacturing, real estate, hotels and motels, public
entity and builder’s risks. The carrier introduced a new property program for woodworkers.

Moving into 2011, look for Fireman’s Fund to become bullish in the commercial lines market, particularly
as the company expands its Green-Gard endorsement. So far, Fireman’s Fund has sold about 1,500 Green-
Gard property endorsements. Look for the national insurer to extend its green underwriting capabilities
into 2011 as the Allianz subsidiary gets a wake-up call to turn around slumping midyear 2010 business
volume. Thus far Fireman’s Fund gross premiums written were down 7.1 percent from a year ago to
$1.7 billion even though the national carrier’s combined ratio had improved to 96.3 percent. A year ago,
Fireman’s Fund wrapped up the first six months with a 98.9 percent combined ratio.
Look for Fireman’s Fund to continue to spin out niche Green-Gard endorsements going into 2011 similar to
what the carrier did in late August with the introduction of the Green-Gard commercial building coverage
for public and private schools, colleges and universities, and trade and vocational schools. The insurer
builds coverage into Green-Gard for educational facilities whereby the insurer will pay the cost to rebuild
as a green certified building in the event of a loss. In addition, if the building is already green-certified, it
will benefit from a five percent premium discount on its regular property insurance coverage.

Time to Cross-Sell
Heading into 2011, Hartford will expand its cross-sell marketing capabilities via its hot selling Small
Commercial segment. The carrier last month expands its group benefits clinical services when the carrier
named Robert E. Bonner, MD, MPH, as the clinical practices director for its Group Benefits Division. In
addition to his previous role as medical director and vice president of medical practices in workers’
compensation, Bonner will also provide expertise to the medical and vocational rehabilitation practices for
the insurer’s group disability claims.

Earlier this year, Hartford began to cross-sell group benefits with its Small Commercial because it is the
only unit getting rate increases of 3 percent. Also at midyear, Small Commercial had $1.35 billion of
earned premiums on a combined ratio of 83.7 percent compared to
$1.33 billion and a combined ratio of 85.4 percent last year.
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 Crittenden’s Insurance Markets Page 3
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REINSURANCE REPORT: M&A POSSIBILITIES ABOUND

Given how the U.S. property and casualty reinsurance market is mired in a competitive pricing cycle with
property rates down nearly 15 percent and workers’ comp rates off 30 percent, look for financially strong
reinsurers such as Berkshire Hathaway, Munich Re, Berkley and QBE Reinsurance Group to possibly
engage in a bidding war for weaker reinsurance companies.

XL Re is one company that could be snapped up by any of the above-mentioned reinsurers. This marks the
second time XL has been rumored to be ideal acquisition bait. In late 2008, in the midst of XL’s near
financial collapse from the subprime mortgage dealings of majority-owned bond insurer Syncora Capital,
there was talk that Munich Re might buy XL. Obviously that deal never materialized.

Though the company seems headed in the right direction compared to that era, they still have been
struggling to stay profitable. A year ago, XL recorded a combined ratio of 123.2 percent. XL Re was
among the 10 major reinsurance companies out of 19 showing a considerable decline in net premiums
written during the first six months of 2010, according to the Reinsurance Association of America. During
that period, XL wrote net premiums written of $310.5 million, down from $352.9 million last year. In
addition, XL scored a six-month combined ratio of 116.1 percent stemming from losses tied to the
Deepwater Horizon oil rig explosion and storm losses in the United States.

The future direction of XL arises at a time when the reinsurer’s book value of $27.74 per ordinary share at
June 30, was up 13 percent from Dec. 31, 2009. Despite the improved investment value of XL, the
company’s current CEO Michael McGavick might authorize a sale if the price is right. Furthermore,
McGavick stands to reportedly earn $16.6 million in the event XL is sold.

Many Potential Suitors

Munich Re has plenty of cash available to buy XL if the Germany-based reinsurer decides to pursue such a
transaction. During the first six months Munich Re’s U.S. operations pocketed $1.4 billion NPW compared
to $1.2 billion during the first six months of 2009. This year, Munich Re’s combined ratio in the U.S. rose
nearly 3 percentage points to 100.5 percent compared to 98.8 percent last year.

Berkley’s reinsurance operations would be strengthened if it moved to buy the Bermuda-based operations
of XL. However, in all likelihood Berkley, which wrapped up the first six months of the year with
$683.9 million of U.S. reinsurance NPW compared to $653.5 million last year might not necessarily want
to put in a bid to acquire XL given Berkley’s longstanding opposition to off-shore reinsurance companies
in the United States. But time and conditions can change past attitudes even at Berkley. Berkley could still
turn in a bid if the numbers stack up in favor of the Connecticut-based company.

Although two Berkshire Hathaway companies — National Indemnity Co. and General Re Group —
both show declining H1 2010 NPW figures, these reinsurers could very well assemble individual bids
where at least one company could buy XL. Berkshire Hathaway has in the past invested heavily in
competitors Swiss Re and Zurich and could throw out another investment lifesaver to XL. At midyear,
General Re Group’s U.S. NPW stood at $666.5 million on a combined ratio of 100.5 percent compared
with $684.2 million and a 97.6 percent combined ratio. National Indemnity wrapped up the first half of
2010 with a combined ratio of 82.6 percent on a NPW of $2.3 billion versus a 2009 combined ratio of
80.4 percent with a NPW of $2.6 billion.

Already Active in the M&A Market

Recently QBE, with headquarters in Australia, has been more active buying U.S. primary carriers such as
General Casualty and Unigard and earlier this month Seattle Specialty Insurance Services, but this time
around QBE could substantially increase its U.S. reinsurance market share if it moved ahead to acquire a
company like XL.

Equator Re serves as QBE’s reinsurance arm and it drew $553.2 million NPW through the first half of
2010 in comparison to $373.8 million a year ago. QBE ended the first six months on a good underwriting
note with a combined ratio of 98.8 percent compared to 98.3 percent during H1 2009.
Continued on Next Page
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 Page 4 Crittenden’s Insurance Markets
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REINSURANCE REPORT
AMERICAN AGRICULTURAL INSURANCE CO. (A): R. Robert Stallman Jr., chairman and president,
1501 E. Woodfield Road, Suite 300 W., Schaumburg, IL 60173, (847) 969-2900, rstallman@aaic.com.
ENDURANCE REINSURANCE CORP. OF AMERICA (A): David Cash, CEO, Wellesley House, 90 Pitts Bay Road,
Pembroke HM 08, Bermuda (441) 278-0400, dcash@endurance.bm.
EVEREST REINSURANCE CO. (A): Joseph V. Taranto, chairman and CEO, Wessex House, 45 Reid St., Second Floor,
Hamilton HM DX, Bermuda, (866) 233-0686, joseph.taranto@everestre.com.
GENERAL REINSURANCE CORP. (A++): Franklin Montross, chairman, president and CEO, 695 E. Main St.,
Stamford, CT 06904, (203) 328-5000, info@genre.com.
MUNICH REINSURANCE AMERICA INC. (A+): Tony Kuczinski, president and CEO, P.O. Box 5241,
tony.kuczinski@munichre-america.com.
NATIONAL INDEMNITY GROUP (A++): Donald F. Wurster, president, 3024 Harney St., Omaha, NE 68131,
(402) 536-3000, info@nationalindemnity.com.
ODYSSEY AMERICA RE (A): Andrew A. Barnard, president and CEO, 300 First Stamford Place, Stamford, CT 06902,
(203) 977-8000, investor-relations@odysseyre.com.
PARTNER REINSURANCE CO. LTD. (A+): Patrick Thiele, CEO, Wellesley House, 90 Pitts Bay Road, Pembroke,
HM 08, Bermuda (441) 292-0888, patrick.thiele@partnerre.com.
PLATINUM UNDERWRITERS HOLDINGS LTD. (A): Michael D. Price, CEO, The Belvedere Building,
69 Pitts Bay Road, Pembroke HM 08, Bermuda, (441) 295-3700, michael.price@platinumre.com.
QBE (A): John Rumpler, president and CEO, 88 Pine St., 16th Floor, New York, NY 1005-1801, (212) 422-1212,
jrumpler@qbeusa.com.
TRANSATLANTIC RE (A): Robert F. Orlich, president and CEO, 80 Pine St., New York, NY 10005, (212) 365-2200,
robert.orlich@transre.com.
XL REINSURANCE AMERICA (A): Michael McGavick, CEO, XL House, 1 Bermudiana Road, Hamilton HM 08,
Bermuda, (441) 292-8515, michael.mcgavick@xlgroup.com.

REINSURANCE REPORT: M&A POSSIBILITIES ABOUND...

Continued from Previous Page
To demonstrate that a merger and acquisition does not necessarily bring about improved underwriting
results, Partner Re ended the half year writing only $313.6 million in net premiums written in comparison
to $385.9 million in 2009. The challenging market conditions out-dueled Partner Re’s underwriting
capabilities even though the company completed its $2 billion acquisition of Paris Re earlier this year.

Other reinsurers putting up lower half-year NPW numbers included American Agricultural Insurance
Co. with $149.2 million compared with $435.8 million in 2009. Endurance wrote $190.2 million NPW
versus $242.9 million in 2009. Business volume was down at Everest Reinsurance Co. where the
company wrote $803.2 million NPW in comparison to $828.1 million last year. U.S. business at
Transatlantic Re was off at $1.7 billion compared to $1.8 billion last year. U.S. NPW at Platinum
Underwriters Reinsurance was $225.6 million in comparison to $294.5 million last year. Odyssey
America Re wrote $852.6 million NPW in comparison to $898.1 million in 2008.

INSURERS ACCELERATE SMALL COMMERCIAL LINES

Fading anticipation that the over-extended soft market will turn around before the first quarter of 2011 will
push carriers to crank up small and midsize commercial multi-peril operations. The name of the game for
these carriers — in light of weakening economic indicators — is to tweak coverages or adjust rates for
BOPs and CPPs in the hope that they can maintain market share in a usually very profitable segment.

Rates will remain inadequate as long as the U.S. economy remains weak. As of August, commercial
property rates were down an average of 4 percent and commercial general liability rates were down even
more at 6 percent. These declines come after the gross national product nearly stalled, with a small
1.6 percent gain, compared with a 3.7 percent gain for Q1 2010 and a 5 percent gain for Q4 2009. The
U.S. unemployment rate rose to 9.6 percent in August compared to 9.5 percent in July. While some
insurers individually manage to impose single-digit rate increases, they will be few and far between.
This will ensure that the soft market continues well beyond Q1 unless the nation’s economy shows
significant improvement. Continued on Next Page
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 Crittenden’s Insurance Markets Page 5
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INSURERS ACCELERATE SMALL COMMERCIAL LINES...

Continued from Previous Page
Travelers Group gears up to chop rates in Florida about 15 percent for its Master Pac Policy. Hartford
wins approval to boost rates by a meager 0.9 percent for its Growing Spectrum BOP in states such as
Pennsylvania. Hanover inched up rates 1.5 percent during Q2 for its small commercial lines and then spun
out enhanced covers in September for its businessowners policy and commercial package policy. CNA sets
sights on growing its improving Small Business with the rollout in August of nine new Choice Endorsements.
CNA Commercial leaps at the opportunity to churn out attractive underwriting results, and its rates on
average rose 2 percent for small commercial lines business during the three months ended June 30. A year
ago CNA Commercial rates were flat. CNA Commercial also turned in the first underwriting profit in
several years with a Q2 combined ratio of 98.2 percent compared with 104.6 percent in Q2 2009. With
those impressive results, the carrier adds nine new small business Choice Endorsements catering to the
property covers of business services, healthcare, manufacturing, professional services, real estate,
technology and wholesale distributors. Now available in 34 states, the carrier expects to have the new
Choice Endorsements available to CNA independent agents in 16 remaining states by the end of 2010. The
Choice Endorsement is attached to the carrier’s Connect Business Owners Policy. Some of the property
coverages found in the Choice Endorsement include an additional $100,000 for accounts receivable, $5,000
for computer fraud, $5,000 for unauthorized business card use, and $10,000 for claim data expense.
Travelers thinks it has the small commercial lines market down pat, given the fact Select Accounts new
business for accounts fetching premiums averaging $3,400 has steadily risen 22 percent since 2005. The
carrier expects to keep Select Accounts on this upward swing by decreasing rates as much as 15.1 percent
for its Master Pac Policy in Florida. Florida is one of the carrier’s top five premium production states. The
insurer plans to put the rate decrease into effect in the Gator State on Dec. 1. Travelers slashes rates in
states like Florida in order to turn around a 2 percent decrease in Select Accounts net written premiums
during Q2. The carrier wrote $716 million net written premiums during the quarter. Even with the decline
in Select Accounts NPW, look for the carrier to surpass the $2.8 billion in Select Accounts business it
penned last year as the insurer aggressively goes about recruiting new agents. The carrier now has 7,900
Select Accounts agents, an increase from 6,625 agents at the end of 2009. Look for more agents to come
on board and use the Select Accounts TravelersExpress rate and quote automation system.
Hartford got the green light in Pennsylvania in September to increase rates for its Growing Spectrum BOP
by 0.9 percent as the insurer introduces several new classes for the small business product. Those new
classes include biotechnology testing laboratories excluding products; biotechnology firms research only
excluding products; medical, hospital and surgical equipment and supplies distributor excluding products;
medical device manufacturing excluding products; and computer and electronic equipment and software
distributor. Although the tiny rate increase applies to those new classes of business for the Growing
Spectrum BOP, the insurer during its Q2 earnings presentation reported rate hikes of as high as 9 percent
for other small classes of business. During that quarter written premiums were up at $662 million
compared to $643 million a year ago. Hartford Small Commercial also continues to be one of the carrier’s
most profitable segments, reporting a combined ratio of 85.9 percent compared to 83.4 percent in Q2 2009.
Hanover trumpets the announcement it wants to climb up the national rankings as a big commercial multi-
peril carrier possibly rivaling the likes of Travelers, Hartford and CNA with the unveiling of
businessowners policy and commercial package policy enhancement covers. Hanover, which is now one of
the nation’s top 25 commercial line writers introduced in September a Deluxe Bronze Broadening
Endorsement that offers about 40 enhanced property covers. The insurer also expands BOP classes to
include convenience stores, gas stations, liquor stores, janitorial services and pet services. Hanover also
added to its commercial package policy coverage for data breach and a Green Advantage endorsement to
repair or upgrade environmentally friendly buildings.
A major reason why Hanover boldly expands its commercial lines capabilities is because the insurer has
expanded operations in Arizona, California, Colorado, New Mexico, Oregon, Utah and Washington.
Also, Hanover at the end of June had non-renewed about $100 million and renewed $150 million of the
$400 million of small and medium-size commercial business the carrier had acquired from OneBeacon
Insurance Co. earlier in the year. Via the expansion in the West and the renewed OneBeacon business,
Hanover expects to get a better handle on its commercial lines combined ratio that rose in Q2 to
106.1 percent, up from 96.4 percent in Q2 2009 because of catastrophe losses the insurer sustained from
its established operations especially in the Northeast and Midwest regions.
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 Page 6 Crittenden’s Insurance Markets
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RESTAURANTS
AMTRUST GROUP INC. (A): Mark Gunn, VP marketing, 59 Maiden Lane, Sixth Floor, New York, NY 10038,
(216) 328-6105, mgunn@amtrustgroup.com.
GREAT AMERICAN INSURANCE (A): Heidi Strommen, president, Prohost USA Inc., 4500 Park Glen Road,
Minneapolis, MN 55416, (952) 922-2404, info@prohostusa.com.
DISCOVER RE (A): Richard Stasi, chief operating officer of alternative risk, Avizent, 131 Prosperous Place, Suite 18-B,
Lexington, KY 40509, (859) 263-5015, rstasi@avizentrisk.com.
WORKERS’ COMPENSATION
ACUITY A MUTUAL INSURANCE CO. (A+): John Kautzer, general manager, sales, P.O. Box 58,
Sheboygan, WI 53082-0058, (920) 458-9131, john.kautzer@acuity.com.
AMERICAN ALTERNATIVE INSURANCE CORP. (A+): Pam Wagner, SVP and national practice leader, workers’
compensation, V3 Insurance Partners, 1113 General Washington Memorial Blvd., Unit B, Washington Crossing, PA 18977,
(908) 246-1928, pam.wagner@v3ins.com.
COMPWEST INSURANCE CO. (A): William J. Mudge, president and CEO, P.O. Box 193460, San Francisco, CA 94119,
(888) 266-7937.

WORK COMP NOTES: NEW WEB AND GROUP PROGRAMS; EXPANSION

American Alternative Insurance Corp. (AAIC) teams up with managing general underwriter V3
Insurance Partners to launch a new Internet-based work comp program for small and midsized employers
with at least two years’ experience. Eligible classes — chosen because they work well with a rule-based
product sold online — include retail, wholesale, manufacturing, servicing, local trucking and artisan
contractors, among others. V3 chose to break into the work comp space because operating costs are lower
than normal in the weakened economy and because it’s a good time to recruit talent. The product, called
V3iConnect Comp, will launch this month as the partners accept business with an effective date of Oct. 1
or later. The program is direct-billed, offers installment plans, provides loss control and management
services, and runs using Sword AgencyPort’s Web-based AgencyPortal platform. V3iConnect was
designed by Pam Wagner, SVP and national practice leader for work comp at V3 and a pioneer in
Internet-based work comp.

Premiums in V3iConnect Comp will start at $5,000 with an expected average premium of $12,000. The
guaranteed-cost product is currently available in Alabama, Arkansas, Florida, Illinois, Missouri and
Tennessee — states where the National Council on Compensation Insurance (NCCI) is the licensed rating
and statistical organization — as well as in the independent-bureau states of Texas and Indiana. Look for
V3 and AAIC to expand program availability in additional NCCI states in the near future. Expect V3 to
target independent agents and brokers who are experts in work comp, have a portfolio of business and seek
a partnership with a quality Internet-product provider.
• • • • •
CompWest Insurance Co. looks to build work comp business in two states through a partnership and a
new program. The Accident Fund Group subsidiary recently gained approval for a new work comp
product in Florida. The filing, effective Aug. 1, adopts the NCCI rates, rating plans and rules approved for
use in Florida effective July 1, 2010. CompWest will use the NCCI Employer Safety Credit and NCCI
Mandatory Small Deductibles in Florida.

CompWest also recently launched a program in partnership with the California Manufacturers and
Technology Association to provide a group comp program for California’s manufacturing sector. The
program can underwrite more than 120 classes of manufacturers, a sector that generates more than
$250 billion annually in the state and employs more than 1.5 million Californians.
• • • • •
ACUITY brings its work comp product to Pennsylvania as part of its overall move into the state. The
initial rate and rule filing went into effect Sept. 1, and its approval is another step in the carrier’s overall
expansion into the Keystone State, including its ongoing appointment of 40 agents. In addition to
Pennsylvania, ACUITY writes in New Mexico, Utah, Arizona, Colorado, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota,
Tennessee and Wisconsin. ACUITY accepts business from independent agents.
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NEW PROGRAMS FOCUS ON RESTAURANT SEGMENTS

Look for restaurant insurers to chase particular restaurant segments by serving up new and revamped
programs tailor-made for each sector. ProHost USA targets faster-growing casual restaurants — which are
on the rise — with a recently launched Great American Insurance-backed program that slots in between
full-service and fast-food restaurants. AmTrust Financial Group will launch a program next week
specifically aimed at fine-dining restaurants by virtue of a minimum entrée price. Risk manager Avizent
repackages a former program enhanced by coverage changes and new guidelines and backed by Discover Re.

Avizent expects its new risk-sharing captive called Restaurant Franchise Captive Program II to bring in
about $3 million in premium in the first year. Although the program is geared toward franchises, Avizent
will write independent restaurants. Avizent is partnering with financial holding company Concordis Group
Inc. and broker United Alternative Risk Solutions LLC to dish up the coverage, which is a revamp of a
similar Avizent-underwritten coverage that had been open only to brokers. The basic package in
Restaurant Franchise Captive Program II includes property, GL and work comp.

The Restaurant Franchise Captive Program II features an “entrée,” geared toward franchises, and an
“appetizer” option, which is meant for smaller businesses. The GL carries a $1 million limit. The
minimum premium for the entrée coverage is $150,000. Appetizer coverage premiums start at $50,000.
Avizent anticipates an average premium for the entrée coverage in the $250,000 to $300,000 range. The
average premium for the appetizer coverage likely will be near $75,000. The Restaurant Franchise Captive
Program II coverage is available in all states. There may be some underwriting sensitivity in states more
prone to wind-related and other property damage coverages. Avizent’s program is backed by Discover Re,
a Travelers company. The new partnership with Avizent will fit well with the expansion plans at
Concordis Group. Headed up by CEO Trent Sommerville, Concordis recently formed new subsidiary
Concordia Capital Inc. to provide captive cell funding to clients of captive insurer Concordis Insurance
SPC and assist other captive service providers, individual companies and organizations with captive cell
funding.

Coverage Targets Growing Segment

Great American Insurance will underwrite coverage for ProHostUSA’s four-month-old Fast Casual
Restaurant Program. The program caters specifically to restaurants that do not offer full table service but
still provide food of a quality higher than that of a fast food restaurant. These fast-casual restaurants are the
fastest-growing segment in the restaurant industry and the concept — also referred to as “quick casual” or
“limited service” — has grown over the past few years to fill a space between fast food and casual dining
with a typical per meal price of $8 to $15, including beverages. The minimum package premium is $5,000
and coverage is available in 48 states. The program offers liquor liability, umbrella liability and work
comp as optional coverages. Submission requirements include a copy of the menu, four years of company
loss runs, ACORD applications and ProHost’s Restaurant Supplementary Application. ProHost also offers
programs for fine dining and family restaurants, bars and taverns, and nightclubs.

Likes Fine Dining

AmTrust will launch on Oct. 10 a Fine Dining Restaurant Program designed for restaurants that serve
entrées costing more than $20 and have full table service. The program will cover independent and chain
restaurants. AmTrust’s filings for the program have been approved in 20 states and the carrier plans to
expand the program nationally in the future. The program is followed by two fine dining enhancement
endorsements, one for property and one for liability. Property enhancements include property extensions,
crime coverage, inland marine coverage and business income extensions. The program can write all lines
of business, including liquor liability, work comp, commercial auto and umbrella.

AmTrust expects an average premium of $5,000 for the package. The minimum premium is $1,000 for a
package with $1 million/$2 million limits for GL, $1 million for products liability and $1 million for liquor
liability. AmTrust can also provide umbrella limits to $10 million over the underlying, work comp and
commercial auto coverages. Submission requirements include a minimum of three years plus current year
of loss runs, a copy of the menu and wine list, ACORD applications, AmTrust’s supplemental fine dining
restaurant application and a copy of the service contract for semi-annual service to automatic fire
suppression system.
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 Page 8 Crittenden’s Insurance Markets
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NEW PRODUCT FILINGS

American International Group — California

The company introduces a new feedlot livestock mortality program that will provide animal mortality coverage for
these kinds of businesses. The group expects to write $100,000 in premium within the state during the first year.
AIG has requested an effective date of Dec. 13, 2010.

Argo Group — Louisiana

The group looks to begin offering its Busgard Program for school buses in the state. The program will focus on
commercial auto, and typical accounts will cover schools with 25 to 100 busses. Private passenger vehicles can
be included. The company is looking to write excess coverage up to $4 million. Standard limits are $5 million.
Argo has requested and effective date of Oct. 1, 2010, for new business and Dec. 1, 2010, for renewal business.

Liberty Mutual Insurance Cos. — Wisconsin

The company is working to implement a comprehensive new enhanced Commercial IQ product set for American
Fire and Casualty Co., The Ohio Casualty Insurance Co., Ohio Security Insurance Co. and West American
Insurance Co. Liberty Mutual believes this will provide a more competitive commercial lines product within a
consolidated group of underwriting companies and reduce organizational complexity. The group has requested an
effective date of Feb. 15, 2011.

Munich-American Holding Corp. — California

This filing introduces a new businessowners umbrella liability policy for “Main Street” exposures that do not
already have underlying coverage through Munich-American. The estimated premium for the first year in the
state is $1 million. The company has requested an effective date of Jan. 1, 2011.

Munich-American Holding Corp. — Florida

The company files a new collateral protection equipment product. Munich-American has filed property and
liability coverages related to this new product. The company has requested an effective date of Dec. 15, 2010.

Western National Insurance Group — Wisconsin

The group files rates and rules for a new businessowners policy with an effective date of Nov. 1, 2010.

The Insurance Markets Team

E-mail: editor@crittendeninsurancemarkets.com

Customer Service Newsroom Fax: (415) 475-1575

Tel: (800) 421-3483 Fax: (949) 900-3760
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