torus group overview 2011 12

OverviewOverview 2011 / 12

11torus.com

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Contents

01 Who we are02 Key facts03 Timeline05 Current lines of business07 Overview of operations09 Global office locations13 Financial highlights14 What we write and where we write it15 Group Chief Executive’s message19 Chairman’s message21 Chief Executive’s message, Torus Americas23 Chief Executive’s message, Torus International25 Underwriting approach26 Claims approach27 Executive Committee

Who we are

A global specialty insurer with a niche reinsurance division

Our story

In June 2008, Torus launched with 20 employees and two offices, one in London and one Bermuda. Initially focused on writing energy and large commercial technical business, the longer term vision to build a global specialty insurer was established with the appointment of Group Chief Executive, Clive Tobin in October 2008. Four years later, that vision has been realised; Torus employs over 500 people across 16 offices worldwide with an established and diversified portfolio of insurance products across technical Property, Specialty and Casualty lines, as well as a niche Casualty and Specialty reinsurer.

Now serving a global client base with over 25 lines of business diversified by risk class, market segment and geography, Torus’ Gross Written Premium in 2011 was close to $1bn*. Such expansion has been achieved through the dedication of Torus’ industry specialists, driving the business forward through the pursuit of attractive acquisition opportunities as well as organic growth.

Torus holds a Group rating of A- (Excellent) by A.M. Best, a rating held since launch and most recently affirmed November, 2011.

Key facts

Lines of business

25 key product linesA diverse portfolio of products across technical Property, Casualty, Specialty and Reinsurance enhances opportunity as well as stability; consistent returns for our investors and financial strength for our insureds.

Global reach

16 offices worldwideOur specialist teams are located throughout the US, Europe, Bermuda and Latin America, with a dedicated operational hub in Gurgaon, India.

Industry specialists

30+ industries servedWhether insuring a billion dollar oil rig or the owner of a local family-run nursing home, Torus’ underwriters are among the best in the business, experienced specialists in every industry they serve.

Insurance vehicles

5 insurance companiesThrough Bermudian, European and US regulated insurance companies, Torus has licences to serve a global client base.

Lloyd’s syndicates

2 Lloyd’s syndicatesTorus offers a variety of products through Syndicates 2243 and 1301. Through Lloyd’s Torus is licenced to underwrite on either a surplus lines basis or as a reinsurer in the US and in over 75 territories worldwide.

Premium growth

60/40 organic & acquisitions Torus’ strong premium growth results from organic growth as well as diligent pursuit of attractive acquisition opportunities. In 2010 and 2011, approximately 40% of Torus’ Gross Written Premium was acquisition based.

01 Torus Overview 2011 / 12 Torus Overview 2011 / 12 02* All $ amounts noted in this document are USD

Timeline

Torus has quickly established the necessary infrastructure to be a global business.

Torus opens for business

Torus opens for business with offices in London and Bermuda following a $720m investment from First Reserve Corporation and the affirmation from A.M. Best of an A- (Excellent) Group financial strength rating.

Purchase of New Castle Re

Torus acquires selective renewal rights and personnel of New Castle Re; Reinsurance platform opens.

Torus’ US Property and Excess Casualty platform opens

Torus’ Property and Excess Casualty platform opens for business in the US.

Today, products are offered nationwide from offices in Atlanta, Chicago, Houston and Jersey City, supported by a wholesale brokerage office in San Francisco.

Launch of Specialty division

Torus launches its global Specialty division.

Today, the Specialty division offers insurance solutions across 13 key product lines from both our Americas and International offices.

Torus in Continental Europe

Torus opens for business in Continental Europe with offices in Amsterdam and Paris.

Today, Torus has seven offices across the Continent in Amsterdam, Cologne, Liechtenstein, Milan, Paris, Rotterdam and Zurich.

Further capital investment

Torus announces an additional capital investment from Corsair Capital of $150m, alongside further investment from First Reserve Corporation.

Merger with Sideris Re

Torus merges with Sideris Re Holdings Limited (Lloyd’s Syndicate 2243) following First Reserve Corporation’s agreement to amalgamate both businesses.

Torus Executive Risks

Torus Executive Risks Limited, Torus’ joint venture with Nexus Underwriting Limited, opens for business. Specialising in financial lines products, the company focuses on nonUS domiciled insureds, offering unique insurance products for a broad range of business classes.

Torus acquires Glacier Insurance AG

Torus acquires Glacier Insurance AG, now Torus Insurance (Europe) AG. The acquisition brings on-board an experienced European team, new offices in Continental Europe and additional Specialty product offerings.

Financial strength affirmation

A.M. Best most recently affirms A- (Excellent) financial strength rating of Torus Insurance Holdings Limited and its operating subsidiaries, a rating held since launch.

23.06.08

200801.01.10

201022.02.10

201009.12.09

200918.12.08

200806.04.10

201002.06.09

200904.05.10

201008.11.11

201107.09.09

2009

CV Starr Continental Europe renewal rights

Torus acquires the renewal rights to CV Starr’s Continental European business, business now written through Syndicate 2243.

Lloyd’s Syndicate 1301

Torus acquires Lloyd’s Syndicate 1301, effective 01.01.12. The acquisition completes the key platforms necessary to be a truly global specialty insurer.

05.12.11

201120.09.11

2011

03 Torus Overview 2011 / 12 Torus Overview 2011 / 12 04

Year end 2008GWP $57m

3 offices 50+ people







09.10.08 Clive Tobin Appointed Group Chief Executive, effective 01.01.09

28.07.09 Naveen Anand Appointed Global Chief Operating Officer; now Chief Executive, Torus Americas

07.09.09 Dermot O’Donohoe Appointed Chief Underwriting Officer, Global Specialty and Chief Executive Officer, Torus UK and Continental Europe; now Chief Executive, Torus International

Executive Committee timeline

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Current lines of business

Torus has developed a diverse product portfolio serving a global client base across both traditional and emerging markets.

Renewable and Select Energy

OnshoreEnergy

Bloodstock/Livestock

Aviation

Healthcare

Marine

War andTerrorism

Specialty

EuropeanCasualty and

Environmental Impairment

Liability

Construction and

EngineeringLines

Accident and Health

Casualty

International Excess

Power andUtilities

Professional Indemnity

Property Treaty

US Umbrella and Excess

Property Direct and Facultative

Upstream and Offshore Energy

PropertySchemes

Property Special Risks

Management Liability

Space

Surety

Business written though:

KEY

Torus Americas

Torus Bermuda

Torus International

Syndicate 1301

Syndicate 2243

Torus Executive Risks Limited

General Property

Casualty Property Specialty Reinsurance


Torus AmericasTorus Americas incorporates Torus National Insurance Company and Torus Specialty Insurance Company. Naveen Anand, Chief Executive, Torus Americas, leads this team to drive the profitable growth of Torus’ product range for all business written in North and South America.

In the US, Torus can offer admitted as well as excess and surplus lines products in all 50 states. The majority of business written derives from small to middle market segments, which is increasingly targeted through brokers using traditional channels and internet portal access.

In Brazil, Torus is licenced as an admitted reinsurer focusing on Energy, Construction and Surety lines.

Torus BermudaNiche Casualty and Specialty Reinsurance products are offered from Bermuda through Torus Insurance (Bermuda) Limited.

Torus IndiaSince its opening in 2009, Torus has established a core operational centre in Gurgaon providing actuarial, catastrophe modelling, IT and engineering support as well as research, analysis and data processing. At year end 2011, one third of the Group‘s employees were India based.

Torus InternationalTorus International incorporates Torus Insurance (UK) Limited, Torus Insurance (Europe) AG, Lloyd’s Syndicate 1301 and Syndicate 2243. Dermot O’Donohoe, Chief Executive, Torus International, leads this team to integrate Torus’ operations across London and Continental Europe, driving the growth of Torus’ expanding product range in all regions except the Americas and Bermuda.

London remains the primary source of the Group’s Energy, Construction and other large technical commercial business but the portfolio of business written has significantly diversified into Casualty and Specialty lines such as Marine, Professional Lines, Space, Aviation, Bloodstock and Specie.

Torus also has a London based joint venture with Nexus Underwriting Limited, Torus Executive Risks Limited, which specialises in financial lines products for non US domiciled insureds.

In 2010, Torus acquired Glacier Insurance AG with offices in Cologne, London, Schaan and Zurich, strengthening Torus’ position in Europe and key Property and Specialty markets. The acquisition of the renewal rights to CV Starr’s Continental European business in December 2011 saw further expansion in Continental Europe with additional offices in Rotterdam and Milan, and further capabilities for the French and German markets with additional teams in Cologne and Paris.

Lloyd’s In 2009, Torus merged with Sideris Re Holdings Limited, a subsidiary of First Reserve Corporation, enabling Torus to write Construction business through Lloyd’s Syndicate 2243.

In December 2011 Torus also acquired the renewal rights to CV Starr’s Continental European Marine, Casualty and General Property business. This business is now written through Syndicate 2243.

Following its acquisition in September 2011, Torus now writes Accident and Health, Property Direct and Facultative, Property Treaty, Specie, Property Schemes and Bloodstock business through Lloyd’s Syndicate 1301.

Lloyd’s is rated A (Excellent) by A.M. Best, A+ by Fitch Ratings and A+ by Standard & Poor’s. Ratings are applicable to all Lloyd’s syndicates. Through Lloyd’s, Torus is licenced to underwrite on either a surplus lines basis or as a reinsurer in the US and in over 75 territories worldwide.

500+ EMPLOYEES

16LOCATIONS AROUND THE WORLD

7INSURANCE VEHICLES

Overview of operations

Insurance vehicles Torus Insurance Holdings Limited is the holding company of seven wholly owned insurance vehicles, including two Lloyd’s Syndicates:

Torus Insurance (UK) Limited an FSA regulated UK business

Torus Specialty Insurance Company a US excess and surplus lines insurer and a Brazilian admitted reinsurer

Torus National Insurance Company a US admitted markets insurer

Torus Insurance (Bermuda) Limited a Class-4 insurer domiciled in Bermuda

Torus Insurance (Europe) AG a Liechtenstein-based European specialty insurer

Syndicate 1301

Syndicate 2243

Through Bermudian, European and US regulated subsidiaries, Torus has licences to serve a global client base.


AMSTERDAM

SAN FRANCISCO*

SCHAAN

MILAN

ZÜRICH

GURGAON

CHICAGO

HOUSTON

SÃO PAULO

BERMUDA

NEW JERSEY

ATLANTA

LONDON

ROTTERDAMCOLOGNE

PARIS

GLOBAL OFFICE LOCATIONS

AMSTERDAM

SAN FRANCISCO*

SCHAAN

MILAN

ZÜRICH

GURGAON

CHICAGO

HOUSTON

SÃO PAULO

HAMILTON

JERSEY CITY

ATLANTA

LONDON

ROTTERDAMCOLOGNE

PARIS

AMERICAS

Atlanta Suite 1750, 3 Ravinia Drive, Atlanta, GA 30346, USAt: +1 (678) 332 5500

Chicago 190 South LaSalle, Suite 2025, Chicago, IL 60603, USAt: +1 (312) 873 7100

Houston1300 Post Oak Blvd, Suite 1875, Houston, TX 77056, USAt: +1 (713) 581 2800

Jersey City Harborside Financial Center, Plaza 5, Suite 2600, Jersey City, NJ 07311, USA t: +1 (201) 743 7700

San Francisco* One Embarcadero Center,Suite 500, San Francisco, CA 94111, USA t: +1 (415) 293 8362

São PauloWorld Trade Center São PauloAv. das Nações Unidas, 12.551 9º Andar04578-000 São Paulo, Brasilt: +55 11 3443 1715

BERMUDA

Hamilton 26 Reid Street, HamiltonHM11, Bermuda t: +1 (441) 295 6722

INDIA

Gurgaon Pegasus 1 DLF, Golf Course Road, Sector 53, Gurgaon,Haryana, Indiat: +91 124 674 7000

INTERNATIONAL

Amsterdam Ito Tower, 11th Floor, Gustav Mahlerplein 76a, 1082 MA Amsterdam, Netherlandst: +31 (0)207 956 200

Cologne Spichernstrasse 8, 50672 Cologne, Germanyt: +49 (0)221 952 700

London 88 Leadenhall Street,London, EC3A 3BP, UK t: +44 (0)203 206 8000

MilanFlat 32, 3rd floor, Via Matteo Bandello n. 1, 20123, Milan, Italyt: +39 (0)2 3929 6956

Paris 42 rue de Bassano 2ème étage, Paris 75008, Francet: +33 (0)1 56 89 87 00

RotterdamBeurs-World Trade Center, Office 659, 6th Floor, Beursplein 37, 3001 DD Rotterdam, Netherlandst: +31 (10) 2053 940

Schaan Zollstrasse 82, 9494Schaan, Liechtenstein t: +423 239 98 98

Zürich Genferstrasse 35, 8002Zürich, Switzerland t: +41 (0)44 560 7900

09 Torus Overview 2011 / 12 Torus Overview 2011 / 12 10 *Wholesale brokerage office for Western Region business, Torus Insurance Services, Inc. CA Licence #0GB7192

CasualtyEuropean Casualty and EILInternational ExcessUS Umbrella and Excess PropertyConstruction and Engineering LinesGeneral PropertyOnshore EnergyPower and UtilitiesProperty – Direct and FacultativeUpstream and Offshore Energy SpecialtyAccident and HealthBloodstockAviationHealthcare Management LiabilityMarineProfessional IndemnityProperty SchemesProperty – Special RisksRenewable and Select EnergySpaceSuretyWar and Terrorism ReinsuranceCasualtySpecialtyProperty Treaty

Syndicate 1301Accident and HealthBloodstockProperty SchemesProperty – Special RisksProperty – Direct and FacultativeProperty Treaty Syndicate 2243AviationConstructionMarine

Nothing stays the same and we see that as the greatest opportunity. As new industries arise and new risks emerge, and as new economies develop, the pool of insureds is expanding.

Torus has the industry specialists on- board and the flexibility as a company to respond to those opportunities, serving our brokers and their clients through an ever changing world.


Torus Americas FY 2011Gross Written Premium by product line as at December 31, 2011

Reinsurance FY 2011Gross Written Premium by product lineas at December 31, 2011

Torus International FY 2011Gross Written Premium by product lineas at December 31, 2011

Property $384.8m

Casualty $48.4m

Specialty $331.9m

Treaty $152.9m

Property and Specialty CAT $120.9m

Casualty Re $12.9m

Specialty Re $19.0m

Australia/Asia $77.9m

Europe $171.8m

UK $68.7m

US and Canada $415.8m

Rest of the world $183.8m

Property $305.3m

Casualty $6.8m

Specialty $242.6m

Property $79.6m

Casualty $41.6m

Specialty $89.3m

Torus Overview 2011 / 12 14

What we write and where we write it

Total $918.0m

Total $918.0m

Total $210.5m

Total $152.8m

Total $554.7m

Group FY 2011Gross Written Premium by product line as at December 31, 2011

Group FY 2011Gross Written Premium by geographyas at December 31, 2011

13 Torus Overview 2011 / 12

Strong premium growth across both new and existing linesAt the outset, establishing a worldwide presence through global insurance hubs such Jersey City, London, Houston and Bermuda was key in building a global specialty company. Having that foundation in place enabled Torus to successfully develop our technical product lines and expand and diversify into regional markets to build a balanced book of business.

With our global technical lines of business established the next stage of Torus’ development is to expand our regional Specialty product offering targeted at middle market and small/medium enterprises, through both traditional as well as internet portal distribution channels.

Gross Written Premiumas at December 31, 2011

$918.0m

Strong premium growth

Sideris

Glacier

New Castle Re

Torus

Organic and acquisition based growth $m

2008

56.6

Total 56.6

190.8

74.4

Total 265.2

2009

457.1

123.2

119.1

88.3

Total 787.7

2010

Total 918.0

514.1

120.9

189.2

93.8

2011

Financial highlights

Financial strength

Shareholders’ equityas at December 31, 2011

$845.7m

Rated A- (Excellent) by A.M. BestTorus holds a Group financial strength rating of A- (Excellent) from A.M. Best, most recently affirmed in November 2011. For business written through Syndicate 1301 and 2243, Lloyd’s is rated A (Excellent) by A.M. Best, A+ by Fitch Ratings and A+ by Standard & Poor’s.

Torus launched in June 2008 with a five year strategy to build a global specialty insurer with a niche reinsurance division.

It was an ambitious and somewhat unique strategy in that it required building, from scratch, an insurance group with significant scale. To succeed meant we needed the necessary people, offices, legal entities and infrastructure to operate globally within a very short timeframe.

16 offices and over 500 people later, we have successfully built an enterprise that serves a global client base with over 25 major lines of business written through both our own operating entities and Lloyd’s.

This range of offices and products provides us with an array of strategic options for future growth and our Indian operational centre provides us with the necessary support to manage that growth effectively at lower marginal cost.

There is still more work to do. Over the next two years Torus’ expense ratio will fall into line with our peers as development

costs tail off and revenues grow. However, at year end 2011, through organic growth as well as diligent pursuit of attractive acquisition opportunities, gross premiums written were close to $1bn. This is a huge achievement in just four years and a testament to the talented team of people on-board who have worked tirelessly to drive and shape the business.

Torus’ initial focus was on writing large technical lines and reinsurance business in the major global wholesale insurance hubs. By attracting leading underwriters and claims professionals we were able to reach our strategic goals and continue to build in those markets.

Now these lines are established the next stage of development is to grow Torus’ regional Specialty products targeted at middle market and small/medium enterprises. We are achieving this through both traditional distribution across a network of regional offices as well as through our award-winning internet portal, ESCAPE.

Clive TobinGroup Chief Executive

GROUP CHIEFEXECUTIVE’SMESSAGE

Continued >


“Torus’ development is a result of organic growth as well as a diligent pursuit of attractive acquisition opportunities. We remain committed to our original vision of becoming a leading global specialty insurer and we continue to build on the strong foundation now in place.”

Disciplined ambitionTo achieve rapid but profitable development over the last four years we have adhered to two fundamental principles:

1. Attract the best people in the business

2. Pursue attractive specialty acquisition opportunities

The financial crisis of 2008 and its impact on some of the largest insurers, along with a more difficult environment for small companies to get scale, created a unique window of opportunity for both.

Attracting talentTorus has had access to a great amount of talent and we continue to hire people who are among the best in the industry. Senior underwriting, claims and service department appointments have been made across the US and Europe as we look to enhance local presence in our key specialty markets. With industry specialists at the helm Torus seeks to attract and retain business due to recognised expertise in underwriting and claims rather than price.

India A third of Torus employees are India based. We made a conscious decision when starting the company to create a core operational centre in Gurgaon that would target high processing and data standards while allowing the Group to scale business effectively at reasonable cost. With the people we have on-board, this is proving a highly successful strategy.

Augmenting the Executive Committee José González was appointed Group General Counsel in April 2011 and Richard Goldfarb

as Group Chief Actuary and Chief Risk Officer in December. In early 2012 we were also extremely pleased to announce that Tim Harris had joined as Group Chief Financial Officer. With over 20 years’ experience in financial and capital management, Tim brings deep experience across finance, treasury and capital markets to Torus, which will become increasingly important in the next phase of our strategic development.

Growth through acquisition as well as organic developmentSince 2010, approximately 40% of Torus’ Gross Written Premium growth is acquisition based. Key transactions include the selective renewal rights and personnel of New Castle Re (now Torus Re), the acquisition of Sideris Re Holdings Limited (now Lloyd’s Syndicate 2243), Glacier Insurance AG (now Torus Insurance (Europe) AG), the renewal rights to CV Starr’s Continental Europe business and the acquisition of Lloyd’s Syndicate 1301.

The acquisition of Syndicate 1301 in September 2011 was a milestone for Torus as it completed the key global platforms needed to achieve our strategy of building a leading global specialty insurer. Along with the CV Starr renewal rights transaction, we now have a sizeable business within Lloyd’s. That transaction also augmented our presence in Continental Europe alongside our now fully integrated European operations obtained through the acquisition of Glacier Insurance AG.

Targeted acquisitions for Torus are typically companies that have good

underwriting in complimentary Specialty lines but do not have the prospect of sufficient scale to optimise returns as standalone entities. We have been able to buy those businesses at an attractive price and, perhaps even more importantly, we have ensured that Torus has minimal exposure to past liabilities.

Our commitment to a disciplined approach to underwriting, even when acquiring portfolios, has meant that in each and every case where an acquisition has occurred, we have reduced the size of the portfolio to optimise the underwriting result.

However, it is important to note that Torus is not a constant acquirer. Attractive opportunities have arisen over the past four years because of where the industry was in the cycle. Acquisition has been and will continue to be a core part of our strategy, as long as market conditions and valuations of companies continue to make economic and financial sense.

Financial strength despite a difficult year for the industryThe Group’s in-house claims team is an integral part of the business. Claims-paid activity and potential exposure updates are given to management and underwriting in real time to ensure no financial surprises in the short term and that accurate provisions are made for longer tail claims. The team also works closely with management and underwriting to ensure lessons are learned from major market claims, a key to Torus’ approach to loss prevention for both the Group as well as insureds.

2011 was a difficult year on the back of the second worst catastrophe year on record for the insurance industry. As independent market data has highlighted, the impact on capital was severe for many recognised carriers. As a catastrophe (re)insurer with an international book of business, Torus was not unaffected. However, we are satisfied with our performance and our capital providers, First Reserve Corporation and Corsair Capital, are supportive of our assessment of results; A.M. Best also affirmed Torus’ A- (Excellent) Group financial strength rating in November 2011. Strategic decisions, 2011We made the decision, effective July 1, to exit Property Catastrophe Reinsurance business. This decision was made for several reasons. Firstly, the amount of capital required by the rating agencies to write this business going forward will increase as a result of changes in cat modelling introduced by RMS in their version 11 release.

Secondly, 2011 highlighted the increasing exposure coming from outside of the US. This was the second worst year on record for catastrophes but with no major hurricane or earthquake in the US. The cost of Reinsurance protection has therefore risen as insurers look to purchase larger limits of international protection at prices which have significantly increased.

Finally, because we are a new company, Torus is required to carry additional capital over these base amounts, which makes it even more challenging.

The company now has a diversified range of Specialty products and in evaluating the volatility and additional capital required to write Catastrophe Reinsurance it was determined that it was better to allocate this capital to our core specialty franchise where we continue to see opportunities to expand. We appreciate the fine job our Catastrophe Reinsurance team did over the past three years. In such a short time period, which included the second worst CAT year on record, they produced a 65% gross and 73% net loss ratio.

As part of our exit strategy we sold our renewal rights to Montpelier Re. They provide quota share support on our existing book and Torus in turn is providing a limited amount of sidecar capacity in 2012.

We also determined to stop writing large commercial Excess Liability business in the Bermuda market. We had entered that market in 2009 because key leading players were in severe stress from the financial crisis. We saw an opportunity for significant market share at hardening prices. As events played out these companies were able to recover from the verge of bankruptcy and instead of a hardening market we saw increased competition. We know this market extremely well and determined that we were not going to see the necessary change in pricing dynamics in an acceptable timeframe. We remain in the Excess Casualty market in the US but our focus is on the middle market and SME business, which we target through our internet portal, ESCAPE.

These decisions were not made in haste nor made lightly. They were necessary actions to achieve our strategic plan to build a balanced book of Specialty business, and actions necessary for stable longer term growth to support our clients and investors throughout the market cycles over the years ahead. As most recently noted by A.M. Best, these actions have significantly reduced Torus’ exposure to catastrophe risk and earnings volatility and are expected to support the maintenance of strong, consolidated risk-adjusted capitalisation.

2012 and beyondAs I stated at the beginning, what has been built over the past four years is somewhat unique. Most companies that have grown to the size of Torus within this timeframe have done so in very favourable market conditions, after a major loss event and where the majority of their business is Catastrophe Reinsurance.

We have built this company through our experience and knowledge, through attracting leading underwriters, claims and insurance professionals and finding companies and teams that have been happy to become part of Torus. A lot of the heavy lifting has been done but the same entrepreneurial spirit which has stood us in good stead during the foundational years of the company will continue to drive the company to achieve its long term vision.

Clive TobinGroup Chief Executive

GROUP CHIEF EXECUTIVE’SMESSAGE Continued >


05

First Reserve is pleased with what the management at Torus has achieved over the past four years in terms of building a global business and attracting talent.

We continue to work very closely with Torus’ management team, all of whom have significant experience in the industry and many of whom have experience in establishing and developing new insurance operations.

We are also happy to have a supportive partner in Corsair Capital whose expertise in financial services, particularly in insurance, brings added depth and insight to the Board. Their investment of $150m in February 2010 was a significant endorsement of the potential we all see in Torus.

We believe Torus has well managed the catastrophe related losses of 2011 on top of the necessary investment needed to build the infrastructure underpinning a global business, and we are fully supportive of the strategic plan in place for 2012 and beyond.

Macro-economic conditions will continue to be an ongoing challenge but Torus has now achieved operational scale to economically support its global underwriting platforms.

Given the company’s scale, the depth of management experience and the quality of people who work to drive the business forward, Torus is well positioned to benefit from the prospects of hardening pricing conditions and opportunities in new markets as they arise.

Kenneth W. MooreTorus Chairman; Managing Director, First Reserve Corporation

CHAIRMAN’SMESSAGE

“First Reserve is proud of the operational scale, global reach and depth of experience that Torus brings to a highly competitive environment.”

Capital providers

First Reserve CorporationTorus was originally conceived and capitalised by investment funds sponsored by First Reserve Corporation, a leading global energy investment firm dedicated to the energy industry with over $23bn of raised capital as of December 31, 2011. With nearly 30 years of investing experience and offices in North America, Europe and Asia, First Reserve is well positioned to make strategic investments on a global basis. Its experience in insurance was originally developed through investment in two insurance sidecars deployed in 2006.

Corsair CapitalIn February 2010, Torus announced an additional equity capital investment from Corsair Capital of $150m (alongside further investment from First Reserve Corporation). Corsair Capital is a New York based private equity firm investing solely in the financial services industry. Set up in 1993, it has invested in the US, Europe, Latin America and Asia.


Torus Americas opened for business in June 2009. Initially focusing on General Property, Onshore Energy and Construction, Torus Americas now offers a wide variety of Specialty products on both an admitted as well as excess and surplus lines basis across 12 lines of business from underwriting centres in Atlanta, Chicago, Houston, Jersey City and São Paulo, with a dedicated broker support office in San Francisco.

I am tremendously pleased with the performance of the Americas team in building out our business. And this in spite of strong competition from established local insurers. I can proudly report that this is being achieved through the service proposition Torus brings to the market – a fresh and flexible insurance operation with the industry specialists on-board to offer capacity across both traditional and emerging markets in the complex as well as small to middle market segments.

Supported by the latest technology to drive our business forward, we offer intermediaries and their customers the highest levels of service, product innovation and delivery through both traditional as well as internet portal distribution.

We see continued opportunities for our original Property and Casualty business. But with those lines now established, most notable growth during 2011 was seen within our newer Excess Casualty portal business, Healthcare and Professional Lines.

Launched in January 2010, our Healthcare practice is now recognised as one of the go-to markets for Medical Professional Liability. Our Professional Lines team announced in November its primary underwriting capability offering primary product solutions for over 70 risk classes across Professional Liability, Private Company Management Liability and Financial Institutions.

Built up over the course of the year, an expert team of industry specialists is now in place which brings strength in technical underwriting of complex management and professional liability risks along with in-depth customer knowledge. November also saw the division unveiling a ground-breaking, highly flexible modular policy architecture that enables agents and brokers to tailor coverage to fit the specific needs of their customers.

Growth seen in Excess Casualty business written through our award-winning web portal, ESCAPE, (launched in October 2010) has been exponential. In June, the team announced new and improved functionality as well as the capability to deliver excess products on an admitted basis. In 2012, 50% of Excess Casualty business will be written through ESCAPE. The upward trajectory of premium written through ESCAPE continues as more brokers become aware of the benefits its unique system functionality brings to streamlining the quote-to-bind process. Following its success, plans are in place this year for additional Torus products to be offered via the portal. 2011 also saw the launch of Torus Surety. Focusing on providing contract surety in the US to small and mid-size construction contractors, in time the operation will also offer commercial surety products. We are also seeking to develop Contract Surety business in key emerging markets throughout Latin America, placed through Torus’ admitted reinsurer in Brazil and the Group’s other licences in the region.

Torus is already in the Construction, Property and Energy business in Latin America through our various legal entities, and we see great opportunities to expand our business profitably on all fronts but with a particular focus on Brazil, which is an exciting and growing market.

Naveen AnandChief Executive, Torus Americas

“Our award-winning web portal ESCAPE is a key investment and growth initiative for Torus. As the company continues to expand and meet market demands for innovative Specialty insurance products, we firmly believe delivery should leverage 21st century technology platforms.”

CEO AMERICASMESSAGE


05

It was a strong year end for Torus International in terms of build out. The acquisition of Syndicate 1301 in September 2011 was a great achievement because, as a Lloyd’s platform, it was essentially the last piece in the puzzle necessary to complete the key infrastructure for Torus to be a global specialty insurer.

Along with the acquisition of the renewal rights to CV Starr’s Continental European business in December, Torus now has a sizeable business in Lloyd’s; business written in 2012 will account for approximately 25% of the Group’s Gross Written Premium.

The acquisitions also augmented Torus’ Specialty portfolio and expanded our offering in Continental Europe.

Syndicate 1301 brought on-board a range of niche short tail business across several product lines, including Accident and Health, Property Direct and Facultative, Property Treaty, Specie, Property Schemes and Bloodstock.

The CV Starr renewal rights transaction strengthened our Marine, Casualty and General Property portfolio. And along with the now fully integrated Torus Insurance (Europe) AG operations through our expanded branch network we now offer a

wide range of Specialty, Property and Casualty products across Continental Europe. We like the fact that you need very strong market specific relationships in Europe. This allows us to build market loyalty and long term partnerships. As we established during the initial years of our London Market business, building close working relationships with clients and brokers that endure the market cycle is our aim in Europe. We’re achieving this through having the local teams on-board that are highly experienced and understand the differing drivers and dynamics of each European insurance hub and their specific needs.

So, despite international markets continuing to be competitive, Torus is building an effective platform to produce a credible and sustainable offering. We are developing into a serious alternative and market player for sophisticated as well as small and middle market insureds.

2011 was a tough year for the industry but, as described, we’ve expanded and balanced out our portfolio significantly with solid growth across our Specialty lines in addition to our original Property and Casualty business. I am pleased to report that 2012 results so far are looking positive.

Dermot O’DonohoeChief Executive, Torus International

“Acquiring Syndicate 1301 in September 2011 was a milestone for Torus, essentially completing the key platforms necessary to be a global specialty insurer. Along with Syndicate 2243, business written through Lloyd’s will account for approximately 25 percent of the Group’s Gross Written Premium in 2012.”

CEO INTERNATIONALMESSAGE



Underwriting approach

Industry specialists - expert solutionsFrom the beginning, as part of our strategy to build a leading specialty insurer, Torus’ philosophy has been to identify solutions to better serve insurance intermediaries and their clients worldwide. Our industry specialist underwriting teams have deep experience in all major and emerging markets.

Complex, technical riskFor industries requiring complex, technical risk solutions, Torus differentiates itself through a pragmatic approach to underwriting based on extensive knowledge of the underlying asset, supported by advanced risk analytics and a global team of in-house engineers when required; a deeper understanding of risk enables our underwriters to provide bespoke insurance and loss prevention solutions, as well as facilitating competitive pricing based on actual rather than market perceived risk.

Regional small, middle marketFor intermediaries serving regional small to middle market segments, Torus’ underwriters offer creative and flexible solutions with a strong emphasis on responsiveness.

As part of this offering, in September 2010, Torus launched ESCAPE, a revolutionary award-winning web portal designed to improve the online quote-to-bind process for intermediaries in the US.

Geared for select brokers selling umbrella and high excess liability policies to small businesses, ESCAPE was built using the latest breakthroughs in software and technology.

A year later, ESCAPE is firmly established in the US as a leading platform for umbrella and excess liability policies. Plans for additional Torus products to be offered via the portal are in place for 2012.

Jeffrey Grange Chairman, Torus Group Underwriting Committee; Head of Professional Lines

David Message Head of Onshore Energy, Offshore & Upstream Energy

Richard Etridge Deputy Chairman, Group Underwriting Committee; Head of Aviation

Steven Norcliffe Head of Construction & Engineering Lines and Power Generation

Tony Albanese Head of Surety

Demian Smith Head of Marine

Robert Allen Head of Healthcare

Linc Trimble Head of Casualty

Dominic KirbyHead of Syndicates

Gerald DupreHead of General Property

David Whiting Head of Casualty and Specialty Reinsurance

Underwriting Practice Leaders

In February 2012, Torus was recognised by leading research and consulting firm, Celent, as a 2012 Model Insurer for the development of ESCAPE.

Torus has the financial ability and claims resources to ensure our customers receive a quick and efficient claims service. Our experienced in-house claims professionals are decision makers; they deliver fast, hands-on claims adjustment services anywhere in the world through a single point of contact. Ensuring continuity of customers’ operations, rapid and equitable settlement and consistency in the adjustment process are key objectives.

For more complex lines, Torus’ claims team offers a wider service platform that uses the team’s experience of loss events to prevent future recurrence. To achieve this, the claims team works closely with insureds, intermediaries and Torus’ underwriters and risk services departments both pre and post loss.

Claims approach

“We provide clarity and transparency in the claims process and ensure an understanding of both insureds’ businesses and their need for continuity of operations. We offer a rapid, consistent and equitable settlement and adjustment process.” Rob Powell, Group Chief Claims Officer

Leading-edge risk management

Claims

Torus differentiates itself by claims service. It is deeply embedded within the Torus brand.

Intelligent interactivityIntelligent interactivity is at the heart of every Torus transaction. Supported by the latest technology and strong infrastructure, our underwriting and claims teams have simultaneous access to data, working together wherever necessary with our risk engineering and risk analytics departments to enhance the Torus offering with high-level service and specialist solutions.

Aiming to provide the most innovative and cost effective loss prevention services for sophisticated insureds, Torus has a strong commitment to provide optimal loss prevention solutions in today’s fast moving business environment.

• Since 2009, Torus has developed a suite of structured and industry specific risk quality assessment tools for large commercial businesses to maximize analytical performance and gain an in-depth understanding of risk. This enhances our ability to evolve our products and services and help businesses prevent loss.

• On call when needed, Torus’ in-house Chartered engineers are represented on recognised industry committees, publish technical papers and speak at major industry conferences, collaborating with engineering and risk management specialists worldwide.

• In March 2010, Torus launched its online Risk Engineering Best Practice Centre. In technical publications, Torus’ engineers regularly keep insureds informed about industry best practice, technological developments and emerging risks.

In November 2011, Torus implemented a new, state of the art claims management system, Guidewire ClaimCenter®. Unlike the majority of insurers who rely on older, multiple platforms, Torus implemented ClaimCenter as its one global claims management system to support its entire product suite, standardising claims handling processes to deliver enhanced claims efficiency and improved speed and accuracy of claims payments for Torus customers worldwide.

“ClaimCenter was fully implemented and integrated with all Torus’ technology platforms in under 12 months. It’s one of many examples where Torus leverages the latest information technology to deliver consistent, high level service in real time to our customers throughout the quote, purchase and claims settlement process.” Michael Kim, Chief Administrative Officer

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Executive Committee

Clive Tobin Group Chief Executive

Printhan Sothinathan Group Chief Strategy Officer

Naveen Anand Chief Executive, Torus Americas

Dermot O’Donohoe Chief Executive, Torus International

Tim Harris Group Chief Financial Officer

José González Group General Counsel

Richard Goldfarb Group Chief Actuary and Chief Risk Officer

“Torus has a senior management team in place that has significant experience in the insurance industry and the targeted classes of business. In addition, the group benefits from the experience that a number of senior personnel have in establishing and developing new insurance operations.”A.M. Best

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