University of HoustonBauer College of Business

April 13, 2006

presentation by:

Robert B. Hixon

Take-Away Concepts

Agent vs. Broker – Is there a difference? Salesmen or Professional Service provider?

What services are offeredWhere is the brokers value added

Where does your allegiance reside? Contractual Issues with the Insured and the

Insurer Compensation Issues

CommissionFee

Sample Broker Presentation

Response to Request for Proposal

Discussion Items

The Wortham DifferenceInsurance Market UpdateAvailable ServicesTeam Selection & SupportCasualty and Energy Claim Handling ServicesInternational CapabilitiesCost of Risk and Retention AnalysisEnergy, Liability and Casualty Insurance Renewal StrategiesEmployment Practices LiabilityAlternative Programs Broker Relationship & CompensationClosing Comments

The Wortham Difference

The Wortham Partnership

Houston based

Continuous operation since 1915

Over $1 billion in annual premiums

Client focused

No bias in recommendations

No outside stockholders (partnership)

Transparent and open communication

The Wortham Difference

76 Managing Directors or “owners” of the Firm

Depth and experience of technical staff

Distinction is superior service to customers

High retention ratio

Continuity of staff

Employees’ tenure averages over 12 years

Managing Directors’ tenure is over 20 years

Mission Statement

Service – to handle our client’s insurance business as if it was ours

Quality Coverages – to develop coverages and risk management tools that allow clients to better compete in their business

Price – to forge relationships between carriers and our clients that will add value and be long term

The Wortham Difference

Partnership – We have no outside stockholders, so we focus on serving you

Reputation – Underwriters trust us, giving you a competitive edge

Innovation – We partner you with markets to develop new solutions to your unique risk profile

Independence – We also have no ownership in other insurance providers, so we find you unbiased options with transparent compensation arrangements

Available Services

Service DifferentiationRisk Management Support

Partner in risk management problem solvingProvide presence when required

Administrative consultationUnderwriter meetingsTPA/claims support meetings

Trigger technical supportSubmitting frequent “open items” listsAdvise as insurance market conditions change

Critical Wortham Services

Risk Management Information Systems (RMIS) support

Internet portal Electronic certificates Contract review Retention analysis Exposure survey Loss control / safety support Alternative risk products

Team Selection & Support

Goals in Team Selection

Experience in industry, very significant accounts and specialization requirements

Availability to deliver Wortham’s standard of service

Depth to provide appropriate and timely solutions

Service Team

Primary account service team members chosen to meet Your needs

Access to Wortham’s 425+ member team of experts

Continuity – the average tenure of our partners and professionals is over 20 years

Your Wortham Team

PartnerAccount Executive

PartnerRisk Mgmt.

Services

PartnerRMIS

Loss Control

PartnerAlternative Risk

PartnerProf. Indemnity

PartnerCrime/Bond

Manager

PartnerMarine

PartnerMarine

PartnerCasualty

InternationalCasualty

PartnerCasualty Claims

PartnerEnergy

PartnerEnergy

Assistant

Casualty and Energy Claim Handling Services

Casualty Claim Services

Assistance in selecting claim service providers Monitoring of insurance company or independent claims services Review of claims prior to statistical filings Monitoring of “questionable” claims and active involvement in

“large” claim settlements Resolution of coverage questions/disputes Assistance in locating qualified defense counsel Claim/reserve audits as needed Periodic status reports with action recommendations Self-insured program design and implementation Structured settlement and portfolio transfer consulting services, as

requested

Energy, Well Control and Property Claims

Wortham’s Energy and Property Departments have successfully collected over $1,000,000,000 in claims, which have resulted from upstream oil and gas operations during the past five years.

Our technicians handle all physical damage and control of well claims personally. Wortham believes that the client’s interest is best served when the individual that negotiated the terms of coverage pays an integral role in the collection of a claim. We believe this approach provides a better service to the client.

International Capabilities

WorthamNet

Business partnerships with 179 successful brokerages in 134 countries worldwide

In-country knowledge and expertise

Wortham quality, service and standards of coverage

Cost of Risk and Retention Analysis

Risk Retention Factors

Materiality of extraordinary losses

Frequency and severity of expected losses

Cost and availability of insurance excess of various retention levels

Company’s degree of risk aversion

Renewal Strategies

Alternative Programs

“Outside the Box” Ideas

Risk Financing Programs Captive and finite risk programs could be considered for

retention management purposes

Potential tax planning opportunities

Retention Adjustment Structures Structures allow for adjustment of retention based on current

economic / business indices – rig count, for instance

Provides for lower retentions and greater risk transfer when business is soft

“Outside the Box” Ideas

Loss Portfolio Transfer (LPT)Reduction of balance sheet reserves

Reduction of required collateral

Environmental Cost CapsFunding vehicle plus risk transfer for overruns

Reduction of balance sheet reserves

Potential tax planning opportunities

Broker Relationship & Compensation

Closing Comments

Why Wortham?

Our partnership business model is dedicated to providing very broad, high quality, meaningful service to our customers with long- term view

Our strategy is to lower your overall cost of risk

You would be an important energy related account for Wortham and would be handled with a sense of urgency

We invite you to check our reputation with clients, underwriters and service providers

THANK YOU