DEEPWATER HORIZON BACKGROUND

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1 TODAY! - DEEPWATER HORIZON OIL WEBINAR at 11am EDT Exactly how extensive are the insurance ramifications of the Deepwater Horizon oil rig disaster and spill in the Gulf of Mexico now considered to be the largest offshore oil spill in US history? While BP has set up a $20 billion fund to cover certain costs, the final impact on the insurance industry is just beginning to unfold. Advisen is hosting a dynamic free one hour webinar today at 11am EDT to discuss these issues. Join our assembled panel of experts to explore this disaster and how its impact is radiating throughout the insurance industry. Register here. REGISTER HERE Register for Advisen s Deepwater Horizon Oil Webinar on Friday, July 23 at 11am EDT via This free webinar is scheduled to last one hour. PANEL We have assembled a heavyweight panel of insurance and law luminaries: Stuart Smith, a Partner at New Orleans-based Smith Stag and author of OilSpillAction blog and a much-loathed legal heavyweight in the world of Big Oil. John O Brien, President of the Environmental product line at Ironshore Curtis Porterfield, a Partner in the Insurance Recovery practice at Howrey Tom Schruben, an independent environmental consultant, Dave Bradford, EVP and head of Advisen s Research & Editorial teams. The panel which will be moderated by Advisen Principal Jim Blinn. DEEPWATER HORIZON BACKGROUND So far, 21 organizations including BP plc, Transocean, Andarko Petroleum, Cameron, and Halliburton, are named in loss events and legal cases stemming from the Deepwater Horizon oil rig disaster and subsequent spill. As of early July, Advisen s large loss research team is tracking 151 individual loss situations. Similar to the Sub-prime & Credit / Liquidity Crises string of 1,061 loss situations that Advisen has tallied, our early research indicates that the Deepwater Horizon event will have many far-reaching tentacles. The purpose of this webinar is to uncover and discuss these loss pathways. The panel will also discuss how new opportunities are being created and identify new insurance needs and engineering applications as well.

2 CLASH, CATASTROPHES, and LARGE LOSS Within Advisen s Large Loss database of over 51,000 loss cases and events are over 1,150 Related Cases. The Deepwater Horizon Oil Spill case is just one. These Related Cases are Clash Events, Catastrophes and other incidences where two or more Large Losses or potential Loss Events are linked to a single underlying root cause. Some are clash situations, some are catastrophes, others are just good examples of bad things happening in clusters. While we can debate the terms of clash vs. catastrophe, if macro situations with names like Exxon Valdez, Sudden Acceleration, Madoff, Massey, Heparin, Subprime Credit Crisis, etc., torment or threaten your book of business or risk management planning, you should find our fully-indexed and detailed listing of over 1,150 Related Events extremely useful. CLASH vs CATASTROPHE Academics argue that the nature of a Clash event is a supreme insurance debacle. Clash events act like the concentric waves that ripple in a pond away from where you threw out a stone. On the other hand, others suggest that true insurance calamities stem from Catastrophes. Our visual image of catastrophe is more like a falling line of dominos to suggest a linear string of cause & effect events. Not willing to take a stand as the debate rages, Advisen is agnostic. Dave Bradford, an Advisen co-founder and Head of Advisen s Research & Editorial teams, explains that we just look for a connection in almost any dimension between two or more large losses. If we find that connection, we link the cases in our database and we label them Related. It s just that simple. For example, Wal-Mart s unpaid overtime cases are actually a composite of 6 pieces. All together, MSCAd contains 619 unique Wage & Hour cases totaling over $3 billion in loss now. Some 800 Catastrophe, Severe Calamities and Natural Disasters are now part of Advisen s Large Loss database, too. Under the category for Windstorms, there are 329 hurricanes, tornados, cyclones, etc., of which the largest value of loss is Katrina, of course. WHAT DEFINES A RELATED CASE? Something big & bad happened, and subsequently some people had bad results with bad repercussions. You frequently read about Related Cases in the newspaper or on Advisen s Front Page News daily . Accordingly, a Related Case amidst our Large Loss database takes on many forms. Here are some Related Case examples:

3 EVENTS Big Dig Tunnel Collapse World Trade Center Sept 11, 2001 Exxon Valdez spill Massey 2010 mine disaster Chilean 2010 Earthquake PRODUCTS Toyota Recalls Fujitsu hard drive defect Heparin Vioxx Peanut Corporation of America Product Recall MISBEHAVING COMPANIES / PEOPLE EU Chipmakers Price Fixing Foreign Corrupt Practices Act Madoff Stanford Group Ponzi scheme Enron INDUSTRY MALPRACTICE Subprime Lending and Credit Crisis Contingent Commissions Stock options grants Unpaid overtime WHO CARES ABOUT CLASH EVENTS? Insurers seek to protect themselves against a confluence of bad events. For Reinsurers writing professional liability or casualty treaties, a list of companies being sued can be very helpful. Cedents don't always point out which of their insureds are being sued or otherwise threatened, and a current list is hard to acquire. Clash events are crucial for Reinsurers and Cedents alike to see aggregate exposures, so within our database of 50,000 Large Losses, we link together events with a common causation or root. If you are responsible for Risk Management or Corporate Governance issues, you may also find MSCAd s Related Cases to be an essential tool of aggregating corporate risk and exposures. MSCAd s Related Case data illustrates the magnitude of practices like Market Timing Trading Violations or Biased Research.

4 THE ADVISEN DIFFERENCE The 51,000 loss events entered into Advisen s MSCAd are a unique resource. We do not beat around the bush; we name names. We tell you the identity of the companies, the claimants, the plaintiffs, and their lawyers. We source all of our materials and we provide links to supporting docs, such as copies of complaints. If we know of coverage involvement and the insurers and the insured amounts, we print them. FUEL YOUR PROPRIETARY MODELS All MSCAd data is linked to Advisen s company database of 16 million entities. That means that we can relate all of our data to market caps, OSHA violations, Federal litigation, and dozens of other companyspecific demographic and exposure datapoints such as aircraft ownership. If you have a custom loss model that combines data about insureds with loss information, look to Advisen for a tremendous ability to refresh your data and expand your model s applications. Insurance Companies, Reinsurers and Brokers use Advisen MSCAd data as a key ingredient of their proprietary models and predictive engines. Advisen offers frequent extraction files combined and/or downloads of hundreds of other company demographic and financial data point values, so you can focus on the development work that sets your company apart. Gathering data and assembling it for use is our job. MSCAd, ADVISEN S LARGE LOSS DATABASE Selling, buying or writing coverage is easier when you have 50,000 large loss examples at your fingertips. The Advisen Large Loss database totals $3.6 trillion and covers cases that are Securities, Recalls, Product & Services, Employment, Professional Services, Cyber and more. Beyond actual judgments, settlements, insurance payouts, events and other determinations of liability, MSCAd also includes estimates or projections of potential losses as well as dismissed cases. Use MSCAd to identify uninsured or underinsured exposures for your company, your clients, or within your portfolio. Justify higher limits by filtering our list to find the exact set that meets your criteria. Also use this database to see which large losses might trip your new policy language. NOW OVER 50,000 LARGE LOSSES for $3.6 TRILLION IN LOSS Show case examples by category (eg cyber, employment, securities), cause (eg explosions, fire), company size (eg for market caps $1B - $2B), coverage type (eg D&O, Professional Liability), or sort by dozens of other filters. Search this database by keyword (e.g. location, court,

5 and defendant) or by SIC code or industry. Track trends within industries and geographical locations to gain a wider understanding of the likely exposure, from which appropriate terms, cover and price can be driven through the underwriting and broking process. BENCHMARK PAIN Nothing helps to make your case better for higher limits than specific examples of losses that tripped up peer companies. Why do companies buy Side A D&O coverage? MSCAd shows you a list of 634 Derivative Shareholder Actions How big could an ERISA Class Action event become? Of the 208 items in MSCAd, the Health Net s $255M event is the largest. Advisen s Benchmarking tool shows what limits companies buy; our Large Loss database illustrates why those companies purchase those limit levels. Our data demonstrates the pain other companies have experienced. Export data to Word, download copies of complaints, and graph groups of related cases. Make your limits case by showing the pain. JOIN THE CLASH EVENTS DISCUSSION GROUP We ve started a new discussion group on for Clash Events and Catastrophe Insurance. The members of this LinkedIn group are Insurers & Reinsurers and other commercial insurance professionals who follow Casualty Clash & Catastrophe situations such as Deepwater Horizon, Enron, Madoff, Subprime, 9/11, Vioxx, contaminations, etc. The focus here is Large Loss. To join the group, log into LinkedIn, Search Groups for Clash and request to Join the Group. NEED ASSISTANCE? To access Advisen s MSCAd, click on the Losses & Exposures dropdown menu and select MSCAd (Cases & Actions). Also, if you d like a free copy of our MSCAd QuickStart Guide, just let us know. Contact us and we will walk you through MSCAd to find the right selection of losses for your situation. Reach your Advisen rep at support@advisen.com