David O. Becker President and Chief Operating Officer

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2 Most insurance brokers offer the same limited set of services, the same mediocre experience, and the same value they did twenty years ago. Cottingham & Butler is different. We provide solutions to protect our clients most valuable assets through an expanding set of services. We recognize that the risks they face today are often quite different than the ones they faced in the past. We invite you to discover the Cottingham & Butler difference and learn how it creates real value for our clients. David O. Becker President and Chief Operating Officer

3 DAVID BECKER President and Chief Operating Officer JOHN BUTLER Chairman 11% GROWTH - 20 YEAR CUMULATIVE AVERAGE GROWTH RATE COTTINGHAM & BUTLER The difference is OUR PEOPLE. While our services continue to adapt to meet the changing needs of our clients, the one constant is our team of outstanding people who are passionate about serving our clients with excellence. They put in long hours on the road, study insurance to become technical experts, and constantly challenge each other to improve. Our company is not for everyone, but it attracts and fits those who want great careers and the challenge of being among the elite in our industry. For 125 years, our people have been the heart of the Cottingham & Butler difference. In 2012, our people: Achieved $78 million in revenue Expanded to over 450 employees Celebrated 125 years in business

4 OUR RISK MANAGEMENT ASSESSMENTS, ON AVERAGE, IDENTIFY 3-4 CRITICAL COVERAGE GAPS DEAN FAIR Senior Vice President, Risk Management RISK MANAGEMENT The difference is INSIGHT. Our Risk Management practice delivers Property & Casualty programs customized to our clients needs. Rather than a one-size-fits-all approach, our proprietary Risk Management Assessment process provides a complete roadmap for optimizing each client s unique insurance program across coverage, risk transfer options, claims management, and loss prevention. In 2012: Our Risk Management Assessments, on average, identified 3-4 critical coverage gaps Grew revenue 14.5% versus

5 CAPTIVES & PROGRAMS MORE THAN $11.7 MILLION IN DIVIDENDS RETURNED TO CLIENTS IN 2012 The difference is PERFORMANCE. Captives have become a significant advantage in an incredibly competitive world. Our Captives provide best-in-class companies an advantage in the form of alternative risk solutions by rewarding great performance. Over the last twenty years, our captive clients have received more than $75 million in dividends. It s insurance that pays you back for being safe. In 2012, our performance reached new heights: 16 new captive members added in 2012 $11.7 million in dividends returned to clients in % client retention MARK FITZJERRELLS Senior Vice President of Captives and Programs 3

6 CHRIS VOGEL Vice President, Transportation Group MARK ROLING Vice President, Transportation Group STEVE SCHILL Senior Vice President, NSTD CHRIS PATRICK Senior Vice President, Transportation Group TRANSPORTATION GROUP ACTIVELY MANAGING OVER $290 MILLION OF TRUCKING PROPERTY & CASUALTY PREMIUMS The difference is EXPERTISE. With over 125 skilled professionals dedicated solely to serving the transportation industry, Cottingham & Butler offers transportation companies the best insurance solutions. More than 2,500 trucking companies have chosen Cottingham & Butler as their insurance partner and trusted advisor. In 2012, our experts: Added over $10 million in premium to our trucking captives Exceeded over $290 million of total trucking Property & Casualty premiums Created a proprietary owner-operator program assessment tool Gathered more than 100 trucking industry professionals at our 2nd annual Transportation Summit 2

7 REDUCED OSHA CITATIONS AND PENALTIES BY AN AVERAGE OF 55% PER INSPECTION CHAD HOPPENJAN Director of Transportation Safety Services DAVE FRANSON Senior Vice President of CBCS & Safety Management DALE SABERS Director of Risk Management Services SAFETY MANAGEMENT The difference is NO ACCIDENT. A great deal of what passes for safety and loss control is nothing more than nit-picking around the periphery of what matters. Our Safety Management Services team applies a top management approach to help our clients develop the culture, processes, and metrics required to create world-class safety programs that endure. Better safety results are no accident. In 2012, we: Achieved a satisfactory rating for 99% of the fleets that engaged our safety services Reduced OSHA citations and penalties by an average of 55% per inspection Developed best practices for training inexperienced drivers in the transportation industry COTTINGHAM & BUTLER 2012 ANNUAL REPORT 5

8 ORGANIC 24 % GROWTH IN REVENUE FOR 2012 DAVE FRANSON Senior Vice President of CBCS & Safety Management CBCS The difference is TRANSPARENT. Cottingham & Butler Claims Services (CBCS) is a third-party property & casualty claims administrator dedicated to something quite unique in the industry: a 100%, fully disclosed business model. Our clients understand what they are truly paying for claims administration services. The CBCS difference is clear; our transparent business model combined with client results have produced a 99% client retention rate. In 2012, our team delivered: 24% organic growth in revenue A proprietary tool for estimating savings as a result of our transparent model Health Ticket a client tool to drive down medical costs associated with workers compensation 2% adjuster turnover compared to an industry average of 16% 6

9 IN 2012, OUR TRIBAL PARTNERS SAVED OVER $15 MILLION THROUGH OUR MEDICARE- LIKE RATES PROCESS JOHN LINK Vice President, Tribal Insurance BENJAMIN BUTLER Vice President, Tribal Insurance TRIBAL INSURANCE The difference is COMMITMENT. Cottingham & Butler Tribal Insurance delivers cost effective risk management and health & welfare solutions for Tribal Nations. Our team s primary focus is working with Tribal Nations. We understand the unique challenges and risks tribal communities face and have a deep expertise in tribal-specific solutions, such as our proprietary Medicare-Like Rates process. In 2012, our commitment delivered: Tribal partners saving over $15 million through our Medicare-Like Rates process Biometric wellness screening to over 5,500 tribal members In-depth risk management analysis for government and enterprise operations Education series on tribal leader liability and internet gaming liability Active involvement in many tribal associations, including NIGA and NAFOA COTTINGHAM & BUTLER 2012 ANNUAL REPORT 7

10 61% INCREASE IN NEW BUSINESS REVENUE FROM 2011 DEAN VANDER PLAS Senior Vice President, Employee Benefits BRADLEY PLUMMER Senior Vice President, Employee Benefits COST PER EMPLOYEE, PER YEAR TREND: Cost per employee per year 2.8% - C&B AVG. ANNUAL INCREASE 7.4% - NATIONAL AVG. ANNUAL INCREASE* $9,500 $9,000 $8,500 $8,000 $7,500 $7,000 $6, EMPLOYEE BENEFITS The difference is RESULTS. Cottingham & Butler Employee Benefits is a full-service consulting and brokerage practice, specializing in delivering competitive benefit programs. We do not simply parrot the latest industry ideas to create an illusion of competence. Rather, we bring deep experience, combined with a focus on data analytics. We challenge conventional wisdom and deliver the long-term outcomes our clients are looking for. In 2012, we produced the following results: 61% increase in new business revenue from % client retention Health Care Reform tools for helping our clients make informed decisions *National Average Annual Increases based on a 2011 National Survey of Employer-Sponsored Health Plans 8

11 MAJOR MEDICAL PLAN DESIGN: 30% REDUCTION IN ANNUAL COST PER EMPLOYEE DICK SIGWARTH Vice President, SISCO SISCO The difference is THE EXPERIENCE. SISCO is a third-party benefit administration firm dedicated to helping clients and their employees maximize the value of their employee benefits. At SISCO, you won t find faceless computers processing claims and your employees won t spend endless hours navigating a phone menu. Our team combines the best in state-of-the-art claims processing technology with a responsive, client oriented staff to deliver a cost-effective, yet human experience. In 2012, we: Launched a call center enrollment service with licensed SISCO agents that assist participants in making better decisions during their benefit election period Delivered a major medical plan design that controls benefit costs through Medicare benchmarking resulting in a 30% reduction in the annual cost per employee Expanded our partnership with locally owned, community-based health plans to deliver high-quality, cost-effective health care to several midwest communities COTTINGHAM & BUTLER 2012 ANNUAL REPORT 9

12 FOUR YEAR CLIENT STUDY: INCREASED # OF HEALTHY BY48 % INDIVIDUALS JIM WACHTEL National Sales Director, HealthCheck360º ANGIE LONG Assistant Vice President of Operations MICHAEL KELLY Director of HealthCheck360º HEALTHCHECK360º The difference is MEASURABLE. HealthCheck360º is a leading provider of performance-based wellness solutions that work. We do not believe wellness solutions should rely on posters and water bottles to deliver results. Rather, we implement comprehensive, annual biometric screenings that provide real tracking of health improvement over time. We combine biometric data with detailed medical claims data to identify specific health risks and tailor our programming and interventions to address those risks. In 2012, we delivered the following measurable results: A correlation of biometric risk factors to claims costs enabling clients to target more effectively Enhanced participant portal: engagement programs, personalized tracking and mobile application Improved participants average health scores every year since inception (2007) Outcomes for clients in the program for four years: - Increased number of healthy individuals by 48% - Decreased high risk population by 38% 10

13 COMPLIANCE MANAGEMENT: 80% COMPLIANCE VS. INDUSTRY AVG. OF 40% HEALTHCORP The difference is EVIDENT. HealthCorp is a medical management division focused on improving medical outcomes through utilization review, case management, and disease management. Our nurses and physicians help ensure that providers follow evidence-based medicine guidelines and that patients receive the most appropriate care and guidance for their conditions. The result is improved cost-savings, better outcomes, and happier patients. In 2012: Compliance management program achieved 80% compliance vs. industry average of 40% for those with chronic conditions Provided nurses a dashboard that integrates biometric data, claims data, and medication adherence data for each participant Enhanced medical management software linking patient data to custom care plans DR. ANGELA RILEY Medical Director, HealthCorp 3

14 VICKIE LAGROTTA Director of Information Technology CRAIG HERBST Director of Sales Strategy NICOLE PFEIFFER Vice President, Human Resources JULI GOTTO Director of Marketing TIM BERNS Chief Financial Officer CORPORATE SERVICES ADDED 105 EMPLOYEES TO OUR TEAM IN 2012 The difference is OUR CULTURE. We are a company of many different businesses, but our culture is the common thread that runs through each of them. Our culture celebrates excellence, demands professionalism, expects lifelong learning, values results over effort, and is never satisfied with the status quo. Our Corporate Services team is charged with finding and growing our talent, managing our resources, driving new business initiatives, and developing the tools our businesses need to thrive and succeed. In 2012 we: Added 105 employees to our team Implemented Covey training for managers building the skills of our leaders Launched a new corporate website 2

15 800 Main Street PO Box 28 Dubuque, Iowa