SENECA INSURANCE COMPANY, INC.

SENECA INSURANCE COMPANY, INC. New York, New York Ultimate Parent: Fairfax Financial Holdings Limited SENECA INSURANCE COMPANY, INC. 160 Water Street, New York, NY 10038-4922 Web: www.senecainsurance.com Tel: 212-344-3000 Fax: 212-344-4567 AMB#: 000324 NAIC#: 10936 Ultimate Parent#: 058364 FEIN#: 13-2941133 BEST S CREDIT RATING Best s Financial Strength Rating: A Outlook: Stable Best s Financial Size Category: XIII The company s rating reflects its reinsurance agreement with United States Fire Insurance Company (AMB# 002136) as a member of the Crum & A RATING RATIONALE Rating Rationale: The ratings apply to the four members of the Crum & Forster Insurance pool, led by United States Fire Insurance Company, and several reinsured affiliates, and are based on the consolidated financial position and operating performance of these companies. The ratings reflect the group s diversified product portfolio, supportive capital levels and more recent improvement in accident year underwriting performance. The ratings also reflect the implicit and explicit support of the group s ultimate parent, Fairfax Financial Holdings Limited (Fairfax), which maintains a solid level of liquidity and has historically supported its subsidiaries operations. Partially offsetting these positive rating factors is the variability in loss reserve development over the past few years, due in part to older accident years asbestos and environmental reserves and development on more recent accident years relating to general liability and California workers 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 1 of 9

compensation. The group is also exposed to competitive market conditions that persist in the commercial lines sector, significant dividend payments and relatively unfavorable expense levels. The outlooks reflect A.M. Best s expectation that the group will improve its underwriting performance as a result of its focus on the more profitable specialty book of business which it has grown both organically and through acquisitions. Also, improved underwriting results are expected to continue given management s ongoing corrective actions which include a re-underwriting of its standard commercial lines book, California workers compensation and specific liability business. In addition, the group ceded certain loss reserves relating to its general liability and net asbestos, environmental and other latent liabilities to an affiliate, significantly reducing those exposures. A.M. Best believes the group members are well positioned at their current rating levels, favorable rating action is possible should the group maintain a strong capital position and underwriting and operating results that outperform the averages of its peers. Factors that could lead to negative rating actions include operating performance falling short of A.M. Best s expectations and/or an erosion of surplus that causes a decline in risk-adjusted capital to a level no longer supporting the current ratings. FIVE-YEAR RATING HISTORY Date Best s FSR Date Best s FSR 06/04/15 A 03/28/13 A 05/30/14 A 05/03/12 A 07/12/13 A 02/09/11 A KEY FINANCIAL INDICATORS ($000) Statutory Data Direct Premiums Written Premiums Written Pre-tax Operating Income Income Total Admitted Assets Policyholders Surplus 2010 98,726 125,113 27,263 26,614 384,647 182,084 2011 116,271 155,910 21,447 22,777 370,315 129,156 2012 143,564 190,053 23,830 22,168 443,927 157,330 2013 155,255-43,152 11,842 61,526 194,728 132,958 2014 160,445 2,520 171 193,915 134,147 Profitability Leverage Liquidity Comb. Ratio Inv. Yield (%) Pre-tax ROR (%) NA Inv Lev NPW to Overall Liq. (%) Oper. Cash flow (%) 2010 86.6 4.5 23.4 15.0 0.7 1.8 189.9 145.3 2011 91.6 4.5 15.2 24.2 1.2 3.1 153.9 130.0 2012 91.3 3.9 13.5 17.0 1.2 3.0 155.2 133.5 2013 13.4 3.2 24.4 0.5 315.2 133.5 2014 2.0 0.5 0.4 324.4 999.9 5-Yr 98.3 3.9 18.0 (*) Within several financial tables of this report, this company is compared against the Commercial Property Composite. (*) Data reflected within all tables of this report has been compiled from the company-filed statutory statement. BUSINESS PROFILE The Crum & Forster Insurance Group (C&F) provides a broad range of specialty commercial insurance products produced through over 2,000 independent insurance producers nationwide. Principal lines of business provided by the company include other liability, group A&H commercial multi-peril and workers compensation. Standard lines have been reduced significantly in recent years as a result of re-underwriting initiatives. The group maintains a focused underwriting strategy targeting challenging classes of business requiring individual risk underwriting and pricing. C&F s business strategy is to adhere to a centrally controlled underwriting philosophy and focus on generating underwriting profit through careful risk selection, appropriate pricing, aggressive loss control, engineering and claims handling. Recent business initiatives focus primarily on specialty programs that can be effectively underwritten and priced. To enhance its strategies, C&F has also expanded and diversified its distribution channels, including the appointment of certain specialty producers as a complement to its existing producer base. The diversification of distribution channels allows for the group s production source to be more adaptable to changes in underwriting preferences and market conditions. Target customers are generally small to medium-sized companies across numerous industry groups with contractors making up the largest segment. Twenty regional and branch offices, strategically located throughout the United States, service C&F s producers and policyholders. C&F monitors its catastrophe property exposure in relation to both total exposed policy limits and modeled loss measures of probable maximum loss and average annual loss. Overall, the company has minimal catastrophe-exposed business. Affiliations: The company is a member of and participates in the business underwritten or serviced by the Fair Plan. TOTAL PREMIUM COMPOSITION & GROWTH ANALYSIS DPW Reinsurance Prem Assumed Reinsurance Prem Ceded ($000) (% Chg) ($000) (% Chg) ($000) (% Chg) 2010 98,726 0.9 41,877 52.3 15,490-23.7 2011 116,271 17.8 58,867 40.6 19,229 24.1 2012 143,564 23.5 71,067 20.7 24,578 27.8 2013 155,255 8.1 90,549 27.4 288,956 999.9 2014 160,445 3.3 111,099 22.7 271,544-6.0 5-Yr CAGR 10.4 32.2 68.0 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 2 of 9

NPW NPE ($000) (% Chg) ($000) (% Chg) 2010 125,113 19.1 116,751 16.0 2011 155,910 24.6 141,014 20.8 2012 190,053 21.9 175,950 24.8 2013-43,152-99.9 48,525-72.4 2014 100.0-99.9 5-Yr CAGR -99.9-99.9 Territory: The company is licensed in the District of Columbia, Puerto Rico and all states. 2014 BY-LINE BUSINESS ($000) Reinsurance Reinsurance DPW Prem Assumed Prem Ceded Product Line ($000) (%) ($000) (%) ($000) (%) Com l MultiPeril 94,612 59.0 10,109 9.1 104,721 38.6 Oth Liab Occur 15,921 9.9 33,059 29.8 48,981 18.0 Inland Marine 13,299 8.3 7,641 6.9 20,941 7.7 Fire 11,601 7.2 31,056 28.0 42,657 15.7 Surety 7,486 4.7 7,486 2.8 Workers Comp 7,384 4.6 7,384 2.7 Allied Lines 6,933 4.3 29,233 26.3 36,166 13.3 All Other 3,207 2.0 0 0.0 3,207 1.2 Total 160,445 100.0 111,099 100.0 271,544 100.0 Business NPW Retention Product Line ($000) (%) (%) Com l MultiPeril Oth Liab Occur Inland Marine Fire Surety Workers Comp Allied Lines All Other Total BY-LINE RESERVES ($000) Product Line 2014 2013 2012 2011 2010 Fire 12,442 7,489 4,364 Allied Lines 10,444 10,248 5,861 Com l MultiPeril 73,590 64,252 55,951 Surety 28 1,000 1,000 Workers Comp 11,411 12,642 13,681 Oth Liab Occur 60,713 47,398 33,683 Inland Marine 7,171 1,789 3,918 All Other 3,794 5,007 8,255 Total 179,594 149,825 126,713 GEOGRAPHIC BREAKDOWN BY DIRECT PREMIUM WRITINGS ($000) 2014 2013 2012 2011 2010 New York 56,971 50,133 46,431 42,266 39,925 Texas 13,159 12,751 10,110 5,688 1,895 New Jersey 11,868 10,577 10,147 8,302 6,703 Kentucky 9,514 9,309 8,485 8,462 8,178 California 7,078 6,878 7,138 5,514 3,982 Illinois 5,459 5,859 4,206 3,449 3,078 Pennsylvania 5,067 5,206 4,503 3,628 2,631 Connecticut 4,014 3,409 2,736 2,008 1,961 Virginia 3,999 3,860 3,927 3,577 3,323 Florida 3,679 3,557 4,498 3,480 2,382 All Other 39,636 43,716 41,383 29,898 24,666 Total 160,445 155,255 143,564 116,271 98,726 RISK MANAGEMENT The companies in the group participate in risk management at the Fairfax Financial Holdings Ltd (Fairfax) group level under the direction of a Chief Risk Officer as well as at the company level under the Chief Risk Officer. At the Fairfax level, risks are reviewed on a quarterly basis with risk managers at the company level. This practice allows the company to share information, resources and best practices with the other operating entities. Fairfax monitors and estimates each of its anticipated risks as a percentage of capital. At the C&F level, the business risks relating to the operating, underwriting and regulatory environments are addressed through various means. C&F and Fairfax level actuaries, as well as the external auditor review the loss reserves. C&F has disaster recovery plans for IT systems and ongoing operations. Risks relating to pandemics or catastrophes that affect staffing are also addressed through offsite facilities. C&F s current reinsurance program includes standard property per risk coverage of up to $45 million excess of $5 million retention and catastrophe limits of $100 million excess of $30 million retention. Workers compensation is reinsured at $100 million excess of $50 million; the last $50 million of coverage is for terrorism only. Umbrella business is reinsured at $20 million excess of $5 million; admitted business has additional coverage of $10 million excess of $25 million. OPERATING PERFORMANCE Operating Results: C&F s operating performance has been variable over the past five years. The favorable results in 2014 and 2013 follow improved underwriting performance. Investment performance still lags the peers given the constraints from its conservative investment strategy which includes a 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 3 of 9

higher than average holding in cash, short-term investments and common stocks. As well as the practice of hedging a portion of the downside risk on their equity investments. The group s investments are managed by Hamblin Watsa Investment Counsel Ltd. (Hamblin Watsa), which is the investment management subsidiary of Fairfax. Hamblin Watsa conducts its own analysis and concentrates on long-term, value-oriented investments. The investment strategy seeks to provide sufficient liquidity while preserving invested capital, with an emphasis on maximizing total investment return. The group s focus is on driving total return, rather than focusing exclusively on income through yield which is depressed from the group s lower than average investments in bonds, high percentage of bonds made up of lower yielding tax exempts and higher than average cash and short term investment balances; in addition the group s hedge program limits its investment income. Pretax returns on revenue and equity lag the composite for the same reason in addition to historically worse than average underwriting performance. On an accident year basis, underwriting results have improved over the past few years reflecting the group s focus on its more profitable specialty lines, improved rate environment on most lines and continuing expense management notwithstanding the uptick in the 2014 expense ratio. The group s underwriting expense ratio has improved over the past five years, as a result of efforts to reduce expenses and a sizable increase in net written premiums over that time period. The increase in premium was driven by growth in the specialty E&S segments, mainly the general liability line, most notably A&H and environmental business. UNDERWRITING EXPERIENCE Undrw Income ($000) Loss Ratios Expense Ratios Ind Pure Loss LAE Loss LAE & Other Total Div. Comb. Comm. Exp. Exp. Pol. Ratio Comb. Ratio 2010 12,494 33.8 14.6 48.3 20.8 17.5 38.2 86.6 88.7 2011 6,343 39.5 15.1 54.6 21.6 15.4 37.0 91.6 103.1 2012 10,227 39.9 14.8 54.7 21.5 15.0 36.5 91.3 100.7 2013 3,833 45.1 10.0 55.1 26.1-67.7-41.6 13.4 96.1 2014 PROFITABILITY ANALYSIS ($000) Company 5-Yr Total/Avg 32,896 38.8 14.3 53.2 12.8 32.2 45.1 98.3 96.4 Pre-tax After-tax Operating Operating Total BY-LINE LOSS RATIO Income Income Income Return Product Line 2014 2013 2012 2011 2010 5-Yr Avg 2010 27,263 20,532 26,614 28,012 Fire 37.4 49.2 56.6 28.4 45.5 2011 21,447 16,044 22,777 21,922 Allied Lines 48.4 28.8 67.2 31.3 41.8 2012 23,830 17,389 22,168 23,563 Com l MultiPeril 47.2 38.6 39.9 34.9 38.8 2013 11,842 21,435 61,526 62,708 Surety 0.9-19.1-6.3 2014 2,520 2,647 171 928 Workers Comp 53.3 30.0 32.5 68.3 45.2 5-Yr Total 86,902 78,047 133,256 137,133 Oth Liab Occur 46.4 41.6 40.2 35.3 40.0 Inland Marine 52.6 63.5 15.5 21.5 43.5 Company Industry Composite All Other 30.2 28.3-38.3 32.7 11.5 Pre-tax Return Operating Pre-tax Return Operating Total 45.1 39.9 39.5 33.8 38.8 ROR (%) on (%) Ratio (%) ROR (%) on (%) Ratio (%) 2010 23.4 16.0 73.9 24.9 11.6 75.1 DIRECT LOSS RATIO BY STATE 2011 15.2 14.1 80.9 2.7 1.4 96.2 2014 2013 2012 2011 2010 5-Yr Avg 2012 13.5 16.5 83.5 7.5 4.3 93.4 New York 36.2 34.9 47.3 27.9 28.8 35.3 2012 24.4 43.2-3.1 10.6 11.0 89.7 Texas 59.2 38.7 54.6 30.7 38.7 48.4 2014 0.7 7.5 New Jersey 56.8 25.4 64.8 6.0 43.6 40.8 5-Yr Avg 18.0 18.2 87.1 11.7 7.1 88.4 Kentucky 44.8 15.2 54.5 28.2 127.7 53.4 California 12.9 19.4 32.9 21.3 17.1 21.0 Underwriting Results: C&F s calendar year underwriting performance has improved over the past few years despite varying levels of adverse development. Within the past few years, all A&E reserves and a portion of the construction defect related reserves were transferred to an affiliate which somewhat limited the negative effects of adverse development on older accident years. Despite the benefit of these loss portfolio transfers, prior year Illinois Pennsylvania Connecticut Virginia Florida All Other 44.3 67.8 18.7 66.4 18.0 41.1 44.8 223.4 16.2 18.1 35.4 39.5 76.6 22.3 53.3 56.4 20.0 29.4 57.8 33.0 38.4 18.6 15.7 44.6 18.5 42.2-14.7 23.5-18.0 40.1 48.9 89.3 22.9 37.5 17.0 38.6 loss reserves continue to develop adversely, mainly relating to construction Total 41.6 39.8 43.4 31.0 38.8 39.4 defect claims, other specialty classes of business and California Workers Compensation business, included in the standard lines segment. The group Investment Results: The group s total return on invested assets has been continues to limit its California workers compensation book. volatile over the past five years as net investment yields declined and variable amounts of realized and unrealized gains have been recorded. In addition, total 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 4 of 9

invested assets declined significantly over the past five years, primarily as a result of dividend payments. All of the Fairfax companies are allocated a portion of the investments which are centrally managed by HWIC. The investments are allocated based on the capital size of the company as well as its capacity for higher risk investments. The group s percentage of total assets invested, at about 86%, is in-line with its peer composite. As a percentage of the policyholders surplus investment composition differs from the group s peers as cash, short term invested assets and common stock (including large affiliated holdings) accounts for a much larger percentage of invested assets and long term bonds is a lower portion of invested assets. investment income has fallen markedly over the past few years, reflecting lower dividend and interest payments from the group s reduced equity and bond portfolios coupled with a significant increase of lower yielding short-term investments. In addition to net investment income, the group s investments generated variable levels of gains and losses over the past five years. In 2014 the group benefited from sizable amounts of realized gains following the inter-company sale of its affiliated holding in Odyssey Re. In 2013, the group recognized both unrealized losses on its bond portfolio and realized losses on the total return swaps which hedge its common stock portfolio. In 2011 and 2012, realized gains benefited net income. These gains are lower than the group s historical norms, as higher than average losses on the group s hedging program were realized and 2012 included an OTTI of an investment in one of the group s value investments. In 2011, the unrealized losses were mainly due to a loss recorded on the group s value investments which represent those investments which in the mid-term are expected to outperform the industry but in the short term are suffering some financial hardship. The group has a large investment in municipal bonds which at year end had an unrecorded loss of market value over book value. The realized gains in 2010 resulted primarily from sales of long-term bonds and equities, offset by costs associated with the group s hedging program. INVESTMENT GAINS ($000) Company Realized Unrealized Inv Capital Capital Year Income Gains Gains 2010 14,769 6,083 1,398 2011 15,104 6,732-855 2012 13,603 4,779 1,395 2013 8,009 40,090 1,182 2014 2,520-2,476 757 5-Yr Total 54,005 55,208 3,878 Company Industry Composite Pre-tax Invest Inv Inc Inv Return on Total Inv Inc Inv Growth Yield Inv Assets Return Growth Yield Year (%) (%) (%) (%) (%) (%) 2010 9.6 4.5 6.3 7.6 61.8 4.5 2011 2.3 4.5 6.6 6.1-45.6 2.3 2012-9.9 3.9 5.3 7.1 11.1 2.6 2013-41.1 3.2 20.7 19.2-13.3 2.2 2014-68.5 2.0 0.0 2.2-0.1 2.1 5-Yr Avg -16.9 3.9 8.0 8.7-2.9 2.7 BALANCE SHEET STRENGTH Capitalization: C&F s overall risk-adjusted capital position, as measured by Best s Capital Adequacy Ratio (BCAR), benefitted most recently from an improvement in the group s surplus mainly attributable to the sale of its affiliated holdings in Odyssey Re. The decrease in surplus over the past few years has been driven by shareholder dividends, adverse development, and negative macro-economic impacts on underwriting, as well as other changes. During 2014, the most notable change was realized due to significant increase in unrealized appreciation on bonds and a $90 million increase in surplus driven by investment results. Strengthening of prior years loss reserves has had a negative impact on capital generation over the past few years. Additionally, the strengthening coupled with the effects of the loss portfolio transfers has distorted the prior years development patterns which leads to dependence on qualitative assessments by management. However, with the sale of the A&E and a portion of the construction defect liabilities, run-off of California workers compensation business and the declining effect of finite reinsurance, we expect the volatility in the reserve levels to lessen. Current BCAR: 181.1 CAPITAL GENERATION ANALYSIS ($000) Source of Surplus Growth Pre-tax Realized Unrealized Operating Capital Income Capital Year Income Gains Taxes Gains 2010 27,263 6,083 6,732 1,398 2011 21,447 6,732 5,403-855 2012 23,830 4,779 6,441 1,395 2013 11,842 40,090-9,593 1,182 2014 2,520-2,476-127 757 5-Yr Total 86,902 55,208 8,854 3,878 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 5 of 9

Source of Surplus Growth Change % Chg Contrib. Other in in Year Capital Changes 2010-13,479 481 15,014 9.0 2011-74,769-81 -52,929-29.1 2012 4,610 28,174 21.8 2013-59,000-28,080-24,372-15.5 2014 261 1,189 0.9 5-Yr Total -147,248-22,809-32,924-4.3 QUALITY OF SURPLUS ($000) Surplus Other Contributed Unassigned Year Notes Debt Capital Surplus 2010 31,076 151,009 2011 31,076 98,080 2012 31,076 126,254 2013 31,076 101,882 2014 31,076 103,071 Year-End Conditional Adjusted Year Reserves 2010 182,084 182,084 2011 129,156 535 129,691 2012 157,330 552 157,882 2013 132,958 132,958 2014 134,147 134,147 LEVERAGE ANALYSIS Company Industry Composite Res. Res. NPW to to Gross NPW to to Gross 2010 0.7 0.7 1.8 2.0 0.5 0.4 1.4 2.1 2011 1.2 1.2 3.1 3.4 0.5 0.4 1.7 2.7 2012 1.2 1.1 3.0 3.3 0.6 0.5 1.9 3.0 2013 0.5 0.5 1.8 2.6 2014 0.4 0.4 1.6 2.5 CEDED REINSURANCE ANALYSIS ($000) Company Bus. Reins. Ceded Ret. Recov. to Reins. to (%) (%) (%) Industry Composite Bus. Reins. Ceded Ret. Recov. to Reins. to (%) (%) (%) Ceded Reins. Total 2010 44,180 91.3 17.7 24.3 56.0 37.2 68.9 2011 37,568 91.3 17.6 29.1 48.8 49.6 94.6 2012 46,440 90.9 17.4 29.5 50.8 62.3 108.0 2013 5,524-27.8 4.2 51.9 86.9 2014 2014 REINSURANCE RECOVERABLES ($000) Paid & Unpaid Losses IBNR Unearned Premiums Other Recov* Total Reins Recov US Affiliates... 192,144 81,344 119,765 393,253 Grand Total... 192,144 81,344 119,765 393,253 * Includes Commissions less Funds Withheld LOSS & ALAE RESERVE DEVELOP.: CALENDAR YEAR ($000) Orig. Developed Develop. Develop. Develop. Unpaid Unpaid Loss Reserves to to to Reserves Res. to Reserves Thru 14 Orig. (%) (%) NPE (%) @12/14 Develop. (%) Calendar Year 2009 102,904 82,788-19.5-12.0 82.3 2010 119,076 102,962-13.5-8.8 88.2 2011 140,951 130,904-7.1-7.8 92.8 2012 169,781 169,781 96.5 2013 2014 LOSS & ALAE RESERVE DEVELOP.: ACCIDENT YEAR ($000) Accident Year Orig. Loss Reserves Developed Reserves Thru 14 Develop. to Orig. (%) Unpaid Reserves @12/14 Acc. Yr Loss Ratio Acc. Yr Comb. Ratio 2009 42,493 37,646-11.4 54.3 96.2 2010 47,021 45,528-3.2 52.2 90.5 2011 61,000 59,334-2.7 59.4 96.4 2012 77,432 77,558 0.2 60.6 97.1 2013 55.1 13.4 2014 Liquidity: The group s level of quick liquidity is significantly above that of the commercial casualty peer group, reflecting the above-average allocation of investments to cash and short-term investments. Cash flows have historically been variable as a result of catastrophe payments and reinsurance commutations; however, with the recent increase in premiums and the reduction A&E exposure, positive cash flows have stabilized. 2011 operating cash flow was also impacted by a $233 million payment made to transfer the A&E reserves to an affiliate. 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 6 of 9

LIQUIDITY ANALYSIS Company Industry Composite Gross Gross Quick Current Overall Agents Bal. Quick Current Overall Agents Bal. Liq. (%) Liq. (%) Liq. (%) to (%) Liq. (%) Liq. (%) Liq. (%) to (%) 2010 23.0 163.9 189.9 1.4 61.0 132.7 204.1 15.5 2011 18.5 120.4 153.9 3.8 49.8 114.5 184.4 21.4 2012 20.4 119.3 155.2 5.3 53.4 112.0 174.1 23.8 2013 47.6 122.2 315.2 4.8 54.8 122.6 181.0 22.7 2014 25.0 135.1 324.4 4.9 61.0 124.8 189.5 19.3 CASH FLOW ANALYSIS ($000) Company Industry Composite Underw Oper Underw Oper Underw Oper Cash Cash Cash Cash Cash Cash Cash Year Flow Flow Flow Flow (%) Flow (%) Flow (%) Flow (%) 2010 39,274 43,561 6,807 145.6 145.3 121.9 132.0 2011 30,434 35,777-6,188 127.3 130.0 101.6 106.0 2012 50,340 49,277 16,479 137.1 133.5 103.0 107.5 2013 17,072 22,383-29,174 125.7 133.5 99.0 102.2 2014-946 6,834-5,132-99.9 999.9 121.6 124.1 5-Yr Total 136,175 157,831-17,208 INVESTMENT LEVERAGE ANALYSIS (% OF ) Industry Company Composite Class 3-6 Bonds Real Estate/ Mtg. Other Invested Assets Common Stocks Non-Affil. Inv. Affil. Inv. Class 3-6 Bonds Common Stocks 2010 3.6 11.5 15.0 14.9 1.5 29.7 2011 4.2 19.9 24.2 27.8 1.5 27.3 2012 1.8 1.0 14.2 17.0 29.4 1.9 34.2 2013 35.9 2014 0.5 0.5 36.7 2.0 INVESTMENTS - SECURITIES Current Year Distribution of Bonds By Maturity Years Yrs-Avg 0-1 1-5 5-10 10-20 20+ Maturity Government 1.5 0.5 2.1 58.2 24 Gov t Agencies & Muni 2.5 6.4 12.6 12.3 16 Industrial & Misc 3.7 0.3 1 Total 5.2 2.8 6.9 14.7 70.5 20 2014 2013 2012 2011 2010 Bonds (000) 74,920 64,414 266,261 227,342 265,631 US Government 64.0 72.3 17.1 14.6 14.3 State/Special Revenue - US 35.5 26.0 81.6 82.7 83.2 Industrial & Misc - US 0.5 1.7 1.2 2.6 2.5 Private Issues 3.9 3.3 0.4 1.5 Public Issues 96.1 96.7 100.0 99.6 98.5 Bond Quality (%) 2014 2013 2012 2011 2010 Class 1 99.1 100.0 95.8 94.2 96.0 Class 2 3.3 3.7 1.8 Class 3 0.9 0.9 1.1 1.0 Class 4 1.2 Class 5 1.0 INVESTMENTS - EQUITIES 2014 2013 2012 2011 2010 Stocks (000) 49,190 47,683 78,198 71,684 58,204 Unaffiliated Common 28.6 35.9 35.9 Affiliated Common 100.0 100.0 59.1 50.1 46.6 Unaffiliated Preferred 12.3 14.0 17.5 INVESTMENTS - OTHER INVESTED ASSETS 2014 2013 2012 2011 2010 Other Inv Assets (000) 5,590 10,722 41,449 23,417 30,605 Cash 29.3-58.3-7.6-29.0 85.2 Short-Term 70.7 158.3 103.9 129.0 11.5 Schedule BA Assets 3.7 All Other 3.3 HISTORY The company was incorporated on March 29, 1978, under the laws of New York as Eagle Star Insurance Company of America. Following a change in ownership and management, the present title was adopted on April 8, 1987. Pursuant to a transaction entered into in February 1990 between Eagle Star Insurance Company Ltd. (Eagle Star) and the company, all liabilities arising from business written by the company prior to December 31, 1986 have been assumed by The Continental Insurance Company and Eagle Star. The transaction was approved by the New York Department of Insurance effective as of December 31, 1989. All of the outstanding stock of the company is owned by The North River Insurance Company, which is a wholly-owned subsidiary of Crum & Forster Holdings Corp., which is a wholly-owned subsidiary of Fairfax (US) Inc. The latter is 100% owned by FFHL Group Ltd., which is a wholly-owned subsidiary of Fairfax Financial Holdings Limited, Toronto, Ontario, Canada. Paid-up capital of $4,800,000 is comprised of 24,000 common shares at $200 par value each. All authorized shares are outstanding. MANAGEMENT On August 31, 2000 Fairfax Financial Holdings Limited, through its subsidiary, The North River Insurance Company acquired Sen-Tech International Holdings Inc. (Sen-Tech), Seneca Insurance Company Inc s parent at the time, in a cash transaction. Seneca Insurance Company, Inc. was not included in Crum & Forster s intercompany pooling agreement and has been operating independently. 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 7 of 9

Effective April 1, 2013, Seneca Insurance Company, Inc. entered into a 100% quota share reinsurance agreement with United states Fire Insurance Company, (a wholly owned subsidiary of Crum & Forster Holdings Corp.), whereby all of the business of Seneca Insurance Company, Inc., including loss reserves and unearned premiums as of March 31, 2013 is ceded to United States Fire Insurance Company. In May 1996, The Trident Partnership, L.P. had purchased a 72% equity interest in Sen-Tech from Odyssey Partners, L.P. (Odyssey). On October 8, 1993, J.P. Morgan Capital Corp., Boston Insurance Investors, Third Avenue Value Fund and National Reinsurance Corporation had purchased a 28% collective ownership interest through a private placement of $10.0 million of common stock, which reduced Odyssey s controlling interest to approximately 72%. Seneca Insurance Company, Inc. is under the direction of Marc Wolin (President and CEO), with underwriting operations led by Keith McCarthy (Executive Vice President and Chief Underwriting Officer), Thomas Diaczynsky (Senior Vice President Surplus Property and John R. Moran, Jr. (Vice President Inland Marine). Marc Wolin has been with Seneca since 1989 and previously held the position of Chief Operating Officer and Chief Financial Officer. Officers: Chairman of the Board, Marc J. Adee; President and Chief Executive Officer, Marc T. A. Wolin; Executive Vice President and Chief Underwriting Officer, Keith McCarthy; Senior Vice Presidents, Thomas A. Diaczynsky (Surplus Property), Frank V. Donahue, Jr. (Claims), Chris I. Stormo (Administration); Vice President and Controller, Vincent I. Maida; Vice Presidents, Kathleen G. Alicks, David W. Bishop (Surplus Property), Albert J. Caradonio (Reinsurance), Gregory A. Crapanzano (Claims), Eunice Halstead, David A. Hansen (Surplus Property), John W. Holmes (Arizona Branch), George G. Juzdan, Rechelle A. McArthur, Kathleen A. McNamara, John R. Moran, Jr. (Inland Marine), Carol A. Muller, Lois D. Noia, Lauren Parente, John W. Rendina, Kenneth J. Ryan (Surety), Michael J. Skadra (E & S Casualty), Marguerite M. Williams; Secretary, James V. Kraus; Treasurer, Paul W. Bassaline. Directors: Marc J. Adee, Paul W. Bassaline, Harvey K. Childs, Donald R. Fischer, David J. Ghezzi, Gabriel M. Krausman, Albert B. Lewis, Stephen M. Mulready, Chris I. Stormo, Marc T. A. Wolin. REGULATORY An examination of the financial condition is being made as of December 31, 2014, by the insurance department of New York. The 2014 annual independent audit of the company was conducted by PricewaterhouseCoopers, LLP. The annual statement of actuarial opinion is provided by Robert S. Bennett, FCAS, MAAA. BALANCE SHEET ADMITTED ASSETS ($000) 12/31/14 12/31/13 14% 13% Bonds... 74,920 64,414 38.6 33.1 Cash & short-term invest... 5,590 10,722 2.9 5.5 Investments in affiliates... 49,190 47,683 25.4 24.5 Total invested assets... 129,699 122,819 66.9 63.1 Premium balances... 36,918 36,390 19.0 18.7 Accrued interest... 257 152 0.1 0.1 All other assets... 27,040 35,367 13.9 18.2 Total assets... 193,915 194,728 100.0 100.0 LIABILITIES & SURPLUS ($000) 12/31/14 12/31/13 14% 13% All other liabilities... 59,768 61,770 30.8 31.7 Total liabilities... 59,768 61,770 30.8 31.7 Capital & assigned surplus... 31,076 31,076 16.0 16.0 Unassigned surplus... 103,071 101,882 53.2 52.3 Total policyholders surplus... 134,147 132,958 69.2 68.3 Total liabilities & surplus... 193,915 194,728 100.0 100.0 SUMMARY OF 2014 OPERATIONS ($000) Funds Provided from Statement of Income 12/31/14 Operations 12/31/14 Premiums earned... Premiums collected... -755 Losses incurred... Benefit & loss-related pmts 803 Undrw expenses incurred LAE & undrw expenses paid -613 underwriting income Undrw cash flow... -946 investment income... 2,520 Investment income... 549 Pre-tax cash operations Pre-tax oper income... 2,520-397 Realized capital gains... -2,476 Income taxes incurred... -127 Income taxes pd (recov)... -7,231 income... 171 oper cash flow... 6,834 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 8 of 9

Why is this Best s Rating Report important to you? A Best s Rating Report from the A.M. Best Company showcases the opinion from the leading provider of insurer ratings of a company s financial strength and ability to meet its obligations to policyholders, as well as its relative credit risk. The A.M. Best Company is the oldest, most experienced rating agency in the world and has been reporting on the financial condition of the insurance companies since 1899. A Best s Financial Strength Rating is an independent opinion of an insurer s financial strength and ability to meet its ongoing insurance policy and contract obligations. The Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing insurance policy and contract obligations. The rating is not assigned to specific insurance policies or contracts and does not address any other risk, including, but not limited to, an insurer s claims-payment policies or procedures; the ability of the insurer to dispute or deny claims payment on grounds of misrepresentation or fraud; or any specific liability contractually borne by the policy or contract holder. The rating is not a recommendation to purchase, hold or terminate any insurance policy, contract or any other financial obligation issued by an insurer, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser. In arriving at a rating decision, A.M. Best relies on third-party audited financial data and/or other information provided to it. While this information is believed to be reliable, A.M. Best does not independently verify the accuracy or reliability of the information. The company information appearing in this pamphlet is an extract from the complete company report prepared by the A.M. Best Company or A.M. Best Europe Rating Services Limited. For the latest Best s Financial Strength Ratings along with their definitions and A.M. Best s Terms of Use, visit the A.M. Best website at www.ambest.com. You may also obtain AMB Credit Reports by visiting our site or calling our Customer Service department at +1-908-439-2200, ext. 5472. To expedite your request, please provide the company s identification number (AMB#). 2015 A.M. Best Company, Oldwick, NJ 08858 Printed July 8, 2015 www.ambest.com Page 9 of 9