Ipc Corporation Ltd · SGX:AZA
Ipc — Merger or Acquisition (July 2009)
30 slides from Ipc's merger presentation, Jul 7, 2009
Slide 1: Filed by Flagstone Reinsurance Holdings Limited Pursuant to Rule 425
Filed by Flagstone Reinsurance Holdings Limited Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: IPC Holdings, Ltd. Commission File No.: 000-27662 The following slides were presented as part of t
Slide 2: Acquisition of IPC Holdings, Ltd.
Acquisition of IPC Holdings, Ltd. PROPERTY | PROPERTY CATASTROPHE | SPECIALTY LINES | SHORT-TAIL CASUALTY
Slide 3: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this presenta
Slide 4: Additional Legal Information
ADDITIONAL LEGAL INFORMATION Additional Information About the Proposed Transaction and Where to Find It In connection with the proposed transaction, Flagstone plans to file with the United States Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 that will include a
Slide 5: Executive Summary
EXECUTIVE SUMMARY • Flagstone announced July 1st a proposal to acquire IPC Re for total consideration of $33.62 (July 1, 2009 stock price) • Flagstones proposal of 2.638 FSR shares per IPC share and $5.50 per IPC share in cash represents a superior proposal for IPC shareholders compared to competing
Slide 6: Terms of Transaction
TERMS OF TRANSACTION Transaction: Flagstone to acquire 100% of IPC Holdings, Ltd. Offer Price Per Share: $33.62 (using July 1, 2009 market price) Premium: 21% to IPC 07/01/09 closing price Consideration: $5.50 cash; 2.638 FSR shares per IPC share Diluted TBVPS received by IPC shareholders : 1 $35.59
Slide 7: Combination Analysis
COMBINATION ANALYSIS Combined (7) As of March 31, 2009 Investment Portfolio (1) $2,190.0 $1,728.5 $3,918.5 Total Assets $2.453.1 $2,472.0 $4,925.1 Loss & LAE Reserves $354.5 $429.8 $784.3 Stockholders’ Equity (2) $1,849.5 $1,024.1 $2,873.6 (6) Corporate Debt (3) $0.0 $265.3 $265.3 Total Hybrid Debt
Slide 8: Superior Transaction Value
SUPERIOR TRANSACTION VALUE BY THE NUMBERS Flagstone’s proposal is superior on a number of key economic fronts to competing proposals Flagstone Validus Difference Net to IPCR Economic Value to IPC Shareholders $,000 $ per share unless otherwise stated Share Exchange Value (July 1, 2009 close) ü $28.1
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Slide 10: Immediate Combination Benefits
IMMEDIATE COMBINATION BENEFITS • Combined company will be in a peer group with the largest broker market companies • Combined company leverage ratio of 9.2% provides further COMBINED ENTITY financial flexibility WILL BE • IPC shareholders benefit from Flagstone’s Swiss platform • Combined platform g
Slide 11: Combination Benefits
COMBINATION BENEFITS COMBINED COMPANY HAS HIGHER ROE’S Flagstone Shareholders are investing at modest dilution to tangible book value of less than ($20 million). The investment logic is as follows: 2% • Combined company has over $400 million excess capital using current FSR capital • Combined compan
Slide 12: Combined Business Strategy
COMBINED BUSINESS STRATEGY THE FLAGSTONE DIFFERENCE • Utilize industry-leading technology • Leverage off a global, integrated business platform • Pursue a balanced high-margin global strategy • Capitalize on experienced underwriting team • Committed and Shareholder-aligned Leadership 10
Slide 13: The Flagstone Difference: Industry Leading Technology
THE FLAGSTONE DIFFERENCE Industry leading Technology • Entire company integrated through technology • Thin-client model enables global risk management INDUSTRY LEADING • Fully integrated work flow, underwriting, and risk management system TECHNOLOGY • Combination of commercial models and in-house CA
Slide 14: Performance: Peer Analysis
PERFORMANCE: PEER ANALYSIS 2008 UNDERWRITING PROFITABILITY - LOSS RATIO (as reported) 2008 UNDERWRITING PROFITABILITY - LOSS RATIO (ex releases) 12 Source: Company reports based on public company data
Slide 15: The Flagstone Difference: Unique Global Platform
THE FLAGSTONE DIFFERENCE UNIQUE GLOBAL PLATFORM • Creates ability to effectively analyze risk • Offers fast, efficient service to clients 24 hours a day • Sources more risks and allows us to be more selective in the risks we choose (offer to bind ratio approx. 25%) • Penetrates local markets using l
Slide 16: Balanced High-Margin Global Strategy
THE FLAGSTONE DIFFERENCE BALANCED HIGH-MARGIN GLOBAL STRATEGY IPCR - 2008 GPW (1) FSR - 2008 GPW (2) Other Short Tail GPW BY LINE OF Insurance BUSINESS Short-Tail Smart diversification: Specialty Property & Casualty Catastrophe Continued focus on high- return short-tail business Property Catastrophe
Slide 17: Balanced High-Margin Global Strategy: Geography
THE FLAGSTONE DIFFERENCE BALANCED HIGH-MARGIN GLOBAL STRATEGY IPCR - 2008 GPW FSR - 2008 GPW GPW BY GEOGRAPHY Other Japan and Other Caribbean (2) Australasia Japan and Australasia Combined company will North Europe Europe America have a global platform (13 United offices in 12 countries) States Worl
Slide 18: Experienced Underwriting Team
THE FLAGSTONE DIFFERENCE EXPERIENCED UNDERWRITING TEAM 37 Underwriters 11 Actuaries 18 Catastrophe Modelers Senior Underwriting Team Classes Previous Industry Industry Members Written Experience Experience 22 Guy · Property · CUO: ACE Tempest Reinsurance Chief Underwriting Officer, Swayne · Cat · Lt
Slide 19: Committed Management Team
THE FLAGSTONE DIFFERENCE COMMITTED MANAGEMENT TEAM • Industry Leading Shareholder Alignment • 10 of 12 Board Members are Independent Previous Experience Experience Mark Byrne • Chairman: West End Capital Management 22 years Executive Chairman • Director: White Mountains, Terra Nova, Markel • Signifi
Slide 20: Appendixes
APPENDIXES I. Investment Portfolio II. Underwriting, Actuarial, Modeling, and Claims Team III. Board of Directors 18
Slide 21: Investment Portfolio
INVESTMENT PORTFOLIO APPENDIX I IPCR FSR Cash & Cash Equivalents Other Conservative portfolio: Equities • No substantial exposure Fixed Maturities Cash Fixed Maturities to sub-prime or Alt-A & Cash Equivalents securities 3/31/09 Investments: 2,190mm 3/31/09 Investments: 1,125 mm • Lower current retu
Slide 22: Experienced Teams
EXPERIENCED TEAMS APPENDIX II Underwriting Team - 37 Underwriters with significant industry experience Line of Business # of Underwriters (Multiple Average year experience classes) Property 17 20.3 Property Cat 20 16 Aviation 8 19.3 Space 6 19.3 Motor 9 22 Energy 13 25.6 Engineering 7 23.1 Agribusin
Slide 23: Board of Directors Biographies
BOARD OF DIRECTORS BIOGRAPHIES APPENDIX III Board of Directors Background Gary Black Gary Black has been a director since June 2006. He was Chief Claims Executive and Senior Vice President of OneBeacon Insurance Company, a subsidiary of White Mountains Insurance Group, until his retirement in 2006.
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Slide 25: Board of Directors Biographies
BOARD OF DIRECTORS BIOGRAPHIES APPENDIX III (cont) Board of Directors Background Stephen Coley Stephen Coley is Director Emeritus of McKinsey & Company. During his 28+ years of active client service with McKinsey, Mr. Coley led a wide variety of successful business strategy and organization efforts,
Slide 26: Board of Directors Biographies
BOARD OF DIRECTORS BIOGRAPHIES APPENDIX III (cont) Board of Directors Background Stewart Gross Stewart Gross is a Managing Director and member of the Investment Committee of Lightyear Capital, a private equity firm investing in companies in the financial services industry. Prior to joining Lightyear
Slide 27: Board of Directors Biographies
BOARD OF DIRECTORS BIOGRAPHIES APPENDIX III (cont) Board of Directors Background Anthony Latham Tony Latham is a former member of the Group Executive of RSA Group plc where he held a variety of senior executive roles over a period of 17 years. RSA Group plc is an international insurance group, liste
Slide 28: Acquisition of IPC Holdings, Ltd.
Acquisition of IPC Holdings, Ltd. PROPERTY | PROPERTY CATASTROPHE | SPECIALTY LINES | SHORT-TAIL CASUALTY FLAGSTONE REINSURANCE HOLDINGS LIMITED Crawford House, 23 Church Street, Hamilton, HM 11, Bermuda www.flagstonere.com
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