Ipc Corporation Ltd · SGX:AZA
Ipc — Merger or Acquisition (March 2009)
19 slides from Ipc's merger presentation, Mar 11, 2009
Slide 1: Investor Presentation
EXHIBIT 99.1 Investor Presentation March 2009 BERMUDA IRELAND UNITED STATES LLOYD’S
Slide 2: Information Concerning Forward Looking Statements and Certain Other Information
INFORMATION CONCERNING FORWARD LOOKING STATEMENTS AND CERTAIN OTHER INFORMATION This presentation includes statements about future economic performance, finances, expectations, plans and prospects of both IPC and Max that constitute forward-looking statements for purposes of the safe harbor provisio
Slide 3: Transaction Overview
Transaction Overview Structure Stock-for-stock merger of equals Exchange Ratio 0.6429 IPC shares for each Max common share Fixed exchange ratio Pro Forma Ownership 58% by IPC shareholders (Fully Diluted) 42% by Max shareholders Board of Directors 12 directors in total – 6 directors from Max, includi
Slide 4: Strategic Rationale
Strategic Rationale A diversified, balanced global underwriting platform Strong and vibrant franchise serving both property & casualty markets Strong capital base with over $3 billion in capital as of 12/31/08 and minimal leverage Greater size enhances financial flexibility Strong and deep managemen
Slide 5: Combining Strong Management With Deep Experience
Combining Strong Management With Deep Experience Previous Experience W. Marston Becker Orion Capital / Royal Sun Alliance USA McDonough Caperton/ Acordia Chief Executive Officer Trenwick James Bryce Chief Underwriting Officer of IPC Senior Management Positions at AIG Non-Executive Chairman of Max IP
Slide 6: Strong and Well-Capitalized Company
Strong and Well-Capitalized Company 12/31/2008 Combined company would have had over $3 Company Equity 1 Everest Re $4,960 billion of shareholders’ equity as of 12/31/08 2 AXIS 4,461 Conservative operating leverage to support 3 PartnerRe 4,199 4 Arch Capital 3,433 future growth in business 5 Transatl
Slide 7: Strong Balance Sheet and Capital Base
Strong Balance Sheet and Capital Base Combined As of December 31, 2008 ($mm) (1) Investment Portfolio $2,235.2 $5,356.9 $7,592.1 Total Assets $2,388.7 $7,252.0 $9,640.7 Loss & LAE Reserves $355.9 $4,305.1 $4,661.0 Stockholders' Equity $1,850.9 $1,280.3 $3,131.3 Corporate Debt $75.0 $241.1 $316.1 Tot
Slide 8: We Have A Strong Capital Position to Support Growth
We Have A Strong Capital Position to Support Growth Opportunistic Expansion in a Hardening Market Additional capital to accelerate growth through global operating platform We expect to reduce cat premiums in 2010 by $50-$75 million (~10% of total property) We expect to increase retentions on Max’s c
Slide 9: How the Combined Business is Expected to Change
How the Combined Business is Expected to Change Diversified portfolio of risks will generate more stable underwriting returns Anticipated reduction of catastrophe exposures Improved financial flexibility to opportunistically expand by increasing retentions on seasoned insurance business Expect each
Slide 10: A Diversified Underwriting Platform
A Diversified Underwriting Platform Full range of coverage - 39% casualty, 43% property and 17% other short tail lines (1) Business is diversified by class of business, geography and customer Stable market presence Established platforms provide full access to wide array of business Technical underwr
Slide 11: A Diversified Operating Platform
A Diversified Operating Platform IPC Holdings Max Capital Combined Insurance 35% 47% Insurance Reinsurance 53% 65% Reinsurance 100% Reinsurance Property / property cat Property / Life & annuity property cat Life & annuity 19% 20% 15% Property / 39% property cat 19% Other short-tail 32% P&C long-tail
Slide 12: Diversified Premium Mix: A Key Differentiator
Diversified Premium Mix: A Key Differentiator Looking to return the underwriting balance back toward 50% / 50% Reinsurance TRH PTP PRE MRH IPCR FSR RE RNR ORH VR AHL Casualty Property ACGL AXS MXGL ENH AWH LRE Incumbent (Re) Insurers Insurance Class of 2001 Class of 2005 ____________________ Note: B
Slide 13: Global Reach Through Established Platforms
Global Reach Through Established Platforms Bermuda / Dublin Bermuda / Dublin Lloyd’s U.S Specialty Insurance Reinsurance Insurance Agriculture Aviation Personal accident General liability Aviation Excess liability Financial institutions Marine Excess liability Professional liability Professional lia
Slide 14: Disciplined Underwriting Strategy
Disciplined Underwriting Strategy Post portfolio optimization, no group of risks are expected to expose the firm to a loss (1 in 250 year PML) of more than a 15% to 20% of surplus One third of portfolio realignment expected to be completed in 2009, with balance during 2010 renewals Zones expected to
Slide 15: A Strong and Liquid Investment Portfolio
A Strong and Liquid Investment Portfolio IPC Holdings Max Capital Combined Cash Equities Cash Cash 3% 14% Alternative 9% 18% Equities Investments 7% 3% Alternative Alternative Investments 12% 14% Investments 68% 71% Fixed Income 81% Fixed Income Fixed Income $2.2 billion $5.4 billion $7.6 billion Ta
Slide 16: Investment Strategy
Investment Strategy High quality fixed income strategy for 88% to 90% of invested assets Duration, yield curve, and currency matched to the company’s liabilities High quality - “A” and above securities only / average “Aa” portfolio quality Focus on liquid securities – government, agency, and agency
Slide 17: High Quality Fixed Income Portfolio
High Quality Fixed Income Portfolio IPC Holdings Max Capital BB or Cash BBBlower BBB BB or lower Treasuries Gov't A A 0.4% 0.9% 1.3%0.2% Cash agencies 18.8% 4.1% 13.7% 20.9% 0.1% 9.6% AA 8.7% 9.0% Treasuries 22.2% AA 43.9% 12.6% 33.6% Gov't AAA agencies AAA $1,870 million $4,541 million ____________
Slide 18: Highlights of IPC / Max Merger of Equals
Highlights of IPC / Max Merger of Equals Enhanced size and scale The combined company is expected to have shareholders’ equity of over $3 billion, which should lead to improved financial strength and flexibility Global platform and diversified business mix The combined company will have a diversifie
Slide 19: Creating a World Class Specialty Insurer and Reinsurer
Creating a World Class Specialty Insurer and Reinsurer March 2009 BERMUDA IRELAND UNITED STATES LLOYD’S