Towers Perrin Commercial Insurance Pricing Study Reports Modest Price Decreases from 2006 to 2007

Quarterly Pricing Survey Uses Data Directly From Insurers; Shows Price Declines Dramatically Less Than Reported in Other Studies

Stamford, CT, January 17, 2008 — Towers Perrin’s quarterly survey of commercial lines insurance pricing and profitability trends (CLIPS) reports that average prices for all lines of coverage combined decreased 4% to 5% between 2006 and 2007. More specifically, survey data for the third quarter of 2007 indicated an average price decrease of approximately 5%, with large accounts and specialty insureds experiencing the largest decreases of nearly 9% on average.

While prices fell in all surveyed lines, both the Directors & Officers Liability and Employment Practices Liability lines realized the most the greatest year-over-year price declines. Additionally, the survey findings suggest that insurance carriers expect loss ratios for accident-year 2007 to be higher than those in accident-year 2006, as price reductions were not matched by reductions in the expected costs of claims.

Launched in the summer of 2005, the data in CLIPS reflect information compiled by commercial lines insurance companies based on their price monitoring systems, distinguishing the study from commercial lines pricing reports that are based solely on agent/broker perceptions.

CLIPS participants represent a cross section of U.S. property/casualty insurers that include the majority of both the top 10 commercial lines companies and the top 25 insurance groups in the U.S. CLIPS’ measurement of both pricing changes and loss ratios changes also sets it apart from other studies.

“The CLIPS results have consistently indicated a less dramatic decrease in commercial insurance prices than other industry pricing surveys,” said Jeanne Hollister, Managing Principal and Practice Leader, Property/Casualty Insurance, Americas. “For example, several agent/broker surveys quoted decreases in prices in excess of 10% in the third quarter of 2007, compared with the CLIPS findings of 5%.

“Given the insurance industry’s aggregate reported premiums for the first nine months of 2007, it seems unlikely that price decreases were as dramatic as those reported in other surveys,” said Ms. Hollister.

Pricing data are a critical component of the information insurers use to develop business plans and anticipate changes in product profitability. Likewise, investors and regulators closely monitor insurance pricing trends and use this information to analyze insurance company performance and financial security. Thus, it is critical that these audiences have access to accurate data.

Said Ms. Hollister: “We have confidence in CLIPS results because they reflect price change information captured in companies’ price monitoring systems. In our view, this data are the most reliable, as compared to data coming from second hand sources.”

About the Commercial Lines Insurance Pricing Survey (CLIPS)

The purpose of the CLIPS report is to provide participants with regular benchmarks of industry price changes along with added and improved historical loss ratio change information for decision making. The survey is updated on a quarterly basis, with historical changes in price and loss costs reported relative to the same period in the prior year. Price change information is collected on a written basis, and ultimate loss cost information is collected on an accident-year basis, year-to-date for the current accident year, excluding catastrophes. Means are premium weighted and percentiles are based on respondent counts, irrespective of premium volume. Towers Perrin conducts this survey in accordance with the antitrust laws and recent guidelines issued by the Department of Justice.

Results for the full-year 2007, reflecting fourth-quarter survey data, are expected to be available in mid-March 2008.

About Towers Perrin

Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and capital management, reinsurance intermediary services and actuarial consulting.

Towers Perrin has offices and alliance partners in the United States, Canada, Europe, Asia, Latin America, South Africa, Australia and New Zealand. More information about Towers Perrin is available at www.towersperrin.com.