The OIL Group of Companies

www.oil.bmwww.ocil.bm

“Tools for Risk Transfer”Presentation to

University of HoustonApril 11, 2013

The Evolution of Energy Mutuals

TraditionalInsurance

Market

EIM1986

sEnergy2002-2011

AEGIS1975

OCIL1986

OIL1972

NEIL1980

TOPS1993-99

Insurance Crisis # 1 Why was OIL Formed in

1971?• Inability of petroleum companies to

purchase all-risk property damage coverage at realistic rates and capacity.– Incident – 1967 Explosion and Fire at Cities

Service Oil Co. refinery in Lake Charles , Louisiana.

• Unwillingness of the commercial insurance industry to sell third party pollution liability to petroleum companies at any price.– Incident – 1969 Union Oil Co. oil spill in Santa

Barbara Channel, California.• Realization on the part of 16 oil companies

that the combined capital & surplus of the petroleum industry greatly exceeded that of the insurance industry.

Insurance Crisis # 2 (1985-86)

Oil Casualty Insurance, Ltd. (OCIL)

• Energy industry-owned company insuring • Excess General Liability • D&O Liability (now discontinued)• Assumed Reinsurance (Energy Industry Risks)

• Formed in 1986 by 14 interested members of OIL.• Lack of D&O capacity was key driver in OCIL’s

formation. • Today – 99 Shareholders and Policyholders

headquartered around the world with total gross assets in excess of $3.5 Trillion.

…and again in 1993

TOPS (Total Loss Only Platform Structures)• Petroleum industry-owned company providing

high-level Excess Property Damage coverage for large production structures located in the North Sea.

• Established in response to commercial insurance market’s overpricing of coverage specifically related to such structures.

• Formed in 1993 by 16 petroleum companies headquartered in Europe and North America.

• No losses in entire history of operations.• Liquidated in 1999 when rational pricing returned

to the commercial market.

…and once again in 2002!

• Energy industry-owned company providing • Business Interruption • Property Damage (excess of OIL)

• Lack of affordable, long-term and stable commercial market capacity was key driver in sEnergy’s formation.

• Formed in 2002 by 12 energy companies.

• sEnergy operated with an “OIL-like” Rating & Premium Plan.

• Closed down in 2011.

sEnergy Insurance Limited (sEnergy)

OIL INSURANCE LIMITED

A Case Study….

The OIL Group of Companies

• Two energy industry mutual insurance companies:

• Headquartered in Hamilton, Bermuda.

• Established when commercial market:

– Ceased to provide adequate coverages/limits.– Priced high risk energy operations at unacceptable

levels.

• The two companies have a total combined membership of over 121 different Shareholders/Policyholders who are world-class energy companies headquartered around the world.

Why Mutualize?

• Industry ownership ensures fair treatment of Policyholders.

• Being a mutual or member owned provide ‘hedge’ against a frequently volatile commercial insurance market.

• Shareholders maintain active control of the coverages available to them.

• Highly cost-effective catastrophe insurance facility.

• Generates long-term benefits for Policyholders.

Over $2 trillion in assets insured globally for 52 members

$300 million broad and stable “cornerstone” capacity

$6 billion in assetsOver $3.0 billion in shareholder’s equityOver $11 billion in claims paid over 40

yearsS&P A- rating (stable outlook)Expense ratio = approx. 3-6 %

Not dependent upon reinsurance

Who is OIL?

• World’s Largest Energy Mutual• –by the numbers

OIL is an Energy Industry Mutual Insurance Company headquartered in

Hamilton, BermudaFormed by 16 major energy companies in

1972 after two incidents in the late 60’s that resulted in inadequate

coverage / pricingToday, OIL is a world leader in global

energy insurance52 Shareholders / Policyholders - medium to large public / private world-class energy

companies headquartered around the world

46% of membership has been with OIL for over 20 years

Who is OIL?

• World’s Largest Energy Mutual

Why “Bermuda”?

• Bermuda is one of the three largest insurance markets in the world (London and New York being the others.)

• More than 1,600 international insurers and 1,200 captive insurers are registered in Bermuda.

• Favorable tax/regulatory/legal environment.

• Highly developed markets in all lines of insurance coverage.

• Sophisticated on-Island business infrastructure.

Second largest insurance / reinsurance market in the world

Over 1200 international insurers and reinsurers listed on its books

Writes nearly $108 billion in gross written premium

Capital & Surplus nearly $185 billionTotal assets of approximately $525 billion

World’s largest captive domicileHome to 600+ licensed captives

Total assets over $86Bn and $21Bn in annual gross premium

Location: quick access from main hubs (East Coast / London)

Friendly regulatory environment

Why Bermuda?

Source: Bermuda Monetary Authority 2011 Annual Report

The OIL Group of Companies “Mutual/Member Owned” Structure

Basic structure similar to any other corporations:- Shareholders, Board of Directors, Board Committees,

Officers & Staff.Major differences: Shareholders are the Customers (Insureds.)

Directors are elected from the Shareholder Body.

The Investment companies are directed by a separate Board of Directors, which includes senior

financial officers from major Shareholder companies.In case of OIL, no “Underwriting” per se - each Policyholder treated equitably; premiums are

formula-based—”Post lost funding”.

Corporate Governance

SHAREHOLDERS(Annual Meeting)

BOARD OF DIRECTORS

(3-5) Meetings per year)

OMSLMANAGEMENT

CompensationCommittee

AuditCommittee

GovernanceCommittee

ExecutiveCommittee

Elects Board Annually

Chairman Nominates Committee members and Board Approves

All Officers and Support STAFF reside

in Management Company

The OIL Group of Companies Operational Structure

OCIL and OIL have no employees, The Companies are administered by Oil Management Services Ltd.

Property DamageWell Control,

Pollution

Excess General LiabilityExcess Property

Facultative Reinsurance

Oil CasualtyInvestment Corp. Ltd.

(OCICL)

Oil Casualty Insurance, Ltd. (112* members)

Oil Management Services Ltd.

(“OMSL”)

Oil Insurance Limited

(52 members)

Oil Investment Corp. Ltd.

(OICL)

*112 Members at December 31, 2012

58 Shareholders.

OIL: An Alternative Insurance Solution

• Today, OIL continues to be a very real and attractive option to many insurance buyers in the energy industry.

• OIL’s $300 Million limit is one of the largest net line capacity insurers currently available to the energy industry.

• OIL does not buy reinsurance so it is not subject to annual changes in conditions or restrictions on terms offered – in this way full terrorism coverage continued to be offered after September 11th.

• Any rate increase in OIL is due to increased losses by the membership - not internal or external pressures - and hence is transparent.

Who are OIL’s 52 Members?

• Big Companies, such as:ConocoPhillipsTOTALChevron

• Small Companies, such as:

Tesoro Petroleum LOOP LLCMurphy Oil

• Electric Utility/Power Generation Companies, such as:

Electricity de France (EDF), DTE Energy

• Other members of varying sizes and business focus within the broadly-based Energy Industry.

Apache CorporationArkema*

BASF SE*BG Group plc*

BHP Billiton Petroleum (Americas) Inc.

Buckeye Partners, L.P.Canadian Natural Resources Ltd*

Canadian Oil Sands LimitedCEPSA*

Chevron Corporation Chevron Phillips Chemical

Company LLCCITGO Petroleum Corporation*

ConocoPhillips*DONG Energy A/S*

Drummond Company Inc.DTE Energy Company

EDF Group*Energy Transfer Partners, L.P.

ENI S.p.a.*Galp Energia S.A.*Hess Corporation*

Hovensa LLCHusky Energy Inc.

LOOP LLC.Lyondell Chemical Company*

Marathon Oil Company

Marathon Petroleum Corporation

MOL Hungarian Oil and Gas Company*

Murphy Oil CorporationNexen Inc.*

Noble Energy, Inc.Nova Chemicals Corporation*

Occidental Petroleum Corporation*

OMV Aktiengesellschaft* Paramount ResourcesPhillips 66 Company

Puerto Rico Electric Power Authority

Repsol YPF, S.A.*Royal Vopak N.V.*

Santos Ltd.*Sempra Energy

Sinclair Companies (The)Statoil ASA *

Suncor Energy Inc.Talisman Energy Inc.*

Tesoro Petroleum CorporationTOTAL*

Valero Energy Corporation*Westlake Chemical Corporation Williams Companies, Inc. (The)Woodside Petroleum Limited.*

Yara International ASA*

Current OIL Members

Membership “Count”*

61

7887 84 82 83

60 56 56 54 52

0

10

20

30

40

50

60

70

80

90

100

* Year-end member count, net year on year change.

2012- 2013 Membership Changes

Members as @ 1/1/2012 52

New Members 2

Merger/Acquisitions (1)

Departures as @ 12/31/2012 (1)

Members as @ 1/1/2013 52

2013 Membership by Industry Segment

8% 26%

11%

8%

24%

19%

2% 2%

Electric Utilities

Integrated Oil

Chemicals

Pipelines

E&P

Refining & Marketing

Mining

Other

OIL Shareholders by Headquarter

Location12-31-2013

USA49%

Canada15%

Europe30%

Australasia4%Caribbean

2%

Globally diversified membership with an increasing interest from non-US companies.

OIL: Risks Insured

Eight Business Sector Coverages1. Physical damage to first party property.2. Well Control, including Restoration and Redrilling.3. Third party Pollution Liability, (non-gradual).4. Limits = $300 million per occurrence, no annual

aggregate.5. Single Event Limit = $900 Million.6. Deductibles = $10 Million minimum, increasing in

$5 million increments.Winstorm Coverages: Onshore and offshore (ANWS only)

Coverage Grants same as 1, 2, and 3 above. Limits= $150 Million p/o $250 million per occurrence Single Event Limit = $750 Million. Coverage is automatic for exposed assets, but

member can effectively opt out of the coverage.

Automatic coverage for:Worldwide Coverage for an Energy

Company and its Consolidated Subsidiaries / Affiliates

A member’s interest in a JV or other non-consolidated affiliate (if interest

equates to less than 1% of Gross Assets)

Coverage for non-owned assets where a member has a contractual obligation

to repair / replace

What’s Covered?

Membership is exclusive to energy companies Members are all shareholders / policyholders and have

vested interests“Mutualized” sharing of losses

Easy annual renewal. Premiums are formula and performance based i.e. no

underwriting One policy form for all members per the OIL

Shareholders’ Agreement OIL uses gross assets from audited balance sheets

while the market uses insured values

OIL vs. Commercial Market

No Annual Aggregate.Joint Ventures – full Limits available. Limits do not scale

for working interest but deductibles scale for interest.Aggregation Limit – maximum payout of $900 Million

(non-windstorm) on multiple shareholder claims arising out of one occurrence.

Reduced limits are available (minimum limit is $100M) subject to a warranty as respects the absence of other

insurances (warranty does not apply to windstorm).Limits can apply as primary, excess, quota share,

ventilated and different limits may be elected by sector.

Oil Limits – 8 Business Sectors

For windstorm coverage outside of the ANWS zone (i.e. South China Sea, North Sea, Australia etc.), the windstorm

limit is $300M (not $150M part of $250M) and the Aggregation Limit is $900M.

ROW coverage, by geographic region, will be restricted only after incurring a Loss Trigger Event:

A single loss event of $750MCumulative losses of $1B over a 5 year rolling basis

After a threshold trigger is met, windstorm coverage and pricing will automatically change in the next policy year

unless the Board of Directors determines otherwise

Rest of the World (RoW)

OIL Rating & Premium Plan

Formula basis – no traditional “underwriting.”Premiums paid by Policyholders is a function of

their Gross Assets.Gross Assets = Gross value (historic cost) of

property, plant & equipment before deprecation, depletion, and amortization, plus inventories,

materials, and supplies.Gross Assets are then adjusted for operational risk

and coverage profile (i.e., sector and deductible weightings) = Weighted Gross Assets.

Eight Business Sector Coverages only

Net Incurred Losses Since 1972*

• By Geographic Region of Physical Loss

As at December 31, 2012Expressed in billions of U.S. dollars

* untrended

USA Europe Canada W/Storm GOM

North Sea Other Areas$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

Repayment Schedule for Losses Incurred

2007-2011

Sector Weighting for Risk

Policyholders’ Gross Assets are adjusted to recognize differences in operational risk between Business Sectors:

Offshore E&P -- PharmaceuticalsOnshore E&P -- Mining

Pipelines -- OtherElectric Utilities

Refining & Marketing/ChemicalsANWS-OnshoreANWS-Offshore

Weighted Gross Assets are used to calculate individual Policyholders premiums.

Utilizes sector and deductible weightings.Gross Assets are adjusted for operational risk (sector

weighting) and coverage profile (limit/deductible weighting) to generate Weighted Gross Assets which is used to determine pool % and calculate individual

premiums.

8 Business Sector Pricing (Non-Windstorm)

• ELECTRIC UTILITY

• PIPELINES*

• MINING

• OTHER*

8 Business Sector Gross Assets

Unmodified Gross Assets by Industry Segment ($2,214 Bn)*

Weighted Gross Assets by Industry Segment ($1,166 Bn)*

Business Sectors

E&P Offshore E&P Onshore R&M / Chemicals Pharmaceuticals

Mining Utilities Pipelines Other

R&M Chemical

s26%

Other 2%Utilities

7%Mining

2%Pipelines3%E&P

Onshore9%

E&P Offshore

51%

* as of December 31, 2011

•Premium Calculator Example

•- 8 Business Sector

GROSS ASSETSBY BUSINESS

SECTOR

SECTOR / DEDUCTIBLE / LIMIT

WEIGHTING FACTORS

WEIGHTED GROSS ASSETS

(WGA)

WGA = 38.75B / $1,046B(GROUP WGA) =

3.7%

MEMBERSHIP ANNUAL LOSSES

(20%)

ANNUALPREMIUM

Gross AssetsOffshore E&P = $25B

Pipelines = $5BTotal = $30B

Weighting FactorsOffshore E&P = 1.50

Pipelines = 0.25

Weighted Gross FactorsOffshore E&P = $37.50B

Pipelines = $1.25BTotal = $38.75B

XX

=X

OIL’s History: 40 Years

MembershipShareholders’ EquityAssetsGross Assets Insured

12/31/2012 52

$3.6 Billion$5.5 Billion$2.3 Trillion

1972 16

$160 Thousand$160 Thousand

$48 Billion

+$13.5 Billion- $13.8 Billion+$ 5.2 Billion- $ .8 Billion+$ .4 Billion- $ .9 Billion $ 3.6 Billion

Inception To Date:Net Premiums Earned Net Losses & Loss Expense *Investment Income **Dividends Paid ***Preference SharesOperating, Financing & Other Costs

* Includes IBNR/IBNE ** Net of Interest Expense*** Excluding Preference Share dividends paid

Consolidated Balance Sheet

31-Dec-12 31-Dec-11($ in 000's) ($ in 000's)

AssetsCash and Cash Equivalents 671,927 282,441 Investments 5,603,471 5,255,944 Investment sales pending settlement 32,488 82,853 Accrued investment income 25,936 30,220 Accounts receivable 12,584 22 Amounts due from affiliates 36 59 Retrospective premiums receivable 102,115 91,741 Other assets 2,100 2,725 Total assets 6,450,657 5,746,005

Consolidated Balance Sheet

31-Dec-12 31-Dec-11($ in 000's) ($ in 000's)

LiabilitiesOutstanding loss and loss expense 2,461,518 2,280,278 Retrospective premiums payable 3,769 1,313 Premiums received in advance 25,587 22,666 Securities sold short 224,842 116,433 Investments purchases pending settlement 109,235 285,023 Accounts payable 11,112 5,622 Amounts due to affiliates 2,823 1,523

Total liabilities 2,838,886 2,712,858

Shareholders' equityPreferred shares 344,654 402,458 Common shares 530 520 Retained earnings 3,266,587 2,630,169 Total shareholders' equity 3,611,771 3,033,147

Total liabilities and shareholders' equity 6,450,657 5,746,005

Statutory capital and surplus 4,867,109 4,221,387

Consolidated Income Statement

31-Dec-12 31-Dec-11($ in 000's) ($ in 000's)

Premiums written 633,963 558,141 Retrospective premiums 38,522 (14,716) Premiums written & earned 672,485 543,425

Discount earned on retro-premium receivable 215 1,062 Losses and loss expenses incurred (612,540) (599,109) Acquisition costs (526) (323) Underwriting income (loss) 59,634 (54,945)

Interest income 102,052 103,667 Dividend income 27,486 31,807 Investment gains (losses) [realized & unrealized] 506,652 (143,904) Interest expense and financing costs (705) (787) Investment advisory and custodian (27,631) (22,619) Net investment income 607,854 (31,836)

General and administrative expenses (21,385) (17,855) Net income (loss) 646,103 (104,636)

Other changes in Shareholders' Equity:Preferred share dividend (12,687) (24,515) Gain on preferred share repurchase 3,002 3,060

The OIL Group: Efficiency & Control

Why we are different from the Commercial Market…

Commercial

Market~30-40%

Expense Ratio

PREMIUM

LOSS PAYMENT

Member

PREMIUM

• LOSS PAYMENT• OWNERSHIP• CONTROL• RETURN ON CAPITAL

“OIL Group”

~ 5%Expense Ratio

Insured(Buyer)

Marketing

• Broker Consulting Agreements– OIL has signed global service agreements with 4 key

brokers to assist OIL in its efforts to attract “Quality” new members.

– The services include:o Prospect Identification & Qualification.o Market Intelligence/Researcho Product Developmento Member opportunities/issueso Training

– These agreements do not include any contingent compensation arrangements.

Marketing

In 3rd year of a global marketing plan

Building global broker network capabilitiesOil has been “on the road” globally engaging brokers

Delivering new global marketing materialsWeb site

BrochuresTools

Launching the OTA (Oil Technical Accreditation)Launched in December 2012

New On-Line Tutorial & Official Accreditation Register @ www.oil.bm

“OTA”• Oil Technical Accreditation

Investment Management

Investment Objectives

Investment objectives are to provide adequate liquidity to meet OIL’s future obligations, and endeavor to both preserve and enhance value over a market cycle.The Investment Board reviews the investment objectives, investment policy, and asset allocation strategy at least annually.

Current Asset Allocationas at December 31, 2012

6%6%

47%10%

31%

Chart Title

Cash

Bonds backing Pref Shares

Global Bond

Fund of Hedge Funds

Global Equity

Update: as approved by the Investment Board, 25% of Global Bonds (benchmark and portfolio) were shifted to short duration on October 1, 2012. This shift was made to reduce interest rate risk, locking in gains following a period of declining interest rates and protecting against potential losses from future interest rate rises.

Investment Portfolio Returnsas at December 31, 2012

2012 2011 2010 2009 2008-30

-20

-10

0

10

20

30

10

0

8

13

-19

13

-1

10

20

-24

11

-1

8

14

-17

OICL Benchmark OICL Portfolio OIL Total (incl cash)

% R

etur

n

Update: 1 Month ended January 31, 2013OICL Benchmark 1.6%OICL Portfolio 2.1%OIL Total (incl cash)1.9%

Current Events:Natural Catastrophes

Historical Hurricane “Tracks” Impacting OIL

Katrina $1,000M

127-161mph

Ivan $581M121-

132mph

Rita $1,000M

121-138mph

Ike$750M104-

109mph

Gustav109-

115mph

Hurricanes – Past Payout Patterns As of 31 Dec 2012

YearsHurricane

Lili (2002)

Hurricane Ivan (2004)

Hurricane Katrina (2005)*

Hurricane Rita (2005)*

Hurricane Ike

(2008)*

< 1 Year 0% 9% 5% 2% 2%

< 2 Years 81% 78% 42% 20% 27%

< 3 Years 97% 79% 56% 35% 57%

Current 100% 99% 100% 100% 74%

Total Reserve $96M $558M $1,000M $1,000M $750M

Members 6 8 19 20 13

Net Incurred Losses since 1972*

by Geographic Region of Physical Loss

As at December 31, 2011Expressed in millions of U.S.

dollars* untrended

$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000

Net Incurred Losses by Industry 1972-2011 (39 yrs) *Aggregate Value =

$11.8Bn (untrended)

* Pure Loss—Excludes loss expense

Offshore E&P48%

Refining & Marketing

27%

Petrochemicals9%

Onshore E&P7%

Pipelines4%

Other2%

Mining2%

Electric Utilities1%

Net Incurred Losses

75%

11%

7%5%

1% 1%

Offshore E&P

Onshore E&P

Refining & Marketing

Electric Utilities

Pipelines

Other

By Industry Sector – 2012 only

Aggregate Value = $599M*

*$294M – North Sea Blowout Loss

OIL Capital Structure Summary

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2006 2007 2008 2009 2010 2011 2012

$ in

Mill

ions

Catalyst Statutory Capital CreditTWP BMA Statutory Capital CreditPerpetual Preferred SharesShareholders' Equity (excluding preferred shares)

OIL Capital Structure

• In June 2006, OIL issued 600,000 Series A perpetual preferred shares (“Series A preference shares”) and received proceeds from the issuance, net of direct issuance costs, of approximately $586,842,000. Upon dissolution of OIL, the holders of the Series A preference shares are entitled to receive a liquidation preference of $1,000 per share, plus accrued unpaid dividends. 

• Dividends on the Series A preference shares from the date of original issuance through June 30, 2011 are payable semi-annually in arrears in cash, when and if declared by the Board of Directors, out of funds legally available for the payment of dividends under Bermuda law. Such dividends are payable on June 30 and December 30 of each year, at the annual rate of 7.558% per $1,000 liquidation preference until June 30, 2011. 

• After June 30, 2011 if the shares are not called, dividends will accrue at an annual rate of 3-month LIBOR plus a margin equal to 298.2 basis points per $1,000 liquidation preference, payable quarterly in arrears. The Company may redeem the Series A preference shares on or after June 20, 2011, at a redemption price of $1,000 per share.

• During 2012, the Company repurchased and retired 59,100 of the Series A preference shares. As of December 31, 2012, OIL had 352,382 Series A shares outstanding.

Theoretical Withdrawal Premium (TWP)

• Both Standard & Poor’s and the Bermuda Monetary Authority now give OIL capital credit for TWP

• Credit is calculated as follows:─ Remove all sub-investment grade TWP

amounts for individual members from the aggregate TWP amount

─ Discount future premium flows by 5% for 3 years

─ Discount each member’s TWP amount by their credit default risk factor (S&P Capital Model)

What about OCIL:

The Evolution of Energy Mutuals

TraditionalInsurance

Market

EIM1986

sEnergy2002

(in runoff)

AEGIS1975

OCIL1986

OIL1972

NEIL1980

TOPS1993-99

OCIL’s Historical Mission and Value Proposition

OCIL = historically significantFounded at a time when capacity was scarce

Hedge against commercial market “knee-Jerk” reactions, irrational underwriting and erratic pricing

Owned and controlled by ShareholdersOCIL’s original mission

To provide its policyholders with Directors & Officers Liability coverage on policy forms that were

comparable to or broader than coverage available in the commercial market

To offer substantial limits at reasonable prices, which are reliable over the long-term in lines (Excess

General Liability and D&O) that are often volatile or restrictive by commercial markets

To maintain capacity, pay claims that arise, and ensure fair treatment of members

OCIL OIL

Organization Member owned Mutual

Premium calculation Flexible; Underwriting discretion Formula driven

Mutualization of losses No Yes

Avoided PremiumSurcharge & Theoretical Withdrawal Premium

No Yes

Aggregation limit No Yes

Follow Form capability Yes No

Ability to Assess Membership No Yes

Major Differences: OCIL vs. OIL

OILFinancial Strength A- A2

OCILFinancial Strength BBB+ A- Stable

Moody’s

Financial Ratings

Standard & Poor’s A.M. Best

Consolidated Balance Sheet

30-Nov-12 30-Nov-11($ in 000's) ($ in 000's)

AssetsCash and Cash Equivalents 116,120 52,934 Investments 780,541 740,982 Investment sales pending settlement 14,640 43,475 Accrued investment income 5,894 6,621 Losses recoverable from reinsurers 220,912 187,179 Accounts receivable 35,978 12,620 Funds withheld 30,840 19,359 Prepaid reinsurance premiums 16,517 13,684 Other assets 10,428 5,409 Total assets 1,231,870 1,082,263

Consolidated Balance Sheet

30-Nov-12 30-Nov-11($ in 000's) ($ in 000's)

LiabilitiesOutstanding loss and loss expense 429,412 307,448 Unearned premiums 78,273 44,327 Securities sold short 10,294 5,383 Investments purchases pending settlement 36,785 86,573 Loan payable 150,334 150,334 Reinsurance premium payable 27,578 21,537 Amounts due to affiliates 490 544 Accounts payable 9,233 5,000 Total liabilities 742,399 621,146

Shareholders' equityCommon shares 300 305 Retained earnings 489,171 460,812 Total shareholders' equity 489,471 461,117

Total liabilities and shareholders' equity 1,231,870 1,082,263

Statutory capital and surplus 629,398 606,306

Consolidated Income Statement

30-Nov-12 30-Nov-11($ in 000's) ($ in 000's)

UGL premium written 59,460 53,345 Assumed reinsurance premium 86,410 28,760 Premiums written 145,870 82,105

Premiums earned 111,924 64,919 Premiums ceded 36,551 27,588 Net premiums earned 75,373 37,331

Losses and loss expenses incurred (100,583) (193) Commission and brokerage fees, net (7,782) (1,296) Underwriting income (loss) (32,992) 35,842

Interest income 21,624 22,114 Dividend income 1,344 1,435 Investment gains (losses) [realized & unrealized] 65,018 (4,665) Interest and debt expenses (12,523) (12,482) Investment advisory and custodian (3,125) (2,834) Net investment income 72,338 3,568

General and administrative expenses (10,987) (9,796)

Net income (loss) 28,359 29,614

OCIL Asset Allocation as at November 30, 2011

75%

11%

10%4%

Global Fixed IncomeFund of Hedge FundsGlobal EquityCash

Portfolio Returns By Asset Class Fiscal Year Ended November 30

48

25

-9

5

-1

6 9

-16

13

-2

6

34

-41

152 8

22

-19

102 5 9

-12

8

-60-40-20

02040

2011 2010 2009 2008 2007

% R

etur

n

Global Bond Fund of Hedge Funds Global Equity OCICL Portfolio OCICL Benchmark

Update: 3 Months ended February 29, 2012

Global Equity Benchmark 11.6%Hedge Fund Benchmark 2.8%Global Bond Benchmark 3.2%

Investment Portfolio Returns Fiscal Year Ended November 30

26 6

-10

72

9

18

-16

9

2

9

17

-16

8

-20

-10

0

10

20

2011 2010 2009 2008 2007

% R

etur

n

OCICL Benchmark OCICL Portfolio OCIL Total

Cat Bond Definition

Cat Bond is short for Catastrophe Bond:A corporate bond with special language that requires the bondholders to forgive or defer some or all payments of interest or principal

if actual Catastrophe losses surpass a specified amount, or trigger.

Cat Bonds were originally developed by insurance companies in the early to mid 1990’s who were looking for additional

capacity to reinsure natural Catastrophes, ie: earthquakes, wind

storms, hurricanes.Historically, Cat bonds have provided

risk securitization for purely Catastrophic events – Avalon Re, Ltd. was the FIRST

(and probably last) company to issue a Casualty Catastrophe Bond

Conclusions

OIL Business Model

• Business model that has worked successfully to service the energy industry for over 30 years.

• Insurance facility is tailored to the needs of the energy industry.• Mutualization of losses assures fairness and recovery of losses.• Among the largest limits available in the world market.• Highest form and reliability of coverage.• Strong access to capital markets when necessary.• Investment strategy promotes capital growth, as well as,

security.• Low cost, most efficient vehicle for managing major risk

transfer.• Biggest Challenge: Natural Catastrophes. How do we insure

them? How do we allocate premium for them in a mutual setting?

Thank you!