Finance Monthly M&A Awards 2015 Winners Edition

FIRM PROFILE Since 1985, Demotech has focused on insurer rating requirements. In the late 1980s, independent, regional or specialty insurers in the United States were not rated by rating services. In response, Demotech pioneered its rating service. Demotech secured acceptances from the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and United States Department of Housing and Urban Development for Financial Stability Ratings® (FSRs) of A or better. Today Demotech has numerous accreditations and acceptances. We review more than 400 insurers countrywide. As third parties become familiar with our ability to identify financially stable insurers, increasing numbers of umbrella insurance carriers, premium finance companies, insurance agent’s errors and omissions insurers and others recognize FSRs of A or better as credible and viable supplements for their pre-existing insurer requirements. A recent, independent study of Demotech, A.M. Best, Standard and Poor’s, Moody’s and Fitch insurer ratings was undertaken by Florida State University’s College of Business Risk Management and Insurance. A Comprehensive Examination of Insurer Financial Strength Ratings concluded there was general consistency in the firms that each agency categorized as financially secure and Demotech served the need of a unique group of insurers. Recent acknowledgements of our capabilities include HUD’s re-affirmation of our acceptance in its Section 232 Handbook and expanding our acceptance to its Section 241(a) program, Fannie Mae Multifamily acceptance of risk retention groups and captive insurers rated A or better, our nomination for Intelligent Insurer’s Global Award – Best Rating Agency (2014 and 2015) and securing the ACQ5 award for US – Niche Financial Analysis Provider – Insurance, two consecutive years, 2014 and 2015. In addition Demotech was nominated for the Rating Agency of the Year at the Fall 2015 Reactions North America Gala. We were also honored with the Florida Association for Insurance Reform’s Founder’s Award at its 2015 annual meeting. Demotech distinguishes itself in many ways. Our more notable distinguishing features are the industry experience of our analysts, long tenure of our analysts, focus on an insurer’s business model, rather than its size and transparency of our analysis process. Our analysts, including myself, are experienced professionals. I am an actuary with forty years of insurance and financial analysis experience. Sharon Romano Petrelli, co-founder of Demotech, is a CPCU, AIAF, CCP and ARC. She has served on the board of an insurer as well as the board of governors of the CPCU Society. She has thirty years of insurance experience. Barry J. Koestler, II, Chief Ratings Officer, a Chartered Financial Analyst has more than twenty years of insurance and financial analysis experience including rate filings, loss and loss adjustment expense reserving and financial analysis. He has coordinated development and monitoring of FSRs since 1996. Robert M. Warren, CPCU, CPA, Client Services Manager, has served as the chief financial officer of several insurers. His forty years of experience includes more than ten years with Demotech. Although other rating agencies seem fascinated by the size of an insurer and its diversification, neither size nor diversification has kept insurers out of liquidation. As such, Demotech focuses on a carrier’s business model and its execution of that model. We introduced Company Classification to initiate dialogue on business models. In age of transparency, our analysis process is focused on quantitative criteria, not subjective, qualitative criteria. Should a carrier not meet our criteria for an FSR at the A level or above, we point to a specific metric(s) or condition(s) that influenced our decision. We do not utilize subjective criteria to supersede or ignore their underlying financial stability. We focus on the fundamental relationships in the balance sheet and income statement including, but not limited to, loss and loss adjustment expense reserve adequacy, realistic pricing and the quality and quantity of the carrier’s reinsurance program. Financial Analysis Firm of the Year Joseph Petrelli | President Demotech, Inc. | 2715 Tuller Parkway | Dublin, Ohio 43017-2310 Main: (800) 354-7207 | Direct: (614) 526-2160 | Fax: (614) 526-2161 Email: JPetrelli@demotech.com | Website: www.demotech.com Finance Monthly M&A Awards 2015 www.finance-monthly.com 45 M A & AWARDS 2015 USA