Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — Investor Day (May 2009)
86 slides from Zurich Insurance's investor day presentation, May 20, 2009
Slide 1: Farmers – Strategy Update
Farmers – Strategy Update Investors’ Day London, May 20, 2009
Slide 2: Disclaimer and cautionary statement
Disclaimer and cautionary statement By attending this meeting where this presentation is made you agree to be bound by the following limitiations. Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predications of or indicate future
Slide 3: Farmers: Strategy is working – Positioned for growth
Farmers: Strategy is working – Positioned for growth Paul Hopkins Chief Executive Officer of Americas Chairman of Farmers Group, Inc. May 20, 2009
Slide 4: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey Wrap-up and close Paul Hopkins Q&A May 20, 2009 Farmers Strategy Update 4
Slide 5: US market: vehicle and home sales decline
US market: vehicle and home sales decline - lower sales in a tough economy Total Vehicle Sales Units (‘000s) 2000 1800 1600 1400 Total unit sales have 1200 declined 34.2% YoY… 1000 Significant drop in 800 the last 7 months 600 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Bureau of
Slide 6: The US P&C market landscape is challenging
The US P&C market landscape is challenging - negative growth forecasted through 2009 Premium growth rate in the market Total US P&C Industry Premium Growth 9.0% Global financial crisis 5.2% 4.7% affecting exposure 2.2% 2.2% growth -0.5% -1.2% -0.6% 2003 2004 2005 2006 2007 2008F 2009F 2010F Source:
Slide 7: Our strategy is working as Farmers continues to outperform key competitors
Our strategy is working as Farmers continues to outperform key competitors Growth vs. GAAP Combined Ratio – Overall P&C1, 6 With a long history of strong performance Growth NPW % 4 GWP growth Industry Industry Growth Rate1 10.0 8% 2008: -1.2% 103.0% 2009 Forecast: -0.6% 2 6.5% 8.0 GEICO6 6.1%2 2 6%
Slide 8: Farmers is positioned to continue to outperform the industry's growth rates
Farmers is positioned to continue to outperform the industry’s growth rates Farmers has been outpacing the Met first three targets to USD 21bn industry Farmers Future 2010 Aspirations % 7 22 6 Farmers GWP (USD bn) 5 20 4 18 3 2 16 1 0 14 -1 12 -2 2005 2006 2007 2008 2005 2006 2007 2008 2009 2010 Gro
Slide 9: Announced AIG PAG acquisition is a strong strategic and cultural fit
Announced AIG PAG acquisition1 is a strong strategic and cultural fit AIG Personal Auto Group (AIG PAG) is a great strategic fit Structure of the acquisition maximizes the efficient use of capital Post acquisition, the Exchanges’ capital projections are conservative to allow a safe margin Quota Shar
Slide 10: Farmers is financially strong and well positioned for future growth
Farmers is financially strong and well positioned for future growth & continued out-performance Maintain core expense management, underwriting and pricing discipline Continuing laser focus for strong strategy execution Optimize our customer reach AIG PAG is a strong strategic fit and a “Game Changin
Slide 11: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey Wrap-up and close Paul Hopkins Q&A May 20, 2009 Farmers Strategy Update 11
Slide 12: Financial update
Financial update Scott Lindquist EVP & Chief Financial Officer of Farmers May 20, 2009
Slide 13: Farmers' unique structure
Farmers’ unique structure … insulates the management company earnings from volatility of underwriting results. This structure is also unique when compared to the industry. Simplified Structure & Premium Distribution Illustrative example 100 Premiums 100 Premium 70 Losses & LAE 70 Adjusted Reported c
Slide 14: Farmers' unique structure has created a history of reliable earnings growth
Farmers’ unique structure has created a history of reliable & steady earnings growth US P&C Income Farmers Management Services Business Operating Profit Industry Farmers Exchanges In USD millions In USD billions in USD millions 800 100 1'400 600 1'200 80 400 1'000 60 800 200 600 0 40 400 -200 20 200
Slide 15: Farmers Management Services has been a reliable source of cash flow to Zurich
Farmers Management Services has been a reliable source of cash flow to Zurich 2'100 in USD millions 1'940 1'800 1'500 1'200 1'026 964 977 900 600 450 444 300 2003 2004 2005 2006 2007 2008 Cash remittances from Farmers Management Services (FMS) Capital management actions in 2005 – 2008 has resulted i
Slide 16: Farmers Exchanges – premium growth outperforming industry
Farmers Exchanges – premium growth outperforming industry GWP growth Industry growth rate1 8% 2008: -1.2% 2009 Forecast: -0.6% 2 6.5% 6.1%2 2 6% 5.7% 5.7% 5.4% 5.0% 5.1% 4.6% 4% 3.2% 3.3% 3.1% 2.2% 2% 1.4% 0% 06 07 08 06 06 06 07 07 07 08 08 08 09 20 20 20 20 20 20 20 20 20 20 20 20 20 r r r hs hs r
Slide 17: Farmers Exchanges – development of the combined ratio
Farmers Exchanges – development of the combined ratio Quarterly combined ratio 120% Target combined ratio: Other Cats 115% 98% through the cycle Midwest Gustav 110% Cats California wildfires Ike 105% California Rita wildfires 100% Florida hurricanes Katrina 95% 90% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 18: Farmers Exchanges – Q1-09 financial highlights
Farmers Exchanges – Q1-09 financial highlights in USD millions 6'000 42.0% Q1-09 Q1-08 for the three months to March 31 5'000 40.0% Gross written premiums 4,152 4,027 Net underwriting result -80 -11 4'000 38.0% Net surplus growth -34 30 3'000 36.0% Ending surplus 5,000 5,749 2'000 34.0% Surplus rati
Slide 19: Competitor snapshot - overall
Competitor snapshot - overall March 2009 Growth vs. GAAP combined ratio – overall P&C1, 6 December 2008 Industry4 Growth 10.0 103.0% FY09 industry estimate NPW % 8.0 GEICO6 Liberty Mutual 7: 6.0 2008 YTD NPW growth = +29% (reflects the Q308 acquisition of Safeco) 2008 YTD CR (STAT) = 102.2% 4.0 2, 3
Slide 20: Exchanges' capital managed conservatively through the cycle
Exchanges’ capital managed conservatively through the cycle Exchanges’ surplus ratio well within historical range Capital sources and uses Combined US regulatory risk-based capital target: 350%1 vary through the cycle Capital uses Exchanges’ target surplus ratio GWP growth M&A ~40% Underwriting Surp
Slide 21: Exchanges and Zurich allocate capital to allow growth at attractive returns
Exchanges and Zurich allocate capital to allow Exchanges and FMS to grow at attractive returns Multiple capital management levers allow for flexibility in support of profitable growth of Divi- Capital Exchanges and FMS/Zurich dends facility Capital contribu- Dividends tions Surplus notes Capital Opt
Slide 22: Exchanges' capital is balanced with conservative maturity profile
Exchanges’ capital is balanced with conservative maturity profile Total surplus USD 5,035m As of December 31, 2008 in USD millions Schedule of maturities of Surplus of Farmers External surplus notes Reinsurance External 600 Company surplus 500 990 1,050 notes 400 300 None 200 150 100 9301 Zurich sur
Slide 23: Exchanges' debt securities are of consistently high quality
Exchanges’ debt securities are of consistently high quality (98% investment grade) As of March 31, 2009 Exchanges’ investments: Debt securities: USD 16.0bn1 USD 13.6bn1,2 credit rating: AAA 45.4% credit rating: AA Debt 97.9% 19.7% securities investment 84.5% grade Cash 12.9% credit rating: A 21.4% E
Slide 24: Exchanges' debt securities are well balanced
Exchanges’ debt securities are well balanced Exchanges’ investments - USD 16bn (100%) As of March 31, 2009 U.S. Government and Agency bonds : USD 1.3bn (7.8%) Municipal bonds : USD 3.4bn (21.3%) of which: 39% General Obligation 38% Revenue 23% Other Corporate bonds: USD 4.4bn (27.1%) of which:
Slide 25: Debt securities portfolio in a modest and improving net unrealized loss position
Debt securities portfolio in a modest and improving net unrealized loss position Exchanges’ debt securities Unrealized gain (loss) development in USD millions Market Unrealized 300 as of March 31 Value Gain (loss) 200 137 Dec-08 Mar-09 100 US Govt & Agency 1,250 50 100 53 50 0 Municipals 3,425 137 -
Slide 26: Exchanges' 2009 CAT reinsurance cover is comprehensive
Exchanges’ 2009 CAT reinsurance cover is comprehensive and designed for 1:250y California1 Texas Hurricane1 Gulf Hurricane1 Other1 Comprehensive CAT in USD millions cover designed to Contingent Surplus Notes (500m excess mitigating 250 year 1,500m) events to tolerable net position 300m USD 250m rete
Slide 27: Exchanges' surplus improvement program continues
Exchanges’ surplus improvement program continues Product management – Initiatives focused on tightening underwriting and improving segmentation Rate / exposure management – Pursuing rates and managing coastal property exposures Loss Adjustment Expense – Actively managing headcount to take into accou
Slide 28: Farmers leads the market in expense management
Farmers leads the market in expense management 2008 Statutory 35% 32.2% 30.8% Expense Ratio1 30% 25.4% 25.4% 24.0% 24.8% 25% 20% 15% 10% 5% 0% Farmers-adj. American Family State Farm Allstate Travelers Nationwide Expense efficiency driven by scale and low-cost culture – National scale drives operati
Slide 29: Exchanges' balance sheet is strong and positioned to support profitable growth
Exchanges’ balance sheet is strong and positioned to support profitable growth The Exchanges are well capitalized with multiple sources of capital resulting in optimization of returns Investment portfolio conservatively positioned and well matched to liabilities Exchanges well reserved with comprehe
Slide 30: Overview of announced AIG PAG transaction
Overview of announced AIG PAG transaction1 Zurich and the Farmers Exchanges have agreed to purchase AIG’s US Personal Auto Group (PAG) for USD 1.9bn plus the assumption of USD 0.1bn of debt. – PAG comprises 21st Century, including AIG Direct, and their auto independent agency business. – At an attra
Slide 31: Deal structure and financing – USD 1.1bn equity and USD 0.4bn hybrid security
Deal structure and financing – USD 1.1bn equity and USD 0.4bn hybrid security M&A transaction Financing transaction USD 1.1bn* cash Transfer of PAG(1) Accelerated ZFS book build USD 1.1bn* USD 0.4bn hybrid(1) Seller FGI USD 1.1bn* in shares USD 1.5bn cash (1) cash injection ZIC USD 0.4bn cash USD 0.
Slide 32: Impact on Exchanges' capital position
Impact on Exchanges’ capital position Estimated Estimated in USD millions Exchanges AIG PAG transaction Pro-forma approximated and rounded 12/31/08 12/31/08 adjustments1 12/31/08 Cash and Investments 18,222 4,057 -1,500 20,779 Insurance balances rec. 2,619 628 - 3,247 Other assets 1,174 474 - 1,648
Slide 33: Impact on Exchanges' capital position
Impact on Exchanges’ capital position ~USD 1.4b acquisition financed from cash on-hand – Cash position has been accumulated since September 2008 Acquire AIG PAG statutory surplus of ~USD 1.7b – Excess of book value over purchase price to be amortized to surplus over 10 years – 40% Q/S ceding commiss
Slide 34: Summary of financial update
Summary of financial update Farmers continues to perform well despite difficult operating environment Unique business model with multiple capital levers positions Farmers well for future profitable growth The Exchanges’ balance sheet is resilient and well capitalized AIG PAG acquisition demonstrates
Slide 35: Break
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Slide 36: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey Wrap-up and close Paul Hopkins Q&A May 20, 2009 Farmers Strategy Update 36
Slide 37: Strategy update
Strategy update Mark B. Smith SVP & Chief Strategy Officer of Farmers May 20, 2009
Slide 38: Strategic Framework
Strategic Framework Customer Product Distribution Experience Manage- Excellence Excellence ment Excellence Infrastructure and Technology Innovation Talent Excellence The Zurich Way and Operational Excellence Achieve market leadership by driving innovation and operational excellence to provide the be
Slide 39: We have experienced significant, above industry average, organic growth
We have experienced significant, above industry average, organic growth Farmers growth 18 Total CAGR of 5.7% from 2005- Farmers GWP (in USD billions) 2008 3.1% CAGR from acquisitions 16 Organic growth 2.6% CAGR Industry has had negative 14 -2.8pts1 growth since 2005 12 2005 2006 2007 2008 We have ou
Slide 40: We have been gaining market share which is to be accelerated with AIG PAG
As a result, we have been gaining market share which is to be accelerated with AIG PAG Top 10 US Personal Lines Insurers1 Company Of the top 3 personal lines carriers we Market Δ ‘05- Share ’07 are the only one profitably growing market share State Farm Group 18.9 % Allstate Insurance Group 11.0 % O
Slide 41: Consumer shopping and purchasing behaviors are changing dramatically
Consumer shopping and purchasing behaviors are changing dramatically Online shopping has nearly doubled in the past 2 years. Significant change in consumer insurance shopping behavior with the number of online quotes almost doubling 2004 – 2007. 75% of people that purchased insurance in 2007 shopped
Slide 42: Adding the direct channel expands Farmers' customer reach
Adding the direct channel expands Farmers’ customer reach Customers have distinct Adding direct preferences on choosing how to purchase insurance 128 million Our natural reach of total US customers is limited households Our today increased Our primary channel market market share is 78 million opport
Slide 43: While more customers are purchasing direct they also still value an agent
While more customers are purchasing direct they also still value an agent and bundled products... Customers who want an agent1 8% While customers are shopping and Not buying online: 13%valuable Neutral Customers value having an agent 79% Value having an Customers prefer to bundle products agent and
Slide 44: Direct by itself is not the answer… Customers want BOTH!
Direct by itself is not the answer… Customers want more…BOTH! These changing preferences are creating challenges for both agent-based and direct sellers. As a result, competitors are converging towards a hybrid distribution model. On one hand On the other hand Internet Shopping1 55% Customers who wa
Slide 45: Creating a "Game Changing" winning model
Creating a “Game Changing” winning model … making a real difference in the market Consumer Life Cycle & Purchasing Preferences Direct Multi-channel Agency Multi-channel An integrated multi-channel model to attract & retain customers through their life stages May 20, 2009 Farmers Strategy Update 45
Slide 46: We have significantly expanded our customer reach
We have significantly expanded our customer reach Reach in all 50 States Broader reach All channels Scale in all channels Fastest growing customer Product Customer Channel Geographic segments expansion segment expansion expansion expansion Largest product breadth expanded to include: Bristol West ac
Slide 47: Strategic priorities
Strategic priorities Our strategy is working – Leverage distribution channels and brand with more opportunities for to expand customer reach growth Cross-sell – multi-line and multi-channel Customer Product Distribution Experience Manage- Excellence Sustain Emerging Market growth Excellence ment Exc
Slide 48: Large distribution footprint with significant scale and reach in all channels
Large distribution footprint with significant scale and reach in all Leverage distribution distribution channels channels and brand Cross-sell Sustain Emerging Market growth 2008 GWP by channel – Prior AIG GWP by channel – Post AIG PAG/ #1 Small Business carrier PAG/21st Century 2% Direct 21st Centu
Slide 49: Managing potential channel conflict through brand & channel alignment
Managing potential channel conflict through brand & channel alignment Leverage distribution channels and brand Cross-sell Sustain Emerging Market growth #1 Small Business carrier Small Specialties & The Farmers Way Auto/Home Business Non-Standard Auto Life Exclusive Agents Independent Agents Full Di
Slide 50: Consolidation of IA units into one brand strengthens our competitive position
Consolidation of IA units into one brand strengthens our competitive Leverage distribution position channels and brand Cross-sell Sustain Emerging Market growth #1 Small Business carrier Acquired numerous medium The Farmers Way sized companies – Consolidated, they total USD 2.8bn in GWP (pro-forma)
Slide 51: Consolidation of IA units into one brand is more attractive to agents
Consolidation of IA units into one brand is more attractive to agents Leverage distribution channels and brand Cross-sell Sustain Emerging Market growth #1 Small Business carrier More robust product offerings The Farmers Way under one brand Best in group technology and process makes it easier to dri
Slide 52: Cross-sell initiative through Value Insurance Package (VIP)
Cross-sell initiative through Value Insurance Package (VIP) Leverage distribution channels and brand Our success in improving our new business (NB) cross-sell and Cross-sell Sustain Emerging product density prepares us for the AIG PAG cross-sell opportunity Market growth #1 Small Business carrier Th
Slide 53: Multi-line bundling is where the long-term value is
… Because multi-line bundling is where the long-term value is Leverage distribution channels and brand Consumers with bundled Cross-sell National customer retention study Sustain Emerging products with a single Market growth #1 Small Business carrier carrier have a 12pts higher 95% 12pts 92% differe
Slide 54: Our emerging markets initiative is on track
Our emerging markets initiative is on track… Leverage distribution channels and brand 189% CAGR since 2006 Cross-sell Sustain Emerging Market growth We have become the #1 #1 Small Business carrier recognized brand in the The Farmers Way Emerging Market (EM) segment EM gross written premiums Increase
Slide 55: Emerging Market Small Business customers are our next opportunity
Emerging Market Small Business customers are our next opportunity Leverage distribution channels and brand Cross-sell Sustain Emerging Market growth #1 Small Business carrier There are an estimated 2.0 million Hispanic businesses The Farmers Way and another 1.5 million Asian businesses in the US, gr
Slide 56: Farmers Small Business strategy is working
Farmers Small Business strategy is working delivering strong and Leverage distribution sustainable performance channels and brand Cross-sell Sustain Emerging Accomplishments Market growth #1 Small Business carrier Top 6 player in small business market Policies in force The Farmers Way and top 3 in C
Slide 57: FarmersFuture strategy is to build bigger, stronger exclusive agencies
FarmersFuture strategy is to build bigger, stronger, and more productive Leverage distribution exclusive agencies channels and brand Cross-sell Sustain Emerging New agent appointments - Exclusive Agent new appointments Market growth #1 Small Business carrier four strongest years in The Farmers Way c
Slide 58: Strategy summary
Strategy summary Farmers is the broadest scale, multi-line, all channel US P&C insurer We have experienced significant, above industry average growth even without acquisitions We have gained market share and closed the gap on key competitors AIG PAG is a strong strategic fit and a “Game Changer” wit
Slide 59: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey 2009 projects supporting transformation AIG PAG integration A closer look at Bristol West Wrap-up and close Paul Hopkins Q&A May 20,
Slide 60: Personal lines transformation
Personal lines transformation Jeff Dailey EVP & President, Personal Lines of Farmers May 20, 2009
Slide 61: Personal lines operational transformation
Personal lines operational transformation Design propositions that maximize customer value & minimize costs through the life cycle of a policy Ease of doing business Customize product Competitive Better Better offerings customer Customer Cost Cost pricing experiences Experiences efficiency Efficienc
Slide 62: 2009 projects supporting transformation
2009 projects supporting transformation Billing Multi-car Better Express customer Cost experiences efficiency ServicePoint MyFieldPoint New Auto & Home Product Competitive advantage May 20, 2009 Farmers Strategy Update 62
Slide 63: Improved billing experience means better customer retention and cost efficiency
Improved billing experience means better customer retention and cost efficiency Interaction-billing component Retention improvement 7% Interaction other JD Power states that high Billing 32% customer satisfaction would 19% result in a 91.5% retention rate Customer satisfaction factors Billing accoun
Slide 64: Billing Operational Transformation
Billing Operational Transformation - Our vision is to create a world class common billing customer experience Farmers All Lines Billing Policyholders Agents Goals: • More options Voice Policy • More Identify of the Processing dependable issues customer • Ease of use Pain points Agent • Convenience C
Slide 65: Multi-car capable policies
Multi-car capable policies Improved customer experience Eliminate multiple mailings to customers when a sister policy is changed Consistent coverages, limits and terms for customers Lower cost model Lower overall processing costs including reduced mail, confusion and phone calls Foundation for perso
Slide 66: It's fast, easy and accurate (Express)
It’s fast (less than 12 minutes to a fully underwritten policy) It’s easy (one screen, three tabs: quote, validate, buy) It’s accurate (at point of sale) Now available in three US states (CO, NM & OK) Private Passenger Auto Next Generation Home VIP Proposals Coming in Express 2.0 Change transactions
Slide 67: Personal Insurance Express – Early results
Personal Insurance Express – Early results “It was so easy, I thought: Is that it?” Leanna Boyles, NM Agency Customer Service Rep. Average Web Pages Visited Core goal: Increase quote volume 2.5% Express vs. eAuto 27.2 over pre-Express levels Express Actual early results: Quote level up 82% 15.6 eAut
Slide 68: Customers want convenience… And so do our agents
Customers want convenience… And so do our agents… Hillsboro, Oregon Tighter control and improved technology resulting in more accurate and consistent customer Olathe, Kansas service experience 100% of exclusive agency force serviced by ServicePoint Austin, Texas Consolidation of eleven service cente
Slide 69: MyFieldPoint – Consolidation of data and functionality
MyFieldPoint – Consolidation of data and functionality improves our ability to compete Distribution management Agent prioritization Optimal contact sequence for new agents Contact results More robust analytics & forecasting Cross business unit performance Drill down based on responsibility Ad-hoc an
Slide 70: New Auto & Home Product features
New Auto & Home Product features Simple Best-in-class products require pricing Aligned product structure in core 28 sophistication… states Interaction among variables is key! One company, one set of rules (Auto) No manual tiering Built on multi-car platform (Auto) Automated Underwriting and validati
Slide 71: New Auto & Home Product – More sophisticated segmentation
New Auto & Home Product – More sophisticated segmentation Current state Advanced state Credit Credit by coverage Symbol Year, make & model Loss ratio modeling for Environmental territory by territory coverage Driver vehicle assignment Driver class averaging Loss ratio-based analysis Multivariate ana
Slide 72: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey 2009 projects supporting transformation AIG PAG integration A closer look at Bristol West Wrap-up and close Paul Hopkins Q&A May 20,
Slide 73: Company overview - AIG Personal Auto Group (AIG PAG)
Company overview - AIG Personal Auto Group (AIG PAG) GWP by distribution channel (Direct vs. Agency) Offers insurance in 49 states 5000 PAG comprises the following two distinct 4’116 4’093 GWP in USD m 4000 3’578 business segments: 1'181 1'117 3000 873 24% – The Direct business, which is a product 2
Slide 74: Strategic rationale – AIG PAG to leverage significant cost & growth synergies
Strategic rationale – AIG PAG to leverage significant cost & growth synergies Farmers is the broadest scale, multi-line, all channel US P&C insurer Market Offers unique value proposition leader Position Farmers as the 3rd largest1 direct auto writer in the US Accelerate Achieve immediate scale in fa
Slide 75: AIG PAG helps balance our product and geographic mix
AIG PAG helps balance our product and geographic mix Product mix shift to Auto Geography mix shift to East 2007 DWP, All-lines Farmers Farmers +PAG Farmers Farmers + PAG (in USD millions) Auto 55.5% 64.4% West 82.3% 77.0% Home 27.4% 22.0% East 17.7% 23.0% Other 17.1% 13.6% Total 100.0% 100.0% 827 /
Slide 76: We will create an integrated multi-channel model creating a growth engine
We will create an integrated multi- channel model creating a growth engine for Farmers and Farmers Exclusive Agents Leads will be provided to 2.5 million1 Auto prospects our Exclusive Agents (EA) annually 1.5 million1 existing direct Auto customers in EA states Auto prospects 500,0001 new direct Aut
Slide 77: Creating a unique integrating multi-channel model
Creating a unique integrating multi- channel model optimizing future growth opportunities “Largest multi- AIG PAG direct benefits channel distribution for Exclusive Agents (EA) footprint & greatest customer reach” Expanded “Customer Reach” allowing customers to do business with us the way they want
Slide 78: Farmers has a demonstrated track record of effective post-M&A integration
Farmers has a demonstrated track record of effective post-M&A integration and growth Foremost - 2.6x Growth since joining Farmers Over the last 10 years Farmers has Written premiums 1999-2008 (in USD millions) successfully integrated two major 1'800 acquisitions: 1'600 – Foremost Insurance (specialt
Slide 79: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey 2009 projects supporting transformation AIG PAG integration A closer look at Bristol West Wrap-up and close Paul Hopkins Q&A May 20,
Slide 80: The Bristol West acquisition has been a success
The Bristol West acquisition has been a success, exceeding our initial estimates Combined Bristol West: combined ratio in % ratio 101.3 99.9 94.1 Bristol West has 92.0 delivered solid 1 results FY08 adjusted FY08 reported Q1-09 adjusted1 Q1-09 reported Growth and Gross Bristol West GWP (in USD milli
Slide 81: Exclusive Agent rollout - driver of Bristol West premium growth
Exclusive Agent rollout - driver of Bristol West premium growth Rapid roll-out of Bristol West product - Installed and trained over 14,000 agents in 29 states in 13 months, including 13 states Bristol West did not do business In - Started in Colorado in July of 2007, when the acquisition closed, and
Slide 82: Summary of personal lines transformation
Summary of personal lines transformation Leverage our data resource to create broadly competitive products with superior agent and customer experience at lower costs Key initiatives are in place to meet our strategy and are on track Integration of AIG PAG to create a unique business model offering s
Slide 83: Agenda
Agenda Strategy is working – positioned for growth Paul Hopkins Financial update Scott Lindquist Strategy update Mark B Smith Personal lines transformation Jeff Dailey Wrap-up and close Paul Hopkins Q&A May 20, 2009 Farmers Strategy Update 83
Slide 84: We have reinvented the Farmers business model
We have reinvented the Farmers business model, repositioning us in the market, and we’re now poised for increased growth Farmers re-invented business model Brand alignment by channel & new brand campaign launch Exclusive Agents (EA) Independent Agents (IA) Direct Customer segments Kaitlyn Sean Rober
Slide 85: Financially strong, building off 13 quarters of growth momentum
Financially strong Building off 13 quarters of growth momentum Significant opportunities for continued growth Broader & stronger distribution footprint Expanded customer reach New products, platforms, pricing Experienced & tested leadership team & well positioned for growth May 20, 2009 Farmers Stra
Slide 86: Q&A
@ ZURICH Q&A Zurich HelpPoint -