Dear Member

I refer to my circular letter of July 2008 (ref 8/08) and am pleased to inform you that the Club has now successfully raised $100 million of callable perpetual subordinated debt ("hybrid capital") in difficult market conditions. As indicated in my earlier letter, the Club will continue to maintain its traditional reserves at a level consistent with the operational requirements of the Club as a mutual P&I insurer.

The hybrid capital will form an additional safeguard against any future requirement to increase solvency capital by augmenting the Club's solvency position without diluting Members' interests as well as allowing the Club to establish a track record for future capital market transactions.

As is customary with transactions of this nature, the identity of the investors will not be disclosed.

Yours sincerely

T BiggiChairman