Club Circular 7/08: POLICY YEAR REVIEW AND FINANCIAL HIGHLIGHTS AT 20TH FEBRUARY 2008

OUTLINE

Solid investment return of 6.51 per cent in challenging investment conditions
Total funds of US$992 million
Net claims reserves of US$763 million
Free reserves of US$229 million
No supplementary calls estimated on the open policy years

TO THE MEMBERS

Dear Sirs

POLICY YEAR REVIEW AND FINANCIAL HIGHLIGHTS AT 20TH FEBRUARY 2008Review of Open Policy Years2005 policy year

Although the 2005 policy year was marked by a number of personal injury and passenger claims the deficit on the year is much lower than both 2004 and the 2006 policy years. Although the year is in deficit the Directors decided at their meeting in May 2008 to close the 2005 year with no supplementary premium required.

2006 policy year

The 2006 policy year's technical reserves were set at February 2007 based on a considerable amount of uncertainty of the cost of the Pool after only 12 months of development. The 18 month development on the year was particularly marked and necessitated increasing the ultimate claims forecast considerably. However, the subsequent development of 2006 has given grounds for cautious optimism and enabled a modest release of some of the provision for the year. No supplementary premium is estimated for this year.

2007 policy year

The 2007 year has been reserved cautiously at this stage taking into account the increase in claims within the Club's retention and the deterioration noted after 18 months of the previous policy year. No supplementary premium is estimated for this year.

Financial Year Highlights

At their May Board meeting the Directors approved the Report and Financial Statements for the year ended 20th February 2008. A separate Club publication - Financial Highlights 2008 - accompanies this circular giving a detailed summary of the Club's financial results for the year to February 2008.

The Club's full financial statements, together with the Directors' Report and Review of the Year will be published, as usual, in July.

Yours faithfully

THOMAS MILLER (BERMUDA) LTD. CONTACT