![]() I N S U R A N C E / R E I N S U R A N C E B E R M U D A I R E L A N D U N I T E D S T A T E S MAX CAPITAL GROUP LTD. Nasdaq: MXGL Acquisition of Imagine Group (UK) Limited (subject to regulatory approval) INFORMATION SUPPLEMENTARY TO PRESS RELEASE OF JULY 24, 2008 Exhibit 99.2 |
![]() 2 INFORMATION CONCERNING FORWARD LOOKING STATEMENTS This presentation includes statements about future economic performance, finances, expectations, plans and prospects of the Company that constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements. For further information regarding cautionary statements and factors affecting future results, please refer to the Company’s most recent Annual Report on Form 10-K , Quarterly Reports on Form 10-Q filed subsequent to the Annual Report and other documents filed by the Company with the SEC. The Company undertakes no obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise. |
![]() 3 Imagine Group (UK) Limited – Organizational Structure Imagine Syndicate Management Limited Syndicate 1400 Active Underwriter Matthew Petzold Property catastrophe 54% Accident & health 28% Financial institutions 18% Total 100% £125.0m Imagine owned £125.0 (100%) Independent 0.0 (0%) Total £125.0 (100%) Syndicate 2525 Active Underwriter David Dale Public liability 50% Employers’ liability 50% Total 100% £42.0m Imagine owned £0.9 (2%) Independent 41.1 (98%) Total £42.0 (100%) Syndicate 2526 Active Underwriter Andy Doré Professional indemnity 92% Medical Malpractice 8% Total 100% £31.8m Imagine owned £11.6 (36%) Independent 20.2 (64%) Total £31.8 (100%) 2008 Product Focus 2008 Capacity 2008 Capacity Provider Iain Bremner — Managing Director Lance Gibbins — Finance Director Matthew Petzold — Underwriting Director Imagine Underwriting Services Limited Imagine Group (UK) Limited |
![]() 4 Imagine Syndicate Management Limited Manages £198.8 million of capacity for 2008, of which 69% is capitalized by Imagine Group (UK) Limited (Imagine) and 31% is capitalized by third party names In addition to London, offices in Copenhagen and Tokyo. Total staff of approximately 85 Syndicates under management Syndicate 1400 2008 stamp capacity of £125.0mm - 100% provided by Imagine Writes property reinsurance, accident & health reinsurance and financial institutions insurance Broad geographic spread, including the US, UK, Caribbean and Asia Syndicate 2525 2008 stamp capacity of £42.0mm – 2% provided by Imagine Writes employers’ and third party / product liability lines, both on primary and excess of loss bases Concentrates on the UK, with only small overseas exposures and no US-domiciled insureds Syndicate 2526 2008 stamp capacity of £31.8mm – 36% provided by Imagine Writes professional indemnity and medical malpractice Primarily UK-domiciled insureds with some European and Australian accounts |
![]() 5 (£ in millions, 2008 projected) Imagine Group (UK) Limited - Financial Summary (UK GAAP pro forma unaudited; excludes discontinued lines of business) 2006 2007 2008P Gross premiums written £68.8 £76.3 £77.5 (Imagine's share of syndicate business) Net premiums written 49.7 63.3 64.3 Net premiums earned 42.0 60.5 67.8 Loss and loss adjustment expenses 10.9 20.5 30.0 Policy acquisition costs 7.2 12.9 15.9 Operating expenses 13.6 15.5 14.1 Total expenses 31.7 48.9 60.0 Underwriting income £10.3 £11.6 £7.8 Loss ratio 26.0% 33.9% 44.2% Expense ratio 49.5% 46.9% 44.2% Combined ratio 75.5% 80.8% 88.4% Years Ended Dec 31, |
![]() 6 2008 Projected Gross Premiums Written - £77.5 million Professional Indemnity / Medical Malpractice, 18% Employers' Public Liability, 1% Property Catastrophe, 44% Financial Institutions, 14% Accident & Health, 23% By Line of Business Syndicate 2526 18% Syndicate 2525 1% Syndicate 1400 81% By Syndicate By Geography North America 29% Europe exc. UK 12% UK 27% Japan 8% Caribbean 5% Other 19% Insurance 34% Reinsurance 66% By Contract Type |
![]() 7 Key Terms of Acquisition Max to acquire Imagine Group (UK) Limited (“Imagine Lloyd’s”) from Imagine Insurance Company Limited (“Imagine”) Total consideration of approximately £11 million in cash Max to replace letters of credit totaling approximately £90 million that an affiliate of Imagine has provided to fund the Lloyd’s syndicate commitments of Imagine Lloyd’s Imagine to provide 70% quota share reinsurance in respect of Syndicate 1400 for the 2007 and 2008 years of account until December 31, 2008. The liability of Imagine in respect of any one year of account under this reinsurance arrangement is limited to 150% of net premiums earned Upon closing of the transaction, Imagine Lloyd’s is expected to be renamed Max UK Ltd. and Imagine Syndicate Management Limited is expected to be renamed Max Lloyd’s Ltd. The acquisition is subject to receipt of various approvals, including those from the Financial Services Authority and Lloyd’s |
![]() 8 Expected Impact on Max Capital It is anticipated that the transaction will close late Q3 or early Q4, 2008. In view of this timing and the 70% quota share reinsurance arrangement on Syndicate 1400 as previously described, the impact on Max’s 2008 results is expected to be minimal During Q3 2008, Max, in conjunction with the management of Max Lloyd’s, will be determining the appropriate mix of Lloyd’s business for Max to write in 2009. Consideration will be given to Max’s total exposures by line across all operating divisions to ensure that aggregate exposures, in particular for property business, do not exceed appropriate levels for 2009. In 2007 proforma Net Premiums Earned by Imagine Lloyd’s amounted to £60.5 million with a Combined Loss Ratio of 80.8%. For 2008 proforma Net Premiums Earned are projected to be £67.8 million with a projected Combined Loss Ratio of 88.4% The transaction is expected to be accretive to Max’s 2009 results |
![]() 9 Imagine Group UK - Senior Management Name Description Matthew Petzold Underwriting Director Active Underwriter of Syndicate 1400 since its formation in 1999. Following the acquisition of Danish Re by Imagine in 2005 he was made Underwriting Director with responsibility for all underwriting matters relating to Syndicates 1400, 2525 and 2526. He was previously Managing Director of Copenhagen Re (UK) where he had worked since 1975. Matthew is an Associate of the Chartered Insurance Institute. Iain Bremner Managing Director Managing Director of Imagine Syndicate Management Limited since Abacus was acquired by Imagine in November 2005. He is also Chairman of Imagine Group’s Broker Vetting and Reinsurance Security Committee as well as ISML’s Risk and Executive Committees. Prior to this Iain was Managing Director of Abacus Syndicates, where he also worked in the roles of Finance Director and Compliance Officer. His earlier career included four years with Marsh & McLennan, three years at the Corporation of Lloyd’s and six years with SBJ. Iain is a Fellow of the Chartered Institute of Certified Accountants. Lance Gibbins Finance Director Finance Director since October 2006. Prior to joining Imagine he was a Director at Aon Capital Markets in London, providing corporate finance advice and capital solutions to insurance and reinsurance clients. Before that Lance was Managing Director of a Lloyd’s managing agency and Group Financial Controller of Limit, a London Stock Exchange listed investment trust and parent company of insurance businesses at Lloyd’s. Lance spent three years at the Corporation of Lloyd’s and three years at BDO Stoy Hayward and is a Chartered Accountant and member of the Securities Institute. David Dale Active Underwriter Active Underwriter of Syndicate 2525 since Abacus was acquired by Imagine in November 2005. Prior to joining Abacus in 2003, David spent 23 years at Limit Syndicate 386 predominately underwriting employers’ liability and public and products’ liability in the UK and Republic of Ireland. David’s working career at Syndicate 386 included all aspects of the business: administrative support, system support and development, account and product development, technical wordings support and development, and prime responsibility for all underwriting matters. Andy Dore Active Underwriter Active Underwriter of Syndicate 2526 since 2003. Andy has spent 18 years as a PI specialist, of which 16 have been as an underwriter in the London market. Prior to joining Imagine, Andy worked as a London Service Company Manager and PI Line Underwriter as Markel, and European PI Manager at CNA. Prior to starting the syndicate, Andy was the PI Underwriter at PRI, a £130m capitalized specialist insurer. |
![]() 10 Max Lloyd’s Ltd. |