1. It is a fact, Lloyds did lift its estimate of WTC loss. It was raised because there was not time to organize the myriad of information needed to be more accurate previously. Hard driving news reporting facilities were demanding an answer even if it was a pre-mature answer. That statement is also a fact. Our world is being abused by news services and their strong arm demands for “an answer”.

2. Lifting the estimate is not a big deal that merits screaming headlines and multiple source reporting. The lift happened on a slow news day. The LA Times and most new services made the announcement a major news happening. It is not major. Most insurers have increased their loss estimates. The Communicator of 9/27/01 is available at www.piu.org. It reminds us of the many layers of financial security that is in place for the assurance of claims ability to Lloyd’s policy owners.

“Anyone searching figures for signs of Lloyds demise will be disappointed. Survival is not a question. Lloyds can mange it’s losses from 911 and these new projections did not change that position” – Sax Riley, Chairman, Lloyds

3. The machinery put in place the past 300+ years at Lloyd’s has withstood every financial and economic condition. It is the best prepared insurer in the World to deal with catastrophic events!

4. Senators Levin and Warner, members of the Armed Services Committee stated unequivocally on Larry King Live (11/27/01) that we suffer from too many news services and too much competitive efforts to get it first and get it in sensational fashion. It hurts our military efforts and our foreign relations endeavors and it overdoses our people. For example this simple act of increasing an estimate has resulted in the public being instantly saturated with ominous sounding articles and statements by an uninformed press corp. that unfortunately creates unnecessary anxiety for consumers.

5. Insurance is about paying claims

6. A.M. Best has announced that it is maintaining Lloyd’s A- (EXCELLENT) rating following the increased loss estimate.

7. We suggest that you have any seriously concerned person call us if they wish to discuss it further.

COMMENTARY

Investors sense the opportunity to raise insurance premiums will create a bonanza for insurance companies and they are recklessly bidding up the price for
insurance stocks. AIG is up 23% since 9-21, even though it has RAISED IT’S ORIGINAL WTC LOSS ESTIMATES. Chubb Corp. is up as is many property/casualty companies on the NYSE.

Terrorist adj: characteristic of someone who employs terrorism (especially as a political weapon); and not limited to foreign countries!

Giant reinsurers are being formed for a 1/1/02 start. Over $20 BILLION in Capital has been set up in the past 6 weeks in Bermuda to take advantage of the
raising rate opportunity.

But Warren Buffet of Berkshire Hathaway believes the hard market (increasing premiums) will last barely a year due to the sudden increased capacity in reinsurance. The Wizard of Omaha is general right!

When the traditional disability markets have done all
they can or strike out altogether , , , , , call us:

• High limits with participation up to 75% of income
• $1,000 per month to $100,000 per month or more
• Lump sums as high as $20,000,000 available
• Own occupation definition
• Out of the ordinary occupations considered
• Optional Residual and COLA