Results for the six months to 30 June 2010

17 August 2010

A leading provider of management and consultancy

services to insurers and insureds

1

John Rowe Chief Executive

George Fitzsimons Finance Director

Damian Ely Chief Operating Officer

2

Financial highlights

Note 1: Adjusted PBT and EPS are adjusted for acquired customer relationship intangible amortisation and exceptional

relocation and reorganisation costs.

H1 2010 H1 2009

Revenue up 6% £48.4m £45.9m

Statutory PBT up 3% £5.7m £5.6m

Adjusted PBT down 1% (note 1) £6.8m £6.9m

Statutory EPS down 33% 7.38p 11.01p

Adjusted EPS down 29% (note 1) 10.02p 14.19p

Dividend maintained 5.54p 5.54p

33

Dividends

10.00 12.00 13.20 13.90 14.55

5.54 5.54

2005 2006 2007 2008 2009 H1 '09 H1 '10

DPS (p)

• Historical dividend progression

• H1 2010 cover 1.8*

• vs 2.6 H1 2009

• vs 2.0 FY 2009

• No strict cover target

• Cash flow/ 2011 prospects are the main important factors

* Adjusted eps/ dps

44

Group divisional structure

Management

services

Adjusting

services

Insurance support

services

Insurance

companies run-off

Investment

management

Mutual

management

Underwriting

services

Captive/Risk

management

Specialist adjusting

for insurers

Average adjusting

for shipowners

Non-life insurance

services

Life insurance

services

Non-life insurance

companies in run-off

Life insurance

companies in run-off

Financial Review

6

Overall trading

45.9 48.4

0

10

20

30

40

50

60

H1'09 H1'10

`̀

Revenues flat in Management and Adjusting, Margin impacted by Adjusting

16.9 16.1

0

2

4

6

8

10

12

14

16

18

H1'09 H1'10

`̀

Revenue £m Margin %

• Revenue growth 5.5%

– -3.4% like-for-like real growth

– 7.8% acquisitions (Axiom and ASG)

– 1.1% favourable FX rates

7

Statutory PBT H1 2010 vs H1 2009

Statutory PBT up £0.1m (3%)

0

1

2

3

4

5

6

7

8

H1 '09 Mgt Adj Ins supp

servs

Ins cos

run-off

Reorg Other H1 '10

£m

= up

= down-0.2

5.6-1.4

-1.3

+0.3

+0.7

+2.0

5.7

8

Adjusted PBT H1 2010 vs H1 2009

Adjusted PBT down £0.1m (-1%)

Note: Adjusted PBT and EPS are adjusted for acquired customer relationship intangible amortisation and exceptional

relocation and reorganisation costs.

£m

= down

= up

0

1

2

3

4

5

6

7

8

H1 '09 Statutory PBT Reorg Other

intangibles

H1 '10

6.9

+0.1

-0.7

6.8

+0.5

9

EPS H1 2010 vs H1 2009

-1%

-5%

-23%

-25%

-20%

-15%

-10%

-5%

0%

Adjusted eps down 29%Statutory eps down 33%

-6%

-30%

3%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

Note: Adjusted PBT and EPS are adjusted for acquired customer relationship intangible amortisation and exceptional

relocation and reorganisation costs.

PBT

Tax

NCINCI

Tax

PBT

10

Adjusted EPS movement H1 09 - H1 10

0

2

4

6

8

10

12

14

16

18

H1 '0

9

Man

agem

ent

Adju

stin

g

Ins supp s

ervs

Ins cos

run-

off

Taxatio

n

Min

ority

inte

rest

Oth

er

H1 '1

0

Pence

= up

= down-0.4

14.2

-3.5 -1.8

+0.6

+4.9

10.0

-0.7

-3.3

1111

Debt and operating cash flow

Net Debt

42.1 41.6

0

10

20

30

40

50

H1 '09 H1 '10

£m

`̀

Interest cover

7.3

6.1

8.8

7.0

0

2

4

6

8

10

H1 '09 H1 '10

Times

Statutory basis

Adjusted basis

`̀

£m H1 ‘10 H1 ‘09

Profit from operations (note 1) 3.9 5.3

Receivables/ payables 1.6 (3.6)

Other (1.0) (0.6)

Net cash flow from operations (note 2) 4.5 1.1

Note 1: Excl. insurance companies

Note 2: Excl. client funds

1212

Pension liability

22.9 -2.0

+5.8

26.7

0

5

10

15

20

25

30

Dec '09 Assets Liabilities June '10

£m

Divisional Review

Head office

Additional Group expense areas year on year

• Compliance and Risk Management

• Internal Audit

• IT: Group move to Outlook

• Professional fees (Pensions, Taxes, HR)

15

Management services division

18.0 18.0

0

5

10

15

20

25

H1 '09 H1 '10

Margin %

14.9 13.9

0

5

10

15

20

25

H1 '09 H1 '10

Revenue £m

• Revenue flat

• H1‘10 profit 6.5% lower

• Standard - Significant increase in resources required (impact 2010)

- Growth and regulatory environment

• Signal - Improving result

- Management fee 1 October 2010

• Captive Management - New clients

• UK public Sector - Impact of Mutual closures

- Sector still promising

• Risk Consulting - Lower fees US/UK

16

Adjusting services division

23.322.9

0

5

10

15

20

25

H1 '09 H1 '10

12.2

18.4

0

2

4

6

8

10

12

14

16

18

20

H1 '09 H1 '10

• 2009 revenue up 2%,

• profit down 33% to £2.8m from £4.2m

• Impact of increase in group overheads

Revenue £m Margin %

17

Adjusting services division

• Energy (45%) - Revenues and market share maintained but profit lower

- Houston/UK – high value work impact

- Calgary/Singapore/Australia good result

- Vancouver/New York investment

• Aviation (18%) - Revenues flat but market share maintained

- UK Hull quieter

- Asset management under performed to date

- Australia improving

- Miami/Dubai remain busy

• Marine (22%) - Good performance continues

- UK good spread of cases

- Greater China increasing importance

- Piraeus investment required

• Non Marine (15%) - Strong result continues

- Financial institution/product recall growth

- Miami busy

- Dubai/Doha development

18

Insurance support services division

4.1

6.6

0

2

4

6

8

H1 '09 H1 '10

-6.6

-0.1

-10

-5

0

H1 '09 H1 '10

Revenue £m Margin %

• Revenue growth all relates to Axiom (acquired May 2009)

• Non-Life - CTIS refocused on core activities

- Claims management, financial reporting, run-off

- Increased opportunities in Lloyds market

- Turnkey still being explored

• Life - Lower revenues reflecting no new business

19

Insurance companies run-off division

2.21.9

0

1

2

3

H1 '09 H1 '10

33.6

144.6

0

20

40

60

80

100

120

140

160

H1 '09 H1 '10

Revenue £m Margin %

• Non-life (UK/ Ireland) - Different profit mix vs H1 2009 (Cardrow and Beech Hill)

- Cardrow significant increase in profits

- Note 82.5%+ minority interest in Cardrow

- Beech Hill immaterial in H1 2010

- Bestpark small loss, narrow margin of solvency maintained

• Life (Isle of Man) - Result better than last year

- Solvency margin increased

- Small Guernsey life insurer acquired

20

Outlook

• Management services division– Background positive for 2011 fee negotiation. (October 2010)

– Signal expect better performance in H2 2010

– CTUA – improving outlook

• Adjusting services division– Remains market leader in key sectors

– Expansion into onshore energy

• Insurance support services division– CTIS – quality of new business opportunities improving

• Insurance companies run-off division– Solvency II (October 2012) remains opportunity.

Business Appendices

2222

The fully integrated insurance model

Insurance operations

Corporate services

Strategy, capital management and governance

Finance and accounting

Legal and compliance

Property services

IT services

HR services

� Core insurance operations supported by corporate services

2323

CTC in the insurance value chain (1)

CTC is an outsource supplier of some core insurance services…

Adjusting

Investment management

Underwriting

services

Mutual

management

Insurance

support

services

Insurance companies

run-off

2424

CTC in the insurance value chain (2)

… as well as providing corporate services and support functions

Investment management

Underwriting

services

Strategy, capital

management and

governance

Legal and

compliance

Finance and

accountingProperty services IT services HR services

Mutual management

Adjusting

Insurance

support

services

Insurance

companies

run-off

25

Our markets

Risk carriers Managing agencies and

Brokers

Insureds

London Mutual mgt (P&I, Stop

Loss and public sector)

Accounting, financial and

regulatory reporting

Audits/ inspections

Claims management/

analysis

Commutations

Loss adjusting

Accounting, financial and regulatory

reporting

Audits/ inspections

Claims management/ analysis

Commutations

Coverholder management

Start-up support

Claims processing, broking and

credit control

Average adjusting

Risk management

Bermuda Mutual mgt (P&I, Signal

and SCALA)

Captive management

N/A Captive management

ROW Mutual mgt (P&I)

Loss adjusting

N/A Average adjusting

Risk management

Captive management (IoM)

26

History

c 1840 Charles Taylor & Co founded

1885 Sets up first mutual, the Standard P&I Club

1900s Focus on management of mutual insurance companies for shipowners

1969 P&I moves to Bermuda

1970s Starts developing other mutuals in the marine, workers’ compensation

and non marine fields

1996 Floated on the London Stock Exchange

1997 Entered Adjusting services sector

2005 Entered Run-off sector

2009 Established Insurance support services division

27

The board

Executive

John Rowe

Damian Ely

George Fitzsimons

Alistair Groom

Joe Roach

Group Chief Executive

Group Chief Operating Officer

Group Finance Director

Executive Director

Executive Director

Non-Executive

Rupert Robson Non-Executive Chairman

Julian Cazalet Senior independent non-executive director

David Watson

Julian Avery

Judith Hanratty CVO OBE

Global offices Europe &

Middle East

Aberdeen

Brussels

Doha

Douglas

Dubai

Dublin

Glasgow

Liverpool

London

Paris

Piraeus

Hampshire

Asia Pacific

Balikpapan

Beijing

Brisbane

Hamilton (NZ)

Hong Kong

Jakarta

Melbourne

Mumbai

Perth

Selangor

Seoul

Shanghai

Singapore

Surabaya

Sydney

Taipei

Tokyo

Americas

Calgary

Dallas

Halifax

Hamilton

Houston

Long Beach

Mexico City

Miami

New York

St Johns

Toronto

Wilton

Vancouver30 June 2010 ⇨ 48 offices worldwide with 914

members of staff

Major offices shown in red

2929

Segmental analysis

Adjusting

services

47%

Insurance

companies in

run-off

4%

Insurance

Support

Services

13%Management

services

36%

Bermuda

35%

Asia Pacific

12%

North America

14%

Other Europe

7%

United

Kingdom

32%

H1 2010 division segment revenue H1 2010 geographical segment revenue

£23.3m

£18.0m

£6.6m

£1.8m

£6.9m

£5.9m

£15.6m

£16.6m

£3.4m

Note : revenue by business segment is before £1.3m intercompany eliminations

30

Acquisition history

Date Name Division Consideration (cash element) Consideration (share

element)

2009• Axiom

• ASG

Ins Supp Serv

Adjusting

£6.2m

£1.7m, earnout £0.8m

-

-

2008• Cardrow Insurance

• Beech Hill Insurance

Run-off

Run-off

£1 plus share of final net assets

£1 plus earnout up to £10m

-

-

2007 • Allegro Management£2.3m cash

Earnout £0.5m cash-

2006

• MGI Loss Adjusters

• Premium Life

• Vertex Administration

Adjusting

Run-off

Run-off

Earnout up to £0.6m cash

£0.2m cash

Earnout up to £0.3m cash

£1.5m shares

-

-

2005• LCL Group and LCL Acquisitions

Run-off £21.5m cash£6.9m shares plus earnout shares and loan notes up to

£15m

2004 • Bateman Chapman Limited Adjusting £18.9m cash -

2001• ULM

• Resolve InternationalAdjusting

£5.6m cash

£3.0m cash

-

£2.0m shares

2000 • LAD (Aviation) Limited Adjusting £2.6m cash £0.5m shares

1999• Rush Johnson Associates

• Hutchins Moore

Adjusting

Adjusting

£4.1m cash £1.8m shares

£0.4m shares

1998 • INDECS Limited Adjusting £2.1m cash and loan notes £0.9m shares

1997 • Richards Hogg Group Limited Adjusting £2.8m cash and loan notes £6.3m shares

Results Appendices

32

Income statement

Note 1: adjusted for acquired customer relationship intangible amortisation of £1.0m (H1 ’09: £0.6m) and exceptional

relocation and reorganisation costs of £nil (H1 ’09: £0.7m)

(0.1)0.0Associates and JVs

6.05.6Profit after tax (note 1)

(0.9)(1.2)Tax

6.96.8Profit before tax (note 1)

(0.7)(1.0)Net finance costs

7.77.8Profit from operations (note 1)

(38.2)(40.6)Expenses (note 1)

45.948.4Revenue

H1 2009H1 2010£m

33

Divisional results

7.8

(0.2)

2.7

(0.0)

2.8

2.5

H1 ‘10

7.7

0.4

0.7

(0.3)

4.2

2.7

H1 ‘09

ResultRevenue£m

48.4

(1.3)

1.8

6.6

23.3

18.0

H1 ‘10

45.9Total

(1.3)Intercompany

eliminations/unallocated

2.2Insurance Run-off

4.1Insurance Support Services

22.9Adjusting services

18.0Management services

H1 ‘09

34

Tax

15.8%20.2%- Statutory

12.9%17.1%- Adjusted

13.1%14.3%Underlying current year trading tax rate (note 1)

Effective tax rate on current period profit

0.91.2Total

0.80.6Overseas charge

0.10.6UK charge @ 28%

H1 2009H1 2010£m

Note 1: Excluding Insurance Companies Run-off

35

Cash flow from operations

Note 1: Excl. insurance companies

Note 2: Excl. client funds

4.5

(1.0)

(0.8)

(1.5)

3.1

(1.4)

1.3

0.9

3.9

H1 2010

0.8Intangible amortisation

(0.5)Other non-cash

1.1Net cash flow from operations (note 2)

0.7Depreciation

(0.9)Interest

(0.7)Tax

(3.8)Payables increase/ (decrease)

0.2Receivables (increase)/decrease

5.3Profit from operations (note 1)

H1 2009£m

36

Cash flow

Note 1: Excluding movement in client funds

6.4

8.3

(1.9)

(0.2)

(0.9)

(0.5)

9.7

(7.7)

(3.4)

1.1

H1 2009

(0.2)Other

(4.3)Financing

(0.7)Capex

1.5FX

10.7Cash and equivalents b/f (note 1)

(3.6)Dividends

7.7Cash and equivalents c/f (note 1)

(3.0)Net decrease in cash

(0.2)Acquisitions & disposals

4.5Operating cash flow (note 1)

H1 2010£m

37

Net debt

0.5

(0.4)

1.4

(1.8)

1.3

(0.1)

1.4

Movement

(41.6)

(1.8)

(28.6)

(18.9)

7.7

(32.3)

40.0

H1 2010

6.4

(32.2)Less: Client funds

(17.1)Overdrafts/ current loans

(42.1)Net debt

(1.4)Other

(30.0)Non-current loans

38.6Cash and cash equivalents

H1 2009£m

38

Balance sheet

71.7

(22.3)

(26.7)

(28.6)

149.3

(75.0)

(230.4)

454.7

96.6

285.5

72.6

7.6

7.0

14.0

44.0

H1 2010

(16.3)Other non-current liabilities

93.7Other current assets

68.6Net assets

(21.1)Pension liabilities

(30.0)Non-current loans

136.0Total assets less current liabilities

(72.1)Other current liabilities

(264.0)Insurance liabilities

472.1Total assets

309.0Insurance assets

69.4Non-current assets

7.8Other fixed assets

6.4Deferred tax

16.8Intangibles

38.4Goodwill

H1 2009£m

3939

Track record – PBT and EPS

0

5

10

15

20

25

30

35

2004 2005 2006 2007 2008 2009 H1

'09

H1

'10

EPS (p)

22.4

27.5

31.331.8

Note: 2004 restated due to UITF38 and IFRS; PBT and EPS adjusted to exclude goodwill, acquired customer relationship intangible amortisation, VOBA reversal/ impairment and exceptional relocation and reorganisation costs and exceptional tax

0

2

4

6

8

10

12

14

16

18

20

2004 2005 2006 2007 2008 2009 H1

'09

H1

'10

PBT (£m)

9.510.4

13.413.6

28.7

13.4

18.729.0

6.9 6.8

14.19

10.02

4040

Track record – dividend

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009 H1

'09

H1

'10

DPS (p)

5.54

9.0

10.0

12.0

13.213.9

14.6

5.54

41

Disclaimer

This presentation contains certain forward-looking statements. By their nature, forward-looking

statements involve risks and uncertainties because they relate to events and depend on

circumstances that will or may occur in the future. Actual results may differ from those

expressed in such statements, depending on a variety of factors, including demand and

pricing; operational problems; general economic conditions; political stability and economic

growth in relevant areas of the world; changes in laws and governmental regulations;

exchange rate fluctuations and other changes in business conditions; the actions of

competitors and other factors.