Results to 31 December 2006

23 March 2007

2

Agenda Slides

• Headline numbers 2

• Business segment results 3-7

• Tax 8

• Free cash flow 9

• Other highlights 10

• Outlook 11-13

• Appendices 14-25

3

Revenue up 17% £79.1m £67.7m

Profit before tax up 28% £13.4m £10.4m

EPS up 14% 31.3p 27.5p

Dividend up 20% 12.00p 10.00p

Interest cover (times) 5.3 7.8

Headline numbers

Note: PBT and EPS are adjusted for goodwill and acquired customer relationship intangible amortisation,and interest cover is based on adjusted profit before interest payable

31.12.06 31.12.05

4

Management resultsRevenue £35.4m (05 £33.0m), +7%

Result* £8.0m (05 £6.3m), +27%

• Margin 22.5% (05 19.1%)

• Widespread growth

• Signal payroll growth (existing members + West Coast)

• Standard (Milan IT System)

• MDU (UK Liveries and care homes and Australia Capricorn)

• Risk Management (USA growth)

*before goodwill and customer relationship intangible amortisation, unallocated FX and share of associates/ jvs

• Investment Management (incl insurance company synergies)

5

Services results

Revenue £35.4m (05 £34.2m), +4%

Result* £5.0m (05 £4.6m), +8%

• Margin 14.2% (05 13.6%)

• Aviation continuing strongly (Asia Pacific, Latin America, liability claims)

• Marine good (hull and hurricane claims)

• Energy flat (Mexico, Houston and Canada offset UK)

• Non-Marine development (UK, Miami, Dubai)

*before goodwill and customer relationship intangible amortisation, unallocated FX and share of associates/ jvs

6

Run-off activitiesServices Insurance companies

Advisory services

Insurance company & claims management

- 3rd party

- intra-group

Current – earn out

Future acquisitions

- CTC risk limited to consideration paid

- benefit from service fees, synergies and potential surplus assets

7

Revenue £8.4m (05 £0.5m)

Result* £1.0m (05 £0.1m)

• Margin 12.5%

• Maintained market position

• Good flow of potential deals

• Consolidation of IoM position

• acquisition of Vertex

• acquired remaining 40% minority interest in FITA (now LCLA)

Run-off services results

*before goodwill and customer relationship intangible amortisation, unallocated FX and share of associates/ jvs

8

Revenue £5.5m (05 £0.4m)

Result* £1.0m (05 £0.6m)

• Commutation successes, Bestpark reserves deterioration

• Consolidation of Life businesses onto IoM (incl Premium Life)

• Strong cash flow from LCLI (£4.8m divis, plus £4.2m loans)

• Partial BIL disposal in July 06 (49.99%) to maximise value potential of tax assets

Insurance companies results

*before goodwill and customer relationship intangible amortisation, unallocated FX and share of associates/ jvs

9

2006 2005£m £m

UK @ 30% 1.8 0.9Overseas 0.5 0.3Deferred tax (1.1) (0.2)PYAs (0.3) (0.6)Associates/ jvs 0.1 0.1Total 1.0 0.5

Effective tax rate 8.6% 3.8%Underlying tax rate 17.8% 6.1%

Tax

Note:- cash tax payments will be lower (BIL losses)- growth trend in overseas profit (North America/ Mexico)

10

2006 2005£m £m

Operating cash flow* 18.9 7.8

Net capex (tangible/ intangible) (1.8) (1.6)

Interest receivable 0.7 0.3

Total 17.8 6.5

Free cash flow

*excluding movement in client monies

11

• Net debt £35.5m, £9.2m below 31/12/05

• Cash from LCLI (IoM) used to repay debt

• LCL acquisition loans repaid

• LCL acquisition costs paid early 2006

• Pensions deficit reduced by £4.6m

• higher bond yields

• but longevity issues

Other highlights

12

• Public Sector Unit• London Authorities Mutual

• Fire Brigades

• Unitary Authorities

• Signal• Self-insured targets

• Standard• Renewal

• Risk Management• Latin America

Outlook - Management

13

• Aviation• Indonesian claims• Arch• Mexico

• Energy• Buncefield• US Onshore/Middle East

• Marine• Average Adjusting claims• Mega yacht business

• Non-Marine• Vopak fuel terminal• IT consulting work

Outlook - Services

14

• Deals under consideration

• Favourable environment• EU Reinsurance Directive• but insurers’ balance sheets have strengthened

• Potential for synergies

Outlook – Run-off

15

Appendices

Slides

Details of full year 2006• Cash flow 15-17• Net debt 18• Foreign exchange 19-20

General background • Acquisition history 21• Business overview 22• Track record 23-24• Dividend policy 25

16

Cash flow2006

£m

2005

£m

Net cash from operations (post-tax)* 18.9 7.8

Interest received 0.7 0.3

Dividends (4.1) (3.4)

Acquisitions (5.3) (25.8)

Financing (5.5) 22.9

Capex (1.8) (1.6)

FX (1.0) 0.3

Other 1.5 0.2

Net increase in cash 3.4 0.7

Cash and equivalents b/f* 6.7 6.0

Cash and equivalents c/f* 10.1 6.7*Excl client funds

17

Cash flow from operations2006

£m

2005

£m

Profit from operations 13.2 10.8

Depreciation 1.3 0.9

Intangible amortisation 1.4 0.1

Receivables (increase)/ decrease 2.4 (7.9)

Payables increase/ (decrease)* 0.5 6.8

Other non-cash (0.8) (0.4)

Tax (0.8) (1.1)

Interest (3.1) (1.4)

Dividends from LCLI 4.8 0.0

Net cash flow from operations* 18.9 7.8

*Excl client funds

18

Cash flow - receivables/ payables

£m

WIP (1.2) Energy, Marine, Aviation

Trade debtors 2.7 Good collections, includes £0.5m MGI

Other debtors 0.9 Includes £0.4m LCL

Total receivables 2.4 Lower receivables

Loans from insurance companies (4.2) From LCLI

Other creditors 4.7 Due diligence fees paid plus Milan accruals netted against prepayments

Total payables 0.5 Higher payables

19

Net debt

31.12.06

£m

30.06.06

£m

Movement 31.12.05

£m

Cash and cash equivalents 30.9 24.4 6.5 31.8

Less: Client funds (20.8) (17.5) (3.3) (25.1)

10.1 6.9 3.2 6.7

Overdrafts/ current loans (18.9) (19.2) 0.3 (17.7)

Non-current loans (26.3) (29.6) 3.3 (33.4)

Other (0.4) (0.4) 0.0 (0.4)

Net debt (35.5) (42.3) 6.8 (44.8)

20

Foreign exchange impact

H1 05 H2 05 H1 06

USD vs £

Average 1.87 1.77 1.79 1.89

1.55

1.60

1.65

1.70

1.75

1.80

1.85

1.90

1.95

2.00

2.05

H2 06

21

31.12.06 31.12.05

Av USD rate 1.85 1.75

Closing USD rate 1.97 1.73

FX loss (£11k) (£459k)

Loss on underlyings (£345k)Profit on hedges £334k

Foreign exchange impact

22

Acquisition history2006MGI Loss AdjustersPremium LifeVertex Administration

Earnout up to CAD 1.3m cash (£0.6m)£0.2m cashEarnout up to £0.3m cash

£1.5m shares

2005LCL Group and LCL Acquisitions £21.5m cash £6.9m shares plus earnout shares

and loan notes up to £15m

2004Bateman Chapman Limited £18.9m cash

2001ULM (Aviation loss adjusting from HCC)Resolve International

£5.6m cash£3.0m cash £2.0m shares

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

1999Rush Johnson AssociatesHutchins Moore

£4.1m cash £1.8m shares£0.4m shares

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

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

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• Mutuals, Investment management, Captives, Risk management, New mutual development

Services Division• Loss adjusting and Claims

management, Average adjusting, Outsourcing & advisory

Business overview

Management Division

Revenue 06*

Revenue by location 06

Result 06

Management

Services

UK £25.0m

2006 – 32%

2005 – 32%

Bermuda £27.9m

2006 – 35%

2005 – 39%

Asia £7.8m

2006 – 10%

2005 – 12%

N. America £11.6m

2006 – 15%

2005 – 13%

Europe £6.9m

2006 – 9%

2005 – 4%

Management

Services

£5.0m

£35.4m

£35.4m

£8.0m

Run-off Division

• Administration, advisory services

• Life and non-life insurance

Insurancecos

Run-off services

£8.4m£5.5m

*before eliminations

£1.0m£1.0mRun-off services

Insurance cos

24

Track record

0

10

20

30

40

2002restated

2003restated

2004restated

2005 2006

Pence

0

5

10

15

2002restated

2003restated

2004restated

2005 2006

£m

Revenue

Earnings per share*

Profit before tax*

0

20

40

60

80

100

2002restated

2003restated

2004restated

2005 2006

£m

*before goodwill and acquired customer relationship intangible amortisation

25

Track record

2002restated

2003restated

2004restated

2005 2006

Revenue £m 55.6 55.9 62.8 67.7 79.1

Profit before tax* £m 7.6 8.8 9.5 10.4 13.4

EPS* (p) 19.3 22.4 22.4 27.5 31.3

Interest cover* (times) 7.0 12.1 9.0 7.8 5.3

*before goodwill and acquired customer relationship intangible amortisation

26

Dividend policy

2002 restated

2003 restated

2004 restated

2005 2006

EPS* (p) 19.3 22.4 22.4 27.5 31.3

Total dividend (p) 7.45 8.20 9.02 10.00 12.00

Dividend cover* (times) 2.6 2.7 2.5 2.8 2.6

*before goodwill and acquired customer relationship intangible amortisation

27

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.