Supplemental IE Report RSAI Sun & Marine - Royal and Sun Alliance

Milliman Client Report
3.12 The motor third party liability claims continue to give rise to significant uncertainty in the reserve level of Sun, and as
such the RSA Group regards them to be high risk and of high materiality to the financial results of Sun, although not
to the RSA Group.
3.13 Notwithstanding the uncertainty relating to motor third party liability claims, based on my review, the reserves of Sun,
Sea and National Vulcan appear reasonable at present.
THE MARINE INSURANCE COMPANY
3.14 I have been provided with technical provisions for Marine as at 30 June 2011 together with an analysis of incurred
movements in the period since 31 December 2010.
3.15 The majority of Marine’s gross liabilities are in respect of fronting for aviation business, for which no liability is retained
in Marine. There was a small release from these gross liabilities in the six months to 30 June 2011.
3.16 The remainder of the liabilities are almost entirely in respect of US surplus lines business, on which overall reserves
moved in line with expectations over the 6 months to 30 June 2011.
3.17 I continue to be satisfied that the reserves in Marine appear reasonable at present.
CONCLUSION
3.18 I believe that the Schemes are unlikely to have a materially adverse impact on the reserve strength provided
to policyholders affected by the Schemes.
Supplemental Report of the Independent Expert 7
November 30, 2011