Table of Contents

• Introduction
• Internal and External Management Practices
• Yield and Expense Benchmark
• Investment Strategies and Policies

Appendix:  Detailed Study Results

Introduction

Ward Group conducted a study of Portfolio Management Practices to assist insurance companies in measuring their performance and evaluating operating practices for this important area. This report presents the findings of an in-depth study of Portfolio Management Practices for insurance companies conducted in the December 2009 timeframe and focused on results and operating practices as of September 30, 2009.

Profile of Participants

To further analyze the survey responses, various benchmark groups were developed. The following briefly summarizes the primary benchmark groups used for the study:

• Asset Size:  Companies were designated small or large based upon the total invested assets.  Small companies were defined as companies with less than $1 billion of total invested assts.  Large companies were defined as $1 billion or more of total invested assets.
• Industry Focus:  Companies were designated as property-casualty (P&C) or life-health (L&H) based upon the industry they operated within. Eight of the participants had both P&C and L&H affiliated operations.  For purposes of the overall benchmark and asset size benchmarks, the responses for these affiliated companies were included only once and assets were combined.  For the P&C and L&H benchmark groups, these companies were analyzed independently.