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CONSTRUCTION DEFECT:CHALLENGES AND SOLUTIONSPresented by: Matt Burns and Paul KelejianGen RePROPRIETARY NOTICEThe material contained in this presentation has been prepared solely for informationalpurposes by Gen Re. The material is based on sources believed to be reliable and/or fromproprietary data developed by Gen Re, but we do not represent as to its accuracy or itscompleteness. The content of this presentation is intended to provide a general guide tothe subject matter. Specialist advice should be sought about your specific circumstances.NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[2]1 of 16

BIOGRAPHIESPAUL KELEJIANVice PresidentPaul is a multiline claim executive in the San Francisco office, and is the national lead for the GL line of business. Paul has over 29 yearsinsurance industry experience. Prior to joining Gen Re in 2003, he worked at various home and branch office claims positions including withCNA in Chicago and General Star in Los Angeles with national and global claims responsibilities.Paul is a graduate of California State University, Northridge.P: 415 393 8434 C: 415 271 4196 pkeleji@genre.comMATTHEW BURNSSenior Vice PresidentTreaty Line of Business Underwriter – Commercial UmbrellaMatt Burns is a senior vice president in Gen Re’s corporate underwriting department in the Stamford, CT, office. In addition to accountunderwriting, he is currently Gen Re’s line of business underwriter for Commercial Umbrella treaty business. Previously, Matt hadresponsibilities for the Personal Umbrella line of business for Gen Re.Matt began his career with Gen Re in 1996 in the casualty facultative department in New York and has worked as a treaty account executive inNew York and Hartford, CT. He joined the corporate underwriting department in 2005. Before joining Gen Re, Matt worked at ContinentalInsurance Corporation as a commercial lines property/casualty underwriter.Matt graduated with honors, including Phi Beta Kappa, from the Catholic University of America with a bachelor’s degree in economics andfinancial management.P: 203 328 6851 C: 860 304 0435 mburns@genre.comNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES[3]AGENDA Gen Re’s Claims Perspective Compendium Profiling Contracting Portfolio State MixClass DescriptionClass Hazard RankState Specific An Underwriter’s Guide Claims ScenarioNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[4]2 of 16

GEN RE’S CLAIMS PERSPECTIVETHE PROBLEM WITH CDPlaintiffDeveloper/General arriersCarriersCarriersCarriersNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES[5]GEN RE’S CLAIMS PERSPECTIVENATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[6]3 of 16

CONSTRUCTION DEFECT COMPENDIUMCONSTRUCTION DEFECT COMPENDIUMWHAT IS THE BASIS BEHIND GEN RE STATE CATEGORIES?Review of key case law in each state capturing Whether or not defective construction can be an “occurrence” that causes “property damage” (PD); The relationship between insured and the faulty work; and, Determine what kind of property can qualify as an occurrence and PD inthat state.Segmenting the different types of PD The defective construction or faulty work itself [ the defect]; Any damaged, non-defective parts of the insured’s project [ the resulting damage to other work within thescope of the insured project]; and, Any third-party property such as work that may be part of another contractors’ project but that is, in any case,outside the scope of the work the insured has been contracted to perform [ the resulting damage to otherwork outside the scope of the insured project].NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[8]4 of 16

CONSTRUCTION DEFECT COMPENDIUMSTATE CATEGORIESDefective work is an occurrence that causes PD[defective work, resulting damage to other work both within & outside the scope of insured’sproject are all covered]Category 2:Resulting damage to other work from defective work is an occurrence that causes PD [onlyresulting damage to other work both within & outside the scope of insured’s project arecovered]Category 3:Risk LevelCategory 1:Defective work is not an occurrence that causes PD[only resulting damage to other work outside the scope of insured’s project is covered]Category 4:Defective work is not an occurrence that causes PD even if damage is to thirdproperty[no PD from any type from defective work is covered]partyCategory 5:The status of whether defective work can be an occurrence that causes PD is undecided orunclear[9]NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIESCONSTRUCTION DEFECT COMPENDIUMHEAT MAPNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & KelejianCategory 1Arkansas, Colorado, Kansas, Louisiana, Maine, Michigan,Minnesota, Mississippi, Missouri, Montana, Nevada, NorthDakota, Oregon, South Dakota, Texas, Vermont, West VirginiaCategory 2Alabama, Alaska, Arizona, California, Connecticut, Florida,Georgia, Indiana, Iowa, Maryland, New Jersey, New Mexico,South Carolina, Tennessee, Utah, Virginia, Washington,WisconsinCategory 3Illinois, Kentucky, Massachusetts, Nebraska, New Hampshire,New York, North Carolina, OhioCategory 4Delaware, Pennsylvania, WyomingCategory 5Hawaii, Idaho, Oklahoma, Rhode Island, Washington D.C.[ 10 ]5 of 16

CONSTRUCTION DEFECT COMPENDIUMUNDERWRITING ANALYSIS – “THE INFLUENCERS” ISO Accident Year Loss Ratio and Loss Cost Analysis* 18 yearsPremium, Exposure & Loss Data by 107 Contractors by Class & StateObserved four-year LR trend pre and post state rulingObserved direct correlation between states with highest CD and stateswith highest Loss CostCensus Data & Geographical Population GrowthResidential Construction Activity – Building Permit StatisticsSoil Stability StudiesRainfall amountsState Legal Environment including Bad FaithGen Re experience*Forms the basis of Gen Re Contractors Classification RankingNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES[ 11 ]CONTRACTING BUSINESS: STATE CATEGORYTHE CONTENTS OF THE FOLLOWING SLIDES REPRESENT DATA AND EXHIBITS OF A HYPOTHETICAL PORTFOLIO2021 Commercial & Personal Lines Seminar - Burns & Kelejian6 of 16

CONTRACTING BUSINESS: STATE CATEGORYPremium DistributionOVERVIEW Gross Subject Premium: 20.5M 1,500,000 Contractors Premium: 11.1M or 54% of Portfolio Top 5 States for Contractors: 5.5M or 50% 1,000,000 State Category 1 & 2 Premium: 6.7M or 60% 500,000 0INTXWV CAFLSC1TNVAWIILKYMI2NY OHPARI453[ 13 ]NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIESCONTRACTING BUSINESS: STATE CATEGORYPolicy Count DistributionOVERVIEW450 Total Policies: 4,100400 Contractors Policies: 2,760 or 67% of Portfolio350 Top 5 States for Contractors: 1,496 or 54%300 State Category 1 & 2 Policies: 1,742 or ARI45NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[ 14 ]7 of 16

CONTRACTING BUSINESS: CLASS PROFILETHE CONTENTS OF THE FOLLOWING SLIDES REPRESENT DATA AND EXHIBITS OF A HYPOTHETICAL PORTFOLIOCONTRACTING BUSINESS: CLASS PROFILEPremium DistributionOVERVIEW General Contractors-Nonresidential Buildings,Other than Industrial: 1.6M or 15%General Contractors-Nonresidential Special Trade Contractors, Not Elsewhere Special Trade Contractors, Not ElsewhereClassified: 1.5M or 14%General Contractors-Single-Family HousesPlumbing, Heating and Air-ConditioningCarpentry Work Combined General ContractorsClassifications: 4.2M or 38%General Contractors-Residential Buildings, Electrical Work Residential Only General ContractorClassifications: 2.5M or 23%Water, Sewer, Pipeline, and Roofing, Siding, and Sheet Metal WorkPainting and Paper HangingPlastering, Drywall, Acoustical, and Installation or Erection of Building Floor Laying and Other Floor Work, Not 0 500,000 1,000,000 1,500,000NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[ 16 ]8 of 16

CONTRACTING BUSINESS: CLASS PROFILEPremium DistributionOVERVIEW High Hazard Classifications: 5.7M or 52%General Contractors-Single-Family HousesHighPlumbing, Heating and Air-Conditioning Medium Hazard Classifications: 3.3M or 30%Carpentry Work Low Hazard Classifications: 2.0M or 18%General Contractors-Residential Buildings, Roofing, Siding, and Sheet Metal WorkMediumPlastering, Drywall, Acoustical, and Insulation General Contractors-Nonresidential Special Trade Contractors, Not Elsewhere Floor Laying and Other Floor Work, Not LowElectrical WorkWater, Sewer, Pipeline, and Communications Painting and Paper HangingInstallation or Erection of Building 0 500,000 1,000,000 1,500,000Total[ 17 ]NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIESCONTRACTING BUSINESS: CLASS HAZARD RANK – STATEFOCUSTHE CONTENTS OF THE FOLLOWING SLIDES REPRESENT DATA AND EXHIBITS OF A HYPOTHETICAL PORTFOLIO2021 Commercial & Personal Lines Seminar - Burns & Kelejian9 of 16

CONTRACTING BUSINESS: CLASS HAZARD RANKSTATE FOCUS - TENNESSEECategory 2 - Resulting damage to other work from defective work is an occurrence that causes PDOVERVIEWCarpentry WorkSpecial Trade Contractors, Not Elsewhere Top 5 Classifications: 1.1M or 67%Plumbing, Heating and Air-Conditioning Combined General ContractorsClassifications: 365K or 33%General Contractors-Single-Family HousesRoofing, Siding, and Sheet Metal WorkPainting and Paper Hanging Residential Only General ContractorClassifications: 308K or 28%General Contractors-Residential Buildings, Plastering, Drywall, Acoustical, and Water, Sewer, Pipeline, and General Contractors-Nonresidential Electrical WorkInstallation or Erection of Building Floor Laying and Other Floor Work, Not 0 100,000 200,000 300,000[ 19 ]NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIESCONTRACTING BUSINESS: CLASS HAZARD RANKSTATE FOCUS - TENNESSEECategory 2 - Resulting damage to other work from defective work is an occurrence that causes PDOVERVIEWCarpentry WorkHighPlumbing, Heating and Air-Conditioning High Hazard Classifications: 1.1M or 65%General Contractors-Single-Family HousesRoofing, Siding, and Sheet Metal Work Medium Hazard Classifications: 308K or 18%General Contractors-Residential Buildings, MediumPlastering, Drywall, Acoustical, and Low Hazard Classifications: 282K or 17%Special Trade Contractors, Not Elsewhere General Contractors-Nonresidential Floor Laying and Other Floor Work, Not LowPainting and Paper HangingWater, Sewer, Pipeline, and Communications Electrical WorkInstallation or Erection of Building 0 100,000 200,000 300,000TotalNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[ 20 ]10 of 16

CONSTRUCTION DEFECT:AN UNDERWRITER’S GUIDECONSTRUCTION DEFECTAN UNDERWRITER’S GUIDEAnalytics State Categories – coverage rulings are critical but not the only variableClassification Ranking – provides framework to evaluate potential exposure to CD by class.Portfolio Assessment – quantifies potential for exposure to CD relative gross portfolio management.Execution Contractors Guidelines Contractors Supplemental Application Coverage Forms and Endorsements Focus additional underwriting oversight on the states and classes that represent the toughestexposures to company’s bookNATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES2021 Commercial & Personal Lines Seminar - Burns & Kelejian[ 22 ]11 of 16