Market Conditions in January 2008

Market rates dropped significantly in January. The SFRI fell from 1.33 to 0.91, a reduction of more than 35%. Increased capacity from capital raised in 2007 along with an relatively quiet year for storms continued to drive the market down. Competition is becoming more intense. Whereas at the end of 2007, new business was being shopped, 2007 has seen renewals under attack.