Our objective is to build shareholder value by achieving a return on average equity of 15% over the long term. We intend to achieve our goal by focusing on underwriting profitability and by generating superior long-term investment returns through:

• Diversified commercial lines focus. Our commercial insurance expertise and broad commercial customer base have been developed through our long operating history and are the foundation for an operating infrastructure designed specifically for commercial lines. Our goal is to be the leading commercial lines writer in Canada, relying on specialized knowledge of our target markets and diversified core business lines.

• Operational excellence. We emphasize the development of best practices throughout our operations, including a detailed approach to overall rate adequacy, strict underwriting discipline and sound risk selection through all business cycles, effective claims management, proper loss reserving and expense controls. We emphasize adherence to underwriting guidelines and adequate pricing over premium growth and, when necessary, are willing to reduce or discontinue business when market conditions do not meet our pricing and underwriting standards.

• Management expertise. We have experienced management teams at each of our operating subsidiaries, with knowledgeable and experienced underwriting and claims professionals. This enables each company to excel within its respective target markets and gives us a detailed understanding of the businesses we serve.

• Multi-channel distribution and strong relationships with distributors. We customize our approach to distribution for each operating company and market segment to respond effectively to our customers’ needs, capitalize on market opportunities, differentiate our products and effectively manage distribution costs. Our diversified distribution network consists of independent brokers, a dedicated sales force and direct-to-consumer sales.

• Differentiated products and services. We intend to derive competitive advantage in the marketplace by offering unique, value-added products and services to our customers. We believe differentiating ourselves from our competitors increases the value of our brands, strengthens customer loyalty and enhances the value of our core insurance products. Together, these factors help insulate our business from the negative effects of downturns in the insurance market cycle.

• Investing our assets on a total return basis. We seek to protect our capital and generate interest income, dividend income and capital gains by investing primarily in high quality fixed income securities, as well as fixed income securities and equity securities which may be selling at prices below their intrinsic value. Our investment advisor is Hamblin Watsa Investment Counsel Ltd., who brings a wealth of expertise, experience and a long-term, value-oriented philosophy to managing our invested assets.

Through the talent and dedication of our people across the group, we believe our focus in these areas will allow us to continue building key competitive advantages, strong customer value and superior long term returns for our shareholders.