Risk Appetite and Tolernace

While our risk management framework addresses all categories of risk and the governance, controls and processes for them, we believe the risks that pose the greatest economic threat to the continuing success of a reinsurance company are assumed risks. They are the reinsurance and capital market risks that we assume for a return. In seeking to limit our assumed risks, we want to protect the Company from downside risk that can have a negative impact on our organization and materially impair our balance sheet. Therefore, we determine our appetite for our assumed risks based on the creation of economic value over time. We determine the level of risk we are willing to assume, based on our tolerance for exposing the capital that our shareholders entrust to us. We explicitly articulate our risk limits as a numerical expression in internal communications and public disclosure. The limits are both absolute limits as well as limits modeled to losses for different time periods. Over recent years, our risk appetite and our integrated approach to risk and return have been validated by our experience.