We.

a e g i s 201 7 a nnua l rev i e w

We.
a e g i s 201 7 an nua l rev i e w
‘We’ is simply the
advantage of our
mutual. We are here
for you. And, we are
all in this together.
Le t ter to o u r m em b ers h i p
Wesley W. von Schack
William P. Cullen
2
Our mutual was tested in many ways during 2017, most notably by a number of natural
catastrophes, including hurricanes Harvey, Irma and Maria, plus the California wildfires
and the mudslides that followed. Several AEGIS members sustained significant losses,
but we were able to absorb these events and turn in solid financial results. Despite the
year’s challenges, AEGIS performed exactly as it was designed to do. We were here for
our members, and we worked together to manage everything that came our way.
The bottom-line measure of our financial strength is policyholder surplus, and by year-end,
it grew by $128 million, to $1.56 billion, which is a new high for the mutual. Since the
worldwide economic crisis, policyholder surplus has more than doubled, at a steady clip
averaging about 8% per year. We believe this is a noteworthy accomplishment, and it’s
a testament to our work together and the enduring strength of the AEGIS mutual model.
In 2017, our mutual operations paid $509 million in claims to members and received
1,100 new claims reports. Over the course of the year, at any given time, we’re working
with members to manage about 3,000 claims matters. Since our founding in 1975, we have
managed more than 100,000 claims and paid policyholders more than $16 billion. AEGIS
members realize that buying insurance based only on price may offer short-term savings,
but the true test of a policy comes when it’s time to recover a loss. Our policy wordings
are clear, our members are confident they will get what they paid for, and our claims
professionals work hard to manage claims fairly and efficiently.
We are pleased with the 2017 financial results, which we accomplished by working
together. Thanks to our members, brokers, Board of Directors, Risk Management Advisory
Committee (RMAC ), member task forces, and AEGIS professionals in North America and
London, we are in the best financial condition in the history of the mutual, and we are
poised to accomplish even more together in 2018.
Wesley W. von Schack William P. Cullen
ch a i r m a n of t h e b oa rd p re s i den t & ce o
We. It’s a simple concept but it makes all the difference. AEGIS is vastly different from the commercial insurance market
because we are always here for our members, and our members are always here for us. We are in this together.

Our mission from the very beginning has been to bring stability to the process of managing risk for the energy industry.
Members appreciate the fact that we provide the same broad coverage year after year, with an eye toward achieving the lowest
cost of risk over the long term. Our policies are clear and straightforward, so when it comes time to make a claim, members
know just what to expect, and our claims professionals work with them as partners, not adversaries, to manage the claim.

AEGIS advantage.
Members also appreciate our energy industry expertise. Our underwriters, claims professionals and loss control engineers
are highly capable, with a deep understanding of energy industry operations, risks, claims and loss control best practices.
As a result, our policies are tailored precisely to each member’s risk profile, claims are managed intelligently, and loss
control measures to improve operations are suggested with confidence.

As a mutual, the relationship we have with members is characterized by uncommon loyalty. Unlike the commercial market,
which will withdraw its support for the energy industry whenever it becomes unprofitable, we’ve provided coverage and
claims support to members without interruption for more than 40 years. And we thank members who renew coverage with
us through our member credit programs. In return, members support AEGIS in a variety of ways, including serving on our
Board of Directors, RMAC and task forces, contributing new ideas at our regional meetings, sharing claims data and loss
control practices that help the membership as a whole, and supporting the responsible and sustainable pricing of policies.

Together, we succeed in ways that are simply not possible in the commercial insurance market. It’s the AEGIS advantage.

3
 $1.56
2 017 Re su l t s

We worked highest surplus ever

billion

together to pro- Our policyholder surplus grew by $128 million in 2017,

duce outstanding to $1.56 billion, the highest level in the history of the
mutual. Strong underwriting results in North America and

results in 2017. London, combined with solid returns on our consolidated

investment portfolio, made this growth possible.

The key measures

of our financial
strength, sound
$1.35
gross premiums written
billion

underwriting Our gross premiums written totaled $1.35 billion in

2017, which was 9% higher than 2016. Consistent
practices and member support of the mutual business and growth in
some key and diverse classes of business in London

claims-paying contributed to this solid result.

ability have
reached some
of the best levels
91% overall
combined ratio
in the history The overall combined ratio for the Group, including
our operations in North America and London, was a
of the mutual. favorable 91%.

4
$789 million in claims
paid to policyholders
Our operations in North America and London paid $789 million in claims to policyholders in 2017. Since AEGIS was founded
in 1975, we have paid more than $16.4 billion in claims, while building a reputation for collaborative claims management
that’s consistently better than other insurers. Our claims service in London was recently awarded the prestigious Outstanding
Service Quality Marque by Gracechurch Consulting, a leading independent expert on claims in the London market.

$1.27 billion member credits

since 1979
Our member credit programs help member companies achieve the lowest overall long-term cost of risk. Each year, the AEGIS
Board of Directors evaluates the company’s financial results and determines the amount of surplus to return to eligible
members in the form of member credits. Members who purchase excess liability, D&O, property and London coverage can
apply the credits to their premiums upon renewal.

$141 million “A” Stable

net investment return
Our consolidated investment portfolio returned more
than $141 million in 2017. This translated to a +3.5% net
return, which was significantly above the plan of +2.3%.
All investment categories performed well in 2017.
rating from A.M. Best
The rating agencies agree on our financial strength
and stability. In 2017, A.M. Best rated us “A” Stable, S&P
awarded an “A-” rating, and Fitch gave us an “A” rating.

5
 1
We know energy. Our underwriters in North America
focus solely on energy risks across all types of
traditional and renewable operations. Our claims
professionals manage only energy claims, including
major losses involving natural gas and electric
facilities, pipeline spills, explosions, wildfires, D&O
matters and cyber incidents. And our loss control
professionals, many of whom are hired from the
member companies we serve, are in member
facilities on a continuous basis to offer suggestions
that help ensure safe and reliable operations.

Stability

2
Stability takes many forms at AEGIS. By taking the
long-term view, and acting in the best interests of our
members, we can provide policy pricing, coverage
and claims management that’s more stable than the
commercial market. This underwriting and claims
stability is backed up by overall financial and
operational stability. Our company-wide Enterprise
Risk Management program, well-grounded investment
strategy and syndicate at Lloyd’s of London bring
balance, diversity and profitability to our mutual
operations.

6 Capability
 3
AEGIS is
fundamentally
different from
the commercial
market. In
short, we stay
and we pay.
Loyalty

Loyalty that’s mutual. We serve only policyholder-

members, and we answer only to them. Unlike the
commercial market, there are no outside sharehold-
ers or quarterly earnings targets, so our culture is
different. Our entire organization is focused exclu-
sively on providing continuous coverage, claims
management and loss control support to members.
Members recognize the difference, and they stick
with us. On average, members have been with AEGIS
26.5 years and counting, and we reward this loyalty
with our member credit programs.

7
All day, every day.
AEGIS underwriting, claims and loss control profes-
sionals are in and out of energy industry facilities all
day, every day. We are not working with a chemical
plant on Monday, a power generation plant on
Tuesday, and a widget factory on Wednesday. Our
singular focus on the energy industry has earned
us a reputation for being energy risk management
experts.

AEGIS Loss Control engineers made more than 800

field visits to member company power generating
facilities and service territories in 2017, which was
the highest number on record. The risk assessment
data they gather helps inform the underwriting
process at AEGIS and helps members improve their
operations. In the course of those visits, we worked

8
with members to address potentially hazardous
conditions, which helped them avoid numerous
multimillion-dollar losses and significantly reduce
the cost of risk.

These efforts, combined with member company

operating and maintenance practices, have contrib-
uted to a reduction in the number of reported
claims to AEGIS . Over the past 10 years, on average,
members with electric operations reported six
fewer claims per year, and members with natural
gas operations reported three fewer claims per
year. These reductions benefit individual member
companies, but they also benefit the membership
as a whole by contributing to the overall lowest long-
term cost of risk and preserving policyholder surplus.

Based on the growing interest in AEGIS Loss

Control services in 2017, we’ve added five loss control
engineers to our staff and, to acknowledge our
appreciation for members who place 100% of their
property programs with AEGIS , property loss control
services are now included as part of the policy.

9
Playing a key role.
Members have always played a key role in the
mutual, and we constantly engage them in the
process through one-on-one meetings, regional
member meetings and our annual Policyholders’
Conference. More than 60 member company
representatives, across 44 member companies,
serve on our Board of Directors, Risk Management
Advisory Committee (RMAC ) and task forces,
providing invaluable guidance and expertise.

10
This active participation ensures that our coverages,
claims management services, and loss control
products and services are continuously refreshed
and remain closely tied to member needs. We are
grateful for these contributions, as well as the
loyalty of our members who consistently renew their
coverage with us. Since 1979, after paying claims
and expenses, we have returned a portion of excess
capital to members who renew their AEGIS policies
in the form of member credits that reduce future
premiums, which is one of the ways we help
members achieve the lowest long-term cost of risk.
Over the years, the member credit program has
been expanded to include excess liability, D&O,
property and AEGIS London coverage, and we have
declared a total of $1.27 billion in such credits,
averaging 3% of total surplus annually.
11
Le a ders h i p
Our mutual efforts are guided by these experienced
executives and professionals. They generously
contribute their time and expertise, and they are
essential to our success.
Board of Directors
Wesley W. von Schack
Chairman
Associated Electric & Gas
Insurance Services Limited
William P. Cullen
President & CEO
AEGIS Insurance Services, Inc.
Gregory E. Abel
Vice Chairman –
Non-Insurance Business
Operations
Berkshire Hathaway Inc.
Chairman
Berkshire Hathaway Energy
Company
Robert W. Best
Director & Former Chairman
Atmos Energy Corporation
Thomas G.S. Busher
Former Chief Operating
Officer, Director and
Deputy Chairman
Montpelier Re
Christopher M. Crane
President & CEO
Exelon Corporation
12
Thomas F. Farrell, II
Chairman, President & CEO
Dominion Energy, Inc.
Walter M. Higgins
Chairman
South Jersey Industries
Christopher P. Johns
Vice Chairman &
President, Retired
Pacific Gas & Electric
Company
James J. Jura
CEO & General Manager,
Retired
Associated Electric
Cooperative, Inc.
Constance H. Lau
President & CEO
Hawaiian Electric
Industries, Inc.
Ronald L. Litzinger
President, Retired
Edison Energy Group
Charles A. Schrock
Chairman & CEO , Retired
Integrys Energy Group, Inc.
William B. Timmerman
Chairman & CEO , Retired
SCANA Corporation
Directors Emeriti
Vice Chairmen Emeriti
Donald J. Greene
Chairman Emeritus
Dewey & LeBoeuf LLP
William H. Grigg
Chairman Emeritus
Duke Energy Corporation
Directors Emeriti
Philip C. Ackerman
Chairman, Retired
National Fuel Gas Company
Keith E. Bailey
Chairman, President & CEO ,
Retired
The Williams Companies, Inc.
Thomas E. Capps
Chairman, Retired
Dominion Energy, Inc.
R. Don Cash
Chairman Emeritus &
Director
Questar Corporation
W.R.P. Dalton
Executive Director, Retired
HSBC Holdings plc
John W. Ellis
Chairman, Retired
Puget Sound Energy, Inc.
Stephen E. Frank
Chairman, President &
CEO , Retired
Southern California Edison
Don D. Jordan
Chairman & CEO , Retired
Reliant Energy
George L. Mazanec
Vice Chairman, Retired
PanEnergy (now Enbridge)
Eugene R. McGrath
Chairman & CEO , Retired
Consolidated Edison, Inc.
Corbin A. McNeill, Jr.
Chairman & Co-CEO ,
Retired
Exelon Corporation
Richard G. Reiten
Chairman & CEO , Retired
NW Natural
Officers Committees Investment Committee Deborah S. Gaffney
William B. Timmerman * Southern Company
Wesley W. von Schack Executive Committee
Walter M. Higgins
Chairman of the Board Wesley W. von Schack * David A. Layne
Charles A. Schrock
Gregory E. Abel Algonquin Power &
William P. Cullen
Christopher M. Crane Utilities Corp.
President & CEO Nominating Committee
William P. Cullen
Gregory E. Abel * Janaize Markland
Gregory E. Abel Thomas F. Farrell, II
Constance H. Lau Pacific Gas & Electric
Vice Chairman Charles A. Schrock
Wesley W. von Schack Company
William Hillman Charles A. Schrock
Audit & Finance Joseph T. Meaney, Jr.
Assistant Vice President &
Committee The AES Corporation
Chief Underwriting Officer Risk & Capital Committee
Christopher P. Johns *
Constance H. Lau * Michael A. Mee
Michael S. Johnson Thomas F. Farrell, II
Robert W. Best Exelon Corporation
Controller James J. Jura
Thomas G.S. Busher
Robert L. Miller
Simon J. Day
Claims & Loss Control Xcel Energy, Inc.
Actuary Risk Management
Committee
Advisory Committee Peter M. Nadel
Rip Reeves Christopher M. Crane *
FirstEnergy Corp.
Treasurer James J. Jura Wesley W. von Schack *
Ronald L. Litzinger Associated Electric & Gas H. Wayne Soza
Patricia L. McKenna
Insurance Services Limited El Paso Electric Company
Assistant Treasurer
Compensation &
Johan G. Bramer James M. Vacek
Mark A. Walsh Benefits Committee
TransCanada Corporation CenterPoint Energy, Inc.
Secretary Thomas F. Farrell, II *
Gregory E. Abel Denise M. Cosentino * Denotes Chairman
Stephen P. Byrne
Christopher M. Crane Eversource Energy
Assistant Secretary
Wesley W. von Schack
John Frank
Elda B. Feldman
Basin Electric Power
Assistant Secretary
Cooperative

13
AEGIS London Board Kirk A. Kelley Keith Bone Loss Control Task Force
of Directors Tennessee Valley Authority Duke Energy Corporation
Mark Boone
W.R.P. Dalton George W. Marget III , Esq. Derek Boyd Dominion Energy, Inc.
Chairman Dominion Energy, Inc. Atmos Energy Corporation
Robert Brandkamp
David Croom-Johnson Ronald D. Rispoli Kirk A. Cresto Avista Corporation
Managing Director Entergy Services, Inc. NiSource, Inc.
Mariya Fedorchenko
Thomas G.S. Busher Richard Sayette C. Larry Davis, Esq. Berkshire Hathaway
John Chambers Exelon Corporation San Diego Gas & Electric Energy Company
Christopher Forbes Company
Frank Stanbrough Robert A. Green
Jonathan Gray
Southwest Gas Corporation Bryony Hodges, Esq. PSEG Services Corporation
Michael Onslow
SCANA Corporation
Alex Powell Lisa Hough
Enterprise Risk
Wesley W. von Schack Judy Y. Liu, Esq. Omaha Public Power
Management (ERM )
Hermien Smeets-Flier CenterPoint Energy District
Task Force
Graeme Tennyson Service Company, LLC
John Mellette
Matthew C. Yeldham Christopher Eaton
George W. Marget III , Esq. SCANA Corporation
Enbridge Inc.
Dominion Energy, Inc.
Evolving Utility Industry Sandy Meyers
Steve Haynes
Risk Task Force Doug McKay City Utilities of Springfield
American Electric Power
Consolidated Edison
J.P. Agnesse Company, Inc. John C. Norman
Company of New York
Portland General Electric AVANGRID
H. Wayne Soza
Company Timothy J. Saviano, Esq.
El Paso Electric Company Ronald D. Rispoli
We Energies
Lisa R. Groff Entergy Services, Inc.
American Electric Power Claims Task Force Mark J. Sweeney, Esq.
Scott Wibbenmeyer
Company, Inc. Pacific Gas & Electric
David P. Abernathy, Esq. Ameren Services Company
Company
Spire, Inc.

14
F ive - Ye a r F i n a n c i a l Hi g h l i g h t s
Associated Electric & Gas Insurance Services Limited

For the years ended December 31, (Expressed in thousands of U.S. dollars) 2013 2014 2015 2016 2017

Revenue:
Gross premiums written $ 1,280,125 $ 1,348,493 $ 1,250,510 $ 1,236,475 $ 1,344,705
Net premiums written 878,492 943,102 860,121 821,955 880,647
Net premiums earned 805,473 897,966 892,685 838,455 852,131
Net investment (loss) income 111,064 83,037 (16,791) 117,725 147,935
Change in fair value of insurance and
reinsurance contracts 38,420 (42,587) 28,642 (22,333) (31,284)
Total revenue 954,957 938,416 904,536 933,847 968,782
Expenses:
Losses and loss expenses incurred 572,215 579,749 535,092 569,308 556,787
Commission expenses 97,773 110,272 97,077 82,589 98,172
Other underwriting expenses 114,812 118,150 95,087 87,093 116,209
Total expenses 784,800 808,171 727,256 738,990 771,168
Income before continuity and other premium credits and
income taxes 170,157 130,245 177,280 194,857 197,614
Continuity and other premium credits 35,544 20,796 19,964 29,275 37,837
Income before income taxes 134,613 109,449 157,316 165,582 159,777
Income tax provision (benefit) 44,981 42,581 70,162 53,467 27,050
Net income $ 89,632 $ 66,868 $ 87,154 $ 112,115 $ 132,727
Other comprehensive income (loss), net of
income tax (benefit) expense (33,639) (1,504) (18,596) 26,478 (4,160)

Total surplus, beginning of year $ 1,100,190 $ 1,156,183 $ 1,221,547 $ 1,290,105 $ 1,428,698

Total surplus, end of year $ 1,156,183 $ 1,221,547 $ 1,290,105 $ 1,428,698 $ 1,557,265

Total assets $ 5,757,767 $ 6,037,151 $ 5,718,282 $ 6,087,210 $ 6,512,136

Reserve for losses and loss expenses $ 3,104,771 $ 3,165,788 $ 2,879,855 $ 3,068,261 $ 3,306,617

For details on our 2017 financial results, please visit aegislink.com.

15
O f f i ce s
AEGIS
Associated Electric & Gas
Insurance Services Limited
The Maxwell Roberts Building
Fourth Floor
One Church Street
Hamilton, Bermuda HM11
Telephone: 441.296.2131
AEGIS Insurance Services, Inc.
1 Meadowlands Plaza
East Rutherford, NJ 07073
Telephone: 201.508.2600
Fax: 201.896.6638
Claims fax: 201.508.1451
Website: aegislink.com
E-mail: inquiry@aegislimited.com
AEGIS London
AEGIS Managing Agency Limited
33 Gracechurch Street
London EC3V 0BT England
Telephone: 44.207.265.2100
Fax: 44.207.265.2101
Website: aegislondon.co.uk
E-mail: enquiries@aegislondon.co.uk
16
2 0 1 8 A E G I S Me e t i n g s
Annual Meeting
The Annual General Meeting of
Members of the Company will be
held on Thursday, October 25, 2018.
Notice of the Meeting and the form
of proxy shall be issued to each
voting Member not less than 10 days
before the meeting convenes, stating
the date, place, time and nature of
the business to be considered.
Policyholders’ Conference
The annual AEGIS Policyholders’
Conference will be held July 16 to 19,
2018, in Chicago, IL . Registration
information will be e-mailed and
posted on our website.
Other Meetings and Seminars
AEGIS will also host a series
of regional member meetings,
Claims Roundtable seminars,
and a number of underwriting,
claims and loss control seminars
and webinars throughout 2018.
Please visit aegislink.com for details.
Associated Electric & Gas Insurance Services Limited (“AEGIS ”) was incorporated in
Bermuda in 1971 and commenced underwriting activities in 1975. AEGIS is registered as a
Class 3 non-assessable mutual insurance company in Bermuda.
AEGIS is an eligible surplus lines insurer in all jurisdictions of the United States. It is
subject to United States federal income taxes, files the required tax returns, and maintains
a United States trust fund in excess of $150,000,000. AEGIS is also a licensed foreign
insurance company in all provinces and territories of Canada and is listed on the general
register of foreign reinsurers in Mexico.
AEGIS ’ operations are conducted through a wholly-owned subsidiary, AEGIS Insurance
Services, Inc. (“AEGIS Services”), which provides AEGIS and its affiliates with professional
staff and services.
The AEGIS Syndicate at Lloyd’s of London, number 1225 (“AEGIS London”), commenced
operations in 1999. AEGIS London’s operations are supported by AEGIS Managing Agency
Limited (“AMAL ”), which provides professional staff and services for AEGIS London.
AEGIS Electric & Gas International Services Limited (“AEGIS International”) is a
corporate member of Lloyd’s and the principal capital provider of AEGIS London. Both
AMAL and AEGIS International are indirect subsidiaries of AEGIS .
In the U.S., AEGIS ; AEGIS & Design; the AEGIS Logo (any reference to “Logo”
or “Design” are references to the AEGIS Diamonds Design); AEGISLINK ; HOW SAFE ;
PEOPLE DON’T KNOW WHAT THEY DON’T KNOW; LESSONS LEARNED ; AEGIS
LONDON; and AEGIS LONDON & Design are registered trademarks of AEGIS .
In the U.K., AEGIS ; AEGIS LONDON; and AEGIS LONDON & Design are registered
trademarks of AEGIS .
In the E.U., AEGIS ; AEGIS & Design; the AEGIS Logo; AEGISLINK ; AEGIS LONDON;
and AEGIS LONDON & Design are registered Community trademarks of AEGIS .
In Bermuda, AEGIS and the AEGIS Logo are registered trademarks of AEGIS .
In New Zealand, AEGIS is a registered trademark of AEGIS .
In Canada, AEGIS ; AEGIS & Design; AEGIS CANADA ; the AEGIS Logo; and AEGIS
LONDON & Design are registered trademarks of AEGIS .
©2018 Associated Electric & Gas Insurance Services Limited and AEGIS Insurance
Services, Inc.
All rights reserved.
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