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PRELIMINARY AND CONFIDENTIAL

Disclaimer Goldman, Sachs & Co. (“GS”) has prepared and provided these materials and GS’s related presentation (the “Confidential Information”) for the information and assistance of the Special Committee of the Board of Directors of Sheffield (the “Company”) in connection with its consideration of the matters referred to herein. Without GS’s prior written consent, the Confidential Information may not be circulated or referred to publicly, disclosed to or relied upon by any other person, or used or relied upon for any other purpose. Notwithstanding anything hereinto the contrary, the Company may disclose to any person the US federal income and state income tax treatment and tax structure of any transaction described herein and all materials of any kind (including tax opinions and other tax analyses) that are provided to the Company relating to such tax treatment and tax structure, without GS imposing any limitation of any kind. The Confidential Information, including this disclaimer, is subject to, and governed by, any written agreement between the Company, the Board and/or any committee thereof, on the hand, and GS, on the other hand. GS and its affiliates are engaged in investment banking, commercial banking and financial advisory services, securities trading, investment management, principal investment, financial planning, benefits counseling, risk management, hedging, financing, brokerage activities and other financial and non-financial activities and services for various persons and entities. In the ordinary course of these activities and services, GS and its affiliates may at any time make or hold long or short positions and investments, as well as actively trade or effect transactions, in the equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of third parties, the Company, any other party to any transaction and any of their respective affiliates or any currency or commodity that may be involved in any transaction for their own account and for the accounts of their customers. The Confidential Information has been prepared and based on information obtained by GS from publicly available sources, the Company’s management and/or other sources. In preparing the Confidential Information, GS has relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by GS, and GS does not assume any liability for any such information. GS does not provide accounting, tax, legal or regulatory advice. GS’s role in any due diligence review is limited solely to performing such a review as it shall deem necessary to support its own advice and analysis and shall not be on behalf of the Company. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses, and GS does not assume responsibility if future results are materially different from those forecast. GS has not made an independent evaluation or appraisal of the assets and liabilities of the Company or any other person and has no obligation to evaluate the solvency of the Company or any person under any law. The analyses in the Confidential Information are not appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold or purchased. The Confidential Information does not address the underlying business decision of the Company to engage in any transaction, or the relative merits of any strategic alternative referred to herein as compared to any other alternative that may be available to the Company. The Confidential Information is necessarily based on economic, monetary, market an d other conditions as in effect on, and the information made available to GS as of, the date of such Confidential Information and GS assumes no responsibility for updating or revising the Confidential Information.

PRELIMINARY AND CONFIDENTIAL

Update on Process To Date

Week of Key Items / Events October 25 On October 29th, Sheffield received offer for $22/share from Fullerton November 8 Sheffield Special Committee retained Latham & Watkins as legal advisor November 22 Sheffield Special Committee retained Goldman Sachs as financial advisor Preliminary kick off call with Sheffield Special Committee and its advisors Press release on engagement of financial and legal advisors released pre-market on November 24 th November 29 Organizational call with Sheffield Special Committee and its advisors regarding key action items, framework of financial analysis / alternatives materials, key due diligence topics and tactical issues to consider Begin weekly calls with Sheffield Special Committee and its financial and legal advisors Call to Fullerton’s financial advisors by Goldman Sachs Calls to listen to views of a number of Sheffield shareholders who reached out to Sheffield management and the Special Committee December 6 Goldman Sachs and Latham met with Sheffield CEO, CFO and General Counsel to conduct preliminary business and financial due diligence Goldman Sachs conducted follow-up calls with Sheffield CEO and CFO to discuss further details regarding business and financial information Sheffield management retained Ilios to perform stock watch services December 13 Additional follow-up calls with Goldman Sachs, Sheffield CFO and CEO to discuss business and financial information Latham negotiated engagement of Milliman on behalf of the Special Committee; Sheffield Special Committee retained Milliman to conduct an independent study of Sheffield reserves Latham in discussion with Fullerton’s legal advisor regarding the sharing of financial information Sheffield begins receiving daily shareholder update lists from Ilios December 20 Meeting with Sheffield Special Committee and its financial and legal advisors Executiive Summary 2

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Key Themes and Observations for the U.S. Surety Market Premium growth is likely to be negligible near term as most surety writers have experienced reduced demand from both a revenue constrained public sector and a cautious private sector While surety results remained strong in 2009 despite the economy, signs of challenges may emerge in the near-term: — Public sector revenues have been supported by stimulus aid; construction spending may decrease without this support — A number of banks supporting surety buyers have faced financial challenges and have been forced to limit lending. As a result, contractors have reduced access to liquidity which may lead to increasing surety losses While most industry premium comes from the public sector, there are significant opportunities in the private sector (i.e., reverse flow market, lenders hurt by contractor failures may drive increased bonding of private work, etc.) Terms / conditions have seen some competitive pressure over the last two years (less so on pricing); however, Top Line top lines should benefit from the lessons learned during the recent recession (i.e., lenders burned by contractor Growth / Pricing failures during the recession) Although surety is a small line in aggregate (~1% of P&C industry DPW), surety has generated a disproportionate amount of total underwriting profits (~9% of the pre-tax underwriting profits for the P&C industry) over the last four years with an average statutory combined ratio of ~75% Surety writers have experienced lower loss ratios vs. the P&C industry (32% vs. 72% in 2009), however expense ratios are significantly higher for surety writers vs. the P&C industry (47% vs. 28% in 2009) Profitability Commercial insurers with large surety books are able to realize economies of scale and achieve lower expenses Normalized operating ROEs have been declining due to capital build-up in the industry There has been relatively little loss activity in older accident years; these reserves have become sufficiently Balance Sheet mature allowing surety writers to release reserves Primary players in the surety market include Travelers, Chubb, Sheffield, Hartford, Liberty Mutual and Zurich Over the last decade, there has been a “roll-up” among surety insurers — Travelers completed 3 large transactions including Aetna’s P&C operations in 1996, surety operations of Reliance in 2000 and merger with St. Paul Companies in 2004 (St. Paul had acquired USF&G and Seaboard Surety earlier) — ACE acquisition of CIGNA’s surety book in 1999; Liberty Mutual’s acquisition of Safeco in 2008 Consolidation / Requirement for highly skilled underwriters and stickiness (importance of relationships / history with key M&A Dynamics distributors) has made it difficult for insurers to organically grow a large surety book Review of the U.S. P&C and Surety Markets4

PRELIMINARY AND CONFIDENTIAL U.S. P&C Industry vs. U.S. Surety Market Last 10 Years Premium Growth Calendar Year Loss & LAE Ratio 14.6% 15.3% 80.8% 88.1% 81.0% 11.5% 77.4% 74.4% 72.3% 10.0% 74.5%72.7% 8.1% 8.6% 7.4% 65.2% 3.7% 5.2% 66.7% 71.3% 70.7% 68.0% 2.8% 64.0% 2.3% 5.2% 53.6% 3.6% 0.7% (1.1)% 0.4% 31.5% (0.4)% 35.5% (1.5)% 31.9% (3.9)% 22.3% 22.7% (8.1)% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Expense Ratio Combined Ratio 55.0% 122.6% 52.2% 117.0% 119.4% 50.4% 47.8% 48.8% 47.1% 110.1% 121.8% 44.8% 107.3% 105.4% 49.4% 115.8% 101.9% 101.0% 47.7% 46.8% 98.5% 92.4% 100.1% 100.7% 95.8% 28.8% 86.7% 79.5% 27.9% 28.2% 81.7% 27.2% 26.0% 25.6% 27.4% 27.5% 68.1% 25.4% 26.2% 70.2% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 P&C Industry Surety Industry Source: SNL Financial, statutory filings, Dowling & Partners 2010 Surety Primer report Review of the U.S. P&C and Surety Markets 5

Comparison of Selected P&C and Specialty Peers Selected Trading Metrics Large, Commercial Insurers 1 1.4 x 30-Sep-10 y = 0.1053x — 0.0344 Closing % of 52 Equity Price / R ² = 0.6531 Price Week Market P/E P/B TBV ROACE Dividend Debt / Company 17-Dec-2010 High Cap ($mm) 2011 ex. AOCI ex. AOCI 2011 Yield Cap Chubb 1.2 x Sheffield — Sheffield $23.85 99.8% $1,065 10.4 x 1.09 x 1.27 x 9.2% 0.0% 2.9% Current Fullerton 27.02 93.2 7,284 9.8 0.70 0.71 6.2 0.0 20.3 Travelers ACE 1.0 x Large Commercial Insurers Sheffield Travelers $55.18 96.1% $25,897 9.2 x 1.04 x 1.23 x 9.8% 2.6% 23.4% AOCI) Pre-Offer ACE 61.05 98.1 21,196 8.1 1.02 1.25 10.9 2.2 16.4 0.8 x Fullerton Chubb 59.20 98.7 18,436 10.1 1.26 1.30 10.7 2.5 22.1 Hartford 26.17 88.3 13,143 7.2 0.65 0.69 8.5 0.8 26.8 Median 97.1% 8.6 x 1.03 x 1.24 x 10.2% 2.3% 22.8 % P/B (ex. 0.6 x Hartford Specialty Insurers Arch $88.66 96.7% $4,570 9.9 x 1.14 x 1.15 x 9.8% 0.0% 13.1% 0.4 x American Financial 32.36 99.4 3,569 9.2 0.90 0.96 8.0 2.0 17.3 HCC 28.46 98.4 3,312 9.7 1.06 1.44 9.6 2.0 10.5 Hanover 47.08 98.6 2,147 11.5 0.94 1.02 7.3 2.1 26.3 0.2 x RLI 51.66 95.5 1,088 14.0 1.65 1.72 9.6 2.2 9.9 Median 98.4% 9.9 x 1.06 x 1.15 x 9.6% 2.0% 13.1% 0.0 x 5.0% 7.0% 9.0% 11.0% 13.0% 2011 ROE Source: Bloomberg 1 Note: regression analysis for specialty insurers not significant. Review of the U.S. P&C and Surety Markets 6

PRELIMINARY AND CONFIDENTIAL Indexed Stock Price Performance 3-Year Performance 1-Year Performance 140% 170% 62.5% 20.0% 160% 120% Sheffield Prior to Announcement: (3.2)% 10.4% 150% 100% (13.4)% 140% Sheffield Prior to 80% Price Price Annuncement: 31.1% (20.1)%Indexed Indexed 130% 60% 120% 20.4% 18.8% 16.9% 40% 110% 20% 100% 0% 90% Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Daily from 17-Dec-2007 to 17-Dec-2010 Daily from 17-Dec-2009 to 17-Dec-2010 Fullerton Sheffield Large, Commercial Lines ¹ Specialty ² Source: Bloomberg 1 Large Commercial Lines index includes: Travelers, Chubb, Hartford and ACE. 2 Specialty index includes: American Financial Group, RLI, HCC, Arch Capital and Hanover Group. Review of the U.S. P&C and Surety Markets 7

PRELIMINARY AND CONFIDENTIAL Historical Valuation Multiples Last 10 Years Price-to-Earnings History Price-to-Book History 20x Average Average 2.5x 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years Fullerton 9.4 x 7.4 x 8.4 x 9.0 x Fullerton0.69 x 0.61 x 0.82 x 0.81 x 18x Sheffield 7.9 7.6 8.5 9.4 Sheffield 0.83 0.89 1.14 1.23 Large, Commercial Lines ¹ 0.97 1.01 1.20 1.36 Large, Commercial Lines ¹ 8.0 7.5 8.1 9.0 2.1x 16x Specialty ² 0.97 1.01 1.18 1.17 Specialty ² 9.1 8.3 9.1 10.1 14x Multiple 1.7x Multiple 12x P/E 10.4x 1.3x 10x 9.8x 1.09x 2011 9.9x 1.06x 8x 8.6x P/B (ex AOCI) 0.9x 1.03x 6x 0.70x 0.6x 4x 2x 0.2x Dec-00 Aug-02 Apr-04 Dec-05 Aug-07 Apr-09 Dec-10 Dec-00 Aug-02 Apr-04 Dec-05 Aug-07 Apr-09 Dec-10 Daily from 08-Dec-2000 to 17-Dec-2010 Daily from 08-Dec-2000 to 17-Dec-2010 Fullerton Sheffield Large, Commercial Lines ¹ Specialty ² Source: Bloomberg 1 Large, Commercial Lines index includes: Travelers, Chubb, The Hartford and ACE. 2 Specialty index includes: American Financial Group, RLI, HCC, Arch Capital and Hanover Group. Review of the U.S. P&C and Surety Markets 8

PRELIMINARY AND CONFIDENTIAL Overview of Sheffield ($ in millions, except per share data) Key Observations Gross Premiums Written Breakdown of Gross Premiums Written ‘05-’09 GPW CAGR: 1.2% Decrease in ‘05-’09 NOI CAGR: 33.2% GPW due to $471.7 $467.1 7% 7% $451.4 $438.3 8% 8% 8% slowdown in the $417.5 construction 33% 30% 29% 29% 30% $341.3 market and weaker economy, partially offset by $92.8 $111.3 $117.1 64% 64% $83.6 59% 63% 63% government $79.2 $37.1 stimulus Loss activity remains 2005 2006 2007 2008 2009 YTD ‘10 2005 2006 2007 2008 2009 favorable — Gross Premiums Written Net Operating Income Contract Small Commercial Large Commercial potential reserve releases for 4Q2010 Underwriting Ratios 1 Book Value Per Share and ROE 2 Underwriting 94.8% 16.0% 15.0% 15.5% remains 13.9% 79.4% 78.4% consistent — 73.3% 75.7% 71.8% Sheffield has $23.48 $20.85 written similar classes of 8.4% $17.37 43.4% $15.13 11.0% business over $12.90 the last 5 years 29.3% $11.00 25.7% 25.7% 24.6% 28.8% Expenses 36.7% remain under 24.3% 24.5% 22.1% control 18.7% 16.5% Continue to 2005 2006 2007 2008 2009 2010 YTD 2005 2006 2007 2008 2009 2010 Q3 strengthen surplus and Combined Ratio CY Loss Ratio AY Loss Ratio BVPS ROE capital flexibility Source: Company filings, SNL Financial, Sheffield management 1 Based on data from Sheffield management. 2 Book value per share based on stated book value per share figure disclosed in 10K, 10Qs and press releases. ROE based on full year figure; ROE for 09/2010 based on annualized YTD net income. Sheffield Overview 10

PRELIMINARY AND CONFIDENTIAL Sheffield Branch Network As of September 30, 2010 ($ in millions) Grand Rapids, MI Total Staff: 3 Seattle, WA Total Staff: 3 Minneapolis, MN Total Staff: 10 Detroit, MI Total Staff: 4 Toronto, ON Albany, NY Portland, OR Total Staff: 4 Total Staff: 3.5 Total Staff: 4 Sioux Falls, SD Chicago, IL Total Staff: ~400 Milwaukee, WI Total Staff: 9 Massachusetts Total Staff: 3 Total Staff: 5.5 Connecticut Pittsburgh, PA Total Staff: 3 Indianapolis, IN Total Staff: 3 Salt Lake City, UT Kansas City, MO Total Staff: 5 New York, NY Total Staff: 5.5 Denver, CO GPW: $4.3 Total Staff: 4 Sacramento, CA Total Staff: 8 Total Staff: 5 Total Staff: 4 Columbus, OH Louisville, KY Total Staff: 4 St. Louis, MO Total Staff: 3 Philadelphia, PA Total Staff: 2 Total Staff: 7 San Francisco, CA Total Staff: 5 Nashville, TN Charlotte, NC Total Staff: 3 Total Staff: 6 Phoenix, AZ Total Staff: 5 Baltimore, MD Atlanta, GA Total Staff: 7 Total Staff: 7 Dallas, TX Total Staff: 8 Southern California, CA Birmingham, AL Total Staff: 5 Total Staff: 3.5 Houston, TX New Orleans, TX Total Staff: 5.5 Total Staff: 4.5 YTD % of Region Premiums Total San Antonio, TX Orlando, FL Central 1 $68.6 31% Total Staff: 5 Total Staff: 9 San Juan, FL Northeast $36.1 17% Total Staff: 3 Northwest $20.6 9% Southeast $47.2 22% Southwest $45.9 21% Source: Sheffield management 1 Central region premiums and contribution exclude the contribution from Sioux Falls. Sheffield Overview 11

PRELIMINARY AND CONFIDENTIAL Sheffield Market Share Statistics ($ in millions) Sheffield Market Share (Surety Line Only 1 ) Small Commercial 2 2004 2005 2006 2007 2008 $472 $467 $451 $438 Probate 3 15.8% 15.0% 14.8% 14.4% 14.3% $418 $389 $371 License & Permit 4 11.4% 11.8% 11.8% 11.1% 11.0% $360 $333 GC Local L&P 38.1% 38.5% 40.5% 39.7% 37.9% $317 Motor Vehicle Dealer 55.1 56.8 56.9 51.9 47.7 9.6% Defective Title 44.8 43.8 46.8 46.2 45.9 8.8% 8.7% 8.2% 8.3% 8.4% 8.3% 8 .0% 7.9% 7.8% Public Official 38.7% 39.8% 31.8% 32.2% 34.1% Notary 62.5% 66.3% 48.2% 45.6% 48.1% Overall 10.1% 10.7% 10.0% 9.5% 10.0% Contract 2004 2005 2006 2007 2008 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sheffield GPW Sheffield Market Share Overall 9.3% 9.1% 8.7% 8.6% 9.1% Source: The Surety Association of America (SAA) Note: Line of business market share data (i.e., License & Permit, Motor Vehicle, Defective Title, Notary) is based on self-reported figures from members of the SAA. Industry totals are based on company filings. As a result, Sheffield management believes the line of business market share figures may be skewed higher than actual. 1 Market share statistics for surety line only; does not include fidelity and other. 2 2009 data not available. 3 A probate bond guarantees an honest accounting and faithful performance of duties by fiduciaries / trustees. These bonds are required by courts or statutes as estates of deceased persons, incompetent persons, and minors are set up and administered 4 License bonds guarantee the principal (general contractor, electrician, plumber, etc.) will comply with applicable codes and regulations established by the oblige (city, town, state). Sheffield Overview 12

PRELIMINARY AND CONFIDENTIAL Small Commercial: Market Overview Per Discussion with Sheffield Management Description Selected Market Dynamics Transactional commercial surety bonds with small obligations Market is highly competitive, with very little product — Major risk classifications include: license and permit, differentiation probate / fiduciary, public and federal official, court and Competition largely based on commission and service; also judicial public official and supply & service contractors susceptible to some rate pressure — Selected E&O insurance products sold as companion Profitability has remained consistent over time products — While commission and other expenses are high, loss ratios Relationship- and service-focused business are consistently low — Placement of small commercial bonds is controlled by Low switching rate given uniformity of rates and commission insurance agents and brokers, including independent among competitors. Also, small premium transactions make agents and outsourced surety providers for captive agents cancel / re-write process costly (e.g., Farmers, American Family, Allstate) Competitors include large commercial lines players (e.g. — Customers require prompt and efficient service Hartford, Liberty Mutual / Safeco, RLI) as well as many small, Requires minimal underwriting regional players Sheffield Strengths / Advantages Sheffield Challenges / Risks Recognized as market leader in small commercial market Sheffield’s e-commerce suite for independent agents is behind — Depth / breadth of product availability and knowledge its competitors (e.g., self-serve tools, value-added services) including extensive library of bond forms — These tools and services will accelerate agency portal Successful automated platform — with Direct Bill, Internet development bONdLINE and Automatic Renewal — combined with live Volume focused business customer service center (1-day response service) — Weaker presence in selected large-volume states including — Automation reduces customers’ opportunities / incentive to CA, TX and NY switch and supports high volume of transactions — Underserved markets include accounts >$50K and direct — Ability to foster agent loyalty through personal delivery marketing opportunities for accounts <$5K methods (i.e., live customer service center, traveling Potential risk of state recovery funds 1 — difficult to get bond marketing reps and telemarketing unit) requirement back once replaced by recovery fund Has achieved significant scale with installed network of 34,000 Risk of federal, state or local laws loosening mandate for use of insurance agents; 40 dedicated marketing reps for these agents surety bonds (i.e., eliminate requirement, unreasonable penalty) 1 State recovery funds are state agencies that go into the bonding business to provide surety guarantees / protection for the public. Sheffield Overview 13

PRELIMINARY AND CONFIDENTIAL Corporate Commercial: Market Overview Per Discussion with Sheffield Management Description Selected Market Dynamics Large commercial products include workers’ compensation Traditional large commercial market highly competitive bonds, reclamation / coal mining bonds and appeal bonds Growth in large commercial premiums driven by non- Customers are primarily Fortune 500 and Fortune 1000 construction contract bonds companies Prices and terms have seen some competitive pressure, — Surety susceptible to large losses when corporate defaults particularly for larger sized bonds ($50mm to $100+mm) and rise selected types of commercial bonds Products distributed through independent agents and brokers — Currently a capacity constraint for specific large commercial Surety acts as a contingent unsecured creditor, unless bond is bonds (i.e. appeal bonds) collateralized Competitors are large commercial lines players including ACE, Travelers, Chubb and Zurich Sheffield Strengths / Advantages Sheffield Challenges / Risks Remains an opportunistic segment for Sheffield — ability to dial Sheffield is a relatively small player compared to the primary exposure up or down competitors Sheffield has maintained a strong financial position throughout — Large commercial is a small portion of total gross premiums the financial crisis given its focus on credit and the benefit of its written (~$30mm) experience from previous soft markets Continuing to rebuild reputation and presence in the large — Maintains combined ratios of less than 80% commercial market after significant cut-back in appetite in early — Potential reserve redundancy in this segment 2000 Loss experience and results can be volatile — Susceptible to large claims as a result of corporate defaults (e.g., Enron) Sheffield Overview 14

PRELIMINARY AND CONFIDENTIAL Total Contract: Market Overview Per Discussion with Sheffield Management Description Selected Market Dynamics Contract surety bonds include bid bonds, performance bonds, Stringent underwriting terms and conditions have persisted payment bonds, maintenance bonds and service bonds through the financial crisis, with minimal to no change in rates Customer segmentation based on contractor work program: Exposure to losses has continued to be minimal “Fast Track” “The Gap” Branch “Jumbo” — Credit quality of contractors has improved — at the onset of financial crisis, contractors had ample cash on hand, reduced Program Size < $500K $500K — $1M >$1M — $250M >$250M overhead and postponed new equipment purchases Market Size (Surety Assoc.) $100M $250M $2B $1B Contract surety has benefited from public sector construction (supported by government stimulus), however, lag in private Sheffield GPW $25M $5M $260M $10M sector construction has led to erosion in premiums Underwriting based largely on credit quality of contractors and Intense competition at all levels below the jumbo market sub-contractors; underwriting of smaller-sized programs (i.e., — Competition increases as size of contractors decrease <$500K) based on algorithm and personal credit reports — Lack of capacity in the jumbo market — competitors include Average length of contract bonds are approximately 1-year Travelers, Liberty, Chubb and Zurich Sheffield Strengths / Advantages Sheffield Challenges / Risks Strong reputation / brand as dedicated, monoline surety writer Perceived to be focused on small- to mid-sized accounts — National reach with regional underwriting capabilities — Sheffield building market share in the Northwest / West through 37 branch offices across the U.S. Deterioration in underwriting standards can lead to volatile loss Focuses on “Fast Track” and branch contract, however has the experience flexibility to play across the market Concentrated exposure to construction firms — Sheffield market share: 13% (branch) and 25% (“Fast Track”) — While contract segment has performed well despite the Focuses predominately on public sector contracts — minimal downturn in the U.S. construction market, Sheffield is impact from slowdown in residential construction susceptible to higher frequency of claims and losses if the Firmly entrenched with “installed base” of contractors construction economy encounters continued difficulties — Knowledge of thousands of contractors from years of credit Competitors turning focus to public sector contracts given lack modeling, u.w. due diligence, monitoring of contractors of private, residential contracts; increases competition in already highly mature customer segments — High persistency rates with clients given high switching costs Jumbo market historically more difficult given co-surety issues 2 “Reverse flow” 1 business showing strong growth / momentum 1 Reverse flow market includes foreign companies requiring surety bonds in the United States. 2 “Co-surety” or joint-insurer accounts include oth er sureties in order to manage aggregate exposure. Sheffield Overview 17

PRELIMINARY AND CONFIDENTIAL Total Contract: Business Overview Gross Premiums Written 1 Accounts by Type 2 Accounts by Work Program 2 $100mm to $150mm >$150mm Heating / Air 2% 3% Small Contract Conditioning 10% International 9% $50mm to 4% $100mm Not Available General 10% 6% Construction 23% Other 44% Electrical $10mm to $1mm to 9% $25mm $10mm Branch Contract Supplier / 86% $25mm to 22% 47% Distributor $50mm 7% Road / Bridge 10% 8% # of Domestic Bonds / Total Policies in Force Average Bond Penalty / Policy Limit ($ in thousands) 33 32 30 30 31 $1,192 $1,237 29$1,181 $1,150 $1,011 $924 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009% of 1.4% 1.2% 1.2% 1.2% 1.3% 1.3% Total PIF Source: Company filings, Sheffield management 1 Pie chart based on data for YTD as of September 30, 2010. 2 Pie charts based on data for YTD as of June 30, 2010. Sheffield Overview 18

PRELIMINARY AND CONFIDENTIAL Sheffield Capital and Reserve Position ($ in millions) CAGR / 12/31/06 12/31/07 12/31/08 12/31/09 09/30/10 Average Reserve for Losses and Loss Expenses $434 $473 $429 $406 $440 0.3% Reserve Development — Favorable 1 5 5 46 54 22 NA Statutory Surplus 349 442 555 679 783 24.0% NPW / Average Surplus 1.3 x 1.0 x 0.9 x 0.7 x 0.6 x 0.9 x Debt $31 $31 $31 $31 $31 0.2% GAAP Equity 566 668 767 923 1,041 17.6% Debt / Total Capital 5.1% 4.4% 3.9% 3.2% 2.9% 3.9% BCAR 260.0% 285.0% 316.0% 417.7% 480.0% 351.7% Treasury Limit 2 $35 $44 $55 $67 $77 23.6% Sheffield has access to Fullerton’s Treasury underwriting limitations through a surety quota share treaty between Sheffield and Fullerton. From July 1, 2010 through June 30, 2011, the underwriting limitations of Fullerton utilized under the quota share treaty total $892.1mm Source: SNL Financial, Company fillings, Sheffield management 1 Reserve development for the year to date period. 2 The U.S. Department of Treasury underwriting limitations are based on an insurer’s statutory surplus. The maximum size (net retention) of a single federal surety bond is 10% of statutory surplus. Sheffield Overview 20

PRELIMINARY AND CONFIDENTIAL Sheffield Investment Portfolio Overall Composition and Fixed Income Portfolio Breakdown — As of September 30, 2010 ($ in millions) Pre-tax net unrealized gain of $101.9mm at September 30, 2010 If interest rates increased by 100 basis points, there would be a net decrease of approximately $69mm in the fair value of Sheffield’s investment portfolio Fixed Income Portfolio Investment Composition Maturity Credit Government & Agency 4.4% BBB Below BBB MBS / ABS/ Equity 2.2% 3.0% CMBS 0.1% 9.6% ABS 6.0% >10 years 16.0% A AAA 24.7% 33.6% 5-10 years Corporate Municipal 49.0% 33.5% 52.4% 1-5 years 29.0% AA 36.5% Total: $1,470 Total: $1,468 Total: $1,468 Fixed Income %: 99.9% Average Duration1 : 4.28 Years Weighted Average Credit Quality: AA- Average Yield: 4.18% (5.17% tax equivalent) Source: Company fillings, Sheffield management 1 Adjusted for estimated duration of municipal bonds Sheffield Overview 21

PRELIMINARY AND CONFIDENTIAL Sheffield Share Price Performance Since January 2000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Share Price Average $12.14 $13.86 $13.49 $9.28 $11.05 $13.89 $18.22 $19.75 $14.92 $15.73 $17.65 High 14.88 15.65 16.40 11.07 13.93 15.40 22.29 23.18 20.50 19.69 23.90 Low 10.56 12.55 7.50 6.67 9.51 12.50 14.92 16.00 9.50 11.81 13.87 ADTV (‘000s) Value $753 $444 $577 $451 $291 $527 $1,159 $1,712 $1,617 $1,455 $1,570 # of Shares 61 32 47 48 26 38 63 88 108 93 81 $30 Current Fullerton Offer: $22.00 $23.85 Price (USD) $20 Closing $10 A B C D E F G H I $0 Jan-00 Oct-01 Aug-03 Jun-05 Apr-07 Feb-09 Dec-10 Daily from 01-Jan-2000 to 17-Dec-2010 Sheffield A Mar-2000 Received $13.00 offer from Fullerton E Jan-2004 Exits small / specialty contract segment B May-2000 Fullerton withdraws offer F Nov-2004 Sale of 34% stake in De Montfort Insurance to HCC C Dec-2000 Began withdrawal from large commercial market G Jun-2006 Re-enters large commercial market D Nov-2002 Announces suspension of quarterly dividend H Jan-2010 Enters reverse flow and Jumbo markets I 29-Oct-2010 Receives offer from Fullerton for $22 per share Source: Bloomberg, company press releases, data from Sheffield management Sheffield Market Update 23

PRELIMINARY AND CONFIDENTIAL Sheffield Daily Pricing Since Fullerton’s Current Offer Since November 1, 2010 (First Trading Day Post Announcement) 107% 105% 3.6% 3.0% 103% 3.0% 101% 99% Price 97% (4.3)% Indexed 95% Since 01-Nov (1-Day Post Annouc.) 93% Travelers (1.1)% Chubb 1.6 91% Hartford 10.4 ACE 1.2 Since 29-Oct (1-Day Prior to Annouc.) American Financial 5.2% 89% Sheffield 23.9% RLI 1.9 HCC 6.2 Fullerton (2.5) 87% Arch Capital 1.4 Large Commercial Lines ¹ 3.5 Hanover Group 3.3 Specialty ² 4.3 85% 1-Nov-2010 8-Nov-2010 15-Nov-2010 22-Nov-2010 29-Nov-2010 6-Dec-2010 13-Dec-2010 Daily from 01-Nov-2010 to 17-Dec-2010 Sheffield Fullerton Large Commercial Lines ¹ Specialty ² Source: Bloomberg 1 Large Commercial Lines index includes: Travelers, Chubb, Hartford and ACE. 2 Specialty index includes: American Financial Group, RLI, HCC, Arch Capital and Hanover Group. Sheffield Market Update 24

PRELIMINARY AND CONFIDENTIAL Illustrative Merger Arbitrage Analysis Illustrative Implied Final Deal Price 1 Illustrative Closing Date $25.03 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 Annualized 7.0% $24.34 $24.79 $25.25 $25.72 Return 9.0 24.47 25.03 25.62 26.22 Illustrative Target 11.0 24.60 25.28 25.99 26.72 13.0 24.73 25.52 26.35 27.22 Premium to Current Fullerton Offer Premium to Undisturbed Price 2 Illustrative Closing Date Illustrative Closing Date $0.00 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 Annualized 7.0% 10.7% 12.7% 14.8% 16.9% Annualized 7.0% 26.5% 28.8% 31.2% 33.6% Return Return 9.0 11.2 13.8 16.4 19.2 27.1 30.0 33.1 36.2 9.0 Illustrative Target 11.0 11.8 14.9 18.1 21.4 Illustrative Target 11.0 27.8 31.3 35.0 38.8 13.0 12.4 16.0 19.8 23.7 13.0 28.4 32.6 36.9 41.4 Source: Bloomberg. Market data as of 17-Dec-10 1 Assumes buy-in at current price of $23.85 as of 17-Dec-10 and annual interest on cash of 0.50%. 2 29-Oct-10 Sheffield undisturbed price of $19.25. Sheffield Market Update 26

PRELIMINARY AND CONFIDENTIAL Sheffield Shares Traded Analysis 1 Month 1 Year 1,400 9,000 1,200 8,000 7,000 1,000 (000) 6,000 800 (000) Volume 5,000 Volume 600 4,000 3,000 400 2,000 200 1,000 0 0 23.45 23.49 23.54 23.59 23.63 23.68 23.72 23.77 23.81 23.86 13.87 14.87 15.88 16.88 17.88 18.88 19.89 20.89 21.89 22.90 to to to to 23.48 23.90 14.86 23.90 Daily from 18-Nov-2010 to 17-Dec-2010 Daily from 18-Dec-2009 to 17-Dec-2010 Weighted Average Price: 23.58 USD Weighted Average Price: 19.36 USD Total Shares Traded as Percent of Shares Outstanding: 5.34% Total Shares Traded as Percent of Shares Outstanding: 45.61% 3 Years Since IPO 25,000 60,000 20,000 50,000 40,000 (000) 15,000 (000) Volume Volume 30,000 10,000 20,000 5,000 10,000 0 0 9.50 10.94 12.38 13.82 15.26 16.7 18.14 19.58 21.02 22.46 4.25 6.21 8.18 10.15 12.11 14.07 16.04 18 19.97 21.93 to to to to 10.93 23.90 6.21 23.90 Daily from 18-Dec-2007 to 17-Dec-2010 Daily from 12-Jun-1987 to 17-Dec-2010 Weighted Average Price: 16.54 USD Weighted Average Price: 14.33 USD Total Shares Traded as Percent of Shares Outstanding: 160.72% Total Shares Traded as Percent of Shares Outstanding: 569.01% Source: Bloomberg Sheffield Market Update 27

PRELIMINARY AND CONFIDENTIAL Current Sheffield Shareholder Base — Top 20 Holders Change in Ownership from September 30, 2010 to December 16, 2010 (In thousands) Total Ä 30-Sep-10 30-Nov-10 Ä from 16-Dec-10 Ä from from % Shares Voting Investor Name Shares Shares 30-Sep-10 Shares 30-Nov-10 30-Sep-10 Outstanding Subscription 1 Dimensional Fund Advisors, Inc. 3,107.6 3,050.6 (57.0) 3,075.6 25.0 (32.0) 6.9% ISS & Glass Lewis 2 GAMCO Investors, Inc. 1,816.2 1,500.0 (316.2) 1,500.0 0.0 (316.2) 4.1 NA 3 Royce & Associates, L.L.C. 1,580.4 1,200.4 (380.0) 1,200.4 0.0 (380.0) 3.6 Glass Lewis 4 Blackrock Advisors, LLC (BGI) 830.9 850.9 20.0 888.0 37.1 57.1 2.0 ISS 5 Northern Trust Global Investments 1,000.2 830.2 (170.0) 816.2 (14.0) (184.0) 1.9 ISS 6 Vanguard Group Inc. 806.5 820.5 14.0 805.5 (15.0) (1.0) 1.8 ISS & Glass Lewis 7 Columbia Management (RiverSource) 715.1 715.1 0.0 690.1 (25.0) (25.0) 1.6 Glass Lewis 8 ClearBridge Advisors, LLC 670.9 620.9 (50.0) 620.9 0.0 (50.0) 1.5 ISS 9 State Street Global Advisors 346.6 346.6 0.0 315.6 (31.0) (31.0) 0.7 ISS 10 OppenheimerFunds, Inc. 338.1 338.1 0.0 295.1 (43.0) (43.0) 0.7 ISS 11 Tiedemann Investment Group 0.0 161.0 161.0 228.0 67.0 228.0 0.5 ISS 12 Goldman Sachs Asset Management 215.3 215.3 0.0 215.3 0.0 0.0 0.5 NA 13 TIAA-CREF Investment Management, L.L.C. 206.8 206.8 0.0 206.8 0.0 0.0 0.5 ISS 14 LSV Asset Management 203.9 203.9 0.0 190.9 (13.0) (13.0) 0.4 Glass Lewis 15 Kennedy Capital Management, Inc. 397.7 220.7 (177.0) 185.7 (35.0) (212.0) 0.4 NA 16 Russell Investment Group 177.0 177.0 0.0 177.0 0.0 0.0 0.4 ISS 17 North Star Partners, LP 153.5 173.5 20.0 176.5 3.0 23.0 0.4 NA 18 Delphi Management Inc. 176.4 176.4 0.0 176.4 0.0 0.0 0.4 NA 19 Pentwater Capital Management, L.P. 0.0 136.5 136.5 165.0 28.5 165.0 0.4 NA 20 Alpine Associates, L.P. 0.0 158.0 158.0 150.0 (8.0) 150.0 0.3 NA Source: Ilios Partners Note: Green text reflects increase in position from previous period; Red text reflects a decrease in position from previous period. Sheffield Market Update 29

PRELIMINARY AND CONFIDENTIAL Current Sheffield Shareholder Base — Other Active Holders Change in Ownership from September 30, 2010 to December 16, 2010 (In thousands) Total Ä 30-Sep-10 30-Nov-10 Ä from 15-Dec-10 Ä from from % Shares Voting Investor Name Shares Shares 30-Sep-10 Shares 30-Nov-10 30-Sep-10 Outstanding Subscription 26 PanAgora Asset Management Inc. 95.1 95.1 0.0 101.1 6.0 6.0 0.2% NA 28 Freestone Capital Management, Inc. 169.4 169.4 0.0 80.4 (89.0) (89.0) 0.2 NA 30 Keane Capital Management 83.9 83.9 0.0 74.9 (9.0) (9.0) 0.2 NA 32 Walthausen & Co., LLC 205.0 83.0 (122.0) 63.0 (20.0) (142.0) 0.1 NA 36 Florida State Board of Administration 48.2 57.2 9.0 57.2 0.0 9.0 0.1 NA 42 GAM London Limited 0.0 30.3 30.3 45.3 15.0 45.3 0.1 NA 44 AllianceBernstein L.P. 57.4 57.4 0.0 42.4 (15.0) (15.0) 0.1 NA 45 TFS Capital, LLC 14.1 48.1 34.0 42.1 (6.0) 28.0 0.1 NA 49 PowerShares Capital Management, L.L.C. 118.4 50.0 (68.4) 38.0 (12.0) (80.4) 0.1 NA 54 Great Oaks Capital Management, LLC. 25.3 28.6 3.2 28.6 0.0 3.2 0.1 NA 58 Citadel, L.P. 0.0 17.0 17.0 19.5 2.5 19.5 0.0 NA 60 D.E. Shaw & Co., Inc. 27.9 0.0 (27.9) 18.0 18.0 (9.9) 0.0 ISS 65 Ohio Public Employees Retirement System 22.7 15.5 (7.3) 15.5 0.0 (7.3) 0.0 Glass Lewis 68 HighMark Capital Management, Inc. 34.7 34.7 0.0 15.0 (19.7) (19.7) 0.0 NA 75 Petrus Securities L.P. 12.3 10.0 (2.3) 10.0 0.0 (2.3) 0.0 NA 83 Whitebox Advisors, L.L.C. 197.1 27.1 (170.0) 5.0 (22.1) (192.1) 0.0 NA 89 First Wilshire Securities Management, Inc. 60.8 10.8 (50.0) 3.0 (7.8) (57.8) 0.0 NA 91 March Partners L.L.C. 0.0 1.8 1.8 1.8 0.0 1.8 0.0 NA 109 Golden Capital Management, L.L.C. 280.9 150.9 (130.0) 0.0 (150.9) (280.9) 0.1 NA Source: Ilios Partners Note: Green text reflects increase in position from previous period; Red text reflects a decrease in position from previous period. Sheffield Market Update 30

PRELIMINARY AND CONFIDENTIAL Overview of Top Surety Competitors Data for FY2009 ($ in millions) As % of AM Group / Surety Total Best Rank Company Name DPW DPW Rating Comments 1 Travelers $924 4.3% A+ ¦ Competes in all segments of contractor market above $1mm programs. Major player in jumbo market 2 Liberty Mutual/Safeco 723 2.9 A ¦ Competes in all segments of contractor market. Dedicated structure for smaller contractors. Accumulated small commercial volume through mergers 3 Zurich 487 1.7 A ¦ Competes in all contractor segments above $1mm. Offers Subguard product 1 4 Sheffield 406 93.2 A 5 Chubb 277 2.9 A++ ¦ Focuses on larger / jumbo contractors 6 Hartford 181 1.7 A ¦ Dedicated small commercial service center. Middle market contractor market. No co-surety (joint-insurer basis) 7 HCC 165 13.1 A+ ¦ Active acquirer — especially in the small / specialty contract segment 8 International Fidelity 147 99.9 A- ¦ Contract appetite up to $40mm 9 ACE 109 1.4 A+ ¦ Large commercial focus. Small to lower end of middle market contractors 10 Hannover 100 3.5 A ¦ Recent aggressive growth in contract business 11 Great American 96 2.8 A ¦ Strong regional player in contract segments up through smaller end of large contractors 12 NAS Surety (Swiss Re) 94 8.7 A ¦ Contract appetite up to $35mm program Large custom bond writer 13 Lexon / Bondsafeguard 87 99.5 A- ¦ Competes in smaller end of mid-sized contractors 14 Arch 79 4.3 A ¦ Middle-market contract. New leadership 15 Chartis Group (AIG) 77 0.3 A ¦ Limited to jumbo contractors 16 RLI 77 12.5 A+ ¦ Competes in commercial and small contract markets Source: SNL Financial, Sheffield management. Surety direct premiums written exclude fidelity and other. 1 Subguard, an alternative product to subcontract performance / payment bonds, is a 2-party agreement that shifts the burden of defaulting subcontractors to the insurance company, as the policy specifies that the insurance company will compensate the general contractor for losses resulting from a subcontractor’s default. A subguard policy covers all subcontractors on a given project. Benchmarking Analysis 32

PRELIMINARY AND CONFIDENTIAL Sheffield Financial Performance vs. Selected Peers Data Shown for Surety Business Segment of Each Company Surety Premium Growth — 5-Year CAGR (2004-2009) Surety Combined Ratio — 5 Year Average (2004-2009) 12.8% 89.5% 85.4% 11.2% 78.1% 74.5% 72.8% 70.8% 68.9% 7.4% 7.3% 7.3% 51.8% 5.3% 4.2% 3.8% HCC Liberty AFG CB RLI Sheffield Hartford TRV AFG Hartford Sheffield RLI Liberty HCC TRV CB Mutual Mutual Surety Calendar Year Loss & LAE Ratio — Last 10 Years Surety Expense Ratio — Last 10 Years 71.3% 70.7% 60.6% 58.9% 59.9% 59.2% 66.7% 64.0% 61.2% 55.3% 53.6% 52.2% 58.9% 55.0% 53.9% 54.5% 50.4% 58.2% 31.8% 31.9% 31.5% 55.0% 47.8% 35.5% 44.8% 25.1% 49.4% 36.7% 22.3% 47.7% 48.8% 46.8% 30.2% 16.5% 47.1% 24.3% 24.5% 23.2% 18.7% 22.7% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sheffield Surety Industry Source: SNL Financial, statutory filings, Dowling & Partners 2010 Surety Primer report and Sheffield management Benchmarking Analysis 34

PRELIMINARY AND CONFIDENTIAL Sheffield Capital Position vs. Selected Peers Data as of September 30, 2010 ($ in millions) AM Best Statutory NPW / Moody’s Debt / FY 20009 FSR Surplus Surplus Total Capital 1 Est. BCAR 2 Sheffield A $783 0.6 x 2.9% 417.7% Fullerton A 9,638 0.7 20.3 210.3 Large, Commercial Line Insurers Travelers A+ $20,868 1.0 x 23.4% 295.5% ACE A+ 15,929 0.9 16.4 192.4 Chubb A++ 14,500 0.8 22.1 330.5 Hartford A 16,347 0.6 26.8 206.1 Specialty Insurers Arch Capital 3 A $851 1.8 x 13.1 % 154.8% American Financial A 3,238 0.8 17.3 206.6 HCC A+ 2,104 1.0 10.5 179.0 Hanover Group A 1,795 1.8 26.3 226.0 RLI A+ 814 0.6 9.9 337.6 Source: Company filings, Sheffield management, SNL Financial 1 Moody’s debt to total capital includes debt adjustment for rent and pension expense. 2 For Sheffield, estimated BCAR per Sheffield management. For all other companies listed, estimated BCAR based on AM Best reports as of end of year 2009. 3 For Arch Capital, statutory surplus and NPW / surplus for the company’s U.S. insurance and reinsurance subsidiaries only. Benchmarking Analysis 35

PRELIMINARY AND CONFIDENTIAL Sheffield Investment Portfolio vs. Selected Peers Data as of September 30, 2010 ($ in millions) Large Commercial Insurers Specialty Insurers 0.1% 0.8% 4.4% 5.1% 3.2% 5.2% 5.4% 2.5% 8.0% 7.0% 0.7% 0.8% 3.3% 2.7% 4.8% 3.6% 15.2% 9.6% 20.0% 12.2% 5.6% 21.1% 23.5% 6.1% 36.2% 25.2% 26.0% 28.0% 25.9% 33.5% 21.6% 20.5% 7.6% 8.6% 15.8% 11.9% 15.9% 23.7% 18.1% 29.5% 49.2% 46.5% 55.4% 30.3% 52.4% 30.6% 47.0% 46.4% 24.2% 31.8% 19.2% 9.7% 11.8% 12.6% 9.5% 4.3% Sheffield TRV ACE CB HIG Arch AFG HCC Hanover RLI Other Equity Government & Agency ¹ MBS / ABS / CMBS / CDOs Corporate Municipal Total Invested Assets: $1,470 $74,717 $50,971 $43,052 $133,590 $12,052 $21,583 $5,835 $5,072 $1,978 % Fixed Income: 99.9% 94.2% 96.0% 91.6% 66.8% 89.4% 91.9% 100.0% 96.7% 84.8% Source: Company filings. Figures do not include cash and cash equivalent. Note: “Other” includes — TRV: redeemable preferred stock and real estate; ACE: limited partnerships and partially-owned investments; CB: distributions from limited partnerships; HIG: mortgage loans, policy loans, limited partnerships, other alternative investments, and controlling interest in investment trust; Arch: TALF investments, AFS, and short term investments pledged under securities lending agreements; AFG: mortgage loans, policy loans, and real estate; Hanover: mortgage loans and real estate. 1 Includes short-term investments and foreign government securities. Benchmarking Analysis 36

PRELIMINARY AND CONFIDENTIAL Potential Considerations Regarding Sheffield’s Illustrative Alternatives Rationale Considerations Least disruptive Challenge to deploy significant amount of excess Has performed well through financial crisis and capital given majority ownership soft market; well-positioned to achieve continued Ability to achieve desired growth / scale profitability Will take time to build out additional teams, market Focus on enhancing current business new products, etc. — Realize benefits from current operating and Valuation may be capped if remain as monoline product initiatives company with limited use of capital Can sell at later point, potentially for more value if multiples improve Shareholders receive premium to current share Ability to achieve sufficient premium price and potentially book value Public shareholders give up potential upside if — Simplifies ownership and governance structure business performs well and multiples recover — Full access to large statutory surplus base and May lose competitive advantage of pure play focus elimination of fronting agreement with Fullerton Loss of acquisition and compensation currency — Cost savings / other synergies Rating agency implications Allows shareholders immediate cash proceeds Fullerton may veto / prevent — Fund with either excess capital or net proceeds Potential impact to credit rating, depending on size from incremental debt offering or both Reduced capital cushion Accretive to ROE Dilutive to EPS / BVPS, particularly special dividend Special dividend treats all shareholders equally Optics of potential reduction in share price Share buyback EPS accretive (immediately ex-dividend) Share buyback potentially limited given stock’s low float Share buyback may adversely impact liquidity of public float Acquisition provides scale, enhances competitive Fullerton publicly announced that it will not sell its position and could diversify products / earnings stake in Sheffield — Ability to be a larger participant in certain Fullerton approval required for acquisitions segments (i.e., large commercial) — Number of attractive and actionable targets? For whole company sale, shareholders receive Hypothetical buyer universe maybe limited to large control premium to current share price strategic players given Treasury underwriting — Potential hypothetical interest from diversified limitations and specialty insurers Sale of minority stake likely not actionable given — Auction dynamic could maximize valuation ownership structure — Provides shareholders with full liquidity Preliminary Review of Potential Strategic Alternatives 38

PRELIMINARY AND CONFIDENTIAL Minority Buy-In: Selected Insurance Company Buyouts by Significant Existing Shareholders ($ in millions) Initial Final Aggregate Final Premium Over Premium to Premium to Inside Date Acquiring Company/ Consideration 1-Week Avg 52- Undisturbed Undisturbed Ownership Tender Offer / of Ann. Acquired Company (mm) Prior to Ann. Week High Stock Price Stock Price Pre- Trans. Merger 10-Mar-08 Nationwide Mutual $2,400 32.0% (19.1)% 24.4% 37.8% 66.0% Merger NFS 17-Jul-07 Alfa Mutual 840 44.4 10.8 15.8 44.7 54.7 Merger Alfa Corp 22-Feb-07 American Financial Group Inc 245 14.0 2.3 8.6 13.2 75.7 Merger Great American Finl Res Inc 24-Jan-07 AIG 813 33.5 22.6 19.0 32.6 61.9 Merger 21st Century Insurance Co 21-Mar-06 Erie Indemnity Co 75 12.3 (0.6) 6.7 6.7 75.1 Tender Erie Family Life Insurance Co 6-Jun-01 Liberty Mutual Insurance Co 536 0.6 (29.2) 2.3 2.3 65.6 Merger Liberty Financial Cos Inc 30-Aug-00 AXA SA 11,189 8.0 4.4 2.4 4.6 60.0 Tender AXA Financial Inc 27-Mar-00 Hartford Fin Svcs Group Inc 1,325 25.5 (8.2) 3.4 18.6 81.5 Tender Hartford Life(ITT Hartford) 21-Mar-00 Citigroup 2,449 23.1 1.5 23.2 24.6 85.0 Tender Travelers Prop. Casualty Corp 27-Oct-98 Allmerica Financial Corp 212 16.6 (4.0) 5.2 20.6 82.0 Tender Citizens Corp Low 0.6% (29.2)% 2.3% 2.3% 54.7% Median 19.8 0.5 7.6 19.6 70.6 High 44.4 22.6 24.4 44.7 85.0 Source: Company filings and press releases, Thomon One, and SDC Financial Note: Reflects insurance company transactions for U.S. targets. Preliminary Review of Potential Strategic Alternatives 40

PRELIMINARY AND CONFIDENTIAL Minority Buy-In: Comparison of Selected Buyouts of U.S. Targets by Significant Existing Shareholders Stock Price 1 Day Initial Initial Premium Majority of Date % Owned Prior Prior to Bid per No of Final Bid Over Market Final Premium % Increase Minority Tender Offer Announced Target Name Acquiror Name to Transaction Value ($MM) Announcement Share bumps per Share Price Over Market Price in Offer Clause? vs. Merger 16-Aug-2010 ResCare Inc Onex Corp 24.9% $487 $10.14 $12.60 1 $13.25 24.3% 30.7% 5.2% NA M 20-Jul-2010 Lions Gate Entertainment Corp Carl Icahn 33.9 1,147 6.03 6.50 1 7.50 7.8 24.4 15.4 NA T 19-Jul-2010 NaviSite Inc Atlantic Investors LLC 36.6 157 2.79 3.05 0 3.05 9.3 9.3 0.0 NA M 21-Mar-2010 CNX Gas Corp Consol Energy Inc 82.5 989 30.80 38.25 0 38.25 24.2 24.2 0.0 Y T 23-Sep-2009 SkyTerra Communications Inc SkyTerra Commun Inc SPV 48.6 1,208 3.40 5.00 0 5.00 47.1 47.1 0.0 N M 04-Sep-2009 Odyssey Re Holdings Corp Fairfax Financial Holdings Ltd 72.6 1,041 50.23 60.00 1 65.00 19.5 29.4 8.3 Y T 27-Apr-2009 Atlas Energy Resources Atlas America 48.0 1,268 14.35 14.40 0 14.40 0.3 0.3 0.0 N M 20-Apr-2009 Pepsi Bottling Group PepsiCo 33.1 10,758 25.20 29.50 1 36.50 17.1 44.8 23.7 N M 20-Apr-2009 PepsiAmericas PepsiCo 43.0 3,900 19.88 23.26 1 28.50 17.0 43.4 22.5 N M 13-Oct-2008 Sovereign Bancorp Inc Banco Santander SA 24.3 1,910 3.81 3.81 0 3.81 0.0 0.0 0.0 N M 12-Aug-2008 UnionBanCal corp Bank of Tokyo-Mitsubishi UFJ 61.1 3,707 58.18 63.00 1 73.50 8.3 26.3 16.7 Y T 21-Jul-2008 Genentech Inc Roche Holding AG 55.9 46,695 81.82 89.00 2 95.00 8.8 16.1 6.7 Y T 05-Jun-2008 Tercica Inc Ipsen SA 42.7 360 4.41 9.00 0 9.00 104.1 104.1 0.0 N M 10-Mar-2008 Nationwide Finl Svcs Inc Nationwide Mutual Insurance Co 66.0 2,400 37.93 47.20 1 52.25 24.4 37.8 10.7 N M 29-Jan-2008 Quadra Realty Trust Inc Hypo Real Estate Capital Corp 34.7 179 7.96 10.65 0 10.65 33.8 33.8 0.0 Y T 23-Oct-2007 Waste Industries USA Inc Investor Group 51.0 272 28.47 36.75 1 38.00 29.1 33.5 3.4 N M 17-Jul-2007 Alfa Corp Investor Group 54.7 840 15.20 17.60 1 22.00 15.8 44.7 25.0 N M 02-Apr-2007 Tribune Co Sam Zell 52.5 13,117 32.11 34.00 0 34.00 5.9 5.9 0.0 N M 22-Feb-2007 Great American Finl Res American Financial Group 81.0 245 21.64 23.50 1 24.50 8.6 13.2 4.3 N M 24-Jan-2007 21st Century Insurance Co. AIG 60.8 813 16.34 19.75 1 22.00 19.0 32.6 11.4 N M 20-Nov-2006 TD Banknorth Inc. Toronto-Dominion Bank 54.8 3,232 30.25 32.33 0 32.33 6.9 6.9 0.0 N M 09-Oct-2006 NetRatings Inc VNU NV 55.8 378 14.57 16.00 1 21.00 9.8 44.1 31.3 N M 28-Aug-2006 Seitel Inc ValueAct Capital Partners LP 39.0 443 3.50 3.70 0 3.70 5.7 5.7 0.0 N M 05-Jun-2006 Trizec Properties Inc Investor Group 37.1 4,747 24.60 29.01 0 29.01 17.9 17.9 0.0 N M 17-Mar-2006 William Lyon Homes General William Lyon 46.7 1,221 75.70 93.00 2 109.00 22.9 44.0 17.2 Y T 06-Feb-2006 Lafarge North America Lafarge SA 48.9 3,227 64.25 75.00 2 85.50 16.7 33.1 14.0 Y T 14-Sep-2006 Applica Inc Harbinger Capital Partners 37.3 266 4.56 6.00 4 8.25 31.6 80.9 37.5 N M 27-Sep-2005 New Valley Corp Vector Group Ltd 57.7 106 7.45 9.01 1 10.78 20.9 44.7 19.6 Y T 12-Sep-2005 WFS Financial Inc Wachovia Corp 83.4 503 64.92 73.86 0 73.86 13.8 13.8 0.0 Y M 01-Sep-2005 Chiron Corp Novartis AG 37.7 6,625 36.44 40.00 2 48.00 9.8 31.7 20.0 Y M 01-Sep-2005 7-Eleven Inc IYG Holding Co 69.7 1,301 28.34 32.50 1 37.50 14.7 32.3 15.4 Y T 01-Jul-2005 Tipperary Corp Santos Ltd 54.5 139 6.25 7.41 1 7.43 18.6 18.9 0.3 Y M 03-Mar-2005 Siliconix Inc Vishay Intertechnology Inc 80.4 231 28.90 33.87 1 39.45 17.2 36.5 16.5 Y T 21-Feb-2005 Eon Labs Inc Novartis AG 66.4 932 27.92 31.00 0 31.00 11.0 11.0 0.0 Y T 27-Jan-2005 Genencor International Danisco A/S 84.0 183 15.54 19.25 0 19.25 23.9 23.9 0.0 Y T 18-Jan-2005 UGC Holdings Liberty Media 52.2 11,499 9.64 9.58 0 9.58 (0.6) (0.6) 0.0 Y M Mean 18.5% 29.1% 9.0% Median 16.9 30.0 4.7 Source: Company filings and press releases, Thomson One, SDC Finan cial Preliminary Review of Potential Strategic Alternatives 41

PRELIMINARY AND CONFIDENTIAL Special Dividend: Illustrative Capital Adequacy Analysis ($ in millions) Reduce Surplus By: Estimated $200mm $300mm $400mm 2010 2010 2010 2010 Regulatory Largest Bond under Max Net Retention 1 $164 $144 $134 NA Treasury Limitation 2 77 57 47 NA Rating Agency BCAR 480% 374% 320% 266% Leverage Premium / Surplus 0.5 x 0.7 x 0.9 x 1.1 x Debt / Total Capital 2.9% 3.6% 4.1% 4.7% Profitability ROE 10.5% 11.7% 12.4% 13.2% Source: Sheffield management 1 Sheffield’s ceded reinsurance program is predominantly comprised of excess of loss reinsurance contracts that limit the Company’s retention on a per principal basis and the maximum size of a single bond that the Company can issue. Due to the terms of the excess of loss treaties, reinsurers may cover some principals in one year but then exclude these same principals in subsequent years. As a result, the Company may have exposures to these principals that have limited or no reinsurance coverage. 2 The U.S. Department of Treasury underwriting limitations are based on an insurer’s statutory surplus. The maximum size (net retention) of a single federal surety bond is 10% of statutory surplus. Preliminary Review of Potential Strategic Alternatives 42

PRELIMINARY AND CONFIDENTIAL Special Dividend: Illustrative Pro Forma Analysis Funded Using Sheffield Excess Capital ($ in millions, except per share data) Illustrative Pro Forma Impact “Value Map” Regression Analysis Special Dividend Amount: $200mm $300mm $400mm 1.8 x Pro Forma Earnings y = 0.1053x 0.0344 -R ² = 0.6531 2011E Standalone Net Income (IBES) $103 $103 $103 Loss of Interest Income (5) (7) (9) 1.6 x Sheffield -Interest Expense 0 0 0 $400mm Sheffield — Div 2011E Pro Forma Net Income $98 $96 $94 $300mm 1.4 x Standalone 2011 EPS $2.30 $2.30 $2.30 Div Pro forma 2011 EPS 2.20 2.15 2.10 EPS Accretion / (Dilution) (4.4)% (6.6)% (8.9)% Chubb 1.2 x Sheffield -$200mm Div Pro Forma Balance Sheet AOCI) Equity ex. AOCI - 9/30/10 $975 $975 $975 Travelers ACE 1.0 x Q4 2010 Earnings (IBES) $6 $6 $6 (ex. Dividend (200) (300) (400) P/B Pro Forma Equity ex. AOCI — 12/31/10 $781 $681 $581 Sheffield — 0.8 x Fullerton Pre Offer Standalone F-D BVPS — 12/31/10E $21.97 $21.97 $21.97 Pro Forma F-D BVPS — 12/31/10E 17.49 15.25 13.01 BVPS Accretion / (Dilution) % (20.4)% (30.6)% (40.8)% 0.6 x Hartford Standalone ROE — 2011E 9.9% 9.9% 9.9% Pro Forma ROE - 2011E 11.8 13.2 14.9 ROE Accretion / (Dilution) (bps) 188 bps 320 bps 496 bps 0.4 x Pro Forma Credit Metrics 0.2 x Stand Alone Debt / Cap — 12/31/10E 2.9% 2.9% 2.9% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 17.0% Proforma Debt / Cap — 12/31/10E 3.5% 4.0% 4.6% 2011 ROE Note: Selected Key Assumptions: (1) special dividend funded with Sheffield excess capital; (2) assumes transaction close on December 31, 2010; (3) opportunity cost of cash of 3.5%; (4) earnings per share based on IBES estimate of $0.57 for Q4 2010E and $2.30 for 2011E; (5) marginal tax rate of 35%; (6) assumes no change in outstanding share count. Preliminary Review of Potential Strategic Alternatives 43

PRELIMINARY AND CONFIDENTIAL Levered Special Dividend: Illustrative Pro Forma Analysis Funded Using Excess Capital and $100mm of Senior Debt ($ in millions, except per share data) Illustrative Pro Forma Impact Selected Observations Special Dividend Amount: $300mm $400mm $500mm Sheffield currently receives an “A” financial strength rating from A.M. Best1 Pro Forma Earnings 2011E Standalone Net Income (IBES) $103 $103 $103 — The rating reflects Sheffield’s solid risk-adjusted Loss of Interest Income (5) (7) (9) capitalization, historically profitable operating Interest Expense (5) (5) (5) results and leading market positions 2011E Pro Forma Net Income $93 $91 $89 — Partially offsetting the positive rating factors are variability in operating results in the prior soft Standalone 2011 EPS $2.30 $2.30 $2.30 market cycle and areas of adverse loss reserve Pro forma 2011 EPS 2.09 2.04 1.99 development experienced on a number of prior EPS Accretion / (Dilution) (9.2)% (11.4)% (13.6)% accident years Pro Forma Balance Sheet — Sheffield benefits from the financial flexibility of Equity ex. AOCI - 9/30/10 $975 $975 $975 Fullerton and its main operating subsidiaries, Q4 2010 Earnings (IBES) $6 $6 $6 which have demonstrated commitment to the Dividend (300) (400) (500) group through reinsurance support Pro Forma Equity ex. AOCI — 12/31/10 $681 $581 $481 Sheffield currently shares an S&P rating with Fullerton and is not rated by Moody’s Standalone F-D BVPS — 12/31/10E $21.97 $21.97 $21.97 Pro Forma F-D BVPS — 12/31/10E 15.25 13.01 10.77 While rating agencies have not provided expectations BVPS Accretion / (Dilution) % (30.6)% (40.8)% (51.0)% for Sheffield’s target financial leverage and coverage ratios, they have commented on the Company’s Standalone ROE — 2011E 9.9% 9.9% 9.9% significant financial flexibility given its low financial Pro Forma ROE — 2011E 12.8 14.5 16.9 leverage and strong coverage ratios ROE Accretion / (Dilution) (bps) 287 bps 458 bps 694 bps Assuming a senior debt issuance of $100mm to fund a portion of an illustrative special dividend, pro-forma Pro Forma Credit Metrics leverage and coverage metrics continue to be Stand Alone Debt / Cap — 12/31/10E 2.9% 2.9% 2.9% stronger than the credit guidelines 2 associated with Proforma Debt / Cap - 12/31/10E 14.9% 16.8% 19.3% Sheffield’s current ratings at S&P and A.M. Best Interest Coverage — 2011E 131.1 x 131.1 x 131.1 x — Fullerton’s consolidated financial leverage would Pro Forma Interest Coverage — 2011E 16.8 x 16.5 x 16.1 x increase by less than one percentage point Note: Selected Key Assumptions: (1) special dividend funded with $100mm of senior debt, remainder with Sheffield excess capital; (2) assumes transaction close on December 31, 2010; (3) assumed cost of debt of 7.5%; (4) earnings per share based on IBES estimate of $0.57 for Q4 2010E and $2.30 for 2011E; (5) marginal tax rate of 35%; (6) assumes no change in outstanding share count. 1 Source: A.M. Best credit rating report dated July 7, 2010. 2 See “Rating Agency Financial Leverage Guidelines” in Appendix A. Preliminary Review of Potential Strategic Alternatives 44

PRELIMINARY AND CONFIDENTIAL Calendar of Key Events / Dates January 2011 February 2011 March 2011 S M T W T F S S M T W T F S S M T W T F S 1 1 2 3 4 5 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 27 28 29 30 31 30 31 Date Topic Description Projections Sheffield management is developing a five-year financial model — Projections will reflect 2010 year-end financial results — Sheffield management will also incorporate potential new initiatives Sheffield management to present projections to the Special Committee Loss Reserves Sheffield management has performed an internal analysis of reserves as of September 30, 2010. This analysis will be rolled forward to year end January 2011 Milliman to complete an independent loss and LAE reserve study Excess Capital Sheffield management to update excess capital analysis, subject to conversations with rating agencies Valuation Goldman Sachs to present views on illustrative financial analysis to the Special Committee Special Committee, in consultation with advisors, to assess full range of potential strategic alternatives Other Tactics Communications strategy with Fullerton and other Sheffield shareholders Response to offer 04-Feb-2011 Company Event Sheffield Q4 2010 Earnings Release 07-Feb-2011 Company Event Fullerton Q4 2010 Earnings Release 14-Feb-2011 13F Filings Next Steps 46

PRELIMINARY AND CONFIDENTIAL Sheffield Historical Financial Performance ($ in millions, except per share data) Income Statement 2005A 2006A 2007A 2008A 2009A 2010 YTD Gross Premiums Written $417.5 $451.4 $471.7 $467.1 $438.3 $341.3 Ceded Premiums (51.6) (41.7) (43.4) (35.4) (27.3) (18.1) Net Premiums Written 365.9 409.6 428.3 431.7 411.0 323.1 Net Earned Premiums 348.4 393.6 421.5 431.7 421.9 313.7 Investment Income 35.7 38.1 44.2 45.9 51.6 40.7 Total Revenue $384.1 $431.7 $465.7 $477.6 $473.4 $354.4 Loss & LAE $127.8 $95.8 $103.1 $80.8 $69.4 $69.3 Commissions 115.5 120.5 126.7 127.7 119.5 NA Underwriting Expenses 87.0 96.2 102.1 107.7 113.9 NA Other Expenses 3.5 3.5 0.2 2.1 1.4 0.9 Total Expenses $333.9 $316.1 $333.5 $318.4 $304.2 $238.3 Pre-Tax Income $50.2 $115.6 $132.2 $159.2 $169.2 $116.1 Net Operating Income $37.1 $83.6 $92.8 $111.3 $117.1 $79.2 Diluted Earnings Per Share $0.89 $1.89 $2.09 $2.49 $2.65 $1.80 Key Operating Ratios AY Loss Ratio 43.4% 25.7% 25.7% 29.3% 24.6% 28.8% Reserve Development - Favorable $23.3 $5.3 $5.1 $45.5 $54.3 $21.2 CY Loss Ratio 36.7 24.3 24.5 18.7 16.5 22.1 Acquisition Ratio 33.2 30.6 29.7 29.6 28.3 NA Underwriting Ratio 25.0 24.4 24.2 24.9 27.0 NA Combined Ratio — Total 94.8 79.4 78.4 73.3 71.8 75.7% Balance Sheet 2005A 2006A 2007A 2008A 2009A Q3 2010 Investments $723.6 $786.5 $965.1 $1,035.9 $1,267.8 $1,430.8 Reserves 665.5 688.0 731.8 687.5 653.9 697.1 Total Assets 1,262.6 1,368.3 1,507.7 1,565.5 1,709.0 1,872.4 Total Debt 50.6 30.7 30.8 30.9 30.9 30.9 Total Equity $476.6 $565.9 $667.7 $767.3 $923.1 $1,040.9 Key Ratios ROE 8.4% 16.0% 15.0% 15.5% 13.9% 11.0% BVPS $11.00 $12.90 $15.13 $17.37 $20.85 $23.48 Source: Company filings and Sheffield management Additional Background Materials 48

PRELIMINARY AND CONFIDENTIAL Rating Agency Financial Leverage Guidelines S&P and Moody’s Rating agencies use a number of ratios to gauge the risks associated with a company’s financial leverage profile, which they evaluate in light of a company’s financial policies, business risks, earnings and liquidity S&P — Financial Leverage Ratio Guidelines GAAP Interest Coverage 1 Leverage (as % of total capital) Senior Debt Rating Low Interest High Interest Rate Environment Rate Environment Debt Leverage Financial Leverage AAA 10x+ 8x+ < 15% < 30% AA 8x — 10x 6x — 8x 15% — 25% 30% — 40% A 5x — 8x 4x — 6x 25% — 35% 40% — 50% BBB 3x — 5x 3x — 4x 35% — 45% 50% — 60% BB 2x — 3x 2x — 3x 45% — 65% 60% — 80% Moody’s — Financial Leverage Ratio Guidelines Coverage Metrics Leverage (as % of total capital) Financial Adjusted Financial Strength Rating Earnings Coverage 2 Cash Flow Coverage 3 Leverage Total Leverage Aaa > 12x > 7x < 15% < 15% Aa 8x — 12x 5x — 7x 15% — 30% 15% — 30% A 4x — 8x 3x — 5x 30% — 40% 30% — 40% Baa 2x — 4x 1.5x — 3x 40% — 50% 40% — 50% Ba 0x — 2x 0x — 1.5x 50% - 60% 50% — 60% 1 EBITDA (excl DAC amortization) / interest expense + non-qualifying hybrids interest 2 EBIT / interest expense + preferred dividends 3 Maximum available dividends from regulated subsidiaries / interest expense + preferred dividends Additional Background Materials 49