Allied World Disclaimer Certain statements contained herein may constitute forward-looking statements within the meaning of applicable Canadian and United States securities laws and are made pursuant to the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995. These include statements using the words believe, expect, seek, target, outlook, may, will, should, could, estimate, continue, expect, intend, plan, predict, potential, project and anticipate, and similar statements which do not describe the present or provide information about the past. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Fairfax, Allied World or the combined company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements reflect the current views of management of Fairfax and Allied World and are subject to a number of risks and uncertainties. These statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, corporate approvals, regulatory approvals, operational factors and other factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. All forward-looking statements attributable to Fairfax and Allied World, or persons acting on their behalf, are expressly qualified in their entirety by the cautionary statements set forth in this paragraph. Undue reliance should not be placed on such statements, which speak only as of the date they are made. Such factors include, but are not limited to: the failure to complete the Offer and/or the Merger or to complete them on the currently proposed terms; a reduction in net earnings if loss reserves of the combined company are insufficient; underwriting losses on the risks the combined company insures that are higher or lower than expected; the inability to obtain shareholder approval or the failure to satisfy other conditions to completion of the merger, including receipt of regulatory approvals; the inability to successfully integrate Allied Worlds business with Fairfaxs business or to integrate the businesses within the anticipated timeframe; the risk that the proposed transactions disrupt current plans and operations or increase operating or other costs; the outcome of any legal proceedings that may be instituted against Fairfaxs or Allied World or others following announcement of the Agreement and the proposed transactions; the occurrence of catastrophic events with a frequency or severity exceeding Fairfaxs or Allied Worlds estimates; negative rating agency actions; changes in market variables, including interest rates, foreign exchange rates, equity prices and credit spreads, which could negatively affect the combined companys investment portfolio; the cycles of the insurance market and reinsurance markets and general economic conditions, which can substantially influence the combined company and its competitors premium rates and capacity to write new business; insufficient reserves for asbestos, environmental and other latent claims; exposure to credit risk in the event the combined companys reinsurers fail to make payments to the combined company under its reinsurance arrangements; exposure to credit risk in the event the combined companys insureds, insurance producers or reinsurance intermediaries fail to remit premiums that are owed to the combined company or failure by the combined companys insureds to reimburse the combined company for deductibles that are paid by the combined company on their behalf; the timing of claims payments being sooner or the receipt of reinsurance recoverables being later than anticipated; the inability of the combined companys subsidiaries to maintain financial or claims paying ability ratings; risks associated with implementing the combined companys business strategies; risks associated with the use of derivative instruments; the failure of hedging methods to achieve their desired risk management objective; a decrease in the level of demand for insurance or reinsurance products, or increased competition in the insurance industry; the impact of emerging claim and coverage issues; the failure of any of the loss limitation methods that the combined company employs; the combined companys inability to access cash of its subsidiaries; the combined companys inability to obtain required levels of capital on favourable terms, if at all; loss of key employees; the combined companys inability to obtain reinsurance or retrocessional coverage in sufficient amounts, at reasonable prices or on terms that adequately protect it; the passage of legislation subjecting the combined companys businesses to additional supervision or regulation, including additional tax regulation, in the United States, Canada or other jurisdictions in which it operates; the impact of acts of terrorism and acts of war; risks associated with government investigations of, and litigation and negative publicity related to, insurance industry practice or any other conduct; risks associated with political and other developments in foreign jurisdictions in which the combined company operates; risks associated with legal or regulatory proceedings; failures or security breaches of the combined companys computer and data processing systems; the influence exercisable by the combined companys significant shareholder; adverse fluctuations in foreign currency exchange rates; dependence on independent brokers over whom the combined company exercises little control; an impairment in the carrying value of the combined companys goodwill and indefinite-lived intangible assets; the combined companys failure to realize deferred income tax assets; assessments and shared market mechanisms which may adversely affect its U.S. insurance subsidiaries; the ability to successfully integrate the transaction and realize certain synergies; and the combined companys ability to implement and achieve its business strategies successfully. Additional risks and uncertainties are described in: (i) Fairfaxs most recently issued Annual Report which is available at www.fairfax.ca and in its Supplemental and Base Shelf Prospectus (under Risk Factors) filed with the securities regulatory authorities in Canada, which is available on SEDAR at www.sedar.com; and (ii) Allied Worlds most recently issued Annual Report filed on Form 10-K, which is available on EDGAR at www.sec.gov. Each of Fairfax and Allied World disclaims any intention or obligation to update or revise any forward-looking statements, and undertakes no obligation to release publicly the results of any future revisions to the forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. There can be no assurance that the Offer and/or the Merger will occur or that the anticipated benefits of the Offer and Merger will be realized. The completion of the Offer and the Merger is subject to various approvals, including competition, antitrust and insurance regulatory approvals.