Titre

1
INTERTANKO - FFSA - HULL COMMITTEE 12th January
2005
Chapter 1

• The Worldwide Marine Insurance Market

Chapter 2

• The French Marine Insurance Market

Chapter 3

• Safety at sea Position of the French Marine
  Insurance Market

2
INTERTANKO - FFSA - HULL COMMITTEE 12th January
2005
Chapter 1
The Worldwide Marine Insurance Market A -
Figures of the Worldwide Marine Insurance
Market. B - IUMI
3
A - Figures of the Worldwide Marine
Insurance Market
- Evolution of Marine premium - 2001/2003 -
(USD Millions)
4
A - Figures of the Worldwide Marine
Insurance Market
- Marine premium split by economic areas -
(USD Millions)
5
A - Figures of the Worldwide Marine
Insurance Market
- Marine premium split by main countries -
(USD millions)
Worldwide premium 14,832 million USDof which
65,40 come from following markets
6
A - Figures of the Worldwide Marine
Insurance Market
- Marine Hull premium split by main countries -
(USD millions)
Worldwide premium 3 862 million USDof which
63,50 come from following markets
7
A - Figures of the Worldwide Marine
Insurance Market
- Evolution of the worldwide Marine premiums
- 1992/2003
(USD millions)
8
A - Figures of the Worldwide Marine
Insurance Market
- World Merchand Fleet and Global Marine Hull
Liability Premium (without PI) -
(Index of evolution, vessels gt 100 GT, 1995
100)
9
A - Figures of the Worldwide Marine
Insurance Market
- Marine Hull and Cargo / Transport - - Gross
Ultimate Loss Ratio -
(u/y Year 1996 to 2003)
Assuming a 30 expense ratio (acquisition and
management expenses)technical break even is
achieved whenthe gross loss ratiodoes not
exceed 70
10
B - IUMI
- The IUMI house  -
www.iumi.com
View from Inside
View from Outside
The recognized globalsource for information,
know howand insights in the marine /
transportation insurance industry
Lobbying
Membership
Activities/
Committees
Organization Finance
11
B - IUMI
- Members and Organisation -

• National or Market Marine Insurance Associations.
• Full Members 53 3 associated Members
• On going discussions to expand in Asia (China),
  South America and Middle East.

PRESIDENT
Council
Executive Committee
Technical Committee
Nominating Committee
Liaison Officers and Observers
12
B - IUMI
- Activities -

• Primary objective is to represent and develop
  insurers interest in Marine and Transport
  Insurance.
• Its main missions are to
• Facilitate the exchange and dissemination of
  information relating to Marine Insurance and
  Technology.
• Promote cooperation with other international
  Governmental and non Governmental related Marine
  Organisations and Associations.
• IUMI is a forum to
• Exchange experience, information and statistical
  data on Marine Insurance matters.
• Discuss legislative issues, loss prevention and
  safety measures.
• Debate challenges and opportunities facing Marine
  insurers.

13
B - IUMI
- Some topics of last IUMI (Singapore September
2004) -

• Solvency and security in Marine Insurance.
• Transport of nuclear material and products.
• Piracy in Southeast Asia.
• The need for war and terrorism insurance in an
  increasingly risky world.
• York Antwerp rules 2004.
• Building risks - Is there a market ?
• ISPS Code - Challenges for implementation.
• OECD - Substandard Shipping.

14
INTERTANKO - FFSA - HULL COMMITTEE 12th January
2005
Chapter 2
The French Marine Insurance Market A - Figures
of the French Marine Insurance Market. B
- Strengths of the French Marine Insurance
Market. C - F.F.S.A. - CESAM - GAREX
15
A - Figures of the French Marine Insurance
Market
- Evolution of Marine premium - 2001/2003 - -
Domestic and cross-border production -
(EUR millions)
16
A - Figures of the French Marine Insurance
Market
- Hull Gross Ultimate Loss Ratio -
(u/y Year 1996 to 2003)
Assuming a 30 expense ratio (acquisition and
management expenses)technical break even is
achieved whenthe gross loss ratiodoes not
exceed 70
17
A - Figures of the French Marine Insurance
Market
- Hull Evolution of rates/deductibles since
1995 -
(Mios EUR)
18
A - Figures of the French Marine Insurance
Market
- Evolution of rates/deductibles - - Comparison
between the different lines of business -
(Mios EUR)
19
B - Strengths of the French Market

• Ranks n 2 worldwide as the Norwegian Marine
  Market.(Japan being considered as a domestic
  Insurer and not an International player).
• A long term player offering stable and quality
  security to back large underwriting limits

• Market shares of main players

20
B - Strengths of the French Market

• A comprehensive product range on offer
• HM, LOH, IV, Mortgagees interests
• Based on taylor made conditions using all well
  known international wordings.
• A real partner of our shipping clients and not
  solely a capacity provider, as such the French
  Market can provide
• Risk identification, assessment and analysis
  processes.
• Risk management (loss prevention) through
  in-house technical advisers (ex. sea-going
  officers).
• Claims handling services (Company, CESAM),
  casualty assessment, adjustment and settlement.
• Issuance of guarantees.

21
B - Strengths of the French Market

• A service orientated market to achieve continuous
  improvement of all processes
• Example Optiflux for a faster payment of claims
  (electronic processing system of all premium and
  claims aspect).

22
B - Strengths of the French Market
- Some clients today of the French Market -

• Alstom Atlantique
• AP Moller
• Bergesen Worldwide
• Bernard Schulte
• Brostrom Tankers
• Canada Maritime
• Cardiff Marine
• Carnival Corporation
• CMB
• Delmas
• Dreyfus
• Enterprise Shipping Trading
• ER Schiffart
• Exmar
• Fairmont Shipping
• Goulandris
• Hapag Lloyd

• Hudong Shipyards
• Hyundaï Heavy Industries
• Hyundaï Merchant Marine
• Jebsen
• Malaysia International Shipping
• Norwegian Cruise Line
• Olympic Maritime
• OMI
• P and O
• Petromarine
• Pleiades Shipping
• Reederei Nord Oldendorff
• Royal Carribbean Cruise Line
• Saipem
• SNCM
• Socatra
• Teekay Shipping

23
C - F.F.S.A.
- Representativeness -

• 301 member companies (French or Foreign owned
  companies).
• 92 of the French insurance market.

24
C - F.F.S.A.
- Statury bodies -

• The F.F.S.A. analyses legal, fiscal, economic,
  social, european and international environment
  and provides its members with expertise through
  specific standing committees.
• The F.F.S.A. conducts technical studies through
  statutory bodies
• Life and health insurance plenary commission.
• Property and casualty insurance plenary
  commission.
• Transport insurance commission.

25
C - F.F.S.A.
- Historical background -
Association des Assureurs Aviation de
France A.A.A.F. established in 1934
Syndicat Français des Assureurs
Maritimes S.F.A.M. established in 1917
Association des Sociétés dAssurances
transports A.F.S.A.T. established in 1995
Commission des Assurances Transports established
01/01/2000
26
C - F.F.S.A.
- Transport Commission -
The Commission

• Carries out legal and technical studies on issues
  pertaining to MAT and space insurance, draws up
  and revises the market policies and clauses.
• Compiles statistics, initiates technical
  recommendations and advises on actions to promote
  the French transport insurance market in a sound
  economic environment.
• Represents and protects the interests of the
  French MAT and space market in France and abroad.

27
C - CESAM
An instrument to the management of marine
insurance business placed in co-insurance.
CESAM

• Monitors and controls the market cash flows
  through an industrialised process allowing
  insurers to benefit from substantial savings.
• Manages a strong network of average agents and
  recommended surveyors of the highest quality in
  the field of marine business.

28
C - CESAM
OPTIFLUX, a secured data exchange system.

• Through OPTIFLUX, CESAM monitors the
  administrative and financial operations on behalf
  of co-insurers.
• Objective
• Optimising cash flows.
• Accelerating and securing cash flows.
• Identifying and matching premium with the right
  policy.
• Reducing costs and delays for all the partners
  and eliminating redundant entries.
• Improvement and simplification of co-insurance,
  namely to control and reduce amount in arrears.
• Compliance with rules set up by authorities
  concerning the management of arrears and the
  availability of information.

29
C - GAREX
2005 Members
30
C - GAREX

• Expertise
• Writes Marine War but Marine War only.
• Security
• First class companies.
• Service
• Fast turn around / Flexibility (London, French,
  American Inst. Clauses, etc)

31
C - GAREX

• Capacity
• Automatic capacity ()
• CSL 160 Mio
• HULL 80 Mio
• CARGO 40 Mio
• () Higher capacity available in
  specific cases.

32
INTERTANKO - FFSA - HULL COMMITTEE 12th January
2005
Chapter 3
Safety at sea Position of the French Marine
Insurance Market
33
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Players in the marine safety chain
• Shipowners / Ship Operators
• Shippers / Charterers
• Staff and crew members
• Classification Societies
• Flag States
• Port States
• Shipyards
• Shipbrokers
• Bankers
• Surveyors
• Insurance Brokers
• Insurers (Hull, PI, Cargo)
• Governmental and International Organizations
• Pilots, Towage Operators, Salvors
• Port Authorities
• Bureau détudes des accidents de mer (French
  Marine Investigation Office).

34
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Marine safety chain and insurers

Synergy with other safety chain players
Claims Handling
Risks Selection
Assistance and Salvage
35
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Risk Selection
• The first player affected by an event is the
  insurer who has to pay compensation for damage.
• Risks selection leads to a hit ratio of 15.
• Underwriting information is collected, analysed
  by a team (underwriters, claims managers,
  technical advisers) and checked for each annual
  renewal.

36
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Risk Selection
• Information on the Insured through broker and
  following sources
• Shipping Registers (Lloyds Register)
• Infospectrum information (financial information)
• Documents transmitted by Classification Societies
  with the owners authorization.
• Consultation of Port State Control.
• Insurers data bases.
• The role of the leading insurer is fundamental,
  as the co-insurer relies on the information
  coming from him.
• A wish access to the classification documents.

37
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Risk Selection
• When assessing the risk, the team in charge with
  this duty can
• Ask for more detailed information or visit the
  shipowner if necessary.
• Inspect one or more vessels.
• Refuse to cover a risk.
• Accept to cover a risk subject to loss prevention
  plan.
• Accept a risk under limited cover or increased
  deductible.
• Automatic insertion in insurance conditions of
  rules of domestic and international regulation
  (ISM Clause, Classification Clause) into the
  standard policy.

38
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Assistance - Salvage
• Co-operation and technical and legal
  recommendations in case of assistance or salvage
  operations.
• Letters of indemnity issued in the shortest
  possible time.
• Assistance / Salvage charges covered.

39
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• Claims settlement
• Assessment of the loss.
• Payment of claim.
• Improvement of risk selection.

40
D - Safety at Sea Position of the French
Marine Insurance Market
- The Marine Safety Chain -

• French insurers work with other players in the
  safety chain
• Shipowners Association.
• Classification Societies (particularly Bureau
  Véritas).
• Bureau Enquêtes Accidents Mer (French marine
  investigation office).
• Shipbrokers.
• Bankers.
• Salvors.

41
D - Safety at Sea Post-Erika Measures
Position of the French Marine Insurance Market

• Tougher control regime in ports, however
• This is just a control by administrative
  personnel limited to checking vessels conformity
  with regulations in force.
• No information on the measures taken by
  shipowners to meet post-Erika measures and thus
  impossibility to assess the quality of their
  reaction and organization.

42
D - Safety at Sea Post-Erika Measures
Position of the French Marine Insurance Market

• Stricter monitoring of the Classification
  Societies
• The oldest classification Societies were founded
  in the early nineteenth century on insurers
  initiative. Classification Societies are an
  essential ingredient for risk assessment. All
  marine insurance contracts systematically
  contains a Classification Clause under which
  insured must be classed with a Classification
  Society which is a member of the International
  Association of Classification Societies (IACS).

43
D - Safety at Sea Post-Erika Measures
Position of the French Marine Insurance Market

• Replacement of single-hull oil tankers by
  double-hull oil tankers
• This will result in a younger world merchant
  fleet.
• On the other hand, the introduction of this type
  of vessels may give rise to new risks inherent to
  double-hull tanker construction - (higher
  incidence of structural failure, not enough space
  for proper maintenance, gas explosions) about
  which insurers have not enough experience to give
  their opinion.
• The French insurers also wonder what will be the
  impact of double-hull vessels on the costs of
  repairs.

44
D - Safety at Sea Post-Erika Measures
Position of the French Marine Insurance Market

• Setting up of the European Maritime Safety Agency
  with the aim of
• Gathering data and exploiting databases on
  maritime safety.
• Evaluating the effectiveness of the measures in
  place.
• Evaluating and auditing classification societies.
• On-the-spot visits to Member States to check
  control methodology.
• French Market fully approves this initiative.

45
D - Safety at Sea Post-Erika Measures
Position of the French Marine Insurance Market

• Stricter control of maritime traffic - Prevention
  of oil pollution from ships
• Authorization for Member states to inspect
  vessels not calling in their ports and beyond
  their territorial waters.
• Prohibition for vessels to leave ports in the
  event of exceptionally bad weather.
• Setting up of places of refuge to accommodate
  ships in distress.

French insurers think it necessary

• To set up a competent emergency committee at the
  European level. This committee will be entitled
  to react immediately in the event of an oil spill
  by
• Designating a place of refuge in order to contain
  pollution.
• Gathering in this area all means to combat
  pollution.
• To build and to operate specialised units to
  fight pollution.

46
D - Safety at Sea Post-Erika Measures
Position of the French Marine Insurance Market

• Improvement of the different regimes of liability
  and compensation for oil pollution

French insurers recommend the creation of an
efficient system of compensation. A quick and
full compensation should be made by the FIPOL on
the basis of a fund as high as 1 billion
dollars. This fund should be financed by taxes on
imported oil.