THE MARINE INSURANCE MARKET 2002

1
THE MARINE INSURANCE MARKET
2002
Houston Marine Insurance Seminar
September 22, 2002
2
International Union of Marine Insurance

• Founded in Berlin in 1874
• 55 Member Associations
• ? Purpose To represent, safeguard and develop
  insurers interests in marine and transport
  insurance
• ? Fosters cooperation and exchanges information
  with international governmental and
  non-governmental organizations
• ? IUMI Organization and Annual Conference

3
The Market

• The area of economic activity in which buyers
  and sellers come together and the forces of
  Supply and Demand affect Prices
• - Websters Dictionary

4
What Factors Drive the Market?

• ? Capital
• ? Economic Activity
• ? Reinsurance
• ? Return on Investments
• ? Management Decisions
• ? Intangibles

5
The 1992 2002 Cycle

• ? Peak Years of 1992-1994
• ? Booming World Trade
• ? Robust World Economic Growth
• ? Favorable Investment Environment
• ? Growing Order Book for New Vessels
• ? Falling Insurance Rates

6
U.S. Marine Insurance Results 2001Highlights

• ? 12 growth in Direct Written Premium to 2.34
  billion
• ? 102 Combined Ratio
• ? Second Consecutive Year of Improvement
• ? Stellar Cargo Results 86.1 Combined Ratio
• ? Excellent Yacht Results 15 Growth / 93.4
• Combined Ratio
• ? Solid Liability Results 88.9 Combined Ratio
• ? No Cats

7
U.S. Marine Insurance Results 2001Lowlights

• ? Energy Offshore 89 Growth / 152.9 Combined
  Ratio
• ? Ocean Hull Premiums grew 3.5 Xs / 113.1
  Combined Ratio
• ? Other Hull / PI 116 Combined Ratio
• ? Liabilities 9 decline in Direct Written
  Premium / Deteriorating Trend
• ? Marginal ROE

8
U.S. Marine Calendar Year Financials
9
Global Marine Premiums
10
Global Marine Premiums
11
Global Marine Premiums
12
Major Marine Markets

• 2000
• ? Japan 2,087
• ? United Kingdom 1,766
• ? USA 1,554
• ? France 972
• ? Germany 964
• ? Norway 584
• ? Italy 509

13
Global Cargo Premiums
14
Global Hull Premiums
15
Major Marine Markets

• Change
• 2000 1998-2000
• ? Japan 2,087 -9.2
• ? United Kingdom 1,766 3.9
• ? USA 1,554 4.7
• ? France 972 -10.2
• ? Germany 964 -24.5
• ? Norway 589 -12.2
• ? Italy 509 -36.2

16
Where Do We Go From Here?

• ? The 2002-2012 Cycle
• ? Market Consolidation
• ? New Capital
• ? Management Decisions

17
The Blame Game

• Whos responsible?
• ? The Underwriter
• ? The Broker/Agent
• ? The Reinsurer
• ? The Customer