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- does it have a future?

Hull Insurance in the 21st Century. AMLIN. - does it have a future?. Simon Beale Marine Divisional Underwriter, Amlin. Agenda. Shipping Statistics Market Results Current Market Future Market. Shipping Statistics.

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- does it have a future?

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  1. Hull Insurance in the 21st Century AMLIN - does it have a future? Simon Beale Marine Divisional Underwriter, Amlin

  2. Agenda Shipping Statistics Market Results Current Market Future Market

  3. Shipping Statistics

  4. World Merchant Fleetof ships of 300gt and overEvolution of the growth rates (GT, DWT, and Number of ships) between 1993 and 2004 Source: Indicators issued from various sources such as ISL Bremen for World fleet and trading figures (as at May 2004) and Clarkson Research Studies for shipbuilding and scrapped vessels (as at June 2004).

  5. Total Merchant FleetDWT 1993 - 2003 2003 = +23% growth on 1992 Source: Institute of Shipping Economics & logistics.

  6. Since 1993 Strong growth (13%) in numbers of vessels Stronger growth (23%) in world fleet size Average size increased 19,100 DWT – 20,700 DWT (9% growth) ? increased values ? increased premiums Fleet Growth

  7. Freight RatesClarksons Index 1990 - 2004 Source: Clarksons Freight Index

  8. Cargo Shipowners’ Earnings

  9. International Market Results

  10. Marine Hull – Evolution of Gross Loss Ratio,actual and estimated towards ultimateU/W Year 1996 to 2003 Assuming a 30% expense ratio (acquisition and management expenses), technical break even is achieved when the gross loss ratio does not exceed 70% 199919982000/ 20021997 / 200120031996 Ultimate calculation based on figures of 6 Member Organisations: France, Germany, Italy, Norway, UK Lloyds, UK IUA (6 for 1996 – No Germany)

  11. Global Marine Hull Premium ($m)1992 - 2003 2003 = 69% of 1994

  12. Global Marine Hull Premium ($m)v’s Merchant Fleet (DWT) between 1992 - 2003 2003 $4.7 / DWT 1994 $8.3 / DWT 2003 = 56% Of 1994 1999 $3.7 / DWT

  13. International Market Results Lost money / inadequate profits since 1995 Recent Premium increases inadequate compared to 1994 Current Premium wholly inadequate for world fleet

  14. SEX 9 Minutes!

  15. Current International Market

  16. Global Hull Premium - Major Markets 1992 - 2003(USD Million)

  17. Underwriting StatisticsRelative Rating 1995 – 2003(Sample 1) Source: Broker Portfolio (1) for Joint Hull Committee

  18. International Market Premiums’Discounted’ Fleet 51% of Claims Lead Price Claims Lead Source: Broker Research

  19. International Market Premiums’Discounted’ Fleet Total Price Paid (100% order) 68% Of Claims Lead Price Source: Broker Research

  20. Current International Market Dearth of technical understanding in global underwriting community Total lack of discipline Too many underwriters and brokers

  21. Future Market Requirement for Insurance Larger world fleet Significant assets Cruise vessels to fishing vessels ‘Rewrite’ Capital requires profit Shipowner better served by stability

  22. Options Captives Reinsurance Market Mutuals Consortiums Marketing Underwriting Expertise Claims service

  23. Conclusion World Fleet Growth Inadequate returns ‘Rewrite’ – a question of when Price / Profit is key “Niceties”, if at all, come later

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