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THE MARINE INSURANCE MARKET 2002

THE MARINE INSURANCE MARKET 2002. Houston Marine Insurance Seminar September 22, 2002. International Union of Marine Insurance. Founded in Berlin in 1874 55 Member Associations

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THE MARINE INSURANCE MARKET 2002

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  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” - Webster’s 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 Cat’s

  7. U.S. Marine Insurance Results 2001Lowlights  Energy & Offshore 89% Growth / 152.9% Combined Ratio  Ocean Hull Premiums grew 3.5 X’s / 113.1% Combined Ratio  Other Hull / P&I – 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 20001998-2000  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 Who’s responsible?  The Underwriter  The Broker/Agent  The Reinsurer  The Customer

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