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July 17, 2006 International Insurance Society Frank Nutter Reinsurance Association of America

A U.S. Perspective on the Global Reinsurance Market. July 17, 2006 International Insurance Society Frank Nutter Reinsurance Association of America. Premiums ceded by primary insurers (US$’bn). Source: Swiss Re. Gross Premium ceded by region of ceding insurer.

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July 17, 2006 International Insurance Society Frank Nutter Reinsurance Association of America

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  1. A U.S. Perspective on the Global Reinsurance Market July 17, 2006 International Insurance Society Frank Nutter Reinsurance Association of America

  2. Premiums ceded by primary insurers (US$’bn) Source: Swiss Re

  3. Gross Premium ceded by region of ceding insurer

  4. Global Reinsurance Premium by Country of Group Domicile in 2004 Source: S&P’s Global Reinsurance Highlights 2005 Edition

  5. Cross Border Premiums $62.0B US to Offshore $62.0B To affiliates $38.8B To non-affiliates $23.2B

  6. Cross Border Premiums $14.3B US to Offshore $62.0B Offshore to US $14.3B

  7. Cross Border Premiums

  8. MUNICH RE GERMANY SWISS RE SWITZERLAND BERKSHIRE HATHAWAY RE U.S. HANNOVER RE GERMANY GE INSURANCE SOLUTIONS U.S. LLOYD’S U.K. ALLIANZ RE GERMANY EVEREST RE BERMUDA XL RE BERMUDA PARTNER RE BERMUDA TRANSATLANTIC HOLDINGS INC. U.S. CONVERIUM SWITZERLAND TOKIO MARINE NICHIDO FIRE INS. JAPAN SCOR FRANCE ODYSSEY RE U.S. SOMPO JAPAN INS. INC. JAPAN MITSUI SUMITOMO INS. CO. LTD. JAPAN CAISSE CENTRALE DE REASSURANCE FRANCE KOREAN RE KOREA PLATINUM UNDERWRITERS HOLDINGS LTD. BERMUDA ACE TEMPEST RE BERMUDA AIOI INSURANCE CO. LTD. JAPAN RENAISSANCERE HOLDINGS LTD. BERMUDA ALEA GROUP HOLDINGS(BERMUDA) BERMUDA TOA RE CO. LTD. JAPAN Top 25 P&C Reinsurance Groups(Based on 2004 premiums)

  9. Top 10 Global Reinsurance Groups in 2004 Source: S&P’s Global Reinsurance Highlights 2005 Edition

  10. Number of U.S. Professional Reinsurers Reporting to the RAA

  11. Announced Insurer Capital Raising* ($ Millions, as of June 8, 2006) As of June 8, 20 insurers have raised $12.1 billion in new capital; 12 Start-ups raised $7.6 billion more and SPRV’s/Sidecars raised $3.6 billion for a total of $23.3B. Existing companies will continue to find it relatively easy to raise cash. *Existing (re)insurers. Announced amounts may differ from sums actually raised. Sources: Morgan Stanley, Lehman Brothers, Company Reports; Insurance Information Institute.

  12. Announced Capital Raising by Insurance Start-Ups ($ Millions, as of June 8, 2006) As of June 8, new Bermuda Start-ups have raised $7.6B.

  13. Announced Capital Raising by Special Purpose Reinsurance Vehicles/Sidecars ($ Millions, as of June 8, 2006) As of June 8, SPRV’s/Sidecars have raised $3.6B.

  14. Berkshire Hathaway Transatlantic Holdings, Inc. Odyssey Re Top 25 Worldwide P&C Reinsurer GoupsCross Ownership Common 100% of US Reinsurers by market share have EU domestic companies

  15. Munich Re Hannover Re Allianz Re SCOR Lloyds* AXA* *No Sub Top 25 Worldwide P&C Reinsurer GoupsCross Ownership Common 100% of US Reinsurers by market share have EU domestic companies 84% of EU Reinsurers by market share have US domestic companies

  16. Munich Re Swiss Re Hannover Re Allianz Re Everest Re XL Re Partner Re Converium Tokio Marine Nichido Fire Ins. SCOR Sompo Japan Ins. Inc. Mitsui Sumitomo Ins. Platinum Underwriters Holdings Ltd. Ace Tempest Re Aioi Insurance Co. Ltd. Alea Group Holdings(Bermuda) Toa Re Co. Ltd. *Based on 2004 data Top 25 Worldwide P&C Reinsurer GoupsCross Ownership Common 100% of US Reinsurers by market share have EU domestic companies 84% of EU Reinsurers by market share have US domestic companies 89% of non-US [EU/Asia/Bermuda/Swiss] Reinsurers by market share have US domestic companies*

  17. Reporting reinsurers’ total capital available

  18. Reason for P/C Insolvencies(218 Insolvencies, 1993-2002) Reserve deficiencies account for more than half of all p/c insurers insolvencies Source: A.M. Best, Insurance Information Institute

  19. Reinsurance Regulation in the U.S. and Mutual Recognition • The current regulatory system has served U.S. buyers well • New initiatives deserve consideration • EU Re Directive • Sovency II • The Goal: sound solvency regulation and healthy competition • Mutual Recognition Road Map • International accounting standards • Standards for regulation • Reconciliation within the U.S. system

  20. www.reinsurance.org

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