Marine & Energy Practice Risk and Insurance Seminar Houston

1. 20 September 2004 Marine & Energy Practice Risk and Insurance SeminarHouston John Lapsley Chairman Marine & Energy

2. Welcoming address

3. Where historians say it all started…

6. Brief history of Marine Insurance

7. Brief history of Marine insurance

8. It’s all to do with a cup of coffee LONDON 1680 Just a 10 minute walk for city financiers EDWARD LLOYD’S COFFEE HOUSE IN TOWER STREET Just a 5 minute walk for ship’s captains

9. Lloyd’s history – the origins / milestones

10. Brief history of Marine insurance

11. Brief history of Marine insurance

12. Brief History of Marine Insurance

13. Lloyd’s today 2002 2003 18% GBP 13,230,000,000 GBP 14,396,000,000 Market capacity greater than at any time in its 315 year history * Source = Lloyd’s Members Services Unit

14. USA History of Insurance - Milestones

15. USA History of Insurance - Milestones

16. 425 375 325 275 225 175 125 75 25 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 The State of the Market Loss Ratio Source: CEFOR Index

17. Global premiums reported 1997 to 2002 (accounting years) Source: CEFOR

18. World Insurance Market 2001Premium Volume in USD Billion 12 957 Life, 60% Non-life, 40% Marine, 0.5% 1439 Marine H&M: 2,8 ~ 0.1% Total: 2,408 Source: Swiss Re & IUMI

19. Market Shares 2002 3.9% 14.2% Europe Asia/Pacific North America Rest of World 22.1% 59.8% Source: CEFOR/IUMI

20. Region Premiums Premiums Premiums Variation Variation Market share Market share Market share 2002 2001 2000 2000-2001 2001-2002 2002 2001 2000 Europe 7,619,037 6,654,292 6,108,608 8.93% 14.50% 59.81% 58.54% 55.64% Asia/Pacific 2,820,473 2,685,196 3,025,848 -11.26% 5.04% 22.14% 23.62% 27.56% North America 1,805,642 1,618,951 1,404,519 15.27% 11.53% 14.18% 14.24% 12.79% Rest of the world 492,985 408,770 440,602 -7.22% 20.60% 3.87% 3.60% 4.01% Report on marine insurance premiums - by economic areas (USD million) Europe = Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom (IUA + Lloyd’s) Asia/Pacific = Hong Kong, India, Indonesia, Japan, North Korea, South Korea, Malaysia, Pakistan, Singapore North America = Bermuda, Canada, USA Rest of the world = Australia, Congo, Egypt, Israel, Ivory Coast, Kenya, Lebanon, Mexico, Morocco, New Zealand, Nigeria, South Africa, Tunisia, United Arab Emirates Source: CEFOR/IUMI

21. 18000 16000 14000 Global Hull 12000 Cargo 10000 Liability 8000 Energy 6000 Total 4000 2000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Accounting Year Global Marine Premium 1992 - 2002 (USD Million), as reported Source: CEFOR/IUMI

22. 0 Global Hull PremiumMajor Markets 1992 - 2002 (USD Million) 1400 France 1200 Italy 1000 Japan 800 Norway 600 Spain UK (ILU/IUA) 400 UK (Lloyd's) 200 USA 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Accounting Year Source: CEFOR/IUMI

23. Absheron

24. Involvement of Energy roots in MarineMarine to Upstream

25. Involvement of Energy roots in Marine 1947 Terrebonne Parish, LA – first offshore structure Gulf of Mexico

26. Involvement of Energy roots in MarineMarine to Upstream 1975 first North Sea structure - Argyll

27. Buzzard

28. Involvement of Energy roots in MarineMarine to Upstream

29. Involvement of Energy roots in MarineMarine to Upstream

30. Oil Insurance Mutual

31. Involvement of Energy roots in MarineMarine to Upstream

32. Fire to Downstream

33. Fire to Downstream

34. Summary