Global Marine Insurance Report 2007
Astrid Seltmann, Facts & Figures Committee
Analyst/Actuary, CEFOR, Norway
Thanks also to Pamela Frood and Cédric Charpentier
Report on marine insurance
premiums 2005 and 2006
•
By end of August 2007, 45 of 53 (ex 47 of 54)
members reported their country’s marine premium
figures for accounting years 2005 and 2006.
•
Reported figures represent approx. 97% of the total
marine premium written by all IUMI members in
2005 and 2006.
•
Total premium for 2006 is therefore estimated to
reach approx. USD 20.3 billion*.
(excluding P&I from mutual P&I Clubs).
* Strong exchange rate effects on premium volume, see explanations in
presentation.
World Merchant Fleet and Global
Marine Hull & Liability Premium
Index of evolution, vessels > 100 GT, 1995 = 100%
175%
150%
No. Ships
125%
Gross tonnage
100%
75%
Global Marine Hull &
Liab. Premium
50%
Average insured vessel
value (CEFOR)
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
25%
Sources: Indicators for World Fleet from ISL Bremen, Vessel value index: CEFOR
World Seaborne Trade Volume and
Trade Values, Global Cargo Premium
Index of evolution, 1995 = 100%
250%
200%
Total World Trade
Volume
150%
Global Cargo
Premium
100%
Total World Trade
Values
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
50%
Source: Indicators for World Trade Volume from ISL Bremen
A major part of the increase 2001-04 and 06
and decrease 2004-2005 is due to
change in exchange rate against USD!
(Cargo mostly written in local currency)
Index of evolution of Exchange rates
between US$ and selected currencies
(as of December each year)
140%
130%
120%
EUR
110%
GBP
100%
JPY
90%
NOK
80%
70%
60%
1999
2000
2001
2002
Source: Norges Bank Exchange Rates Statistics
2003
2004
2005
2006
Global premiums reported
2002 to 2006 (accounting years)
2006
2005
2004
2003
2002
Global Hull
Transport / Cargo
Marine Liability
Offshore / Energy
Total
0
5000
10000
15000
20000
USD (millions)
Increase 01-04 and 05-06 partly due to weakening of USD against major European and Asian
currencies.
Stagnation 05 due to strengthening of USD against major European and Asian currencies.
Market Shares 2006
11.7%
Europe
Asia/Pacific
North America
Rest of World
2.0%
22.4%
63.9%
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 + Lloyds)
Asia/Pacific : Australia, Chinese Taipei, Hong
Kong, India, Japan, North Korea, South Korea,
Malaysia, New Zealand, Singapore
North America : Bermuda, Canada, USA
Rest of the World : Congo, Egypt, Israel, Kenya,
Lebanon, Mexico, Morocco, Nigeria, South
Africa,Tunisia, United Arab Emirates
Countries in italics did not report in 2007
Report on marine insurance premiums
by economic areas
(USD Millions)
Europe, Asia: Exchange rate effects due to weakening/strengthening of USD
14000
Europe
12000
10000
Asia/Pacific
8000
6000
North
America
4000
2000
0
2000
2001
2002
2003
2004
Accounting Year
2005
2006
Rest of the
World
Global Marine Premium 2000 - 2006
(USD Million), as reported
25,000
20,000
Total
15,000
10,000
Cargo
Hull
5,000
Energy
Liability
0
2000
2001
2002
2003
2004
Accounting Year
2005
2006
Global Hull Premium
Major Markets, 2000 - 2006
800
700
600
500
400
300
200
100
0
(USD Million)
France
Italy
Japan
Norway
Spain
UK (ILU/IUA)
UK (Lloyd's)
USA
2000
2001
2002
2003
2004
2005
Accounting Year
From 2004 building risk is officially included in figures.
2006
Global Cargo Premium
Major Markets, 2000 - 2006
(USD Million)
2000
1500
1000
500
0
2000
2001
2002
2003
2004
Accounting Year
Europe/Asia: exchange rate effects.
2005
2006
Belgium
Chinese Taipei
France
Germany
Italy
Japan
Netherlands
Spain
Sweden
UK (ILU/IUA)
UK (Lloyd's)
USA
MARINE MUTUAL MARKET SECTOR
Gross Calls (Premium) – Operational location
Per accounting year – USD Million
1800
1600
1400
1200
1000
800
600
400
200
0
Japan
Norway
Sweden
UK
2000
2001
2002
2003
2004
Accounting Year
Source: Standard & Poors Marine Mutual Report 2007
2005
2006
US
Marine Hull –
Evolution of Paid Claims, Gross Premiums
as reported, U/W Year 1999 to 2006 (USD)
1999 underwriting year
USD
3000
3000
3000
3000
USD
2000 underwriting
underwriting year
year
USD
2001 underwriting year
USD
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
0
end of 1999 2000 2001 2002 2003 2004 2005 2006 2007
ult
3000
USD
0
end of 2000 2001 2002 2003 2004 2005 2006 2007 2008
ult
3000
2003 underwriting year
USD
0
end of 2001 2002 2002 2004 2005 2006 2007 2008 2009
ult
0
end of 2002 2003 2004 2005 2006 2007 2008 2009 2010
2005 underwriting year
USD
USD
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
0
end of 2003 2004 2005 2006 2007 2008 2009 2010 2011
ult
0
end of 2004 2005 2006 2007 2008 2009 2010 2011 2012
ult
0
end of 2005 2006 2007 2008 2009 2010 2011 2012 2013
ult
3000
3000
2004 underwriting year
2002 underwriting year
ult
2006 underwriting year
0
end of 2006 2007 2008 2009 2010 2011 2012 2013 2014
Blue line = Gross Premium; Red line = Paid Claims
Totals of 9 IUMI members –
Belgium, France, Germany, Italy, Netherlands, Norway, Spain, UK Lloyds, UK IUA
ult
Marine Hull – Evolution of
Paid and Total Claims, Gross Premiums
as reported, U/W Year 1999 to 2006 (USD)
3000
3000
USD
1999 underwriting year
USD
3000
3000
2000 underwriting year
USD
2001 underwriting year
USD
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
0
end of 1999 2000 2001 2002 2003 2004 2005 2006 2007
0
end of 2000 2001 2002 2003 2004 2005 2006 2007 2008
3000
USD
3000
2003 underwriting year
USD
0
end of 2001 2002 2002 2004 2005 2006 2007 2008 2009
3000
2004 underwriting year
USD
0
end of 2002 2003 2004 2005 2006 2007 2008 2009 2010
3000
2005 underwriting year
USD
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
0
end of 2003 2004 2005 2006 2007 2008 2009 2010 2011
0
end of 2004 2005 2006 2007 2008 2009 2010 2011 2012
2002 underwriting year
0
end of 2005 2006 2007 2008 2009 2010 2011 2012 2013
2006 underwriting year
0
end of 2006 2007 2008 2009 2010 2011 2012 2013 2014
Blue line = Gross Premium; Red line = Paid Claims, Yellow line = Paid+Outstanding claims
Totals of 8 IUMI members – Belgium, France, Germany, Italy, Netherlands, Norway, Spain, UK Lloyds
Marine Hull Gross Loss Ratio paid claims,
Actual and estimated towards ultimate
U/W Year 1996 to 2005
140%
1999
120%
2000
100%
2002
80%
1996
1997
1997
2001
1998
2004/05/1996
2003
1999
2000
2001
60%
2002
2003
40%
2004
2005
20%
10
8
12
0
1
U 32
lti
m
at
e
96
84
72
60
48
36
24
0%
12
Technical break
even is achieved
when the gross
loss ratio does not
exceed
100% minus the
expense ratio
(between 20%
and 30%,
acquisition costs,
capital costs and
management
expenses)
1998
Ultimate calculation based on figures of 9 IUMI members:
Belgium, France, Germany, Italy, Netherlands, Norway, Spain, UK Lloyds, UK IUA
Transport/Cargo –
Evolution of Paid Claims, Gross Premiums
as reported, U/W Year 1999 to 2006 (USD)
5000
5000
5000
USD
4500
USD
1999 underwriting year
4500
2000 underwriting year
USD
4500
5000
2001 underwriting
underwriting year
year
2001
USD
4500
4000
4000
4000
4000
3500
3500
3500
3500
3000
3000
3000
3000
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
0
end of 1999 2000 2001 2002 2003 2004 2005 2006 2007
ult
5000
USD
4500
0
end of 2000 2001 2002 2003 2004 2005 2006 2007 2008
ult
5000
2003 underwriting year
USD
4500
0
end of 2001 2002 2003 2004 2005 2006 2007 2008 2009
ult
5000
2004 underwriting year
USD
4500
0
end of 2002 2003 2004 2005 2006 2007 2008 2009 2010
USD
4500
4000
4000
4000
3500
3500
3500
3500
3000
3000
3000
3000
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
ult
0
end of 2004 2005 2006 2007 2008 2009 2010 2011 2012
ult
ult
5000
2005 underwriting year
4000
0
end of 2003 2004 2005 2006 2007 2008 2009 2010 2011
2002 underwriting year
0
end of 2005 2006 2007 2008 2009 2010 2011 2012 2013
Blue line = Gross Premium; Red line = Paid Claims
Totals of 8 IUMI members –
Belgium, France, Germany, Italy, Netherlands, Spain, UK Lloyds, UK IUA
ult
2006 underwriting year
0
end of 2006 2007 2008 2009 2010 2011 2012 2013 2014
ult
Transport/Cargo –
Paid and Total Claims, Gross Premiums
as reported, U/W Year 1999 to 2006 (USD)
4500
4500
USD
4000
1999 underwriting year
USD
4000
4500
2000 underwriting year
USD
4000
4500
year
underwriting year
2001 underwriting
2001
USD
4000
3500
3500
3500
3500
3000
3000
3000
3000
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1000
1000
1000
500
500
500
0
end of 1999 2000 2001 2002 2003 2004 2005 2006 2007
4500
USD
0
end of 2000
4500
2003 underwriting year
2001
2002
2003 2004
2005 2006
2007 2008
2004 underwriting year
1500
1000
500
0
end of 2001
4500
2002
2003
2004
2005
2006
2007
2008
2009
2005 underwriting year
0
end of 2002
4500
USD
4000
4000
4000
4000
3500
3500
3500
3500
3000
3000
3000
3000
2500
2500
2500
2500
2000
2000
2000
2000
1500
1500
1500
1500
1000
1000
1000
1000
500
500
500
500
0
end of 2003
2004
2005
2006 2007
2008
2009
2010 2011
0
end of 2004 2005 2006 2007 2008 2009 2010 2011 2012
2002 underwriting year
0
end of 2005 2006 2007 2008 2009 2010 2011 2012 2013
2003
2004
2005 2006 2007
2008
2009 2010
2012
2013
2006 underwriting year
0
end of 2006
2007
2008
2009
2010
Blue line = Gross Premium; Red line = Paid Claims, Yellow line = Paid+Outstanding claims
Totals of 7 IUMI members – Belgium, France, Germany, Italy, Netherlands, Spain, UK Lloyds
2011
2014
Transport/Cargo,
Gross Loss Ratio paid claims,
Actual and estimated towards ultimate
U/W Year 1996 to 2006
100%
90%
80%
70%
2002/04/05/06
60%
2003
50%
40%
30%
20%
10%
U
1
lti 32
m
at
e
0
12
8
10
96
84
72
60
48
36
24
0%
12
Technical break
even is achieved
when the gross
loss ratio does not
exceed
100% minus the
expense ratio
(between 20%
and 30%,
acquisition costs,
capital costs and
management
expenses)
Ultimate calculation based on totals of 8 IUMI members –
Belgium, France, Germany, Italy, Netherlands, Spain, UK Lloyds, UK IUA
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Marine Hull and Cargo/Transport
Gross Ultimate Loss Ratio
U/W Year 1996 to 2006
140%
Impact of major claims
in 2007 attaching to 2006
+ further increase in
partial claims costs in 2007
120%
Technical break
even is achieved
when the gross
loss ratio does not
exceed
100% minus the
expense ratio
(acquisition costs,
capital costs and
management
expenses, usually
between 20% and
30%).
100%
80%
Marine Hull
Cargo/Transport
60%
40%
20%
0%
1996 1997
1998 1999 2000
2001 2002 2003 2004
2005 2006
Examples of Major Hull claims in 2007,
attaching to Underwriting year 2006
Date
Vessel Name
Casualty
18.01.07
08.03.07
08.03.07
08.03.07
05.04.07
12.04.07
MSC Napoli
MSC Joanna
W.D. Fairway
Repubblica de Genova
Sea Diamond
Bourbon Dolphin
Grounding
Collision
Collision
other
Grounding
Capsize
Claims xs 20 MUSD occurred in 2007, but attaching to 2006,
are estimated to sum up to about 600 USD million,
adding roughly additional 18% to the 2006 hull gross loss ratio.
Marine Hull - Quarterly evolution
Net loss ratio paid+outstanding claims
Hull & Machinery insurance
(excluding LOH, freight and hull interest, building risk)
Net loss ratio*
(net of acquisition costs)
120.0%
100.0%
80.0%
2005
60.0%
2006
40.0%
20.0%
0.0%
1
2
3
4
5
6
* =(Paid+Outstanding claims) / Net premium
7
8
Source: CEFOR, Underwriting years 2005 and 2006
9
10
Quarters
Summing up

Marine Hull




Underwriting years 2004, 2005:
 Few major claims
 But increase in average attritional claims amount
Underwriting year 2006:
 Increase in the number and severity of major claims
 Continuing trend towards higher attritional claims
amounts
Quo vadis?
Transport/Cargo


Exposures in values increases significantly, but not
reflected in premium development
Even so, stability in results since 2002