Global Marine Insurance Report 2010
description
Transcript of Global Marine Insurance Report 2010
12 TO 15 SEPTEMBER
Global Marine Insurance Report 2010
Astrid Seltmann
Facts and Figures Committee, Vice Chairman
Analyst/Actuary @ Cefor, The Nordic Association of Marine Insurers
212 TO 15 SEPTEMBER
Global Marine Insurance Report 2010• Global Marine Insurance – Overview• Global Cargo market • Global Hull market • Global Offshore Energy Market
• Addendum (in download only):
Tables with underlying reported figures
312 TO 15 SEPTEMBER
29.0%
51.5%
6.6%
12.9%
2009
Global Hull
Transport/Cargo
Marine Liability
Offshore/Energy
Global Marine Premium 2009, by line of business
Total reported: 22.9 USD billion
Total estimated including not reported: 23.6 USD billion
712 TO 15 SEPTEMBER
61.3%21.4%
9.5%7.8%
Europe
Asia/Pacific
North America
Rest of the world
Market Shares 2009
Europe : Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Nordic (Cefor), Poland, Portugal, Romania, Russia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom (IUA + Lloyds)Asia/Pacific : Australia, Chinese Taipei, Hong Kong, India, Japan, Korea DPR, South Korea , Malaysia, New Zealand, SingaporeNorth America : Bermuda, Canada, USARest of the World : Bahrain, Brasil, Congo, Egypt, Israel, Kazakhstan , Kenya, Lebanon, Mexico, Morocco, Nigeria, South Africa,Tunisia, United Arab Emirates
Countries in italics did not report in 2010
Total reported: 22.9 USD billion
1012 TO 15 SEPTEMBER
67%
23%
6% 4%
UK
Nordic
Japan
US
Calls 2009:UK: 2.47 Nordic: 0.86Japan: 0.21US: 0.14Total: 3.68 (USD billion)
MARINE MUTUAL MARKET P&I Clubs International GroupGross Calls 2009 (Premium) – Operational location
Source: Standard & Poors P&I Highlights 2010/ +27%
1212 TO 15 SEPTEMBER
Global Cargo Premium by marketsTotal: 11.8 USD billion
Belgium3%
Brasil8% France
8%Germany
12%
Italy5%
Japan14%Netherlands
5%Russia
2%Spain
3%
UK (IUA)2%
UK Lloyds7%
USA7%
Other markets27%
2009
1412 TO 15 SEPTEMBER
France7% Italy
6% Japan9%
Korea, Republic5%
Netherlands5%
Nordic (Cefor)
14%Spain5%
UK (IUA)4%
UK (Lloyds)14%
USA5%
Other markets26%
2009
**
** includes facultative and prop. reinsurance
Global Hull Premium by marketsTotal: 6.6 USD billion
*
* Cefor members in Norway, Denmark, Sweden, Finland
1612 TO 15 SEPTEMBER
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Total World Trade Values
Total World Trade Volume
Global Cargo Premium
World Seaborne Trade Volume and Trade Values, Global Cargo Premium, Index of evolution, 1995 = 100%
Source: Indicators for World Trade Volume from ISL Bremen, 2010 figures based on IMF estimates
Cycle irregularities before 2008 mainly due to exchange rates.
2009: reduction in cargo income – due to less global trade, exchange rates, or soft market? 2010: upswing in trade, but probable further decrease of cargo premium due to time lag effects. ?
1712 TO 15 SEPTEMBER
60%
80%
100%
120%
140%
160%
180%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EUR
GBP
JPY
NOK
Index of Evolution of USD Exchange rate
against selected currencies (exchange rates as of December each year, 2010 as of June 10)
Source: Norges Bank Exchange Rates Statistics
USD weaker
strongerwea
kerstronger
Since Financial crisis less correlation between exchange rates
1812 TO 15 SEPTEMBER
50%
70%
90%
110%
130%
150%
170%
190%
210%
230%19
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
09
Average insured value per vessel (Cefor - including new and renewed vessels)
Gross tonnage (> 300 GT)
No. Ships (> 300 GT)
Global Marine Hull & Liab. Premium
World Merchant Fleet and Global Marine Hull & Liability Premium, Index of evolution, 1995 = 100%
Sources: Indicators for World Fleet from ISL Bremen, Vessel value index: Cefor, as of 30.06.10
1912 TO 15 SEPTEMBER
5.5%7.1%
1.9%
8.3%
5.6%
-15.1%
-9.2%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%20
04
2005
2006
2007
2008
2009
2010
Average annual change in insured values for renewed vessels
Change in insured values on renewed vessels, by year of renewal (= insured value on renewal / insured value previous year)
Source: Cefor, The Nordic Association of Marine Insurers, figures as of 30. June 2010
Insured values decrease from 4Q 2008
2112 TO 15 SEPTEMBER
0%
20%
40%
60%
80%
100%
120%
140%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Marine Hull
Cargo/Transport
Marine Hull and Cargo/TransportGross* Ultimate Loss Ratio, U/W Years 1998 to 2009
* Technical break even: gross loss ratio does not exceed 100% minus the expense ratio (usually 20%-30% acquisition cost, capital cost, management expenses)
2007 / 2008: Changing frame and market conditions provoke increase in claims reserves for both cargo and hull.
2009: signs of improvement, but uncertainty as to effect of unstable environment on ultimate results.
2212 TO 15 SEPTEMBER
Macroeconomic parameters/ Claims cost
Market conditions
Income Insurance results
Market predictability?
Change
Change
Change
2312 TO 15 SEPTEMBER
40%
50%
60%
70%
80%
90%
1 2 3 4 5
2003
2004
2005
2006
200720082009
Marine Hull - Gross* Loss Ratio Underwriting years 2003 to 2009 as reported after 1, 2, 3, 4 and 5 years
From 2007: Repair cost driven up by changing frame conditions. Extraordinary upwards adjustment of claims reserves.
=> Change in typical claims pattern!
2009: Price-driving factors turn back to more ”normal” level, but no stable frame conditions => uncertain effect on claim level.
80+%?
70+%?
Previous loss ratio level
Currently to be expected loss ratio level
2009
2412 TO 15 SEPTEMBER
40%
50%
60%
70%
80%
1 2 3 4 5 6
2003
2004
2005
2006
2007
2008
2009
2009
Marine Cargo - Gross* Loss Ratio Underwriting years 2003 to 2009 as reported after 1, 2, 3, 4 and 5 years
2007 / 2008: Changing frame conditions demand extraordinary upwards adjustment of claims reserves.
=> Change in typical claims pattern!
2009: uncertain effectof unstable market conditions on final outcome.
70+%?
62%?
Previous loss ratio level
Currently to be expected loss ratio level
2512 TO 15 SEPTEMBER
Summing up Hull in a changing world… Frame conditions – swing in various
directions: steel prices / repair yard capacity / exchange rates / world trade / commodity prices / vessels in lay-up /...
Changes influence both income (vessel values) and cost (claim frequency and repair cost).
Repair cost and claims frequency increased until 2008. In 2009 signs of returning to more ”normal” levels. But too early to tell, strongly depending on further development of frame conditions / price-driving factors in an unstable economical and trade environment.
Strong major claims impact in 2006/07, improvement in 2008/09, but major claims may occur at any time!
2612 TO 15 SEPTEMBER
Summing up Hull in a changing world… Hull technically at loss for 14
consecutive years!
So not everything is changing after all… Future Global Hull Market depends on
Better understanding of dependencies between macroeconomic parameters and repair cost
Improved models to estimate expected claim cost (= risk premium)
Trade / Fleet development Market discipline / capacity
and as always: the impact of major claims
2712 TO 15 SEPTEMBER
Summing up Cargo in a changing world… From 2008 reduction in insured values,
with respective effect on cargo income. Strong upwards adjustment of 2007/2008
claims reserves. If claims reserves prove to be correct, this produces a technical loss for the first time since 2000.
Uncertainties as to the profitability of 2009. The future: Claim amounts unlikely to
decrease because of increased risk of accumulation, moral hazard, theft frequency.
2812 TO 15 SEPTEMBER
UK (IUA)3.2%
UK (Lloyds)61.9%
USA7.8%
Nigeria5.8%
Malaysia3.9%
Japan3.9%
Italy3.7%
Other markets
9.9%
2009
Global Offshore Energy Premium by markets
Total reported: 2.95 USD billion
No data: Nordic region, Russia, Kazakhstan.
*
* includes facultative and prop. reinsurance
2912 TO 15 SEPTEMBER
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Average Day Rates
Global Offshore Energy Premium
Oil price, Brent Crude
No. Contracted Rigs
Energy Mobiles, Day rates, Oil PriceGlobal Offshore Energy Premium, Index of evolution, 2000 = 100%
Sources: No. Contracted rigs, day rates: RigZone, Oil price: Energy Information Administration (US), 2010 figures as of 31.07.10
3012 TO 15 SEPTEMBER
0%
50%
100%
150%
200%
250%
300%
350%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
outstanding
paid 12th year
paid 11th year
paid 10th year
paid 9th year
paid 8th year
paid 7th year
paid 6th year
paid 5th year
paid 4th year
paid 3rd year
paid 2nd year
paid 1st year
2005Katrina & Rita
2004Ivan
2008Ike
Soft market
2009: no major hurricane activity, but severe physical risk losses not wind-related -> 2009 loss ratio will increase!
Offshore Energy Gross Reported Loss RatiosU/W Years 1996 to 2009, as reported at 31 December 2009
3112 TO 15 SEPTEMBER
Summing up Offshore Energy Volatile business, results depend strongly on
hurricane impact, but trend towards self-insurance in Gulf of Mexico. But no hurricanes does not mean no losses!
Rates and Terms & Conditions improved after 2000, following hurricane activity in Gulf of Mexico.
Long time lag between accident and claims payment, due to technical complexity of the insured objects.
No regular claims patterns. Claims reserves are set depending on knowledge about individual claims.
Deepwater Horizon estimate > 2 USD bill., impact on 2009 & 2010 uw year.
2009: more physical damage losses not related to wind!