IUMI 2002 – New York City
A Joint Hull Committee View from London
Casualty & Underwriting Statistics
IUMI 2002 - New York City
IUMI 2002 – New York City
Casualty Statistics
Casualty & Underwriting Statistics A Joint Hull Committee View from London Agenda
IUMI 2002 – New York City
Casualty Statistics Total Loss Trends
• Summary of Total Loss Statistics
Casualty & Underwriting Statistics A Joint Hull Committee View from London Agenda
IUMI 2002 – New York City
Casualty & Underwriting Statistics A Joint Hull Committee View from London
Casualty Statistics Total Loss Trends
• Summary of Total Loss Statistics
Major Partial Loss Trends• Observations from Salvage Ltd’s major casualty
database
Agenda
IUMI 2002 – New York City
Casualty & Underwriting Statistics A Joint Hull Committee View from London
Casualty Statistics Total Loss Trends
• Summary of Total Loss Statistics
Major Partial Loss Trends• Observations from Salvage Ltd’s major casualty
database
Underwriting Results
Agenda
IUMI 2002 – New York City
Casualty & Underwriting Statistics A Joint Hull Committee View from London
Casualty Statistics Total Loss Trends
• Summary of Total Loss Statistics
Major Partial Loss Trends• Observations from Salvage Ltd’s major casualty
database
Underwriting Results Market Results The Market Cycle
Agenda
IUMI 2002 – New York City
A Joint Hull Committee View from London
Total Loss Trends• Summary of Total Loss Statistics
IUMI 2002 – New York City
Total Losses 1989 – 2001By Number
Vessels > 500Grt
0
25
50
75
100
125
150
175
200
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Number
Bulkers Tankers Other Cargo Others Total
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Total Losses 1989 – 2001By Tonnage
Vessels > 500Grt
0
250
500
750
1,000
1,250
1,500
1,750
2,000
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
GRT (000's)
Bulkers Tankers Other Cargo Others Total
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Total Losses 1989 – 2001As Percentage of World Fleet
Vessels > 500Grt
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
% of World Fleet
%age of Vessels %age of GRT
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Total Losses 1994 – 2001Age / Type Profile
Vessels > 500Grt1.28%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0-4 yrs 5-9 yrs 10-14 yrs 15-19 yrs 20-24 yrs 25 yrs +
% of World Fleet
Bulkers Tankers Other ships Total
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Total Losses 1994 – 2001
0% 5% 10% 15% 20% 25% 30%
Various
Mach / Eng Rm
Hull / Structure
Collision
Fire
Grounding
Weather
Frequency (%age of overall total losses)
By Cause, All Vessel TypesVessels > 500Grt
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Total Losses 1994 – 2001By Cause, Principal Vessel Types
Vessels > 500Grt
0%
5%
10%
15%
20%
25%
30%
35%
40%
Bulkers Tankers Gen Cargo Others
Frequency (%age of overall total losses)
Collision Fire Grounding Hull/Structure Mach/Eng Rm Weather Various
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Total Losses
By Number, By Tonnage, As %age World Fleet:- Downward Trend
• Almost Year on Year
The Most Influential Factors:- Age & Weather
Major Issues:-• Maritime Regulation (Classification, ISM, STCW, Port State Control)
• Technology / Advances in Design & Construction
• World Economy (Maintenance Expenditure)
Conclusion
IUMI 2002 – New York City
Major Partial Loss Trends• Observations from Salvage Ltd’s major
casualty database
IUMI 2002 – New York City
Partial Loss Casualties 1999–2002
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1999 2000 2001 2002
Frequency (%age of overall PA Casualties)
Mach/Eng Rm Grounding Fire/Explosion Collision
Prop/Steering Heavy Weather Sinking/Capsize Others
Source: BMT Salvage Ltd
By Cause, All Vessel TypesEstimated Cost of Repairs > US$250,000
IUMI 2002 – New York City
Partial Loss Casualties 1999–2002
0%
10%
20%
30%
40%
50%
60%
Bulker Container GeneralCargo
Passenger Tanker ChemTanker
Ro/Ro Reefer Gas
Frequency (%age of overall PA Casualties)
Machinery/Eng Rm Grounding Fire/Explosion Collision
Source: BMT Salvage Ltd
Principal Cause and Vessel TypeEstimated Cost of Repairs > US$250,000
IUMI 2002 – New York City
Partial Loss Casualties 1999–2002Frequency & Magnitude, All Vessel Types
Estimated Cost of Repairs > US$250,000
Source: BMT Salvage Ltd
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
Main
Eng
ine
Auxilli
ary
Oth
er ER
Collisi
on
Fire/E
xp
Gro
undin
g
HWD
Ingr
ess/F
lood
Ice
Structu
ral
Coatin
g
Prop/S
teerin
g
Av
era
ge
PA
Ca
su
alt
y C
os
t (U
S$
m)
0%
5%
10%
15%
20%
25%
30%
35%
Fre
qu
en
cy
(%a
ge
of o
'all b
y n
um
be
r)
Average PA Casualty Cost Frequency
IUMI 2002 – New York City
Partial Loss Casualties 1999–2002
0% 5% 10% 15% 20% 25% 30%
0-5 yrs
6-10 yrs
11-15 yrs
16-20 yrs
21-25 yrs
> 25 yrs
Frequency (%age of Total Number of machinery Losses)
Source: BMT Salvage Ltd
Machinery Losses by Vessel AgeEstimated Cost of Repairs > US$250,000
IUMI 2002 – New York City
Partial Losses
Machinery / Engine Room Damage Highest Frequency All Age and Vessel Types
• Machinery / Engine Room Surveys, Deductibles, New for Old? Fire
Highest Cost• Fire Precautions
Grounding / Collisions Significant Cost & Frequency
• Trading Pattern, Deductibles, Loadings Structural / Coating
Significant Cost• Building Surveys, Release to Builders, Warranty Periods
Conclusion
IUMI 2002 – New York City
from London
Underwriting Results Market Results The Market Cycle
IUMI 2002 – New York City
‘T’ Audit Code Projected ULR’s 1993 - 2001Net of Commission, Gross of Reinsurance
Lloyd’s Hull Results
98%
152%153%
106%
82%
63%
52%55%
144%
0%
100%
200%
1993 1994 1995 1996 1997 1998 1999 2000 2001
Projected ULR
Lloyd's Market Analysis Dept Current Projection
Lloyd's Solvency & Reserving Data (@ 31/12/01)
Source: Lloyd’s Market Analysis Dept
IUMI 2002 – New York City
Lloyd’s Hull Results‘T’ Audit Code Projected ULR’s 1993 - 2001
Net of Commission, Gross of Reinsurance
114%
152%153%
106%
82%
63%
52%55%
157%
0%
100%
200%
1993 1994 1995 1996 1997 1998 1999 2000 2001
Projected ULR
Lloyd's Market Analysis Dept Current Projection
Lloyd's Solvency & Reserving Data (@ 31/12/01)
Source: Lloyd’s Market Analysis Dept
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
1996
Hull Underwriting Results
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
1997
1996
Hull Underwriting Results
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
1998
1997
1996
Hull Underwriting Results
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
19981999
1997
1996
Hull Underwriting Results
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
19981999
2000 1997
1996
Hull Underwriting Results
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
19981999
2000
2001
1997
1996
Hull Underwriting Results
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Hull Underwriting ResultsComparison @ 6th Quarter
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
19981999
2000
2001
1997
1996
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Hull Underwriting ResultsComparison @ 6th Quarter
Lloyd's Audit Code 'T'Incurred Loss Ratios
(Net of Commission, Gross of R/I)
0%
20%
40%
60%
80%
100%
120%
140%
160%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarter
Inc
urr
ed
Lo
ss
Ra
tio
6th Qtr
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Lloyd's Audit Code 'T'Booked Premium & Incurred Claims @ 6 Quarters
(Net of Commission, Gross of R/I)
£0
£50
£100
£150
£200
£250
£300
1996 1997 1998 1999 2000 2001
Underwriting Year
Bo
oke
d P
rem
ium
£m
0%
20%
40%
60%
80%
100%
120%
Incu
rred L
oss R
atio
Booked Premium Inc'd Claims Inc'd Loss Ratio
Hull Underwriting ResultsComparison @ 6th Quarter
Source: Lloyd’s Results 2nd Qtr 2002
IUMI 2002 – New York City
Premium Received vs Premium Written2000 - 2001 (as @ 18 mos)
0%
20%
40%
60%
80%
100%
Company (A) Company (B) Syndicate (1) Syndicate (2) Syndicate (3) Syndicate (4)
Bo
oke
d/W
ritt
en P
rem
ium
Rat
io
2000 2001
Cash Flow Comparison
Source: London Market Sample
IUMI 2002 – New York City
Total Loss TrendAs Percentage of World Fleet
Vessels > 500Grt
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
% of World Fleet
%age of Vessels %age of GRT
Source: LMIU for Joint Hull Committee
IUMI 2002 – New York City
Renewal Terms
Premium DevelopmentA ‘Case Study’
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Annual Rate Movement)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Cas
h R
ise
/ Red
uct
ion
Source: Joint Hull Committee
IUMI 2002 – New York City
Premium DevelopmentA ‘Case Study’
Renewal Terms
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Annual Rate Movement)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Cas
h R
ise
/ Red
uct
ion
Source: Joint Hull Committee
IUMI 2002 – New York City
Premium DevelopmentA ‘Case Study’
Renewal Terms
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Annual Rate Movement)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Cas
h R
ise
/ Red
uct
ion
Source: Joint Hull Committee
IUMI 2002 – New York City
Premium DevelopmentA ‘Case Study’
Renewal Terms
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Annual Rate Movement)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Cas
h R
ise
/ Red
uct
ion
Source: Joint Hull Committee
IUMI 2002 – New York City
A ‘Case Study’Premium Development
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Compound Rate Index)
£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Val
ue
of
£1 P
rem
ium
Source: Joint Hull Committee
Rating Index
IUMI 2002 – New York City
A ‘Case Study’Premium Development
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Compound Rate Index)
£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Val
ue
of
£1 P
rem
ium
Source: Joint Hull Committee
Rating Index
IUMI 2002 – New York City
A ‘Case Study’Premium Development
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Compound Rate Index)
£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Val
ue
of
£1 P
rem
ium
Source: Joint Hull Committee
Rating Index
IUMI 2002 – New York City
A ‘Case Study’Premium Development
Analysis of Renewal Terms since 1975Example: A Major Dry Bulk Operator (Compound Rate Index)
£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
Val
ue
of
£1 P
rem
ium
Source: Joint Hull Committee
Rating Index
IUMI 2002 – New York City
Lloyd’s Results vs Fleet X-Section IndexProfit vs Rate Index
Lloyd's Audit Code 'T'Projected Ultimate Result and Rate Index
(Net of Commission, Gross of R/I)
-60%
-40%
-20%
0%
20%
40%
60%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Underwriting Year
Pro
fit
/ Lo
ss
0
30
60
90
120
150
180
Rate M
ovem
ent In
dex
Lloyd's SRD Projection (@ 31/12/01)
Fleet X-Section Rate Index
Source: Joint Hull Committee & Lloyd’s Market Analysis Dept
IUMI 2002 – New York City
Profit vs Rate IndexLloyd’s Results vs Fleet X-Section Index
Lloyd's Audit Code 'T'Projected Ultimate Result and Rate Index
(Net of Commission, Gross of R/I)
-60%
-40%
-20%
0%
20%
40%
60%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Underwriting Year
Pro
fit
/ Lo
ss
0
30
60
90
120
150
180
Rate M
ovem
ent In
dex
Lloyd's SRD Projection (@ 31/12/01)
Fleet X-Section Rate Index
Source: Joint Hull Committee & Lloyd’s Market Analysis Dept
IUMI 2002 – New York City
Profit vs Rate IndexLloyd’s Results vs Fleet X-Section Index
Lloyd's Audit Code 'T'Projected Ultimate Result and Rate Index
(Net of Commission, Gross of R/I)
-60%
-40%
-20%
0%
20%
40%
60%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Underwriting Year
Pro
fit
/ Lo
ss
0
30
60
90
120
150
180
Rate M
ovem
ent In
dex
Lloyd's SRD Projection (@ 31/12/01)
Fleet X-Section Rate Index
Source: Joint Hull Committee & Lloyd’s Market Analysis Dept
IUMI 2002 – New York City
Profit vs Rate IndexLloyd’s Results vs Fleet X-Section Index
Lloyd's Audit Code 'T'Projected Ultimate Result and Rate Index
(Net of Commission, Gross of R/I)
-60%
-40%
-20%
0%
20%
40%
60%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Underwriting Year
Pro
fit
/ Lo
ss
0
30
60
90
120
150
180
Rate M
ovem
ent In
dex
Lloyd's SRD Projection (@ 31/12/01)
Fleet X-Section Rate Index
Source: Joint Hull Committee & Lloyd’s Market Analysis Dept
Lloyd’s MRAD
Projection
IUMI 2002 – New York City
Results
Acute Cycle 1993 – 1996
• Exceptional Profits
1997 – 2000• Losses
2001 –• Improvement
Cash Flow, Total Loss Incidence Rating - relatively low
London Cycle or Worldwide?
Conclusion
IUMI 2002 – New York City
Global Hull PremiumMarket Share 1992 - 2000
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
Spain
IUMI 2002 – New York City
Global Hull PremiumMarket Share 1992 - 2000
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
Italy
Spain
IUMI 2002 – New York City
Global Hull PremiumMarket Share 1992 - 2000
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
Norway
Italy
Spain
IUMI 2002 – New York City
Global Hull PremiumMarket Share 1992 - 2000
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
USANorway
Italy
Spain
IUMI 2002 – New York City
Global Hull PremiumMarket Share 1992 - 2000
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
France
USANorway
Italy
Spain
IUMI 2002 – New York City
Global Hull PremiumMarket Share 1992 - 2000
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
JapanFrance
USANorway
Italy
Spain
IUMI 2002 – New York City
Market Share 1992 - 2000Global Hull Premium
Source: CEFOR Report on Marine Insurance Premium 1999/2000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Market Share
London
JapanFrance
USANorway
Italy
Spain
IUMI 2002 – New York City
Source: CEFOR Report on Marine Insurance Premium 1999/2000
Global Hull PremiumMarket Share Development
Comparison of Market Share1994 & 2000
0%
10%
20%
30%
40%
50%
France Italy Japan Norway Spain London USA
Mar
ket
Sh
are
1994 2000
IUMI 2002 – New York City
Looking Forward 2002 Result?
To Report on Next Year But
Reliance Upon:-• Cash Flow Improvement• Total Loss Reduction
Rating Relatively Low Issues
• World Economy• Effect of Regulation (Flag, STCW, ISM, IMO, IACS)• Changing Nature of Risk• Investment Income• Reinsurance
IUMI 2002 – New York City
A Joint Hull Committee View from London
Casualty & Underwriting Statistics
IUMI 2002 - New York City
Top Related