Norwegian Marine Insurance Statistics As of December 1999

1
Recent Hull Claim TrendsThe cause of recent
claim trends Crew, congestion and harder trade,
or purely a matter of inflation? Astrid
Seltmann CEFOR Analyst/Actuary Central Union of
Marine Underwriters, Oslo, Norway
2
CEFOR A Nordic Marine Insurance Association

• Members

• Marine Lines
• ocean hull machinery (HM)
• coastal HM
• protection and indemnity (PI)
• transport / cargo
• freight, defence demurrage (FDD)
• war risk

Industriforsikring AS
3
CEFOR Mission StatementCEFOR shall secure the
interest of our Nordic members by promoting
quality marine insurance

• 4 Core Activities
• - Product Development Clauses
• - Statistics Analysis
• - Industry Policy Framework Conditions
• - Education

4
CEFOR Statistics Analysis

• Nordic Marine Insurance Statistics (NoMIS)
• database for Hull Machinery insurance
• claims and premiums linked with ship details
  from LMIU and LR/Fairplay
• data from underwriting years 1985 to 2008
• 122,000 vessel years
• 37,000 claims
• 25 of world fleet (by numbers)
• 50 of world fleet (by tonnage)

5
IMSF 2008 - Recent claim trends

• Contents
• 0. CEFOR overview fleet
• General claim trends
• Special claim trends (including nautical,
  engine)
• Cost-driving factors

6
0. The CEFOR Marine Insurance Market

7
0. CEFOR in the global context Global
Marine Hull Premium 2006
World
CEFOR
8
0. CEFOR fleet - Number of vessels per type
Total number of vessels 2002-2006
47,171 2007 11,412
9
0. CEFOR fleet Number of vessels per
classification society
Total number of vessels 2002-2006
47,171 2007 11,412
10
0. CEFOR fleet Evolution of average SI and
Gross ton per vessel, by underwriting year
11
CEFOR General Claim Trends
12
1. General claim trends Claim frequency, by
underwriting year
13
1. General trends - Deductibles, by underwriting
year
14
1. General claim trends Cost per claim
15
1. General claim trends Claim per vessel
?
16
1. General claim trends - Partial claim per
vessel
17
1. Maximum individual claim
18

1. General claim trends Claim bandsby
   underwriting year

19
1. Claim per vessel Quarterly development per
underwriting year
?
2007
New underwriting year new record?
20
1. Partial claim per SI as per 4th quarter
against average SI development
21
Summing up general claim trends

• Claim per vessel doubled since 2003 (both
  overall and PA claim alone)
• Increase in maximum individual claim
• 2007 worse than any previous year
• Increase in PA claim per Sum Insured
• Increase in claims of all sizes
• but stable frequency

22
CEFOR Special Claim Trends
23
3.a. General claim trends Claims by type
24
3.a. General claim trends Claims by type
Good luck?
25
3.b. Nautical related claims Frequencyby type
of claim, by date of loss
26
3.b. Cost per claim by type of claim Nautical
Engine, by underwriting year
Cost of grounding claims rocketing
Change 2000-gt2007 148
123
89
15
27
3.b. Cost per claim by type of claim
Weather-related, by underwriting year
Change 2000-gt2007 551
528
28
3.b. Nautical-related claims Max. single claim
29
3.b. Claim per vessel by type of claim,by
underwriting year
Bad luck?
Good luck?
30
3.b. Nautical-related claims Frequency by
vessel type
No overall increase in frequency. Individual
sectors with increase in number of groundings
Chem./Product, OBO, Passenger
31
3.b. Nautical-related claims Cost per vessel
32
3.b. Nautical-related claims Av. claim cost
Average claim up for all vessel types except
Car/RoRo.
33
3.b. Engine claims Max. Individual claim
34
3.b. Engine claims
Average engine claim up for all vessel types
except tank.
35
Summing up special claim trends

• Sharp cost increase of all claim types
• No frequency increase for any claim types
• Overall increase in claim per vessel for nearly
  all vessel types and claim types
• Congested waters, shortage of qualified crew,
  harder trade, etc.
• gt Should have had less homogenous effects and
  effected the frequency?

36
Cost-driving factors
37
3.c. Cost driving factors Ship operating costs
How Moore Stephens index of ship operating costs
has increased. Ship operating costs continued on
a relentless upward path through last year with
the average increase across all vessel types
running to 8.5. Tradewinds, 24th September
2007
38
3.c. Cost driving factors Exchange rates
USD weaker
USD weaker
- Hull policies / premium payments often in
USD.- Repair costs paid in local currency at
site of repair yard or affected by spare
parts, labor costs etc. paid in other currencies
than USD gt weaker dollar higher repair costs
in USD
39
3.c. World Market Price Indices for selected
commodities Annual Average (1993-2006)
Average in 2007 as at end of May ()
Source  Global Shipping Market Trends , IUMI
Conference 2007
40
3.c. World Trade Values Development 1996-2006
(in million USD) Growth rate in 2006
Total World Trade
Other cargoes
12,000,000
Crude oil and oil products
The 4 main Dry Bulk Cargoes (Iron Ore, Coal,
Grain, Bauxite/Alumina)
Other Cargoes
Total World Trade
()
Source  Global Shipping Market Trends , IUMI
Conference 2007
41
3.c. World Seaborne Trade Volume Development
1996-2006 (in million tonnes) - Growth rate in
2006
The 4 main Dry Bulk Cargoes (Iron Ore, Coal,
Grain, Bauxite/Alumina)
Other Cargoes
Total World Trade
43 growth in seaborne trade volume
from 1996-2006
estimates
()
Source  Global Shipping Market Trends , IUMI
Conference 2007
42
World Merchant Fleet of ships of 300gt and
overEvolution of the growth rates (GT, DWT, and
Number of ships) between 1995 and 2007
70
1,009,524 mDWT
60
( 56.4)
50
685,738 mGT
( 48.1)
40
30
778,758 mDWT
( 18.8)
42,872 ships
20
( 18.3)
520,913 mGT
( 14.2)
10
39,008 ships
( 7.6)
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source  Global Shipping Market Trends , IUMI
Conference 2007
43
3.c. Cost driving factors inflation index
44
Summing up cost driving factors

• Increase in ship operating costs
• Increase in steel prices -gt repair costs
• Weakening of USD -gt premiums paid in USD, claims
  affected by other currencies -gt increase in
  repair costs (or reduced repair quality)?
• Increase in global trade volume and values -gt
  ships driven harder, less time for maintenance
  or compensated by a larger and more effective
  world fleet?
• Is slack and off-hire good?

45
2007 CEFOR Nordic Marine Insurance Statistics
Part 9As of 31 December 2007

• CEFOR marine insurance statistics publications,
  all at http//www.cefor.no
• CEFOR Annual Report 2007, p.18-25, Nordic Marine
  Insurance Statisticshttp//www.cefor.no/news/CEFO
  R2020Annual20Report/CEFOR_AnnualReport2007.pdf
  
• The 2007 CEFOR NoMIS Reporthttp//www.cefor.no/st
  atistics/documents/200720CEFOR20The20NoMIS20re
  port.ppt
• The 2007 CEFOR Report on Hull claim
  trendshttp//www.cefor.no/statistics/documents/20
  0720CEFOR20Hull20Claim20Trends.pdf
• Links to other marine insurance statistics
• CEFOR website, Statistics section (CEFOR and
  IUMI statistics for download, including
  historical data) http//www.cefor.no/statistics/st
  atistics.htm
• IUMI (International Union of Marine Insurance)
  Statistics issued by IUMIs Facts Figures
  Committeehttp//www.iumi.com/index.cfm?id7165