Facts and Figures Committee Report

Cedric CHARPENTIERChairman, F&F Committee

C.U.O. Cargo AXA Corporate SolutionsSeptember 14, 2009

Report of the F&F CommitteeCommittee Members

Angelo Ansaldo - Italy Dieter Berg - Germany Cédric Charpentier - France, Chairman Darren Farr - U.K. Pamela Frood - U.K. Philip Graham - U.K. Patrizia Kern - Switzerland Henry Newman - U.S.A. Astrid Seltmann - Nordic, Secr. and Vice Chairman Michel Van hoorickx - Belgium

Report of the F&F CommitteeDocumentation

Spring Statistics Spring meeting Hull, Energy and Cargo Fact Sheets Conference Global shipping market trends Conference Global marine insurance report Conference Major claims database:

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Contributors

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Global Shipping Market Trends

Prepared by Cédric CHARPENTIERChairman, F&F Committee

September 14, 2009

Sources : ISL, IMF, UNCTAD, World Bank

• World trade of goods down in volumes and even more in values

• Prices of raw materials going down• New buildings orders delayed or cancelled• Freight rates sliding• Possible increase of ships being laid up• Uncertainties on future quality of world fleet• Increase in number of attritional claims declared• …

We must prepare for difficult times !We must prepare for difficult times !21Source: ISL, UNCTAD, LMIU

What change in our environment shall we expect and even started to notice ?

The world entered an unprecedented recession since WW-II, leading to a

sudden collapse of Global Trade

Annual GDP Growth (2001 - 2010)

World

Advanced economies

Emerging and developing economies

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Unprecedented recession but the worst of the slump may now be past

What impact on Global Trade ?

Elasticity of Global Trade to GDP is clearly established by economists It increased significantly in the last decades due to fragmentation and

outsourcing of production across countries. It is higher in downturns than in growth periods mainly due to :

– Draw down of accumulated inventories– Protectionism– More local sourcing to avoid trust or financing problems…

Downturn

Growth GDPWorld Trade

Time

70’/80’ 90’/00’

1.5 A

2 A

0

A

1.2 A

So, as expected, a severe drop in world trade volumes…

WORLD SEABORNE TRADE VOLUME Development 1999 - 2009 (in million tonnes)

900

1 400

1 900

2 400

2 900

3 400

3 900

4 400

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Maj

or tr

ades

(mT

onne

s)

4 000

5 000

6 000

7 000

8 000

Tota

l Wor

ld T

rade

(m T

onne

s)

Total World Trade

Crude oil

Other Cargoes

The 4 main dry bulk Cargoes*

*Iron ore, coal, grain, alumina

- 10%

…combined with commodities prices tumbling…

WORLD MARKET PRICE INDICES FOR SELECTED COMMODITIESAnnual Average (1999-2009) - Average in 2009 as at end of May

422,9 (- 12%)

262,0 (- 46%)

169,8 (- 50%)

107,6 (- 29%)

134,2 (- 44%)

0

100

200

300

400

500

600

Index 2000 = 100

IRON ORE

COAL

CRUDE OIL

AGRI RAW

NON FER. MET

WORLD TRADE VALUES Development 1999 - 2010 (in billion dollars)

4 000

6 000

8 000

10 000

12 000

14 000

16 000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Total World Trade (bn$)

Total World Trade

+ 16%- 27%

+ 4%

… is leading to a collapse of world trade values.

Victim of their own success, shipping companies are already fighting for survival

World transport capacity : “irrational exuberance”

WORLD MERCHANT FLEET of ships of 300gt and overEvolution of GT, DWT and Number of ships between 1995 and 2009 (1st of Jan)

Nb ships + 8%

Nb ships + 27 %

mGT + 80%

mGT + 19%

mDWT + 14%

mDWT+ 69%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Oversupply of capacity and drop in oil prices leading to a collapse of freight rates

FREIGHT MARKET (indices by month) - January 1999 to June 2009

436

448

505

0

200

400

600

800

1000

1200

1400

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Time Charter Index (1 to 2 months)

General Freight Index

Grain Freight Index

Index 1972 = 100

1275 (may 08)

177 (jan 09)

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

mD

wt

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

World Tonnage Additions and Reductions 1999-2009* (in mDwt)

Reductions Additions

* Est. based on Q1

Shipowners reacting to reconcile transport capacity to global trade demand…

+ 200%

+ 30%

… but how long will be necessary?

100.1 129.3

177.8

222.8

263.5

Tankers

Bulk Carriers

LNG/LPGContainer

OthersGeneral cargo

0

100

200

300

400

500

600

mD

WT

2002

2003

2004

2005

2006

2007

July

2008

April 20

09

ORDERBOOK - Evolution by type of shipsin million of DWT

363.8

570.4 566.7

Conclusion

Global trade:– 2009 hit the bottom– 2010 weak recovery

Sustainable recovery?– still not clear where from and when

Shipping industry:– fighting for survival with at least 2 year expected depressed

market ahead– deep modification of the face of the world fleet expected– but medium and long term prospects are intact

Numerous and deep impacts on the marine insurance industry

Thank you for your attentionCedric CHARPENTIER

Chairman, F&F CommitteeC.U.O. Cargo AXA Corporate Solutions

September 14, 2009

Thank you for your attentionCedric CHARPENTIER

Chairman, F&F CommitteeC.U.O. Cargo AXA Corporate Solutions

September 14, 2009

Thank you for your attentionCedric CHARPENTIER

Chairman, F&F CommitteeC.U.O. Cargo AXA Corporate Solutions

September 14, 2009