Marine & Energy Practice Risk and Insurance SeminarHouston

20 September 2004

John LapsleyChairmanMarine & Energy

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Welcoming address

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Where historians say it all started…

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Brief history of Marine Insurance

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Brief history of Marine insurance

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It’s all to do with a cup of coffee

LONDON 1680

EDWARD LLOYD’S COFFEE HOUSE IN

TOWER STREET

Just a 5 minute walk for ship’s captains

Just a 10 minute walkfor city financiers

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Lloyd’s history – the origins / milestones

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Brief history of Marine insurance

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Brief history of Marine insurance

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Brief History of Marine Insurance

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Market capacity greater than at any time in its

315 year history

20022002 20032003

GBP 13,230,000,000 18% GBP 14,396,000,000

* Source = Lloyd’s Members Services Unit

Lloyd’s today

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USA History of Insurance - Milestones

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USA History of Insurance - Milestones

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The State of the Market

Loss Ratio

Index

25

75

125

175

225

275

325

375

425

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Source: CEFOR

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Global premiums reported 1997 to 2002 (accounting years)

0 2000 4000 6000 8000 10000 12000 14000

USD (millions)

Total

Offshore / Energy

Marine Liability

Transport / Cargo

Global Hull

200220012000199919981997

Source: CEFOR

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World Insurance Market 2001 Premium Volume in USD Billion

957

12

1439

Life, 60%

Non-life, 40%

Marine, 0.5%

Source: Swiss Re & IUMI

Marine H&M: 2,8 ~ 0.1%

Total: 2,408Total: 2,408

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Market Shares 2002

3.9%

14.2%

22.1% 59.8%

EuropeAsia/PacificNorth AmericaRest of World

Source: CEFOR/IUMI

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Report on marine insurance premiums - by economic areas (USD million)

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 + Lloyd’s)

Asia/Pacific = Hong Kong, India, Indonesia, Japan, North Korea, South Korea, Malaysia, Pakistan, Singapore

North America = Bermuda, Canada, USA

Rest of the world = Australia, Congo, Egypt, Israel, Ivory Coast, Kenya, Lebanon, Mexico, Morocco, New Zealand, Nigeria, South Africa, Tunisia, United Arab Emirates

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 + Lloyd’s)

Asia/Pacific = Hong Kong, India, Indonesia, Japan, North Korea, South Korea, Malaysia, Pakistan, Singapore

North America = Bermuda, Canada, USA

Rest of the world = Australia, Congo, Egypt, Israel, Ivory Coast, Kenya, Lebanon, Mexico, Morocco, New Zealand, Nigeria, South Africa, Tunisia, United Arab Emirates

Region Premiums Premiums Premiums Variation Variation Market share Market share Market share 2002 2001 2000 2000-2001 2001-2002 2002 2001 2000

Europe 7,619,037 6,654,292 6,108,608 8.93% 14.50% 59.81% 58.54% 55.64%Asia/Pacific 2,820,473 2,685,196 3,025,848 -11.26% 5.04% 22.14% 23.62% 27.56%North America 1,805,642 1,618,951 1,404,519 15.27% 11.53% 14.18% 14.24% 12.79%Rest of the world 492,985 408,770 440,602 -7.22% 20.60% 3.87% 3.60% 4.01%

Source: CEFOR/IUMI

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Global Marine Premium 1992 - 2002 (USD Million), as reported

02000400060008000

1000012000140001600018000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Accounting Year

Global Hull

Cargo

Liability

Energy

Total

Source: CEFOR/IUMI

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0

200

400

600

800

1000

1200

1400

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Accounting Year

France

Italy

Japan

Norway

Spain

UK (ILU/IUA)

UK (Lloyd's)

USA

Global Hull PremiumMajor Markets 1992 - 2002 (USD Million)

Source: CEFOR/IUMI

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Absheron

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Involvement of Energy roots in MarineMarine to Upstream

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Involvement of Energy roots in Marine

1947 Terrebonne Parish, LA – first offshore structure Gulf of Mexico

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Involvement of Energy roots in MarineMarine to Upstream

1975 first North Sea structure - Argyll

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Buzzard

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Involvement of Energy roots in MarineMarine to Upstream

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Involvement of Energy roots in MarineMarine to Upstream

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Oil Insurance Mutual

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Involvement of Energy roots in MarineMarine to Upstream

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Fire to Downstream

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Fire to Downstream

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Summary