CEFOR - The 2004 NoMIS Report

1. CEFOR - The 2004 NoMIS Report Norwegian Marine Insurance StatisticsUnderwriting Years 1995–2004, as of 31 December 2004

2. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 • Part 1 – Introduction • Contents • NoMIS • Explanations • Part 2 – NoMIS position in the Global insurance market • Global Marine Hull Insurance Market 2003 • Norwegian Marine Hull Insurance Market 2004 • Average gross share written in the NoMIS market • Part 3 – NoMIS portfolio Key figures, underwriting years 1995-2004 • Number of vessels • Development of total insured values, DWT and premium • Average age • Average standard deductible • Loss Ratio (including IBNR), 1985-2005 • Premiums and claims (including IBNR) per vessel • Number and cost of claims by type • Claim frequency • Claim per vessel • Claim per Sum Insured • Key figures (table)

3. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 • Part 4 – Key figures by age group • Distribution of number of vessels • Claim frequency • Claim per vessel • Claim per Sum Insured • Claim per DWT • Loss Ratio • Part 5 – Key figures by vessel type group • Distribution of number of vessels • Claims frequency • Claim per vessel • Claim per Sum Insured • Claim per DWT • Loss Ratio • Legal disclaimerCEFOR provides the statistics material in this presentation for general information purposes only. All key figures are derived from the CEFOR portfolio, which reflects a minor part of the world fleet, the selection of ships being biased by Norwegian underwriting preferences. Therefore CEFOR can accept no responsibility and shall not be liable for any loss which may arise from reliance upon the information provided.

4. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 • Part 6 – Key figures by size group • Distribution of number of vessels • Claims frequency • Claim per vessel • Claim per Sum Insured • Claim per DWT • Loss Ratio • Part 7 – Distribution by flag and classification society • Distribution of number of vessels by flag, 15 largest • Distribution by black, grey, white flags (Paris MOU classification 2003) • Distribution of number of vessels by classification society, 6 largest • Part 8 – Premium indices • Premium per vessel – Premium per sum insured – Cash Renewal Index • Evolution of premium per sum insured, 12 months rolling • Part 9 – Exposure curves (partial claims only) • All vessels • Sum Insured bands (<5, <20, <100, and >100 Mio USD) • Explanations

5. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 Introduction The Norwegian Marine Insurance Statistics (NoMIS) is a joint database project of CEFOR members active on the Hull & Machinery market to compile insurance data and vessel characteristics for statistical purposes. The database is administered by CEFOR.Since its foundation in 1985 until 1997 the data was compiled by appointing CEFOR a compulsory facultative reinsurer to which the members of the Norwegian Hull Agreement ceded 0.1% of their Hull & Machinery insurance. Premium and claims information was exchanged via Borderaux, the lead insurer providing details of each claim. When the Hull Agreement was discontinued in December 1996, the statistics cooperation continued. In 1998 steps were taken to update the NoMIS’ database electronically. All necessary routines were in place by December 1999, enabling CEFOR to produce up-to-date hull figures on a monthly basis and extending the database substantially by including non-lead business from underwriting year 1998. In 2000, a further step was taken to restructure the database by extending the updates to include also non-lead business back to underwriting year 1995. In 2003, data from a major new member was integrated, also dating back to underwriting year 1995.In 2004, the database was extended by data from two new members and reached an all-time high of nearly 8,000 registered vessels for underwriting year 2004. By 31st December 2004, in all 83,650 vessels and 25,500 claims are registered for the underwriting years 1985 through 2004.

6. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 All amounts are presented in USD. Rate of exchange applicable to convert the figures from the original currencies into USD: Premiums: average monthly rate of exchange of the month of transaction Paid claims: average monthly rate of exchange of the month of transaction Outstanding claims: average monthly rate of exchange of December 2004 All premiums are net of all rebates and commissions. All claims are net of any deductiblesapplicable. Total Claims = Paid claims + Outstanding claims TLO (or Total Losses) = claims in excess of 75% of the Sum Insured Partial Losses = all losses <= 75% of the Sum Insured Loss Ratio = Total claims / Net premium Underwriting year = year in which the insurance attaches

7. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 Types of vessels specified Vessel Type group Vessels Types included Lloyds Conf. Index Code BULK Bulk, Ore, Cement BBU, BCB, BCE, BOR, BWC CAR/RORO Car Carrier, RoRo MVE, URC, URR CARGO Dry Cargo, General Cargo, Reefers, GCT, GGC, GPC, GRF, MLV Pallett Vessels, Animal Transport Vessels CONTAINER Container UCC, UCR CHEM./PRODUCT Chemical Carriers, Product / Acid / Edible Oil / TAC, TCH, TCO, TEO, TFJ, TFO Fish Oil / Fruit Juice / Wine / Molasses / TMO, TPD, TWA, TWN, TWT Waste/ Water Tankers LNG/LPG Gas Carriers LNG, LPG, LNG/LPG LNG, LPG, LNP OBO Combined Vessels Bulk, Ore, Oil COO, CBO OTHER all other ships and floating units all other codes not specifically defined otherwise, like Fishing vessels, Barges, Cranes, Floating Storage, Floating Production, Pollution Control Vessels, Mud boat, Research vessels, Cable, Seismic Search vessel, Flo/Flo, etc.

8. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 1As of 31 December 2004 Types of vessels specified contd. Vessel Type group Vessels included Lloyds Conf. Index Code PASSENGER All types of passenger vessels and ferries, MPR, OFY, OHF, OHS, PRR Passenger/Roro, Highspeed Craft SUPPL/OFF Supply, Anchorhandling, Standby, Drilling OBS, OBT, ODS, OIB, OIF, OIS, Vessel, General Service Vessel, OIT, OLT, OMN, OMT, OOS, OPP, Supply (Tug, Anchor), Tug/Icebreaker ORP, OSU, OSY, OSZ, OWO, XAA, XAF, XAG, XAH, XAT, XCT, XFF, XFS, XPT, XTG, XTI, XTP, XTR, XTS, XTT, XTX TANK Tanker, Sludge Vessel, Crude Oil Tanker OSC, OTC, TAS, TBK, TCR, Asphalt Carriers, Bunkering Tanker, Floating TNA, TTA Production, Floating Storage, Naval Auxiliary

9. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 2 Distribution of Global Marine Hull Premium 2003 World Norway

10. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 2 Distribution of Norwegian Marine Hull Premium 2004(Norwegian and International business) Industriforsikring If 0.1% 3% NEMI NEMI Gjensidige 7% 8% Norwegian NOR Norwegian Gerling Hull Club 4% Hull Club 11% 31% 29% Gerling 9% Vesta Vesta 1% 0.2% Gard Bluewater Gard Bluewater 26% 12% 32% 15% Codan Codan Coastal Marine 2% 3% Clubs 7% Ocean & Coastal Hull Ocean Hull only

11. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 2As of 31 December 2004 Share = sum of members premiums according to their written share / sum of premiums for 100% of the risk

12. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004 • Comments: • Decline in portfolio from 1997 to 2000 due to members concentrating on target business • Decline from 2001 to 2002 partly due to two NoMIS members withdrawing from underwriting. • Increase 2002->2004 due to real portfolio extension. Two new members start underwriting and join the datapool.

13. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

14. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

15. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

16. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

17. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

18. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004 Claims by Claims type

19. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004 Claims by Claims type

20. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004 Comment: Claims < 10.000 USD account for about half of all claims. Registration of thesemay vary over time and in each company and will thus influence the registered frequency.In addition any increase/decrease of insurance deductibles will have impact on the registered frequency

21. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

22. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

23. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 3As of 31 December 2004

24. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 4 As of 31 December 2004 Number of vessels per age group Total number of vessels 1999-2003: 32,458 2004: 7,815

25. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 4As of 31 December 2004 Comment: Claims < 10.000 USD account for about half of all claims. Registration of thesemay vary over time and in each company and will thus influence the registered frequency.In addition any increase/decrease of insurance deductibles will have impact on the registered frequency

26. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 4As of 31 December 2004

27. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 4As of 31 December 2004

28. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 4As of 31 December 2004

29. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 4As of 31 December 2004

30. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 5As of 31 December 2004 Number of vessels per vessel type Comment: The increase in Chem./Prod and decrease in Tank vessels is mainly due to more differentiated coding of vessel types in Lloyd’s Confidential Index (LMIU) from 2002, rather than to portfolio changes. Total number of vessels 1999-2003: 32,458 2004: 7,815

31. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 5As of 31 December 2004 Comment: Claims < 10.000 USD account for about half of all claims. Registration of thesemay vary over time and in each company and will thus influence the registered frequency.In addition any increase/decrease of insurance deductibles will have impact on the registered frequency

32. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 5As of 31 December 2004

33. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 5As of 31 December 2004

34. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 5As of 31 December 2004

35. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 5As of 31 December 2004

36. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 6As of 31 December 2004 Number of vessels per Size Group Total number of vessels 1999-2003: 32,458 2004: 7,815

37. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 6As of 31 December 2004 Comment: Claims < 10.000 USD account for about half of all claims. Registration of thesemay vary over time and in each company and will thus influence the registered frequency.In addition any increase/decrease of insurance deductibles will have impact on the registered frequency

38. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 6As of 31 December 2004

39. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 6As of 31 December 2004

40. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 6As of 31 December 2004

41. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 6As of 31 December 2004

42. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 7As of 31 December 2004 Number of vessels per flag, 15 largest Total number of vessels 1999-2003: 32,458 2004: 7,815

43. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 7As of 31 December 2004

44. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 7As of 31 December 2004 Number of vessels per classification society Total number of vessels 1999-2003: 32,458 2004: 7,815

45. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 8As of 31 December 2004

46. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 9As of 31 December 2004 PA claims in % of all claims :0-5 Mio USD: 62% 5-20 Mio USD: 73% 20-75 Mio USD: 74% > 75 Mio USD: 100% Sum Insured

47. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 9As of 31 December 2004 • Exposure Curves • Exposure curves are used by reinsurers to price excess of loss reinsurance. • The curves indicate the ceding company's retained share of PA claims after ceding claims in excess of a given percentage of a vessel’s sum insured. • The curves should be applied on individual vessels or groups of vessels with similar values and written shares. • The curves are calculated for 100% values. In applications the choice of curve should thus also be based on 100% values. • Exposure Curves technicalities • The curves are based on H&M covers only. • The curves are based on the underwriting years 1995-2004 (13,000 claims) • The curves are calculated as follows: x = percentage retained C = Individual partial claims V = Vessel value f(x) = Σ min[C, V*x]/Σ C

48. 2004 CEFOR Norwegian Marine Insurance Statistics – Part 9As of 31 December 2004 • Links to other statistics related presentations: • CEFOR Annual Report 2004(page 16-21): • http://www.cefor.no/news/CEFOR%20&%20Annual%20Report/CEFOR%20Annual%20Report%202004.pdf • 2) Presentations at the Facts&Figures Committee Workshop at the 2004 IUMI Conference in Singapore: • http://www.iumi.com/conferences/2004_Singapore/1309/ToreForsmo.pps • http://www.iumi.com/conferences/2004_Singapore/1309/ChristianIrgens.pps • http://www.iumi.com/conferences/2004_Singapore/1309/JustinGardner.pps