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COMSTAC

COMSTAC. Thursday, May 20, 2004. John Vinter International Space Brokers, Inc. 1300 Wilson Boulevard, Suite 990 Rosslyn, Virginia 22209 Telephone: (703) 841-1334 Facsimile: (703) 841-0525 Website: www.isbworld.com. SPACE INSURANCE MARKET IN 2004. Between 2000 and 2004.

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COMSTAC

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  1. COMSTAC Thursday, May 20, 2004 John Vinter International Space Brokers, Inc. 1300 Wilson Boulevard, Suite 990 Rosslyn, Virginia 22209 Telephone: (703) 841-1334 Facsimile: (703) 841-0525 Website: www.isbworld.com ISB Confidential

  2. SPACE INSURANCEMARKET IN 2004 ISB Confidential

  3. Between 2000 and 2004 • Biggest negative factor has been the Boeing 702 claims: • Maximum exposure is approximately US$1 BN • Fewer launches have meant less income, but individual spacecraft still require large sums insured. • More upward pressure on rates • Premium income fell from $1Bn in 2000 to $600M in 2003 • Less spread of risk • At current rates, market should be profitable. • 2002 and 2003 were profitable years ISB Confidential

  4. Between 2000 and 2004 • Underwriters left the market, especially after 2001 (3 loss years out of 4 since 1998). • Remaining underwriters tightened coverage terms, shortened policy and risk periods. • Tight capacity pushed up premium rates and kept them high. ISB Confidential

  5. Space Insurance Market in 2004 Comparing 2000 and 2004 In early 2000, the market: • Had useable launch capacity of approx. US$551M • Had been profitable for most of the prior 10 years • Was competitive • Offered “Launch + 5 Years” policies ISB Confidential

  6. Launch Capacity In-Orbit Capacity Theoretical Capacity 1400 1200 1000 800 Millions (USD) 600 400 200 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Year Market Capacity EXIT SPINNEY AAU GIO RELIANCE ENTRY ASIG GENERALI SWISS RE IF P&C XL AEROSPACE ENTRY AIG DLP SPINNEY HISCOX AVIABEL AAU CATLIN GOSHAWK GIO AXIS ACE 560 BERKSHIRE HATHAWAY 372 221 ISB Confidential

  7. The Market in May 2004 • A viable space insurance market exists today • Coverage terms and conditions are much tighter than in 2000 • The maximum today is a one-year policy period and a one-year risk period • Constructive total loss points now 75% of payload capacity and/or expected life • Rates remain substantially higher but appear steady ISB Confidential

  8. World Wide Space Market Capcity 2004Total Underwriting Maximum Capacity Bermuda USA 4% 20% France 22% World Wide Space Market Capacity 2004Total Underwriting Maximum Capacity United Kingdom Germany 25% 13% Switzerland Italy 6% 6% Japan 4% ISB Confidential

  9. Estimated Launch Capacity 2000 vs 2004 2000 2004 2000 2004 BERMUDA JAPAN 20,000,000 5,000,000 AXIS N/A 11,000,000 N/A 15,000,000 AUSTRALIA FRANCE SWITZERLAND AGF/Space Co. 50,000,000 30,000,000 N/A 30,000,000 Swiss Re SCOR 35,000,000 20,000,000 La Reunion 35,000,000 20,000,000 UNITED KINGDOM Others 7,000,000 N/A Global Aerospace (BAIG) 10,000,000 15,000,000 GERMANY 30,000,000 BRIT 21,250,000 Munich Re 50,000,000 40,000,000 HISCOX 20,000,000 20,000,000 Hannover Re 10,000,000 14,000,000 CATLIN 5,000,000 20,000,000 Frankona N/A 5,000,000 AMLIN N/A 3,000,000 Deutscher Luftpool 5,000,000 N/A LIBERTY N/A 2,000,000 Bavarian Re 10,000,000 N/A HAYWARD 2,000,000 N/A Others 5,000,000 N/A Other Lloyd's Syndicates 25,000,000 10,000,000 & Companies ITALY AIG/Redholm 5,000,000 10,000,000 SATEC 15,000,000 20,000,000 15,000,000 ACE Global Markets N/A Generali 25,000,000 N/A 15,000,000 N/A AAU UNITED STATES BELGIUM 30,000,000 AXA Space 22,000,000 Aviabel 5,000,000 N/A 15,000,000 Kemper Re 3,000,000 N/A USAIG 8,000,000 50,000,000 XL Aerospace 30,000,000 SCANDINAVIA 30,000,000 10,000,000 ACE USA Storebrand 5,000,000 N/A 10,000,000 N/A AIG 2000 Total ESTIMATED USABLE Launch Capacity USD 561,000,000 ISB Confidential 2004 Total ESTIMATED USABLE Launch Capacity USD 372,500,000 ISB CONFIDENTIAL

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