Report on Marine Insurance Premium 1998 and 1999 Tore Forsmo The Central Union of Marine Underwriters Oslo, Norway Thanks also to Fédération Française des Sociétés d’Assurances (FFSA) – Direction des Assurances Transports (DMAT)

Key indicators World Seaborn Trade (1999: estimate - 2000: forecast) In close correlation to the development of world output, global maritime trade expanded at around 3% per annum between 1990 and 1996. As growth of world economic activity increased to 3.3% in 1970 and subsequently slowed down to 2.0% in 1998, seaborne trade followed this pattern by growing 4.1% in 1997 and 2.2% in 1998. In line with the expected development of world output, seaborne trade growth in 1999 is expected to reach a similar rate as in 1998, as United States output is expected to grow at 3.4% and that of the European Union at 1.8%, while Japan will gradually recover from the negative growth of –2.8% to approximatively –1.3% in 1999. Given these present developments and the prevailing expectations that Asian markets will continue their path to recovery, growth in total world maritime trade is expected to rebound to some 3 to 3.5% in the year 2000.

Key Indicators World Tonnage on Order (in thousands of dwt as per 31 World tonnage on order at the end of 1998 reached 82.2 million dwt, a slight increase of 1.2% over the previous year. Tonnage on order by developed market-economy countries amounted to 25.5 million dwt, representing 31.0% of the world total tonnage on order, as compared with 22.0 million dwt or 27.1% in 1997. Major open-registry countries accounted for 45.4 million dwt or 55.2% of tonnage on order, as compared with 43.6 million dwt or 53.7% in 1997. Developing countries’ tonnage stood at 8.0 million dwt or 9.8% of the world tonnage on order, as compared with 9.5 million dwt or 11.7% in 1997. The share of the countries of Central and Eastern Europe continued to decrease slightly in 1998, falling to 1.1 million dwt or 1.3% of the world total tonnage on order.

Key Indicators The Most Important Maritime Countries (total dwt tonnage > 20 Mio) (in % of world total dwt tonnage, 31.12.98)

Key Indicators Maritime Engagement of 10 Major Trading Nations Key Indicators Maritime Engagement of 10 Major Trading Nations (as per 31.12.98) Many of the major trading nations, while maintaining an important ownership position and, to a lesser extent, flag position, are major importers of shipping services. While the large differences in ownership and flag shares reflect cost considerations and the competitiveness of fleets registered under national flags, the important shares in tonnage beneficially owned indicate clearly a desired linkage between fleet size and foreign trade volume.

Key Indicators Share of National Flag of the 10 Largest Maritime Countries (as per 31.12.98) In 1998, the 35 most important maritime countries controlled about 94% of the world merchant fleet (93.6% in 1997), the 5 largest controlling 50% (49.9% in 1997) and the top 10 controlling 67.3% (67.4% in 1997). Among these countries, the trend to register under a foreign flag continued in 1998. Registry under foreign flags is a long-standing practice, mainly by owners from developed market-economy countries. Nevertheless, there are considerable fluctuations among countries.

Report on marine insurance premiums 1998 and 1999 By end of August 2000, 44 of 54 associations have reported premium figures Not all were able to produce figures for both accounting years 1999 and 1998 Reported figures represent approx. 95% of the total marine premium written by all IUMI members for 1998 and approx. 79% for 1999 Total premiums for 1998 is estimated to reach approx. USD 12.7 billion and for 1999 approx. USD 10.7 billion You will notice that we this year are presenting last year’s premium figures (although we only have a 78% reporting) in addition to the 1998 premium (95 %) As I mentioned to you last year, reporting of P&I premiums written by mutual clubs seems still to be a difficulty for some member associations to report To try to fill in the picture, we have added P&I premiums from mutual clubs in to separate slides

Global premiums reported 1998 and 1999 Before we look at the finer details, just a graphic presentation of the lines and totals The 1999 premiums are not as bad as they look due to shortcomings in the reporting

Report on marine insurance premiums (USD billions) This table is another representation of the previous graphics I just showed you We see here premiums from the last three years in addition to indexes Note that 1999 is incomplete, the total premium volume will be higher than what is shown here Inexes is however based on those reporting in both years and should fairly accurate describe the situation Note that Energy is experiencing a tightening, whereas cargo insurance is has gone in the opposite direction *Index based on figures from Associations who have reported in both years

Report on marine insurance premiums - Breakdown by economic areas (USD million) New this year is the geographical split The problem with the 1999 figures is that Japan hasn’t been able to provide any figures, which seriously affect the Asia/Pacific region Fom 1997 to 1998 we see that Europe and North America is slightly increasing their share of the global marine business

Global Marine Premium 1992 - 1999 (USD Million) This is just the historical development over the years CEFOR has collected premium figures on behalf of IUMI From a peak volume in 1994, there as been an overall drop in four years of approx. 25 %, with global hull being the line with the worst deterioration

Global Hull Premium - Major Markets 1992 - 1999 (USD Million) In this slide we have looked at those markets with a premium volume higher than USD 100 mil in 1998, over the past 7-8 years Not surprisingly, we see ”the rise and fall of markets”, with some perhaps rising more and falling harder than others ?

Global Cargo Premium - Major Markets 1992 - 1999 (USD Million) The same picture with markets of more than USD 100 million in 1998 over the past 7-8 years The picture is indeed historically less dramatic than what I just presented for global hull business

Gross calls P&I premium (International Group) 1995 to 1999 Per country (fiscal domicile) Per accounting year - USD 1000 Also new this year is a presentation of premiums from P&I mutuals belonging to the International Group When IUMI member associations are asked to provide figures for our annual premium statistics, we are also asking for P&I premium from mutual clubs. Norway is reporting non-member, mutual P&I premiums but what others are doing we don’t know ! Thus this slide ! Note the total premium! Source: Standard & Poor’s Mutual Marine Report, Edition 2000

Gross calls P&I premium (International Group) 1995 to 1999 Per country (operational location) Per accounting year - USD 1000 The same preiums, only classified according to operational location rather than fiscal reporting; The difference is actually between Bermuda and the UK Source: Standard & Poor’s Mutual Marine Report, Edition 2000

Report on marine insurance premiums - Accounting year 1998 (in USD 1000)

Report on marine insurance premiums - Accounting year 1998 (in USD 1000)

Report on marine insurance premiums - Accounting year 1998 (in USD 1000)

Report on marine insurance premiums - Accounting year 1999 (in USD 1000)

Report on marine insurance premiums - Accounting year 1999 (in USD 1000)

Report on marine insurance premiums - Accounting year 1999 (in USD 1000)