1. You can lead an actuary to water…
You can lead an actuary to water….. but you can’t make him price Ocean Marine

2. Agenda Marine - Is it just “watered down” coverage?
Trends - Writings and Losses
The Reinsurance Market
Reinsurance Products
Guy Carpenter Instrat and the Actuary’s Role
Guy Carpenter

3. Marine Not inland marine: transit over land Lines of business hull
cargo
marine liability / P & I
offshore energy
Guy Carpenter

4. What’s Covered? Perils of the sea Fire and explosion
Barratry of the master
Jettison
Assailing thieves
Theft and pilferage
War
Guy Carpenter

5. Trends (and data)
Approximately 1/3 of domestic business in London market, about half to Lloyd's
Premium grew 27% from 1998 to 2002
Loss ratio fell from 66.4% to 57.6% during same period
Acceleration in loss payments
Lower investment returns
Guy Carpenter

6. Reinsurance Market Use of non-marine market Pre September 11, 2001
soft pricing
negative returns
hardening began
September 11, 2001
little ocean marine insured loss
rates continue to rise
Guy Carpenter

7. Reinsurance Market - 2003 Client (insurer) concerns price retention
coverage
long-term stability of reinsurer/market
Guy Carpenter

8. Reinsurance Market - 2003 Market settling Pricing exposure retention
price
reinstatements
Expanded broker role
Guy Carpenter

9. Reinsurance Market - 2003 Risks attaching vs. losses occurring
Gross vs. Net
TRIA
Capacity
Guy Carpenter

10. Capacity
New
Lloyd's
Guy Carpenter

11. Market Events Affecting Pricing
Fourteen large losses in 4th quarter, 2002
Diamond Princess: $250 million
Hual Europe: $85 million
Hanjin Pennsylvania: $235 million
Tricolor: $130 million
Guy Carpenter

12. Underwriting Changes Old New increased use of actuaries
submission information
quota share
limited terrorism cover
Capacity
Guy Carpenter

13. Reinsurance Products Quota share Excess of loss “Follow-the-Fortune”
“Pure”
Broadening of coverage
Guy Carpenter

14. Guy Carpenter Instrat
What it is
Actuaries role
MetaRisk
Guy Carpenter