1. Gérard de LA MARTINIERE Chairman FFSA Monte-Carlo Rendezvous Gérard de LA MARTINIERE Chairman FFSA Monte-Carlo Rendezvous 9 September 2003, Monte-Carlo CAUSES and LONG TERM CONSEQUENCES of ASSET VOLATILITY on INSURANCE

2. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Market situation

3. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Stock price fall & overreaction of insurance  Three main over/underreaction turning points

4. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) An exuberance not totally irrational  … but a turning point in autumn 2000

5. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Price’s correlation with expected return  … particularly during the fall of stock prices

6. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Expected return driven by interest rate  … but its rise after mid 2000 is not

7. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Risk premium driven by business sentiment  … but its rise since 2002 is not

8. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Decomposition of price variation since 1993  …expected return explains most price variations

9. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Decomposition of expected return  …underlines the crucial role of the risk premium

10. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Specificity of insurance market situation

11. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Recent overreaction of insurance quotation  … overreaction during the recent falling episode

12. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Growing expected return gap vs market  … exploding between mid 2002 & mid 2003

13. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Decomposition of price variation since 1993  … negative contribution of the risk premium

14. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) A not foreseeable overreaction

15. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Perspectives

16. Whole market perspectives  … clear upturn perspectives

17. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Insurance market perspectives  … upturn so as for the whole market

18. Tuesday 9th September 2003 - FFSA – (data source : ECOWIN) Conclusions What lessons from the current financial crisis ? What lessons from the current financial crisis ?