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

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

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

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

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

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

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

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

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

Capacity New Lloyd's Guy Carpenter

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

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

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

Guy Carpenter Instrat What it is Actuaries role MetaRisk Guy Carpenter