0. MARKET UPDATE HOW IS THE INSURANCE MARKET ADAPTING TO NEW OPPORTUNITIES AND CHALLENGES?
2013
Simon Howell
Placement Leader
Bowring Marsh

1. Profitability Peaks & Troughs in the P/C Insurance Industry 1975 - 2012
P&C Insurance Industry has experience 4 consecutive “10 years” cycles since 1975
History suggests next ROE peak will be in

2. Natural Disasters Worldwide, 1980 – 2013 Number of Events
Number of CAT events or quality of its data collection is increasing with time
Insurance markets need to allocate increasing underwriting capital to account for the future anticipated larger CAT Losses

3. Bowring Marsh P&U Portfolio (313,635 MW)
Historical Rate per 100 TIV and Claims
Globally Static Rates
Regional differentials between traditional and emerging Insurance Hubs (London, Europe, Singapore, Middle East)
Increased Quantum and Frequency of claims
Increased technology complexity in manufacturing requirements
Rate per 100 TIV

4. Key Global P&U International Insurers (existing and new)
New, emerging or expanding insurance capacity
London
Existing consolidated P&U expertise
(Zurich, Travelers, Scor..)
New: Sciemus
USA
AIG (US$1 BN)
OIL (Mutual)
Asia
Chinese capacity expanding abroad
(PICC, CPIC)
Cont Europe
Traditional continental capacity expanding abroad
(MAPFRE, AXA, Generali…)
Middle East
Limited
Appetite 4

5. How is the P&U Insurance Market Adapting to Changes in Client Exposure Profile
Statistical data analysis enables development of capacity within historical deductible ranges for both Property Damage and Time Element exposure.
With changes in operating regime, come changing Business Interruption profiles. Post loss movement is a MAJOR CONCERN !
Growth & Development of Dedicated Renewables Insurance Capacity.
Comprehensive Policy Wordings
Deductibles aligned to appetite.
Inclusion of Coverage for Life Time Extension work.
A number of major Market losses have occurred post this LTE work.

6. P&U Insurance Forecast for 2014
Headline Premiums continue to have downward pressure.
New and existing carriers will provide Innovation in Product and Design.
Bespoke Solutions to changing Business Interruption Profiles.
Spin-offs of Renewable Energy Portfolios to stand alone policies.
Development of Deductible “buy down” Solutions.

7. Risk Analysis Modelling Platform (RAMP)
The size and diversity of our global portfolio has enabled us to develop a market-leading Risk Analysis Modelling Platform (RAMP). This helps us benchmark Property Damage and Business Interruption insurance programmes.
In December 2012, the RAMP won the ‘International Broker Innovation of the Year’ Insurance Times award on behalf of Bowring Marsh.
Using data points such as critical catastrophe, deductibles, key sub-limits, loss limit, loss ratio, mega watts, region of exposure, total insured values and type of power generation, the RAMP enables us to provide important in-depth management information on a confidential basis to:
Present a clear visual representation of how any insurance programme compares to that of others in the same industry
Compare local programmes (in the same region as the insured) to those available from international markets
Provide quick ‘ball-park’ estimates for either new or renewing business based on historical trends.

8. Risk Analysis Modelling Platform (RAMP)
Screen Shots of the Risk Analysis Modelling Platform
Tailored Risk Analysis Reports

9. Marsh Ltd conducts its general insurance activities on terms that are set out in the document "Our Business Principles and Practices".
Full details may be viewed on our website
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Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU
Marsh Ltd is authorised and regulated by the Financial Services Authority for insurance mediation activities only.