CEFOR Strategy Meeting

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CEFORStrategy Meeting Open Forum
DiscussionEconomic balance in the (marine)
insurance markets What is needed?
Presented by Hans Terje Anonsen
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CEFORStrategy Meeting Open Forum Discussion

• Can we achieve an Economic balance in the various
  Marine insurance markets?

No !
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Statement Number 1

• The marine market employs too much reinsurance
  capital.

with unsatisfactory returns
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Statement Number 2

• The marine market has become too much of a
  commodity market

with unsatisfactory level of expertise
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Statement Number 3

• There are too many brokers on the market scene

with little or no industry knowledge
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Lloyds of LondonMarine Results Profit / Loss
Before Tax
Estimates according to Chatset
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Lloyds of London Marine Capacity Trends - Summary
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Lloyds of London - 1990 Marine Capacity Trends
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Lloyds of London - 1994 Marine Capacity Trends
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Lloyds of London - 2000 Marine Capacity Trends
Composite Capacity
Estimated according to Chatset
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Hull Capacities 2002
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Norwegian Marine Insurance Market1990 - 2000
Premium Vs Claims
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Brokers to blame ?Number of Lloyds Brokers
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Segmentation of Insurers

• Commodity vs product strategies
• Niche vs Corporate, mutual vs capital
• Retention vs gross capacity
• Commission vs fee remuneration

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Product Strategy

• Demands high service level
• Demands high gross capacity
• Regional underwriting approach
• Requires hands on management
• Undermines market balance

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What is needed?

• Leaders must
• Reduce capacity
• Differentiate price correctly
• Reinsurers must
• Differentiate price
• Segment their marine portfolio
• Brokers must
• Improve efficiency
• Reduce their transactional role