are the 2012 losses just bad luck or the sign of a new ... · 0.4% 4.0% Cost of claims Inner ring:...
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IMSF 2013 London The year of the titans – are the 2012 losses just bad luck or the sign of a new risk picture? Astrid Seltmann Cefor Analyst/Actuary [email protected] The Nordic Association of Marine Insurers (Cefor)
Transcript of are the 2012 losses just bad luck or the sign of a new ... · 0.4% 4.0% Cost of claims Inner ring:...
IMSF 2013 London
The year of the titans – are the 2012 losses just bad luck
or the sign of a new risk picture?
Astrid Seltmann Cefor Analyst/Actuary
The Nordic Association of Marine Insurers (Cefor)
The Nordic Association of Marine Insurers
Contents
1. Recent claims trends
1. Overview
2. The good news
3. The bad news
2. Major claims impact
1. as of December 2011
2. ... and as of December 2012
3. The future risk exposure? – Evolution of ship values
The Nordic Association of Marine Insurers
Contents
1. Recent claims trends
1. The good news
2. The bad news
2. Major claims impact
1. as of December 2011
2. ... and as of December 2012
3. The future risk exposure? – Evolution of ship values
37.1%
1.9%
11.6%21.4%
9.7%
0.6%3.0%
14.8%
36.8%
1.5%
11.3%
24.1%
8.7%
0.3%2.3%
15.0%
Number of claims
Inner ring: 2007-2011Outer ring: 2012
Machinery
Fire/Explosion
Collision
Contact
Grounding
Ice
Heavy weather
Other
Totals
2007-11: 16,127
2012: 2,239
Claims by type of claim – Numbers
32.8%
10.1%
15.1%
7.5%
20.0%
0.2%
2.8%11.5%
17.3%
10.3%
13.9%
9.5%
44.7%
0.02%
0.4%
4.0%
Cost of claims
Inner ring: 2007-2011Outer ring: 2012
Machinery
Fire/Explosion
Collision
Contact
Grounding
Ice
Heavy weather
Other
Totals
2007-11: 4,689.1 MUSD
2012: 1,045.2 MUSD
Claims by type of claim – Cost
The good news (1): Claim frequency stable
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Claim frequency - claims in layersby date of loss
30 <= 50 MUSD
10 <= 30 MUSD
5 <= 10 MUSD
1 <= 5MUSD
<= 1MUSD
IBNR
Pre-financial crisis
increase in frequency
Stabilisation
The good news (2): Average repair cost stable
0
20,000
40,000
60,000
80,000
100,000
120,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Date of loss
Claim cost per vessel, excluding total lossesby date of loss, in USD
Pre-financial crisis
increase in repair cost
Stabilisation
The bad news (1): Total loss cost up!
The Nordic Association of Marine Insurers
0
20,000
40,000
60,000
80,000
100,000
120,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Date of loss
Ultimate partial and total claim cost per vessel (USD)by date of loss
Ultimate claim per vessel incl. IBNR Ultimate partial claim per vessel incl. IBNR
The Nordic Association of Marine Insurers
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Claim frequency, by date of loss
partial claims incl. IBNR (left axis) partial claims (left axis)
TLO claims (right axis)
The bad news (2): Total loss frequency also up
(Costa Concordia was not the only one!)
Cost driving factors – which correlation?
Sources:
Claim index: Cefor NoMIS data as of 31 December 2012; Exchange rates: Norges Bank, Ship operation costs: Moore Stephen’s,
Steel: CRU Steel Price Index (http://www.cruonline.crugroup.com/Steel/CRUspi.aspx)
75.0%
100.0%
125.0%
150.0%
175.0%
200.0%
225.0%
250.0%
275.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Cost driving factors inflation index, 2000 = 100%
USD against EUR Ship operating costs
Claim per vessel, by date of loss (incl. IBNR) Partial claim per vessel, by date of loss (2009 incl. IBNR)
Cru Steel Price Index (CRUspi)
1. Recent claims trends
1. The good news
2. The bad news
2. Major claims impact
1. as of December 2011
2. ... and as of December 2012
3. The future risk exposure? – Evolution of ship values
The Nordic Association of Marine Insurers
Contents
2011: Calm before the storm...?
The Nordic Association of Marine Insurers
0
20,000
40,000
60,000
80,000
100,000
120,000
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Date of loss
Claim per vessel (USD), by date of loss
> 50 MUSD
30-50 MUSD
10-30 MUSD
5-10 MUSD
1-5 MUSD
<= 1 MUSD
IBNR
... as of 2011: Absence of major losses
The Nordic Association of Marine Insurers
...as of end 2012: Unprecedented major loss impact
The Nordic Association of Marine Insurers
0
20,000
40,000
60,000
80,000
100,000
120,000
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Date of loss
Claim per vessel (USD), by date of loss
> 50 MUSD
30-50 MUSD
10-30 MUSD
5-10 MUSD
1-5 MUSD
<= 1 MUSD
IBNR
Average claim cost by type of casualty
= total claim cost / number of claims (per section)
The Nordic Association of Marine Insurers
0
500
1,000
1,500
2,000
2,500
3,000
3,500
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Date of loss
Average claim amount per type of casualtyin USD 1,000, by date of loss
Fire/Explosion
Collision, Contact,Grounding
Machinery
Heavy Weather
Ice
Other
The Nordic Association of Marine Insurers
Largest claims in % of the total claim cost:
17%
0%
7%
14%
0% 0%
15%
0%
8%
0%
9%
14%
7%6%
18%
10%
47%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Claims in excess of 30 MUSD as % of the total claim cost
Six claims
account for half
of the total
claim cost.
Largest claims in % of all ship values:
The Nordic Association of Marine Insurers
0.00%
0.05%
0.10%
0.15%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Cost of the three largest claims in % of the total insured value (USD), by date of loss
The Nordic Association of Marine Insurers
Actual numbers versus statistical expection
0
1
2
3
4
5
6
7
8
9
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Nu
mb
er
of
cla
ims
Claims in excess of 30 MUSD
Actual figures
1-in-100 years worstcase
1-in-20-years worstcase
Expected
Number of large
losses in 2012
exceeds the
range of
expected
statistical
variation
=> Are there
hidden causes
for the increase
in the number
of large losses?
(Industry frame
conditions?)
The Nordic Association of Marine Insurers
Major claims summary:
• 2012 large losses are different in character:
(Costa Concordia not the only one!)
• Ship types: various
(Passenger, Car/RoRo, Container, Tank)
• Loss types: various
(Grounding, Fire/Explosion, Collision, Contact)
• Age: various
• No substandard vessels
• Increase in total losses hard to explain by normal
statistical variation alone.
The Nordic Association of Marine Insurers
Question:
Was 2012 an exceptional
year and just bad luck?
Or do we have to wait more
of this?
1. Recent claims trends
1. The good news
2. The bad news
2. Major claims impact
1. as of December 2011
2. ... and as of December 2012
3. The future risk exposure? – Evolution of ship values
The Nordic Association of Marine Insurers
Contents
The Nordic Association of Marine Insurers
2012: Renewed drop in vessel values on renewals
5.6% 6.1%
2.8%
8.3%
6.0%
-15.3%
-9.4%
-4.3%
-7.2%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
Average annual change in insured values on renewed vessels
The Nordic Association of Marine Insurers
50%
100%
150%
200%
250%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Index of evolution of average Sum insured and gross ton1995=100%
Index Average Sum Insured Index Average gross ton
Vessel value index – Renewals and new builds
New and bigger
vessels
compensate to
a certain
degree for the
reduction in
values of the
existing fleet.
The Nordic Association of Marine Insurers
Despite recent drop in values:
Increased share of high-value vessels
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Distribution of number of vessels by underwriting year by insured values
> 300 MUSD
100 <= 300 MUSD
50 <= 100 MUSD
30 <= 50 MUSD
<= 30 MUSD
40% of all
vessels have
values xs
30 USD million
Until 2003: 20%
Increased number of high-value vessels
=> increased risk of costly claims
The Nordic Association of Marine Insurers
0
100
200
300
400
500
600
700
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Number of vessels by underwriting year,with values xs 100 USD million
> 300 MUSD
100 <= 300 MUSD
The Nordic Association of Marine Insurers
Summary
Pre – Financial crisis:
• Increase in claim frequency and repair cost
Post - Financial crisis:
• Claim frequency and repair cost stabilise
• Exceptional major loss impact in 2012;
various shiptypes involved
Future (?):
• Ship values drop, but new and bigger ships
increase the risk of even more costly claims.
• Watch out for changes in frame conditions
which may trigger the risk of major claims.
New loss prevention methods?
The Nordic Association of Marine Insurers
Thank you!
Cefor statistics publications:
• Recent claims trends in Cefor Annual Report 2012
• The 2012 Cefor NoMIS OCEAN Hull Report
• The 2012 Cefor NoMIS COASTAL Hull Report
• Half-yearly Claims Update Fact Sheet
• Check statistics section @ Cefor website:
www.cefor.no/statistics
(“NoMIS” – Nordic Marine Insurance Statistics)
Other marine insurance statistics:
• IUMI (International Union of Marine Insurance):
Statistics issued by IUMI’s Facts & Figures Committee:
http://www.iumi.com/index.php/committees/facts-a-
figures-committee/statistics
Contact: [email protected]
Nordic Marine Insurance Statistics
