The Global Financial Crisis, International Trade & Piracy · Baltic Dry Index: Shipping Costs of...

The Global Financial Crisis, ,International Trade & Piracy:

Impacts on MarineI M kInsurance MarketsInsurance Information Institute

12 May 2009

Robert P. Hartwig, Ph.D., CPCU, PresidentInsurance Information Institute ♦ 110 William Street ♦ New York, NY 10038

Tel: (212) 346-5520 ♦ [email protected] ♦ www.iii.org

Presentation Outline

The Global Economic Storm: Financial Crisis &The Global Economic Storm: Financial Crisis & Recession• Survey of International Economic Growth Statistics• Industrial Production and Global Supply Chains• Industrial Production and Global Supply Chains• Inflation TrendsEconomic Threats to Marine Insurance Markets• Top Causes of Decline in International Trade• Major Trade and Marine Exposure Trends• Merchandise Trade (Import/Export) Analysis by Region• Economic Stimulus Impacts—Global ReviewFinancial Strength• Ratingsat gs• Investment Performance

Piracy: Trends by Region, Nature of Attack

THE GLOBAL ECONOMIC

STORMWhat Financial Crisis and

Recession Mean for the MarineRecession Mean for the Marine (Re)Insurance Industry &

I i l T dInternational Trade

Real GDP By Market 2007-2010F(% change from previous year)(% change from previous year)

11.9

%9.

1% %10%12%14% 2007 2008E 2009F 2010F

All major economies China are in recession.% % % 0%

96.

6% 8.0 %

%4%6%8%

10%Steep declines in GDP will negatively

impact trade on a global scale.

2.6%

2.0%

2.0% 3.

0

0.7% 1.0%

%

1.3%

0.6%

0.6%

0.7%

0.6% 1.

8%

0.5%

2.6%

0%2%4%

-0.7

%

-2.8

%

-3.2

%

%

-2.6

%

-3.0

%

-6%-4%-2%

-5.6

%

-8%6%

Euro Area Germany Japan US UK ChinaSource: Blue Chip Economic Indicators, 4/10/09 edition.

Real GDP for Selected Large Trading States,2007-2010F, (% change from prior yr.)2007 2010F, (% change from prior yr.)

2007 2008E 2009F 2010F

5.7%

5.3%

5%6%7%

2007 2008E 2009F 2010F

All major economies except China are in recession

3.3%

2.1%

3.5%

2.8%

2.1%

%1.9% 2.

2%

3.1%

% %

2.7%

2%3%4%5%

0.5% 0.7% 1.

3%1

1.0%

0.9% 1.0%

0%1%2%

2.0%

%

-0.7

%

-1.8

%

-1.4

%

-1.5

%

-3%-2%-1%

-2

-2.7

% -

-4%3%

Canada Mexico Brazil France Netherlands BelgiumSource: Blue Chip Economic Indicators, 4/10/09 edition.

Real GDP for Selected Large Trading States,2007-2010F, (% change from prior yr.)2007 2010F, (% change from prior yr.)

2007 2008E 2009F 2010F

11.6

%1%

%10%12%14%

2007 2008E 2009F 2010F

All major economies except China are in recession

5.0%

7.7%

6.4%

0%%

9.6.

6%8.

0 %

5.7%

6%8%

10%

4.0

2.6%

1.1%

3.0%

2.1%

0.8%

2.6%

2.6%

2.4%

1.6%

0%2%4%

-0.7

%2.

4%

% 2%

-0.8

%

-4%-2%0%

-2

-4.2

%

-4.8

% -3.2

-6%Taiwan S. Korea Singapore Hong Kong Australia China

Source: Blue Chip Economic Indicators, 4/10/09 edition.

United States :Real GDP Growth*

% %

Real GDP GrowthRecession began in December 2007.

Economic toll of credit crunch, housing l l b k i i i

3.7%

% 2.5%

3.6%

3.1%

2.9%

4.8%

4.8%

2.8%

% .3%

2.7% 2.9% 3.1%4%

6% slump, labor market contraction is growing

0.8% 1.

6% 2

0.1% 0.

9%

%

0.4%

1.6% 2

0 2%0%

2%

-0.5

%

-2.1

%

-0.2%

-4%

-2%

The Q4:2008 decline was the steepest since the

-6.1%-6.3%-8%

-6%

the steepest since the Q1:1982 drop of 6.4%

8%

20

00

20

01

20

02

20

03

20

04

20

05

20

06

07:1

Q

07:2

Q

07:3

Q

07:4

Q

08:1

Q

08:2

Q

08:3

Q

08:4

Q

09:1

Q

09:2

Q

09:3

Q

09:4

Q

10:1

Q

10:2

Q

10:3

Q

10:4

Q

*Blue bars are Estimates/Forecasts from Blue Chip Economic Indicators.Source: US Department of Commerce, Blue Economic Indicators 4/09; Insurance Information Institute.

GDP Growth: Advanced & Emerging Economies vs World

1970-2010F Emerging economies (led by China) are

Emerging Economies vs. World

8.0

10.0(led by China) are

expected to grow by 3.3% in 2009

The world economy is forecast to grow by 0.5% in 2009, but could shrink for the first time since WW II —by 1% to

2% according to the World Bank.

4.0

6.0g

0.0

2.0

Advanced economies will

-4.0

-2.0

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10

Advanced economies will shrink by 1.9% in 2009,

dampening energy demand

7 7 7 7 7 8 8 8 8 8 9 9 9 9 9 0 0 0 0 0 1

Advanced economies Emerging and developing economies World

Source: International Monetary Fund, World Economic Outlook Update, Jan. 28, 2009; Ins. Info. Institute.

IndustrialIndustrial ProductionProduction Sh D li iSharp Decline in

Production Spread byProduction Spread by Global Supply Chains

Global Industrial Production Is in a Tailspin Signaling Weakness in Trade

Annualized 3-Month Percent Change

Tailspin, Signaling Weakness in Trade

10.0

15.0 Industrial demand for energy has been particularly hard hit

0.0

5.0

10 0

-5.0

0.0

Global industrial production was down 13% in late 2008 adversely

-15.0

-10.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

down 13% in late 2008, adversely impacting energy demand

Source: International Monetary Fund, World Economic Outlook Update, Jan. 28, 2009; Ins. Info. Institute.

Total Industrial Production,(2007:Q1 to 2010:Q4F)(2007:Q1 to 2010:Q4F)

Figures for 2010 revised upwards to reflect

1.5%3.2% 3.6%

0.3% 0.4%

2.7%3.3%3.7%4.0%

1.7%

0 0%

5.0%upwards to reflect expected impact of

Obama stimulus program

-3.4%

-0.6%

-5.0%

0.0%

I d t i lObama stimulus

program is

-8.8%

-5.5%

-10.0%

Industrial production began

to contract sharply during H2 2008 and

i t d t

program is expected benefit impact industrial production and

-12.1%

-15.9%

-15.0%is expected to

shrink through most of 2009

therefore insurance exposure both directly and

indirectly-20.0%

07:Q

1

07:Q

2

07:Q

3

07:Q

4

08:Q

1

08:Q

2

08:Q

3

08:Q

4

09:Q

1

09:Q

2

09:Q

3

09:Q

4

10:Q

1

10:Q

2

10:Q

3

10:Q

4

Sources: US Bureau of Labor Statistics; Blue Chip Economic Indicators (4/09); Insurance Info. Inst.

indirectly

Auto/Light Truck Sales,1999-2010F (Millions of Units)

Weakening economy, credit h h ti t l

New auto/light truck sales are expected to experience a

1999 2010F (Millions of Units)

17.517.817 418

19

crunch are hurting auto sales; Gas prices less of a factor now.

are expected to experience a net drop of 6.7 million units annually by 2009 compared

with 2005, a decline of 39.6% and the lowest level

i th l t 196016.916.916.6

17.117.4

16.516.1

16

17

8 since the late 1960s

13.113

14

15

Impacts of falling auto sales will have a less pronounced effect on a to ins rance e pos re gro th

10 2

12.0

11

12

13 auto insurance exposure growth than problems in the housing market will on home insurers

10.210

99 00 01 02 03 04 05 06 07 08 09F 10FSource: US Department of Commerce; Blue Chip Economic Indicators (4/09); Insurance Information Inst.

Length of US Recessions,1929-Present*1929 Present

50 Current recession began inMonths in Duration

43

404550 Current recession began in

Dec. 2007 and is already the longest since 1981. It is now

also the longest recession since“We will rebuild. We will recover.”

253035

also the longest recession since the Great Depression.--President Barack Obama

addressing a joint session of Congress

1311 10 10 11

16 1618

152025

February 24, 2009

810

810

68 8

05

10

Aug.1929

May1937

Feb.1945

Nov.1948

July1953

Aug.1957

Apr.1960

Dec.1969

Nov.1973

Jan.1980

Jul.1981

Jul.1990

Mar.2001

Dec.2007

* As of May 2009, inclusiveSources: National Bureau of Economic Research; Insurance Information Institute.

Length of U.S. Business Cycles, 1929-Present*1929 Present

120120

Contraction Expansion FollowingDuration (Months)

A erage D ration**

80

106

9290

100110120 Average Duration**

Recession = 10.4 MonthsExpansion = 60.5 Months

Length of expansions

greatly

50

80

58

73

60708090 g y

exceeds contractions

4350

3745

39

2436

30405060

138 11 10 8 10 11

166

168 8

1812

01020

MonthAug.1929

May1937

Feb.1945

Nov.1948

July1953

Aug.1957

Apr.1960

Dec.1969

Nov.1973

Jan.1980

Jul.1981

Jul.1990

Mar.2001

Dec.2007

* As of May 2009, inclusive; **Post-WW II period through end of most recent expansion. Sources: National Bureau of Economic Research; Insurance Information Institute.

Month Recession Started

Inflation TrendsInflation Trends Significant ModerationSignificant Moderation Should Help ReduceShould Help Reduce Severity Trends, but

R d M h diReduces Merchandise ValuesValues

Inflation Rates for Largest European Economies & Euro Area, 2007-2010F, (% change from prior yr.)

2007 2008E 2009F 2010F

7%

4.6%

4%5%5%

2007 2008E 2009F 2010F

Inflation is down sharply across Europe, reducing

% %

3.3%

2.8%

3.7

2.8%

.6%3%

4%4% p , g

claim severity concerns

2.3%

2.3%

1.5% 1.6% 1.

8%

2.

3%1.5%

3%

1.8%

1.5% 1.6% 1.

9%2.1%

2%2%3%

1

0.6%

0.4% 0.

7%

0.5% 0.

8%

1.31

1.3 1

1%1%2%

0%Euro Area Germany UK France Netherlands Belgium

Source: Blue Chip Economic Indicators, 3/10/09 edition.

Annual Inflation Rates(CPI U %) 1990 2010F(CPI-U, %), 1990-2010F

6.0Inflation peaked at 5.6% in August 2008 on

high energy and commodity crisis The4.9 5.1

3 8 3 84 0

5.0

6.0 high energy and commodity crisis. The recession and the collapse of the commodity bubble have produced temporary deflation.

3.0 3.22.6

1 9

3.3 3.4

2.5 2.3

3.0

3.8

2.8

3.8

2.82.92.43.0

4.0

1.51.9

1.31.6

1.0

2.0

(0 7)(1.0)

0.0

(0.7)(1.0)90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09F10F

Sources: US Bureau of Labor Statistics; Blue Chip Economic Indicators, April 10, 2009 (forecasts).

Baltic Dry Index: Shipping Costs of Goods Plunged as Trade Weakensg

The Baltic Dry Index, a measure of shipping costs plunged more thanshipping costs, plunged more than

90% after the collapse of the commodities bubble in late 2008

Sources: InvestmentTools.com accessed 11 May 2009.

ECONOMIC THREATS TO MARINE INSURANCEINSURANCE MARKETSMARKETS Caught in theCaught in the

Economic StormEconomic Storm

Top Causes of Declinein Global Tradein Global Trade

1. GLOBAL RECESSIONGlobal nature of recession and rapid spread throughout the worldGlobal nature of recession and rapid spread throughout the worldDownturn is deep and broad, sharply reducing imports/exports

2. GLOBAL SUPPLY CHAINSFinished products often contain component parts from many countriesFinished products often contain component parts from many countries with ultimate buyers in still othersGlobal supply chains act as a contagion mechanism that transmit and accelerate economic disturbances (positive and negative)

3. SHORTAGE OF TRADE FINANCING (TRADE CREDIT)• Bursting of credit bubble has made obtaining trade credit difficult and

expensive to obtainR d t d i l• Renders some trade noneconomical

4. FUTURE CONCERN: PROTECTIONISM• Countries may erect or increase tariffs and quotas to protect domestict

producersproducers• This was a disastrous policy in 1930s• Ultimate reduces global trade flows and deepen global recession

Source: World Trade Organization; Insurance Information Institute.

Global Merchandise Exports, 1979-2009F ($ Trillions and Annual Growth Rate)($ Trillions and Annual Growth Rate)

M h di E tRecessions routinely

depress trade but the

1618

s) 20%

25%

rts

Merchandise Exports% Change

depress trade, but the current global

financial crisis is much more severe

121416

s ($

Tril

lions

10%

15%

20%

ate

in E

xpor

68

10

ise

Expo

rts

0%

5%

10%

Gro

wth

Ra

246

Mer

chan

d

-10%

-5%

Trade is expected to decline by its largest amount in decades in 2009

0

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

-15%

Source: World Trade Organization; Insurance Information Institute.

largest amount in decades in 2009

Major Economic Trends Affecting Marine Insurance MarketsMarine Insurance Markets

All Major World Economies Except China Are in RecessionDemand for Imported Products Has Plunged GloballyDemand for Imported Products Has Plunged GloballyGlobal Trade Expected to Shrink by 9% in 2009, the First Decline Since 1982 and the Largest Drop Since World War II• Trans Pacific containeri ed trade as do n 3 9% in 2008 ith a 4 1%• Trans-Pacific containerized trade was down 3.9% in 2008 with a 4.1%

drop projected for 2009Immense Amounts of Excess Shipping Capacity is Driving Down Shipping PricesDown Shipping Prices• Baltic Dry Index of shipping prices fell 94% from record high 11,793 in

May 2008 to 663 in December 2008As Much as 11.3% of Global Shipping Fleet is Idlepp gAs Much as 45% of the New Containership Capacity Scheduled for Delivery in 2010 Will Be Delayed or CancelledConcern that Rising Protectionist Sentiments Could IncreaseConcern that Rising Protectionist Sentiments Could Increase Tariffs, Quotas and Further Hurt Trade and Ultimately Deepen Global Recession

Implications for Marine Insurance MarketsMarine Insurance Markets

Decline in Shipping Volume Due to Collapse in Trade is Reducing Exposure (Vessels and Cargo)Reducing Exposure (Vessels and Cargo)

Likely reducing claim frequencyPremium Volume is Flat or Falling in Most Marine SegmentsReturn of Major Catastrophic Losses (Hurricane Ike) HurtReturn of Major Catastrophic Losses (Hurricane Ike) Hurt Offshore Energy SegmentCompetition Remains Strong in Many Marine Segments, Potentially Hurting Underwriting PerformancePotentially Hurting Underwriting PerformanceGlobal Economy Will Recover Slowly, Hurting PremiumInvestment Earnings Are Declining as Returns SufferGl b l I R H D d I L ki iGlobal Interest Rates Have Dropped, Insurers Locking in Lower Returns for Years to ComeIf Major Economies Become Protectionist, Marine Insurers Will S F th E i f th i B iWill See Further Erosion of their BusinessFinancial Collapse Means More/Different Regulation of Insurers Globally, Especially in US (Federal Regulation)

Real GDP and Trade Growth: OECD Countries: 2007:Q1—2008:Q4OECD Countries: 2007:Q1 2008:Q4

Global trade (imports and exports) fell sharply in late 2008 as major economies entered

recessions. WTO estimates global trade will

Sources: World Trade Organization: http://www.wto.org/english/news_e/pres09_e/pr554_e.pdf

gshrink 9% in 2009

Growth in Volume of Merchandise Trade and GDP, 1998 – 2008 (Annual % Change)

Merchandise trade volume istrade volume is

shrinking as major economies enter recession


Merchandise Trade Exports by Region,2007 and 2008, (% change from prior yr.)2007 and 2008, (% change from prior yr.)

2007 2008

19.5

%

20%

25%

Global merchandise trade growth fell by 2/3

%

13.0

%

%

15%

g yin 2008 and will likely

be negative in 2009

6.0% 7.

0%

0% 3.5%

7.5%

4.5%

4.0%

9.5

%

5.5%

%

6.0%

0% 0%

8.5 %

5%

7.0%

5%

10%

3.0 3 4

2.0%

1.5%

0.0%

3.0

3.0

2.5

0%

%

World US South/ EU CIS Africa Middle China Japan IndiaCentralAmerica

Eastp


Monthly Merchandise Exports and Imports, Jan. 2006- Feb. 2009 ($ Bn)p , ( )

Exports -----

Imports------

Exports -----

Imports------

Exports ----- Exports -----

Sources: World Trade Organization: http://www.wto.org/english/news_e/pres09_e/pr554_e.htm#appendix_chart1

Imports------ Imports------

Monthly Merchandise Exports and Imports, Jan. 2006- Feb. 2009 ($ Bn)p , ( )

Sources: World Trade Organization: http://www.wto.org/english/news_e/pres09_e/pr554_e.htm#appendix_chart1

THE $2.75 TRILLION GLOBAL ECONOMIC

STIMULUSSTIMULUSStimulus Spending WillStimulus Spending Will

Have Only a Minor ImpactHave Only a Minor Impact on Trade

Announced Economic Stimulus Packages Worldwide (US$ Bill)*

$787$900

Packages Worldwide (US$ Bill)*U.S. stimulus comprises a mix of

spending tax relief and aid to states

$586

.15.

9

$787

$600$700$800

spending, tax relief and aid to states

Governments around the world are seeking to soften the economic blow

through spending. Deficits as a share of As of March 2009,

these countries h d$

$485

$400$500$600

t oug spe d g. e c ts as a s a e oGDP will mushroom leading to a

potential inflationary threat and higher interest rates the future.

P/C insurers will provide insurance

have approved or proposed at least US$2.3 trillion in stimulus spending

8 0

$130

.43.

0 75.3

0 6 9 8 8 .3 8.0

4 .7 6.8

0.8$200

$300p

necessary for stimulus projects and will benefit from enhanced economic growth

p g

$5.8

$2.0 $33 $7

$8.0

$7.6

$6.9

$2.8

$1.8

$11

$28

$7.4

$13

$36

$40

$0$100

U.S.ex

icoChile

many

ance

U.K.

Spain

Italy

lands

ngary

tugal

eden

China apan

Korea

land*

tralia

India

Dubai

UM

ex Ch

Germa

Fran U Sp It

Nether

laHungPor

tugSwed Ch Ja

pSou

th K

oNew

Zea

lanAustr In Du

Sources: Wall Street Journal, January 8, 2009 with updates by I.I.I.; Institute of International Finance and Brookings Institute.

*As of March 2009.

FINANCIAL STRENGTH &

RATINGSIndustry Has Weathered dust y as Weat e ed

the Storms Well

US P/C Insurer Impairment Frequency vs Combined Ratio 1969 2007vs. Combined Ratio, 1969-2007

Combined Ratio after DivP/C I i t F

Impairment rates are highly

115

120

1 61.82

P/C Impairment Frequencyg ycorrelated

underwriting performance and could reached a

record low in 2007

110

d R

atio

1.21.41.6

nt R

ate

record low in 2007

100

105

Com

bine

d

0.60.81

Impa

irmen

90

95

00.20.4

2007 impairment rate was a record low 0.12%, one-seventh the 0.8% average since 1969; Previous

record was 0.24% in 197290

69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

0

Source: A.M. Best; Insurance Information Institute

Summary of A.M. Best’s P/C Insurer Ratings Actions in 2008*Ratings Actions in 2008

P/C insurance is by design a resilient in

Upgraded, 59 , 4.0%

Initial, 41 , 2.8%Downgraded, 55 , 3 8%

design a resilient in business. The dual threat of financial

disasters and catastrophic losses are Under Review, 63 ,

4.3%

O h 59 4 0%

3.8%catastrophic losses are anticipated in the

industry’s risk management strategy.

Other, 59 , 4.0%

Despite financial market turmoil, high cat losses

and a soft market inand a soft market in 2008, 81% of ratings actions by A.M. Best

were affirmations; just 3.8% were downgrades

Affirm, 1,183 , 81.0%*Through December 19.Source: A.M. Best.

34

3.8% were downgrades and 4.0% upgrades

Historical Ratings Distribution,US P/C Insurers 2008 vs 2005 and 2000US P/C Insurers, 2008 vs. 2005 and 2000

2008 2005 2000A++/A+ and

D0.2%C++/C+

1.9%

E/F2.3% A++/A+

11 5%

C/C-0.6%

A++/A+9.2%

Vulnerable*

A++/A+10.8%Vulnerable*

A++/A+ and A/A- gains

11.5%B/B-6.9%

Vulnerable12.1%

B++/B+21.3%

7.9%

A/A-

B++/B+28.3%

A/A-52 3%

B++/B+26.4%

A/A48.4%

P/C insurer financial strength has improved since 2005

52.3%A/A-

60.0%

Source: A.M. Best: Rating Downgrades Slowed but Outpaced Upgrades for Fourth Consecutive Year, Special Report,November 8, 2004 for 2000; 2006 and 2009 Review & Preview. *Ratings ‘B’ and lower.

has improved since 2005 despite financial crisis

InvestmentInvestment Performance

I t t P i i lInvestments are a Principal Source of Declining f g

Profitability

Property/Casualty Insurance Industry Investment Gain:1994- 20081

$ Billions$64 0

$42 8$47.2

$52.3$44.4 $45.3

$48.9

$59.4$55.7

$64.0$56.9

$51.9

$57.9

$50

$60

$35.4$42.8 $44.4

$36.0$31.4

$30

$40

Investment gains fell by 51% in

$10

$20Investment gains fell by 51% in 2008 due to lower yields, poor

equity market conditions$0

94 95 96 97 98 99 00 01 02 03 04 05* 06 07

08:Q

3

q y

08

1Investment gains consist primarily of interest, stock dividends and realized capital gains and losses. 2006 figure consists of $52.3B net investment income and $3.4B realized investment gain.*2005 figure includes special one-time dividend of $3.2B.Sources: ISO; Insurance Information Institute.

37

PIRACY

An Ancient ScourgeAn Ancient Scourge Impacts 21st Century p y

Marine Insurers

Prime Locations for Piracy Attacks 2008Attacks, 2008

Tanzania, 14Somalia 19

Seven Vietnam, 11Somalia, 19

Bangladesh, 12locations

accounted for more th t

Nigeria, 40

than two-thirds, or 216 of a total 293total 293 reported piracy

attacks in

Indonesia, 28 Gulf of Aden, 92

attacks in 2008

Source: ICC International Maritime Bureau (IMB) 2008 annual report.

Monthly Worldwide Piracy Attacks,Jan 2008 Mar 2009

45

Jan 2008 - Mar 2009Attacks reached a new record in March 2009 with 41 attacks, after peaking in

30

39

30

37 36

41

35

40

45 September 2008 with 39 attacks. November 08 (37) and January 09 (36)

were also busy months.

19 20

30

2024 24

30

20

2525

30

19

1416

10

15

20

0

5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb MarJan -08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Source: ICC International Maritime Bureau (IMB) First Quarter 2009 and 2008 annual reports.

Total Piracy Incidents WorldwideBy Region 2008

189200

By Region, 2008

A total of 293 incidents of piracy

140160180200 A total of 293 incidents of piracy

and robbery against ships were reported in 2008 – an increase of

more than 11 percent on 263

100120140 more than 11 percent on 263

incidents in 2007 – due to the unprecedented number of attacks

in the Gulf of Aden.

23

55

406080

in the Gulf of Aden.

14 1023

20

200

Africa America Far East Indian Sub Rest of the S E AsiaAfrica America Far East Indian SubContinent

Rest of theWorld

S E Asia


Countries Where Five or MoreIncidents Have Occurred 2008

92100

Incidents Have Occurred, 2008A total of 111 incidents were reported for Somalia and the Gulf of Aden in 2008, up

l 200 t 2007 A t t l f 4292

708090 nearly 200 percent on 2007. A total of 42

vessels were hijacked by Somali pirates and 815 crew taken hostage.

I J M 2009 t t l f 61 tt k

2840

405060

In Jan-Mar 2009, a total of 61 attacks were reported for Somalia and the Gulf of Aden, continuing 2008’s trend. Out of the 61 attacks, nine vessels were hijacked and 157 crew members taken hostage.

127 10

28

105 7 6

1914 11

102030

0

nglades

hGha

naf o

f Aden

Indiandon

esia

Malays

iaNigeri

a

Peruhil

ippines

e Straits

Somali

aTan

zania

Vietna

m

Bang

Gulf o Ind M

PhilSinga

pore S Ta V


Piracy Attacks By Vessel Type, 2008

4849

Bulk CarrierContainer

y y yp

91616

303839

48

Fishing VesselProduct Tanker

TUGTanker

General CargoChemical Tanker

33

56

899

Vehicle CarrierPassenger Ship

Supply ShipLPG Tanker

Refrigerated CargoYacht

Fishing Vessel

All types of vessels –from cargo ships to

1111223

Heavy Load CarrierOffshore Support

DHOWResearch Vessel

Cement CarrierFPSO

Vehicle Carrier passenger ships and fishing vessels – have

been attacked.

1111111

Li t k C iLift Barge

Barge CarrierCrew Boat

Ro-RoNA

Heavy Load Carrier been attacked.

1

0 10 20 30 40 50 60

Livestock Carrier


Flag States of Vessels Attacked 10 Times or More 2008

52Panama

10 Times or More, 2008

19

25

Liberia

Singapore

The flag of

14

15

Antigua and Barbuda

Marshall IslandsThe flag of

registry subject to the highest

number of attacks

12

14

14

Bahamas

Hong Kong

Cyprus number of attacks in 2008 was

Panama, followed by Singapore and

10

10

12

Malaysia

Malta

Bahamas by Singapore and Liberia.

0 10 20 30 40 50 60

y


Managing Country of Ships Attacked 10 Times or More 2008

41Germany

Attacked 10 Times or More, 2008

23

31

41

Greece

Singapore

y

The managing

12

16

23

Norway

Japan

The managing country of ships

subject to the highest number of

12

12

China

U.K.

y highest number of attacks in 2008 was Germany,

followed by

10

11

Hong Kong

Malaysia

followed by Singapore and

Greece.

0 10 20 30 40 50 60Source: ICC International Maritime Bureau (IMB) 2008 annual report.

Total Piracy Incidents Worldwide2003 Q1:2009

445450

2003 - Q1:2009A total of 293 incidents of piracy and

robbery against ships were reported in

329350

400

450 robbery against ships were reported in 2008 – up 23 percent since 2006 – the second consecutive year of increases.

276239

263293

250

300

102100

150

200Attacks in the first quarter of 2009 have almost doubled from 53 in Q1 2008 to 102 in Q1 2009 due almost entirely

0

50

100 Q1 2009 – due almost entirely to increased Somali pirate activity off the Gulf of Aden.

02003 2004 2005 2006 2007 2008 2009 Q1*


Types of Arms Used During Attacks 2008Attacks, 2008

Not stated, 80, Pirates Other weapons, 6,

2%27%boarding

vessels are better

d d

Knives 68

armed and prepared to assault and

injure Knives, 68,23%

injure crew. Total incidents in which guns

Guns, 139,

which guns were used

rose 93 percent

48%p

2007-2008. Source: ICC International Maritime Bureau (IMB) 2008 annual report.

Types of Violence to Crew, 2008yp f ,

Crew threatened 9Kidnap/Ransom, 42, Crew threatened, 9, 1%

Crew assaulted, 7, 1%Crew injured, 32, 3%

Kidnap/Ransom, 42, 4%

C kill d 11 1%Crew killed, 11, 1%

Missing 21 2%Missing, 21, 2%

Worldwide in 2008 a total of 49 vessels were hijacked 889 crew

Taken hostage, 889,

vessels were hijacked, 889 crew taken hostage and a further 46 vessels fired upon – surpassing

all previous records.88% all previous records.


Total Maritime HostageIncidents Worldwide 2003 2008

889900

Incidents Worldwide, 2003-2008

Worldwide a total of 889 crew were

700

800

900 Worldwide a total of 889 crew were taken hostage in 2008, an increase of

200 percent over 2007! In the first three months of 2009 178 crew were

440500

600three months of 2009, 178 crew were

already taken hostage.

359

148188

292

178200

300

400

148 178

0

100

200

02003 2004 2005 2006 2007 2008 Q1 2009


Insurance Information Institute On LineInstitute On-Line

THANK YOU FOR YOUR TIME ANDTHANK YOU FOR YOUR TIME AND

YOUR ATTENTION!

50

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