ACE Tempest Re USA Ocean Marine Roger Howe, CPCU December 6 th 2004 ACE Tempest Re USA 2 Agenda Ocean Marine Overview Lines of Business Results Recent Loss Activity Outlook ACE Tempest Re USA 3 Historical Perspective Marine Insurance is the Oldest Form of Insurance 916 BC Rhodians initiated the concept of General Average Bottomry Bonds 1688 Lloyds First American Insurance Corporation 1792 Insurance Company of North America ACE Tempest Re USA 4 Global Premium & Growth Trends USD billions Source IUMI 2004 ACE Tempest Re USA 5 Ocean Marine Global Premium 2003 Geographic Split Source IUMI 2004 ACE Tempest Re USA 6 Global LOB Split 2003 USD Premium Bn Source IUMI 2004 ACE Tempest Re USA Detail Geographic Premium Written US$ Bn Top Five Premium writers (by country) 1) United Kingdom 2.426B 2) Japan 2.083B 3) United States B 4) Germany 1.536B 5) France B Source: IUMI 2004 Lines Hull/Cargo/Liabilities/Offshore Energy ACE Tempest Re USA 8 US Premium USD Bn Source: AIMU Calendar Year Operating Ratios Including Yachts (not included in IUMI numbers) ACE Tempest Re USA 9 US Premium Split by LOB 2003 Source: AIMU 2003 ACE Tempest Re USA 10 Lines of Business Cargo Bluewater Hull Brownwater Hull and P&I Offshore Energy Marine Liabilities Yachts ACE Tempest Re USA 11 Cargo ACE Tempest Re USA 12 Bluewater ACE Tempest Re USA 13 Brownwater Hull and P&I ACE Tempest Re USA 14 Brownwater Hull and P&I ACE Tempest Re USA 15 Offshore Energy ACE Tempest Re USA 16 Liabilities Brief Description ACE Tempest Re USA 17 Yachts 413 ft Octopus ACE Tempest Re USA CY Results US Market Premiums vs. Combined Ratio (USD Bn) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA CY Results US Cargo Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 20 2003 CY Results US Ocean Hull Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 21 2003 CY Results US All Other Hull Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 22 2003 CY Results US P&I Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 23 2003 CY Results US Yacht Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 24 2003 CY Results US Primary Liab Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 25 2003 CY Results US Offshore Market Premiums vs. Combined Ratio (USD Million) Source: AIMU 2003 Calendar Year Operating Ratios ACE Tempest Re USA 26 Recent Loss Activity ACE Tempest Re USA 27 Rigs in Path Of 9/15/04 ACE Tempest Re USA 28 Structures at 9/15/04 ACE Tempest Re USA 29 Ivan - Ensco 64 ACE Tempest Re USA 30 Ivan - Murphy Medusa Spar ACE Tempest Re USA 31 Petronius VK786 ACE Tempest Re USA 32 Recent Loss Activity ACE Tempest Re USA 33 Outlook Current Market Profitable in many classes Offshore and Yachts presented CAT losses in 2004 Quantitative Analysis Actuarial Cat Modeling