IUMI 2018 REPORT ON WORLD MERCHANT FLEET AND WORLD TRADE

Transcription

1 IUMI 2018 REPORT ON WORLD MERCHANT FLEET AND WORLD TRADE Donald Harrell Chairman IUMI Facts & Figures Committee, Head of International Insurance and Global Head of Marine - Aspen Insurance September 17, 2018

2 IUMI Facts & Figures Program Update on Facts & Figures Committee Report on World Merchant Fleet and World Trade Don Harrell, Chairman IUMI Facts & Figures Committee Major Claims Database Pilot David Matcham, Chief Executive, IUA Global Marine Insurance Report Astrid Seltmann, Analyst/Actuary, CEFOR Sub-Saharan Africa: Medium term opportunities and risks Thea Fourie, Senior Analyst, Sub-Sahara Region, IHS Markit Cargo / Hull / Energy Facts Sheets 2

3 Facts & Figures Committee Members Donald Harrell Chairman London, United Kingdom Astrid Seltmann Vice Chair Oslo, Norway Philip Graham Vice Chair London, United Kingdom Marika Svalskulla Secretary Stockholm, Sweden Mathieu Daubin Paris, France David Matcham IUA London, United Kingdom Jun Lin London, United Kingdom Lars Lange Executive Committee Liaison Hamburg, Germany Erika Schoch Armonk, NY USA Li Zhang Beijing, P.R. Of China Javier Alonso Puente Madrid, Spain Paul Hackett Singapore Andrea Mazza Genova, Italy Jesse DeCouto Pembroke, Bermuda Ben Chung Hong Kong Tetsuya Watanabe Tokyo, Japan Lisa Yu London, United Kingdom

4 Key Data & Content Providers 4

5 IUMI Major Claim Database Project Create a large and consistent loss database (hull and cargo) with standardized data from member companies in order to analyze major losses with respect to loss severity, frequency, location and cause

6 Managing Emerging Risks & Exposures Think the Unthinkable Artificial Intelligence Smart devices Tracking / monitoring Robotics Smart Logistics Autonomous Shipping Pre underwriting surveys InsureTech Risk Modelling Claims mitigation / Claims escalation Internet of Things Block Chain Predictive Analytics Autonomous Ships & Trucks 6

7 Global Marine Market Snapshot 7

8 Marine Premium 2017 by line of business Total estimate 2017: 28.5 USD billion / Change 2016 to 2017: +2% NB: Exchange rate effects! % 24% 7% Global Hull Transport/Cargo Marine Liability Offshore/Energy 57% Hull & offshore energy share reduced 1%, Cargo share up 2%. 8

9 Marine Premiums 2017 by region 9.7% 5.6% 4.0% 2.4% % Europe Asia/Pacific Latin America North America Middle East Africa 29.2% Total: 28.5 USD billion 9

10 Macro Economic Outlook 10

11 Key Issues for the Global Economy 2018 US policy shifts on trade, regulations and taxes T & O Potential sharper than expected inflation T Global trade is still growing despite Brexit and Trump O Extent of US dollar appreciation/ depreciation T & O Imbalances in China's Credit, Housing and Industrial markets T Path and final status of the UK's exit from the EU T & O Political instability and banking problems in the Eurozone T Conflicts in the Middle East, Africa and Korean Peninsula T Changing Technology landscape T & O Global economic growth on track to be the fastest since 2011 O Predicted high levels of energy consumption O Relatively Stable Oil prices T & O Extreme weather events and natural disasters T Source: PWC 11

12 Global real GDP is growing at its fastest pace since 2010 Projected 2.7% growth in 2018 and 2.9% in 2019, in line with the expansion of global GDP Real GDP Source: IHS Markit 2018 IHS Markit 12

13 Emerging Markets lead global real GDP Growth Estimated 3.1% average GDP growth in the subsequent five years ( ), before gradually easing off in the longer term Real GDP Source: IHS Markit Economics and Country Risk 13

14 Asia-Pacific (excluding Japan) will achieve the fastest growth rate in real GDP Europe Real GDP expanded 2.5% in 2017 its strongest pace since 2007 Real GDP Source: IHS Markit Economics and Country Risk 14

15 China s massive debt will constrain future monetary policy, credit growth, and investment Real GDP and industrial production Source: IHS Markit 2018 IHS Markit 15

16 World Trade Volumes Excellent world trade outlook with solid trade growth in the first quarter of 2018 following robust expansion in Commodity prices forecast to increase Year Trade Tonnes 2016 $13.6 billion 2017 $14.1 billion 2018 $14.5 billion 2019 $14.9 billion Year Trade Real Value 2016 $21.7 trillion 2017 $22.7 trillion 2018 $23.6 trillion 2019 $24.6 trillion Source: IHS Markit World Trade Service Commentary WTO World Trade Outlook Indicator 12 February

17 World Trade Volumes expected to grow Trade volumes are expected to grow 3 times as quickly as in 2016 Source: IHS Markit World Trade Service Commentary RBC Economic Research 17

18 World Seaborne Trade Source: Clarksons Research, March

19 World Seaborne Trade By Industry Energy Crude Oil Products Steam Coal Gas Energy 38% Seaborne Trade in billion tonnes Metal Industry Iron Ore Coking Coal Other Ores Steel Products Metal Industry 25% Agricultural Agriculture 11% Container Container 16% Other Cargo Other Dry Chemicals Other 10% Million Tonnes of Cargo, 2017 September Source: Clarksons Research, March 2018

20 (f) e 2018 (f) World Seaborne trade still growing Growth: Seaborne Trade vs World GDP Seaborne Trade per Capita 12% 8% 4% bn tonnes Seaborne Trade (LHS) Trade per Capita (RHS) Milestone : Trade reaches 10bn tonnes tonnes pp % -4% -8% Seaborne Trade Growth World GDP Growth Milestone : Trade reaches 1.5 tonnes per person % of trade is seaborne and growth historically has been well correlated to global economic growth Milestone : Trade passes 1 tonne per person Sea trade cycles generally follow cycles in world GDP but not precisely % GDP growth and 3.1% growth in trade? 12bn tonnes in 2018 forecast Source: Clarksons Research, September

21 U.S. China trade TEU Volumes: % Growth Forecasted Values Chinese Imports from U.S. U.S. Imports from China Source: IHS Markit World Trade Service 21

22 Inflation outlook revised higher Stronger global demand will bring a quicker acceleration in prices Source: IHS Markit Economics and Country Risk OECD, November

23 Purchasing Manager Index signals pick up in economic growth Global economy starts 2018 on a solid footing with PMI highest since September 2015 as emerging market growth hits five-year high Global economic growth Developed vs emerging market output Source: IHS Markit Economics and Country Risk 23

24 Stronger economic expansion in USA while modest expansion in China & Japan and slowdown in Europe Purchasing Managers Indices, monthly data Source: Swiss Re Institute Datastream, Bloomberg 24

25 Slowdown in regional population growth through 2030 Total population, Compound annual growth rate Source: IHS Markit Economics and Country Risk 25

26 Maritime Industry Outlook 26

27 World Fleet Growth Easing Source: Clarksons Research, September

28 * * Million GT Million GT Global Fleet Development Global Fleet, End Period Growth (GT) Deliveries Demolitions % % 8% 7% 6% 5% 4% 3% 2% 1% % -60 Source: Clarksons Research, August 2018 Note (1): Includes all vessels above 100 GT. Note (2): 2018* = year to date. 28

29 Average Age Average Age Average Age of the World Fleet 27.5 Total Bulkcarrier Gas Tanker Containership/MPP Others 30.0 Global Fleet <2,000GT Global Fleet >=2,000GT Source: Clarksons Research, August 2018 Note (1): Includes all vessels in these categories above 100 GT. Note (2): Average age is calculated using number of vessels. Calculations are based on year and month of build. 29

30 No. of vessels Tanker, Bulker, Containership and MPP Fleets Tanker Fleet Containership/MPPs Fleets Bulkcarrier Fleet Deliveries (RHS) Scrapping (RHS) Source: Clarksons Research, September 2018 Note (1): Includes all vessels in these categories above 100 GT. Note (2): All fleet totals are on the left-hand axis and deliveries and scrapping figures are on the right hand axis. Fleet totals are as at start year; deliveries and scrapping figures are full year totals. 30

31 * * No. of Vessels million DWT Demolition Levels Historical Global Demolition Totals (No.) Historical Global Demolition Totals (DWT) Others Bulkcarriers Tankers 70 Others Bulkcarriers Tankers Source: Clarksons Research, August 2018 Note (1): Includes all vessels above 100 GT. Note (2): 2018* = year to date 31

32 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Ship earnings improving but still competitive The ClarkSea Index, Present US$ 000/day 24 th August 2018 US$12,478/day Average since crisis $11,676/day Annual Average ClarkSea Index (US$/day) OPEX Index (US$/day) ,659 6, ,331 6, ,480 6, ,314 6, ,577 6, ,263 6, ,743 6, ,410 6, ,441 6, ,767 6, * 11,239 6, * = year to date Note: OPEX Index basis Moore Stephens published statistics, weighted using ClarkSea assumptions. Source: Clarksons Research, September

33 Historical Shipbuilding shares (GT) % Global deliveries Other Countries US China Korea Japan Europe Source: Clarksons Research, March

34 Shipbuilding deliveries by Country Million CGT Output in China P.R. 105 yards 11.7 South Korea 15 yards 10.6 Japan 61 yards 6.8 Philippines yards Italy yards Germany Taiwan yards 2 yards The number of yards refers to yards that have delivered a vessel of 1,000 GT and above in 2017 Romania Vietnam United States yards 7 yards 16 yards 313 yards are reported to have delivered a vessel of 1,000 GT or above in This compares to 2016 when 353 yards output at least one vessel >1,000 GT, including 119 Chinese yards, 15 South Korean yards and 67 Japanese shipyards Other yards Source: Clarksons Research, March

35 Environmental Regulation timeline accelerating Source: Clarksons Research, August

36 OFFSHORE ENERGY OUTLOOK

37 Offshore & Energy Shipping & Trade 2017(e) 17% of energy, 25.5m bpd and 115bn cfpd 2017(e) 11.6bn tonnes, 84% of world trade Nuclear, 4% Hydro, 7% Renewables, 3% Bioenergy, 1% Oil Onshore, 24% Crude Oil 17% Gas & Chemicals 6% Oil Products 9% Iron Ore 13% Coal 10% Oil Offshore, 9% Coal, 30% Gas Offshore, 8% Gas Onshore, 16% Other Dry 8% Containers 16% Other Dry Bulk 21% Source: BP Statistical Review, Clarksons Research Source: Clarksons Research, March

38 Offshore: Potentially brighter future? 1986 Downturn , Forecast Overproduction by the Saudis caused a major downturn in the offshore industry. This resulted in significant stacking of assets (Invergordon, Cromarty shown above). Record high oil prices stimulate investment in ever-more sophisticated assets capable of ultra- Deepwater operations Overproduction by the OPEC members Significant rise in US Shale Gas Increased number of rigs stacked and large inventory of rigs Increase in price of oil has increased activity in the oil & gas exploration and production sectors Demand for crude is expected to remain healthy

39 Crude oil prices Crude oil prices increase rapidly in response to strong global demand Source: IHS Markit Economics and Country Risk 39

40 Dayrates Worldwide 500 $ 000/day Average Floaters Worldwide Average Jack-Up Worldwide Data Source: Clarksons Research 40

41 Rig Utilisation Further increases in mobile offshore drilling unit (MODU) utilization are anticipated Projected available at year end Current Utilisation Jack-Ups: 66% Floaters: 67% Projected supply at year end Source: Clarksons Research 41

42 Number of Deliveries $ (bbl) Rig Age Profile Floater Orderbook Jack-Up Orderbook Floater Fleet Jack-Up Fleet 80 Oil Price ($/bbl) 3 rd generation 70 6 th generation Large orderbook but slippage likely nd generation 5 th generation th generation oil price is an average year to date August 2018 Data Source: Clarksons Research, August

43 Rig Removals Rig Demolitions Rig Cold Stacking 50 No. Units No. Units 180 Drillship Drillship Semi-Sub >5,000ft Semi-Sub <=5,000ft Jack-Up >300ft Jack-Up <=300ft Semi-Sub >5,000ft Semi-Sub <=5,000ft Jack Up >300ft Jack Up <= * Data Source: Clarksons Research 43

44 MACRO MARITIME LOSS, PORT ACCUMILATION, HIJACK & TERRORISM STATISTICS

45 Total Losses As a % of World Fleet (Vessels > 500 GT) Downward trend in total losses as a percentage of World Fleet Source: Fleet numbers : Clarkson Research Services Losses: LLI, total losses as reported in Lloyds List Source: IUMI 2018 Casualty and World Fleet Statistics Clarksons Research 45

46 Losses By Vessel Type GT Other Dry Cargo Non-Cargo Bulkcarriers Gas Carriers Tankers Losses as % of Fleet % of Start Year Fleet (GT) 0.16% % % % 0.08% 0.06% % % ytd = Jan-August 2018 September ytd 0.00% Data Source: Clarksons Research, August

47 Marine Top Risk Accumulation in Ports Not just the biggest container hubs have a high risk of loss, but also smaller ports due to their cargo type and the natural hazards they face No strong correlation between port s size and catastrophe loss potential. 500 year loss. $ Ports at risk for highest losses due to natural perils $ $ $ $ $- The modeling takes into account: cargo type (e.g. autos, bulk grains, electronics specie), precise storage location (e.g. coastal, estuarine, waterside or within dock complex), storage type (e.g. open air, warehouse, container stacked or ground level), dwell time (which can vary due to port automation, labor relations and import/export ratios) Source: RMS Risk Management Solutions 47

48 Frequency of successful and attempted hijacks - Somalia, Gulf of Guinea and Malay Peninsula Source: IHS Markit 48

49 Successful & attempted hijacks by attack area Source: IHS Markit 49

50 Terrorism Risk one year outlook Source: IHS Markit 50

51 The Global Outlook Summary Global economic growth expected to increase from 3.2% to 3.4% in 2018 and Fastest pace since 2010 US economy will experience robust growth, thanks to tax cuts and increased government spending Eurozone growth is slowing, but remains above trend UK growth is being undermined by the uncertainty regarding Brexit. Japan s growth is decelerating after a strong run China s growth is holding steady, but will gradually slow as the government aims to reduce excesses in industrial capacity, debt, housing, and shadow banking. Asia s other emerging markets will sustain robust growth. Russia and Brazil will continue to recover from recessions Sub-Saharan African economies continue to record strong growth 51

52 The Global Outlook Summary Businesses remain upbeat, despite policy and political risks. Trade is again an engine of growth. Commodity prices will rise only gradually if at all during the next two years. Given closing output gaps, inflation will move up but probably slowly. Most central banks will take their time in reducing stimulus (Fed Reserve) US dollar is likely to strengthen in the near term, but then weaken as the growing current-account deficit exerts downward pressure. Policy mistakes remain among the biggest threats to the current expansion. Oil price projected to stabilize through

53 THANK YOU Donald Harrell Chairman IUMI Facts & Figures Committee, Head of International Insurance and Global Head of Marine - Aspen Insurance September 17, 2018