Marine risks

The Group writes a broad account of marine risks with maximum lines as follows:

Marine Class

	2005 Gross premium £m	Current maximum line size £m	2005 Average line size £m
Hull	16	10	1.1
Cargo	16	17	2.3
Energy	27	20	3.1
War and terrorism	19	17	5.5
Specie	9	34	7.9
Bloodstock	13	4	0.6
Yacht (hull and liability)	20	4	0.8
Liability	17	57	3.6

Notes:
1) Limits are set in US dollars and therefore currency rate of exchange changes may increase or reduce the sterling limits.
2) Maximum line size is after business written and ceded by specific proportional treaties to Amlin Bermuda Ltd.
3) Premiums are stated net of acquisition costs.

The hull and cargo account is worldwide. The yacht account is predominantly UK and Europe.

The hull and cargo account covers property damage to ships and loss or damage to a large variety of cargo or goods in transit. The book can be impacted by attritional claims of a small size as well as a single individual large claim. These lines could also be involved in a major natural catastrophe loss.

The energy portfolio is mainly offshore rig and construction policies which may be impacted by large individual claims but also is exposed to severe catastrophe losses in the North Sea and Gulf of Mexico.

War business includes aviation, marine and on land terrorism coverage and is therefore exposed to single incidents or a series of losses arising from concerted action. A small amount of political risk and confiscation risk is written.

Specie business consists of the insurance of fine art, exhibitions, vaults and high value goods including jewellers block and cash in transit. It is therefore subject to a frequency of small claims and also large individual losses. Some areas such as the USA are potential catastrophe zones.

The Bloodstock account is mainly UK but business from the USA, Australia and South Africa is also written. The average value insured is below £1 million. There is the potential for an aggregate loss such as a stable fire which could cause multiple claims.

Yacht business is generally for smaller value yachts and there is an expectation of a large number of small claims. Third party liability yacht account claims arise from injury or damage caused by one of our policyholders. There is also the potential for a large catastrophe loss such as a UK windstorm where there are large aggregate sums insured in coastal regions such as southern England.

The marine liability portfolio is written to protect ship-owners, harbours, charterers and energy companies against damage or injury to third parties. This includes the potential for pollution claims. The account could suffer a large catastrophe incident from a collision causing death of crew and passengers or an oil or chemical spill which could require large clean up costs.