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					THE BROKERS
PERSPECTIVE
Mark Hue Williams
Head of Strategic Accounts - Willis Aerospace
Amazing Asia!

'Asia today is an astounding force in the travel industry'.
(Robert Bailey, Abacus International, President and CEO)



Market Capitalisation                                   Market Contribution to 2011
Market Capitalisation underscores the shift             Forecasted Profit of US$9.1bn
eastwards. 4 out of the top 5 Largest Airlines
in the world by market cap are Asian:                       Asia            US$4.6bn
 Air China                                                 North America   US$3.2bn
 Singapore Airlines                                        Latin America   US$700m
 Cathay Pacific
                                                            Middle East     US$400m
 China Southern
                                                            Europe          US$100m
Source: IATA

                                                            Source: IATA




Singapore Conference 2011                      March 2011                     Page 1
                   Eyjafjallajokull
Singapore Conference 2011   March 2011   Page 2
IATA Industry Outlook 2010

Quarterly Profit / Loss Forecast
                                                                    16                      15.1
April                       -US$2.8bn

                                                                    12
July                        +US$2.5bn
                                                                                      8.9

October                     +US$8.9bn                                8




                                                      US$ Billion
                                                                                                        April
                                                                                                        July
                                                                                                        October
December                    +US$15.1bn                               4                                  Deceber
                                                                                2.5



                                                                     0

“The outlook for 2011 is more
pessimistic. Oil could spoil our very                               -4
                                                                         -2.8

modest party.”                                                                   Quarter

(IATA Director General and CEO, Giovanni Bisignani)



Singapore Conference 2011                             March 2011                               Page 3
World Wide Airline Hull & Liability Premium and Claims on a
Calendar Year Basis
2006 – 2010 (Net Leaders Terms US$M)
                                   Net Premium*              Claims**          Loss Ratio
               $2,500                                                                                                                                   250%

                                                                                                                     Attritional
               $2,000                                                                                                                                   200%
                                                                                                                                          Attritional
                                                                 Attritional

               $1,500                                                                                                    Liab                           150%
                                                                                                                                              Liab
                                       Attritional
                                                                     Liab                  Attritional
               $1,000                                                                                                                                   100%
                                                                                               Liab
                                          Liab

                  $500                                                                                                                                  50%
                                         Hull &                    Hull &                    Hull &                    Hull &              Hull &
                                         Spares                    Spares                    Spares                    Spares              Spares

                     $0                                                                                                                                 0%
                                     2006                     2007                      2008                      2009                 2010
       Net Premium*                $1,758                    $1,645                    $1,687                    $1,961               $1,976
       Claims**                    $1,370                    $1,918                    $1,431                    $2,352               $2,073
       Loss Ratio                  77.90%                   116.60%                   84.80%                    119.90%              104.91%
       Est Att Losses                $400                     $425                      $425                      $450                 $450

 * Premium includes all known airlines with an AFV in excess of US$100m and is based on Net London Lead Terms; it is subject to change as more information
 becomes available.
 ** Claims shown include the estimated figure for attritional losses. Claims are updated as more information becomes available.


Singapore Conference 2011                                                          March 2011                                            Page 4
Hull & Liability 2010
Major Airline Losses
(In Excess Of US$10m)

                                                                                                                     Passenger
  Date of Loss             Operator       Aircraft Type                          Location of Loss
                                                                                                                      Fatalities

 Jan 25          Ethiopian Airlines   B737-800               In Mediterranean Sea, off Coast of Naameh, Lebanon          82

 May 12          Afriqiyah Airways    A330-202               Tripoli International Airport, Libya                        93

 May 22          Air India Express    B737-800               Mangalore Airport, India                                   158

 July 28         Airblue              A321-200               Margella Hills near Islamabad, Pakistan                    146

 August 16       Aires Colombia       B737-700               San Andrés, Colombia                                        2

 August 24       Henan Airlines       EMB190                 Yichun, Heilongjiang, China                                 42

 September 13    Conviasa             ATR42-320              8 km southeast of Puerto Ordaz Airport, Venezuela           15

 November 4      Aerocaribbean        ATR72-212              Near Guasimal, in the Sancti Spiritus region of Cuba        68

 TOTAL PASSENGER FATALITIES                                                                                             606




Singapore Conference 2011                                 March 2011                                        Page 5
Market Drivers

              Capacity                   Diversification




                             Pricing




           Reinsurance                    Investment




Singapore Conference 2011   March 2011   Page 6
2010 Quarterly Premium Change
                                                                           2009 Net 2010 Net          US$ m                     Renewal Distribution % Share
                                  No. of        AFV %         PAX %                                                Premium
                                                                           Premium Premium           Premium                                            Q1
                                 Renewals       Change        Change                                               % Change                             7%
                                                                            US$ m    US$ m           Change                        December
                                                                                                                                     27%
Q1 Summary                            19         12.9%         -3.9%          47.9        55.2           7.4         15.4%                                             Q2
                                                                                                                                                                      21%
Q2 Summary                            54          7.5%         11.4%         215.2       232.9          17.8          8.3%
Q3 Summary                            56         14.0%         16.0%         286.7       304.4          17.8          6.2%
Q4 Summary                           128          1.3%          8.6%        1,346.5     1,383.2         36.7          2.7%
2010 Total                           257          3.3%          9.6%        1,896.2     1,975.9         79.7          4.2%
                                                                                                                                  November
Top 50 to date                        47         -0.3%          8.4%        1,150.7     1,135.8        -14.9         -1.3%          17%                          Q3
                                                                                                                                              October           22%
Three programmes are no longer in the Top 50 in 2010: GCC, Mexicana and United Airlines, which merged with Continental                          6%




The Willis 50                                                                                                                   Premium Distribution % Share
                                                                                                                                                        Q1
                                   Number of Programmes Percentage Share                                                                                3%       Q2
                                                                                                                                                                12%



                                                                                Top 50
                                                                                                                                                                          Q3
                                                                                Airline                                          December
                                                                                                                                                                         15%
                                                                                                                                   45%
                                                                             Programmes
                                                                                 20%
                                                                                                                                                                        October
                                                                                                                                                                          6%


                                                                                                                                                             November
                                                                                                                                                               19%


                                                                                                                              The last six weeks and a small
                                                                                                                              number of programmes ultimately
                                Other                                                                                         determine the outcome of the year
                                Market
                             Programmes
                                 80%


Singapore Conference 2011                                                       March 2011                                       Page 7
Market Drivers

              Capacity                   Diversification




                             Pricing




            Investment                   Reinsurance




Singapore Conference 2011   March 2011   Page 8
New Aircraft Exposure
Existing Fleet / Order Book


                            A380                                               B787

                                                                             Africa
                                Africa                                        4%
              North America      1%                          South America
                    4%
                                                                   6%
                                         Asia
         Europe                          33%                                                        Asia
          19%                                                                                       37%


                                                   North America
                                                        21%



                                                               Europe
                  Middle East                                   16%                   Middle East
                     43%                                                                 16%




Singapore Conference 2011                       March 2011                               Page 9
Insurance Hull and Liability Limits
A Regional Analysis


                              CSL                                  Max Hull Values
                            US$2bn+                                  US$250m+

                                                                    Indian Sub
                                                                     Continent
                                                                        9%
                                                          Europe
             Europe
                                                            9%
              24%



                                                                                           Asia
                                                                                           50%


    Middle East
       12%                            Asia           Middle East
                                                        32%
                                      64%




Singapore Conference 2011                    March 2011                          Page 10
'There is a tranche of very good underwriters
who lead the business. The others I relate to
sheep'




Singapore Conference 2011   March 2011   Page 11
Singapore Conference 2011   March 2011   Page 12
Willis Limited
Willis Limited, Registered number: 181116 England and Wales
Registered address: 51 Lime Street, London, EC3M 7DQ

Lloyd's broker authorised and regulated by the Financial Services Authority.
This review is intended to inform our clients and others of issues and developments within the aviation insurance markets. Whilst every
effort is made to ensure the accuracy of the information contained herein, Willis Limited accept no responsibility for any errors or
omissions in the information or its consequences.




Singapore Conference 2011                                          March 2011                                    Page 13

				
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