1 RUSSIAN AVIATION INSURANCE CONFERENCE 9 December 2009 AIRLINE RATE DYNAMICS IN THE INTERNATIONAL MARKET 2002 – 2009

2 2009 Airline Insurance Market Review Private and Confidential November 2009Page 1 2009 TO DATE

3 2009 Airline Insurance Market Review Private and Confidential November 2009Page 2 Hull & Liability General Trends – 2009 Market Losses currently totals US$2,240m – the highest on record* Premium currently totals US$1,165m with large volume of premium still to renew This will result in insurers making a loss in 2009. Insurers expenses estimated to be in the region of US$300m – Includes reinsurance and other operating expenses Third straight loss making year Insurers committed to continue increasing premium levels in 2009 and 2010 * Excluding September 11 th, 2001 losses.

4 Hull & Liability 2009 Net % Premium Movements +17% Airline Insurance Market Review Private and Confidential December 2009

5 Hull & Liability 2009 Hull Rate % Movements +15% Airline Insurance Market Review Private and Confidential December 2009

6 Hull & Liability 2009 Net Liability Rate per Passenger % Movements +18% Airline Insurance Market Review Private and Confidential December 2009

7 *Premium includes all known airlines and an estimate for untracked airlines, and is based on Net London Lead Terms; it is subject to change as more information becomes available **Claims include the estimated figure for attritional losses 7 Year Totals (2002-2008) Premium: US$17,120m Claims (inc attritional): US$9,096m Profit to the market: US$8,024m Loss Ratio: 53% World Wide Airline Hull & Liability Premium and Claims on a Calendar Year Basis 2002 – 2009 (Net Leaders Terms US$M) Airline Insurance Market Review Private and Confidential December 2009

8 Page 7 No of Losses Hull Reserves US$ 2002 – 2009 Airline Hull Losses - In Excess Of US$10m (Excluding Hull War) Airline Insurance Market Review Private and Confidential December 2009

9 Page 8 No of Losses Liability Reserves US$ 2002 – 2009 Airline Losses with more than 50 Fatalities (Excluding War Losses) Airline Insurance Market Review Private and Confidential December 2009

10 Hull & Liability 2002 - 2009 Net % Premium Movements Airline Insurance Market Review Private and Confidential December 2009

11 Hull & Liability 2002 - 2008 AFV Airline Insurance Market Review Private and Confidential December 2009

12 Hull & Liability 2002 - 2008 Passenger Numbers Passengers Airline Insurance Market Review Private and Confidential December 2009

13 CONCLUSION Since 2002 Fleet Values up 27.75% Passenger numbers up 45.6% Hull losses stable LiabiIity awards erratic, dependant upon Nationalities involved, where cases brought 2008 Premium only 52% of 2002 level Average yearly loss since 2002 = USD 1.4B plus attritionals of USD450M ? Plus R/I costs USD300M ? What level of premium do the market need to be reasonably profitable ?

14 2009 Airline Insurance Market Review Private and Confidential November 2009Page 13 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. Selection Criteria used Premium/Index percentage change derived from Airlines renewing with Average Fleet Values of US$100 million and greater. Comparisons made from annual renewal figures year-on-year. Liability rate is calculated as premium per passenger carried. However the basis of liability rating for Airlines varies and can be based solely or on a combination of passengers carried, departures, RPK’s, passenger seats or per aircraft. It should be noted that due to the relatively small sample of renewals in some months, that the comparisons with previous years can be distorted by the renewal of a small number of major risks and should be treated with caution.