IMIA NEWS. News from the International Association of Engineering Insurers. Sea-storm damage to the construction of Sochi seaport cargo facility

Transcription

1 IMIA NEWS 17 th Issue - March 2011 News from the International Association of Engineering Insurers Sea-storm damage to the construction of Sochi seaport cargo facility More inside on page 7 The Hong Kong - Zhuhai - Macau Bridge In this edition Page Construction of this Mega project commenced in 2009 and will last until Upon its completion, the 50km long Hong Kong- Zhuhai-Macau Bridge will not only connect three major Chinese economic zones, it will also be the largest cross-sea bridge in the world. Read more on page 5 News from the Executive Committee 2 New Short Papers on 2 New Developments First Solar Power Air Conditioner 3 Third European Wind Turbine Committee 4 at Rüschlikon Water Management Publication (SCOR) 4 Next Annual Conference 9 1

2 1 News from the Executive Committee Since last issue we are grateful to report on a number of interesting contributions by IMIA Members as you will see below. As regards, photo competition we have three tenders so far and if you have suitable good photos, please join the competition. There are two novelties on the IMIA website. - The one is a menu item for quick access to key topics, the ones with the highest numbers of hits from our website visitors. We trust this will be helpful for everyone searching for details of these topics. - The other is an electronic workroom for allowing IMIA working groups to exchange information, files and pictures and work on centralised documents. This should be a great help in elaborating the working group papers. Access is limited to the working groups. The EC had its last meeting on 11 th March and these are the main points discussed: - New requests of memberships. The following new Members were agreed: Ping An (Mr. Shi YUHUI), Cunningham Lindsey International (Rupert Travis) and Amlin Re Europe (Martin Frey) - Progress of IMIA working groups. All groups seem to make good progress and their completion should be in good time. - State of action of the new created sub-committees. Progress is slow due to time constraints of the committee members, but results will be reported at the next conference. - Selection of new IMIA working group topics for 2012 from the suggestions received from Delegates has been completed and once the chairman for each topic has been nominated the new topic list will be distributed for Delegates to choose which group they wish to join. - The IMIA accounts for 2010 were discussed and finally agreed. They will soon be published on the IMIA website (Members Area). - Preparations for the next conference in Amsterdam. See more on last page. 2 New Short Papers on the IMIA website 2.1 The first one (by Infrassure) dealing with a transformer loss which demonstrates the problem of settling such a mechanical loss on the basis of classical repair costs basis for particular circumstances when dealing with warranties and IAR conditions. Here is the link to the Short Paper: The second one (by Nationale Suisse) highlights the specific aspects of insuring mountain rail- and cableways systems on the top of Switzerland: 2

3 Schilthorn Piz Gloria: Best view of Eiger, Mönch and Jungfrau! Here is the link to the very interesting Short Paper: 3. New Developments 3.1. First Solar Power Air Conditioner (provided by Volkan Babür) In Texas, the cost of running an AC system in the hot months of the summer can run into hundreds of dollars for cooling alone. A new directly solar powered air conditioning system has been unveiled in China that has the potential to not only make cooling a home green, but also save homeowners a huge amount of money at the same time. The machine is made by a company called Vicot. 3

4 The manufacturer claims an 85% thermal cooling conversion efficiency of the machine and it can utilize solar energy at 27 times what a typical water-heating unit is able to do. The system allows for 24h/7d cooling, heating, and a supply of hot water with natural gas used to supplement when needed. The company claims that in 3.5 years, the initial investment for the system can be recovered and in 6.7 years, the entire investment in the system. 3.2 Engineering Insurance - Third European Wind Turbine Committee, Rüschlikon (by Swiss Re) The Wind Power sector is the fastest growing electricity generation technology. The level of annual installed capacity has grown at an average rate of over 27 percent per year for the past five years. In 2010, over 300 new offshore fully grid connected wind turbines were erected at a cost of EUR 2.6 billion. This represents an 883 MW energy output and a 51 percent increase compared to the previous year. The rapid advancement of both the technology and the increasingly challenging locations and weather conditions in which wind turbines are constructed brings with them new risks. It is in this demanding setting that the Third European Wind Turbine Committee convened on 31 January 2 February Twenty-six participants representing the leading (re)insurance companies in the wind power segment met at the Swiss Re Centre for Global Dialogue in Rüschlikon to discuss the issue. The Committee launched and chaired by Swiss Re in 2009 and having now more than 30 registered members, provides an optimal platform to openly discuss among industry representatives technology issues associated with this type of risk and to create awareness as to the challenges at stake. This year Siemens attended as main guest-speaker and provided an update on their wind turbine technology. The trend to larger capacities in order to reduce specific production costs - such as Siemens latest 6MW offshore wind turbine - brings about questions in terms of prototypical technology and its insurability. The second guest speaker, Charles Taylor Loss Adjuster discussed grouting issues on mono-pile foundations for offshore wind turbines. What was once considered as a relatively harmless risk is currently presenting a potential threat which could affect 65% of all installed offshore turbines in the market. Place and date of the next meeting and more information on the European Wind Turbine Committee meeting can be requested from Guido_Benz@swissre.com or Pascal_Luethi@swissre.com 3.3 Water Management (by SCOR) Water management constitutes a challenging issue for our industry worldwide and takes on a particularly acute angle insofar as it has an impact on all the risks covered by insurance and reinsurance. Fully aware of its importance, SCOR Global P&C through its Large Corporate Risks unit, Business Solutions, organized a seminar on 4

5 Water Management issues in May This session was the opportunity to share SCOR Global P&C s know-how with experts from industry, science and the legal profession. We are delighted to present the result of experts' reflections in our new technical publication Focus Water, a key industrial resource at the crossroads of risks and opportunities. This new Focus publication addresses the challenges surrounding water management in terms of technologies and infrastructure. It also highlights the reinsurance solutions through SCOR s case studies and modelling methodologies. Last but not least, it presents the next legal challenges for the corporate world and the risks involved by legal developments from a lawyer s and an underwriter s point of view. In view of the SCOR Group's sustainable development policy, we have chosen to distribute this publication electronically. To download the publication, please click on the link below: Click here >> Please feel free to circulate this link to your colleagues. 4. Risk News 4.1 The Hong Kong-Zhuhai-Macau Bridge: Connecting cities while lessening risk The 50km long Hong Kong-Zhuhai-Macau bridge will not only connect three major Chinese economic zones, it will also be the largest cross-sea bridge in the world. Construction phase: It includes cable stay bridges and a section of immersed tube tunnel 5

6 The Hong Kong-Zhuhai-Macau Bridge (HZMB) project will connect three economically important areas of China, reducing travelling time between the regions and opening the way for a smoother trade network in the southern region of China. The project consists of over-water viaducts, cable-stayed bridges, artificial islands and sub-sea tunnels in mainland China waters together with boundary crossing facilities and link roads within the three territories. More than half of the proposed 50-km structure will stretch over water. Construction of the main bridge section started in December 2010 and the project is due to be completed in The main bridge section in mainland waters will cost USD 5billion and the construction will face many challenges: Construction is in a frequent typhoon area Pieces as heavy as 3,000 tons must be transferred by barges The construction sites pass heavily travelled marine routes A 180m long box type Tube Tunnel will lie on the seabed more than 45m below water level The artificial islands will be constructed on soft soil In simple terms, risk management of the multibillion USD project is about proactively working with project stakeholders to minimise risks and optimise the opportunities associated with project decisions. Risk management also gives the chance to enter into dialogue with the insured, which strengthens the relationship. Besides providing reinsurance protection, Swiss Re's Global Engineering will also provide Risk Management Services in order to minimise the project's risks and maximise its potential. For more information about the risk management programme please contact Franco_Ciamberlano@swissre.com or Jimmy_Lim@swissre.com. An architectural rendering shows part of the Hong Kong-Zhuhai-Macao bridge design. [ Xinhua] 6

7 5. Interesting Loss Cases 5.1 Sea-storm related damage to the construction site of Sochi seaport cargo district on December 14, 2009 (supplied by Vadimir Moskovenko, Gefest) During the night of 13/14 December, 2009 a severe storm occurred in the vicinity of the city of Sochi. The wind force reached level 5 to 6 on the Beaufort scale. Maximum wave height exceeded 10 meters. As a result of extreme wave impact, serious damage was caused to hydraulic facilities and sea-shore port structures of Sochi seaport under construction. Sochi cargo port construction project plays a significant role in the region and for Russia as a whole. The port is built to handle cargo needed for construction of facilities for the 2014 Winter Olympic Games. Completion of the port within time limits is vital for the Olympic project. The damage was widely discussed even state leaders visited the affected area. GEFEST provided insurance coverage for the facility within two contracts, providing coverage for stages 1 and 2 of construction; both construction stages being state owned property. The stages included construction of protection seawalls South West seawall, consisting of three sections, and East seawall. The seawalls outline the harbour entrance and protect the harbour waters from wind and wave impact. The seawalls consist of three rows of piles made of 1020 mm and 1220 mm metal pipes. The insurance policies satisfied all international CAR/EAR standards. Storm, hurricane and inundation risks, common for hydraulic facilities, were included in the standard coverage. 7

8 At the time when the damage occurred, a significant part of construction had been completed. The main areas damaged, two sections of the South West seawall of 142 m and 480 m in length, were 20% to 40% complete. As a result of the storm, the foundation piles were tilted, damaged or completely destroyed, and the assembled above-water structures (beams and cross-beams) were displaced, damaged or washed away. The seabed stabilizers (mesh structures) were also damaged. This loss happened to be one of the most complicated cases for GEFEST whose experience in construction loss adjustment is wide enough. The adjustment process took about 6 months. GEFEST experts were not able to attend to the loss area immediately due to the continuing storm. The overall extent of damage was assessed only by the help of divers. A significant amount of documentation more than 60 documents had been reviewed, Including regulations supplied by the policy holder (cost estimates, certificates of works performed etc), the report compiled by a special investigation commission appointed by the Ministry of Transportation as well as review documents provided by leading experts in seaport and hydraulic construction. Cunningham Lindsey Russia, an international loss adjustment and claims management company, was also invited to assess the damage. The loss adjustment involved a special scheme for loss calculation, based on the cost of damaged and lost property, and not on the cost of recovery works, since the client decided to improve the construction project after the damage. It was acknowledged that the loss was caused by the extreme storm impact (abnormal wave impact due to special hydrodynamic conditions). The indemnity amounted to 509m roubles (USD 17m) paid out by GEFEST. This is the largest indemnity ever paid in the Russian construction and engineering insurance market. 8

9 6 Next Annual IMIA conference The 2011 annual conference will be hosted by the Dutch association in Amsterdam as advised earlier, and will be held from 17 th to 21 st September. The venue will be the Mövenpick City Hotel at a very good location in the centre of Amsterdam. The necessary arrangements are progressing well and we will be able to put the various conference information and invitation papers on the IMIA website (Members Area) later in March with the request to book your attendance as early as possible. The IMIA EC Team 9