IMIA The International Association of Engineering Insurers TM NEWS SHEET 5 June 2006 This is the third edition of the IMIA News Sheet which was produced for the first time after the Moscow conference. Any contribution you might like to post would be most welcome. We are also looking for your local news, events and anything that might interest your IMIA colleagues. 1. News from the Secretariat The Provisional Agenda for the Boston conference will shortly be on the web site. We are having for the first time a slot on the Monday morning on How the local market works to give us an idea of the workings, structure and processes of the local market. Another new item: there will be a section on Highlights of the National Reports. Three countries have been chosen this year to present their Engineering Market related highlights. We are also having a Guest Speaker on the subject of Hurricane Katrina and there is also to be a hurricane claim presentation. In a few weeks we should start receiving the 2005 National Reports from each IMIA Country for circulation by e-mail to you all and also the Country Analysis Reports for publication in www.imia.com Tsinghua University in China is doing research on Inherent Defect Insurance and their work is to be the subject of a book in Chinese and made available in China at the request of the Ministry of Construction of the PRC. They have asked for permission to include a translation of our paper Inherent Defect Insurance IMIA WGP14 (01) in this book and this has been agreed.
2 Regrettably, however, the attempts to get a Member from China have been unsuccessful to date. 2. News from the Executive Committee The EC met in Munich on May 31st. A long working agenda was dealt with. Working group topics for 2007 were selected from the extensive list of proposals received. The programmes for the Boston conference were reviewed and agreed. Further details can be seen in the Minutes which will be displayed shortly on the web page. The next EC meeting is scheduled for 9th September 2006 just before the Boston conference. 3. Delegate News The following further new delegates will participate at the Boston conference: Joe Sauro Allianz Global Risks, Canada Jim Davidson Zurich, Canada Roger WU Engineering Insurance Association, Taiwan Thierry Portevin AGF, France Kenje Ito Sompo Japan Insurance. Japan Ted Scott Marsh, Los Angeles, USA Ingvar Bodin Zurich, Sweden Erdinç Yurtseven Association of Insurance and Reinsurance Companies of Turkey 4. Web Site news A new web site design and layout has been developed by Louis Wassmer and is being discussed in the EC meetings. A "look and feel" version will be made available on our development website www.imiadev.com at a later stage and the subject will be on the agenda for Boston. 5. Working Group Papers news We have been assured that this year s five working group papers, shown below, are running to plan. They will be put on imiamembers.com when available. Engineering Insurance of Offshore Wind Turbines. IMIA WGP 45 (06) Chairman: Franco Ciamberlano, Swiss Re, Zurich Engineering Insurance Exposures related to Construction of Roads IMIA WGP 46 (06) Chairman: Louis Wassmer, Infrassure, Zurich "Break and Review" Clauses in Project Insurance. IMIA WGP 47 (06) Chairman: Hans Pöttker, Allianz, Munich
3 ALOP/DSU coverage for Tunnelling risks? IMIA WGP 48 (06) Chairman: Hervé Landrin, Munich Re, Munich Recent Developments in the paper and pulp industries - impact on Engineering Insurers. IMIA WGP 49 (06) Chairman: Mats Gådin, If P&C, Sundsvall 6. Breakout Sessions at Boston Conference Thank you for your suggested topics. Quite soon details of these sessions and the composition of the groups will be circulated. 7. Engineering Insurance Market news On 27/28.04.2006, the European International Contractors (EIC) General Assembly took place in Zurich. During the meeting the topic Risk Mitigation in International Construction Risks was discussed and Zurich Financial Services had a leading role in the presentation of Risk Profiling/Mitigation and of Round Table Discussions with living cases. http://www.eicontractors.de/seiten/focus/workshop.php On May 22 the City of Stockholm together with the Swedish Road Administration and the National Rail Administration had invited to a joint International meeting in Stockholm to attract the interest from consultants, contractors and other suppliers for infra structure projects in the Stockholm region. At the meeting information was given about the rapid expansion of the Stockholm region and the project portfolio comprises e.g. motorways, sections of an underground ring road around Stockholm and a twin railway tunnel. The total investment volume over an estimated period of 10 years is in the region of EUR 2.5 Billion. A broad International interest was shown by the 200 plus attendees. 8. Risk and Loss news 8.1. The Swiss Re have issued a new Focus Report on Maintenance - a strategic management tool The report describes the various approaches - from breakdown maintenance to integrated maintenance - highlighting the opportunities and risks inherent in each. The brochure also examines the implications for insurers, with a particular eye to the loss potentials arising out of inadequate or inappropriate maintenance methods. Finally, the publication provides a guide to risk assessment, focusing on the important role of dialogue between insured and insurer. This Focus report is available in English and German. For paper copies, contact publication@swissre.com or visit swissre.com 8.2. Based on an interview with Swiss Re (Oscar Treceño), the INSURANCE DAY of April 11, 2006, published an article on the Wembley project's delay and cost over-
4 run problems under "Insurer caution as Wembley saga sullies UK plc's bigbuild reputation". On page 3 of this article it is stressed once more that insurance for cost over-run is no longer available. The insurance industry has seen major claims in this field, which is nowadays considered to be a purely entrepreneurial risk that is not insurable. In addition, Oscar Treceño stresses the ever increasing importance of a sound and consistent risk management approach (as per IMIA paper "Risk Management approaches in CAR/EAR Projects - IMIA WGP 28(03), throughout the whole construction period. 8.3. The National Plant & Equipment Register (TER) - IMIA is mentioned in the February edition of the TER report: Insurers' own theft report recommends TER. The International Association of Engineering Insurers (IMIA) has produced a paper on equipment theft from an Insurer s perspective. The report, written by Mike Gwynn (Zurich Financial Services), Francois Engles (Firedart), Neville Green (HSB Engineering Insurance), Jean-Claude Henry (AGF) and John Kellow (Allianz Cornhill Engineering), looks at equipment theft across the globe and highlights what actions insurers can take to reduce equipment theft and improve stolen equipment recovery. The report recommends that insurers should get their clients to register plant and equipment with TER. Log on to the IMIA s website, www.imia.com/imia_head.htm - click on Papers Published, and download Theft of Construction Plant IMIA-WGP 43(05). Action this day, insurers! The link below is to the document. The item is on the page 4. http://www.ter-europe.org/newsite2/images/ter%20news%20- %20Feb%2006%20for%20web.pdf The TER web site is mentioned in our Reference Library in www.imia.com 8.4 Working Group on Interesting Claims Good progress has been made by Juha Ettala on the Interesting Claims Working Group. Some twenty six claims have been obtained from the loss data bank of If Industrial and also from previous IMIA papers and these have been put on imia.com More are expected. 8.5 Lack of engineers has an adverse effect on the economy This delicate issue has already been raised in our IMIA Paper - WGP 36(04): Maintaining technical expertise in the insurance / reinsurance industry (see pages 8-9 in particular) In many countries engineers of all faculties are becoming more and more a scarce commodity. This is particularly troublesome during an economic upturn, since a shortage of personnel reins growth. At many universities, far too few students are currently following technical subjects. Though this may be the age of the cellular phone and the Internet, graduates-to-be prefer to spend their time on Freud, Keynes or the penal code than on getting to grips with Einstein.
5 As this issue requires attention from IMIA members in order to influence the trend, it has been decided to publish the entire article of what recently appeared in the Neue Züricher Zeitung: "Our industry faces increasing challenges in recruiting engineers" on our www.imia.com web site. This will be included under the External Papers section as Lack of Engineers has an adverse effect on the economy (EP25-2006). This will be done in a few days but if you would like to see the article now please advise the sender and a copy will be sent to you. 9. Last but not least After this third edition of the IMIA News Sheet we will need to receive your honest views as to whether it is considered worthwhile or whether it should be discontinued. Your views will be collected during the Boston meeting by the Executive Committee members and the matter will be discussed further on the Wednesday. Your IMIA EC Team