IMIA Conference 2011 Amsterdam IMIA Working Group Paper 72 CECR Specific of covers and experience made
Working Group Contributors Thomas Gebert (Zurich Insurance) Chairman Ivan Blanco (XL) Eric Brault (AXA Corporate Solutions) Brendan Dunlea (Zurich Insurance) John Forder (Willis) Blas Gomez (Seguros Atlas) Kun Hong Ho (Scor) Federico Pereira (Hannover Re) Thierry Portevin (Allianz) Gero Stenzel (Partner Re) David Walters (ACE) Volkan Babür (Mapfre) IMIA EC Sponsor
Working Group Contributors
Overview Introduction Insurable Objects Scope of Cover Underwriting Considerations Summary
Introduction Chile Earthquake Feb. 2010 8.8 moment magnitude scale Insured Damages: 8 bn USD
Introduction Queensland Floods Dec. 2010 to Jan. 2011 Insured Losses: 5 bn USD Gladstone 500 km
Introduction Japan Earthquake March 2011 9.0 moment magnitude scale Insured Damages: 30 bn USD
Introduction
Introduction
Introduction Omaha Big Lake
Introduction June 2011 S N June 2010
Insurable Objects Railroads Roads
Insurable Objects Harbours Dry docks Canal systems
Insurable Objects Runways, Aprons of Airports Overhead lines Transmission & distribution lines
Insurable Objects Dams Weirs Pipelines (conveying non- combustible substances) Sewer systems Irrigation systems Water reservoirs
Scope of Cover Customers Government /state entities JV / PPP Private Parties
Scope of Cover Why Engineering? Property (fire) dominant risk is fire standard solutions Engineering technical know how contacts (construction period) risk management tailor made solutions
Scope of Cover Annually renewable All risk/named perils wordings Impact of land borne or waterborne vehicles or aircraft or articles dropped there from Earthquake, volcano, tsunami Storm Flood or inundation Subsidence, landslide, rockslide or any other earth movement Frost, avalanche, ice, snow Vandalism by individual persons Fire, lightning, explosion
Scope of Cover Extensions Debris removal Expediting costs Machinery breakdown Strike, riot and civil commotion Terrorism Consequential loss (separate BI section)
Scope of Cover Exclusions Loss or damage caused by or aggravated by latent or inherent defects Mechanical or electrical breakdown of machinery or electronic installations Wear and tear, corrosion, erosion, normal settlements Wilful acts or negligence War Nuclear risks
Underwriting Considerations Guide to typical exposures Bridges Dams Harbours Pipelines Roads Railways Runways Transmissi on lines Tunnels Sewer & Water Waterways EQ x x x x x x x x x Tsunami x x x x x x x x Flood x x x x x x x x x x Frost, ice x x x Fire x x Explosion x x Landslide / rock fall x x x x x x x Aircraft impact x x x x x Vessel impact x x x x Motor vehicle impact x x x Sabotage / burglary x x x x x x Collapse x x x x
Underwriting Considerations Guide to typical exposures Bridges Dams Harbours Pipelines Roads Railways Runways Transmissi on lines Tunnels Sewer & Water Waterways EQ x x x x x x x x x Tsunami x x x x x x x x Flood x x x x x x x x x x Frost, ice x x x Fire x x Explosion x x Landslide / rock fall x x x x x x x Aircraft impact x x x x x Vessel impact x x x x Motor vehicle impact x x x Sabotage / burglary x x x x x x Collapse x x x x
Underwriting Considerations Sums Insured New structures Project sum insured Existing structures New replacement value
Underwriting Considerations Type of risk (single/multi location) Value of largest structures Geographical and topographical location Exposures Construction Inspection reports Local standards / Maintenance schedule Previous damages Operating personnel
Underwriting Considerations Example 1: Railroad multi-location Operational Rail Tracks: 50,000 km Intermodal facilities: 31 Locomotives: 6,600 Cars: 200,000 Bridges: 13,100 Tunnels: 87 Highway-railroad crossings: 26,000 Rail yards: 120
Underwriting Considerations Example 1: Railroad multi-locations operational 400 locations with values of > 20 m USD BI Choke points CBI Increased cost of working Sub limits IAR basis Non proportional placements Aggregates for NatCat Deductibles Risk management
Underwriting Considerations Reactive Preventive Maintenance Maintenance Periodically Condition Based
Underwriting Considerations Guide to typical exposures Bridges Dams Harbours Pipelines Roads Railways Runways Transmissi on lines Tunnels Sewer & Water Waterways EQ x x x x x x x x x Tsunami x x x x x x x x Flood x x x x x x x x x x Frost, ice x x x Fire x x Explosion x x Landslide / rock fall x x x x x x x Aircraft impact x x x x x Vessel impact x x x x Motor vehicle impact x x x Sabotage / burglary x x x x x x Collapse x x x x
Underwriting Considerations
Underwriting Considerations
Underwriting Considerations Example 1: Railroad multi-locations operational
Underwriting Considerations Example 1: Railroad multi-locations operational
Underwriting Considerations Example 2: Bridges single location operational
Underwriting Considerations Example 3: Road project insurance with CECR/BI extension New Tunnel Existing Road
Underwriting Considerations Guide to typical exposures Bridges Dams Harbours Pipelines Roads Railways Runways Transmissi on lines Tunnels Sewer & Water Waterways EQ x x x x x x x x x Tsunami x x x x x x x x Flood x x x x x x x x x x Frost, ice x x x Fire x x Explosion x x Landslide / rock fall x x x x x x x Aircraft impact x x x x x Vessel impact x x x x Motor vehicle impact x x x Sabotage / burglary x x x x x x Collapse x x x x
Underwriting Considerations Example 3: Road project insurance with CECR/BI extension New Tunnel Rock fall Existing Road
Underwriting Considerations Example 3: Road project insurance with CECR/BI extension New Tunnel Existing Road
Underwriting Considerations Example 4: Motorway operational/project policy Design $ Provisional handover Loss Procurement Cargo & Inland transit CAR/DSU CECR/BI Visit/Ext./Guarantee Maintenance Cover Final Contract Value First year Second year Transport Construction Operation
Underwriting Considerations Example 4: Motorway operational/project policy
Underwriting Considerations Example 4: Motorway operational/project policy
Underwriting Considerations Ageing infrastructure
Summary Comprehensive cover Complex risks Extensions (MB, IAR, BI) High exposure of geographical spread of risk NatCat aggregation important Section/loss limit Underwriting information Detailed knowledge about the account necessary CECR can be a section of a project policy
Thank you INTERNAL USE ONLY CECR 43
Underwriting Considerations Type of risk (single/multi location) Value of largest structures Geographical and topographical location Exposures Construction Inspection reports Local standards / Maintenance schedule Previous damages Operating personnel