imia conference 2011 – amsterdam · imia working group paper 72 imia conference 2011 –...

CECR – Specific of covers and experience made

IMIA Working Group Paper 72

IMIA Conference 2011 – Amsterdam

Thomas Gebert (Zurich Insurance) ChairmanIvan 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

Working Group Contributors

Introduction

InsurableObjects

Scope of Cover

UnderwritingConsiderations

Summary

Overview

Chile EarthquakeFeb. 20108.8 moment magnitude scaleInsured Damages: 8 bn USD

Introduction

500 km

Introduction

Queensland Floods Dec. 2010 to Jan. 2011Insured Losses: 5 bn USD

Gladstone

Introduction

Japan EarthquakeMarch 20119.0 moment magnitude scaleInsured Damages: 30 bn USD

Introduction

Introduction

Introduction

Big Lake

Omaha

Introduction

June 2011

June 2010

NS

RailroadsRoads

Insurable Objects

Harbours Dry docks Canal systems

Insurable Objects

Runways, Aprons of Airports

Insurable Objects

Overhead linesTransmission & distribution lines

DamsWeirsPipelines (conveying non- combustible substances)Sewer systems Irrigation systemsWater reservoirs

Insurable Objects

Customers

• Government /state entities• JV / PPP• Private Parties

Scope of Cover

Engineering• technical know how• contacts (construction period)• risk management • tailor made solutions

Why Engineering?

Property (fire)• dominant risk is fire • standard 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

Scope of Cover

Guide to typical

exposures

Bridges

Dam

s

Harbours

Pipelines

Roads

Railw

ays

Runw

ays

Transmissi

on lines

Tunnels

Sewer &

W

ater

Waterw

ays

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

Dam

s

Harbours

Pipelines

Roads

Railw

ays

Runw

ays

Transmissi

on lines

Tunnels

Sewer &

W

ater

Waterw

ays

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

Underwriting Considerations

• 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

Example 1: Railroad multi-location Operational

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

ReactiveMaintenance Periodically Condition Based

Preventive Maintenance

Underwriting Considerations

Guide to typical

exposures

Bridges

Dam

s

Harbours

Pipelines

Roads

Railw

ays

Runw

ays

Transmissi

on lines

Tunnels

Sewer &

W

ater

Waterw

ays

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

Underwriting Considerations

Example 2: Bridges single location operational

Underwriting Considerations

New Tunnel

Existing Road

Example 3: Road project insurance with CECR/BI extension

Guide to typical

exposures

Bridges

Dam

s

Harbours

Pipelines

Roads

Railw

ays

Runw

ays

Transmissi

on lines

Tunnels

Sewer &

W

ater

Waterw

ays

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

New Tunnel

Existing RoadRock fall

Example 3: Road project insurance with CECR/BI extension

Underwriting Considerations

New Tunnel

Existing Road

Example 3: Road project insurance with CECR/BI extension

Underwriting Considerations

Final Contract Value

Visit/Ext./Guarantee Maintenance Cover

CECR/BI

Transport Construction

Provisionalhandover

CAR/DSU

Second year

$

Operation

Cargo & Inland transit

Procurement

First year

Design

Example 4: Motorway operational/project policy

Loss

Underwriting Considerations

•

Example 4: Motorway operational/project policy

Underwriting Considerations

Example 4: Motorway operational/project policy

Underwriting Considerations

Ageing infrastructure

Summary

Comprehensive coverComplex risksExtensions (MB, IAR, BI)High exposure of geographical spread of riskNatCat aggregation importantSection/loss limitUnderwriting information Detailed knowledge about the account necessary CECR can be a section of a project policy

INTERNAL USE ONLY 43CECR

Thank you

• 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