The Code of Practice for Risk Management of Tunnel Works ... · Insurers’ Perception of the...
Transcript of The Code of Practice for Risk Management of Tunnel Works ... · Insurers’ Perception of the...
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125.04.06
The Code of Practice for Risk Management of Tunnel Works
Future Tunnelling Insurance from the Insurers’ Point of View
ITA Conference Seoul, April 25, 2006
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225.04.06
“No construction project is risk free.
Risk can be managed, minimised,
shared, transferred or accepted.
It cannot be ignored.”
Sir Michael Latham, 1994
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325.04.06
Experience with Tunnelling Insurance in the last Decade
Insurers’ Perception of the Tunnel Construction Industry
The Tunnel Code of Practice – Content and Objectives
Practical Implementation and current Reference Projects
Agenda
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425.04.06
Experience with Tunnelling Insurance in the Last Decade
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525.04.06
High risk type construction methods
Trend towards design + build contracts
One-sided contract conditions
Tight construction schedules
Low financial budgets
Fierce competition in construction industries
General Trends in the Tunnelling Industry
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625.04.06
Loss Examples: Munich Metro (Germany) - 1994
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725.04.06
Loss Examples: Heathrow Express Link (UK) - 1994
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825.04.06
Loss Examples: Taegu Metro (South Korea) - 2000
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925.04.06
Loss Examples: SOCATOP Tunnel A86 (France) - 2002
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1025.04.06
Loss Examples: Shanghai Metro (P.R. of China) - 2003
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1125.04.06
Loss Examples: Singapore MRT – Spring 2004
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1225.04.06
Loss Examples: Singapore MRT – April 30, 2004, 3:15 pm
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1325.04.06
Major Tunnel Losses since 1994
1994 Great Belt Link, Denmark Fire US$ 33 mio
1994 Heathrow Express Link, GB Collapse US$ 141 mio
1994 Metro Taipei, Taiwan Collapse US$ 12 mio
1994 Munich Metro, Germany Collapse US$ 4 mio
1995 Metro Los Angeles, USA Collapse US$ 9 mio
1995 Metro Taipei, Taiwan Collapse US$ 29 mio
PROJECT CAUSE LOSS
1999 Hull Yorkshire Tunnel, UK Collapse US$ 55 mio
1999 TAV Bologna - Florence, Italy Collapse US$ 9 mio
1999 Anatolia Motorway, Turkey Earthquake US$ 115 mio
2000 Metro Taegu, Korea Collapse US$ 24 mio
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1425.04.06
Major Tunnel Losses since 1994
19 Major Losses Total Amount: ~ US$ 600 mio
PROJECT CAUSE LOSS
2002 SOCATOP Paris, France Fire US$ 8 mio
2000 TAV Bologna - Florence, Italy Collapse US$ 12 mio
2002 Taiwan High Speed Railway Collapse US$ 30 mio
2003 Shanghai Metro, PRC Collapse US$ 80 mio
2004 Singapore Metro, S’pore Collapse t.b.a.
2005 Barcelona Metro, Spain Collapse t.b.a.
2005 Lausanne Metro, Switzerland Collapse t.b.a.
2005 Lane Cove Tunnel, Sydney Collapse t.b.a.
2005 Kaohsiung Metro, Taiwan Collapse t.b.a.
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1525.04.06
High frequency of major tunnel losses
Insufficient premium income to pay for all the losses
Wide scope of cover indemnifies far beyond repair costs
Repair costs exceeding original construction costs
Insurance was “cheapest risk management tool”
Tunnelling insurance notoriously unprofitable business
Consequences for the Insurance Industry
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Consequence
Stop offering insurance and Reinsurance for tunnelling projects
Still an option for many market players
Option for Insurers/Reinsurers
Consequences for the International Insurance Industry
Tackle the problems with a professional approach, sustainable for all parties
Increase rates, deductibles, restrict cover
Risk Management:
Joint Code of Practice
Is insurance cover still affordable and worthwhile to buy for the customer?
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1725.04.06
The Code of Practice for Risk Management of Tunnel Works
www.britishtunnelling.org www.imia.com
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Results
Set minimum standards for risk assessment and on-going risk management procedures for tunnelling projects
Define clear responsibilities to all parties involved in tunnel projects
Reduce the probability of losses happening
Reduce the size of claims when they happen
Reinstate insurers’ confidence to continue underwriting tunnelling projects
Export ‘best practice’ to worldwide tunnelling markets
Objectives
Key Objectives of the TCoP
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Contents of the Code
Section 1 - Objective of Code
Section 2 - Compliance
Section 3 - Introduction
Section 4 - Risk Management
Section 5 - Client Role & Responsibilities
Section 6 - Project Development Stage
Section 7 - Contract Procurement Stage
Section 8 - Design Stage
Section 9 – Construction Stage
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2025.04.06
GTII The International Tunnelling Insurance Group
The International Association of Engineering Insurers
Cooperation between ITA, ITIG and IMIA
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Reference Projects
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Kowloon Canton Railway, Hong Kong
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2325.04.06
Marmaray Project, Turkey
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2425.04.06
Shanghai Chongming Crossing, P.R. of China
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Risk exposure in tunnel projects is extremely high due to various factors
Loss experience in tunnelling projects deteriorated to an unsustainable level in the last decade
“Joint Code of Practice for Risk Management of Tunnelling Works” was developed as a professional risk management tool
Application of the Code has to become compulsory to obtain cover for future tunnel projects
Conclusions
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Thank you for your attention!
Dipl.–Ing. Heiko P. Wannick (MSc)
Munich Reinsurance CompanyGreater China – Southeast Asia Division
[email protected] Tel: +49 89 3891 5230