UK Offshore Wind 2004 Fraser McLachlan Offshore – Have Insurers Got It Wrong? Wednesday 3 rd...
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Transcript of UK Offshore Wind 2004 Fraser McLachlan Offshore – Have Insurers Got It Wrong? Wednesday 3 rd...
UK Offshore Wind 2004
Fraser McLachlan
Offshore – Have Insurers Got It Wrong?
Wednesday 3rd March, 2004
Have Insurers Got It Wrong?
Insurers Now take Wind Power Seriously A Positive Message A Brief Overview
Photograph courtesy of Nysted
Have Insurers Got It Wrong?
Key Issues:- The Cost Terms and Conditions Not Risk Free but is Risk Managed
Photograph courtesy of Nysted
Have Insurers Got It Wrong?
Offshore Wind Power is Not New Danish Insurers got it wrong Capacity Up London Energy Market Now Writing This Business
Photograph courtesy of www.Vestas.com
Have Insurers Got It Wrong?
Photograph courtesy of www.Airtricity.com
Energy Market Used To High Risk High Return Wind Energy Is a Different Risk Market has been
educated Starting to treat wind power
differently
Have Insurers Got It Wrong?
Construction – Multiple tasks– Not just one large task
Operating – Failure of one unit will not cause a severe loss– Warranties are provided:
Availability Performance Breakdown
Is the price is right?
Construction – 1.50% - 2.5% on FCV
Operating – 1.00% - 1.50% on FCV
Realistic Rates The Pricing Seems to be about Right!
Have Insurers Got It Wrong
Terms and Conditions:-
– Construction
– Operating
Blythe Windfarm photograph courtesy of www.BWEA.com
Have Insurers Got It Wrong?
Wind Industry takes on much risk themselves
Manufacturers or Contractors provide: Warranties
– Performance– Availability– Mechanical issues
Provide you with O&M
Terms and conditions – construction
Standard Market Wording WelCar has been offered Viewed as the safest option Many insurers too frightened to put up alternative terms
Terms and conditions – main issues
WelCar is designed as owner controlled Wind Industry does not work on this basis for
construction risks Risk falls on the manufactures balance sheet They are normally principle contractors They are happy with this risk
Terms and conditions – other issues
Benefits of cover are for owner
– Additional work
– Removal of wreck
– Standby charges
– QA/QC
Have Insurers Got It Wrong?
An Industry Moan! Deals are put together in a shoddy way Often on the back of personal
relationships
Have Insurers Got It Wrong?
An Appropriate Wording - Still a subject of negotiation
Overlapping Cover ‘Gaps’ in Cover A Standard Approach Brokerage Community must share responsibility
Have Insurers Got It Wrong? - Claims
Mainly ‘frequency’ claims During whilst awaiting load out Within deductibles
– Blade Damage
– Tower Damage
Have Insurers Got It Wrong?
The Good Operators Should be Rewarded
Illustrated Rates Were an Average They Could be discounted for good
risk management
Have Insurers Got It Wrong? - Summary
Premium and Deductibles– Right Terms and Conditions – Wrong Its 50% of the way there!