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RISK TRANSFER

CASE STUDY

Chris Dear
Justin Blackmore
Mike Newsom Davis
Joe Hassett

It was another busy day in the Willis


Energy London office when.

..AN UNEXPECTED E-MAIL ARRIVED


Hi Chris,
Do you remember me? I attended your Master of Energy
training course a few years ago and guess what, I am now CEO
of a new Oil and Gas company based in Hong Kong called New
Asia Oil Co
We have just purchased some assets and have big plans to
expand. Can you please have a look at our portfolio and suggest
how we can best place an Insurance Programme.
Thanks very much
Best regards
Chin

NEW ASIA OIL Co.


Schedule of assets
A refinery valued USD1.5bn in Vietnam
A gas processing plant in Thailand valued USD700m
A 20% share in 22 offshore platforms in the Gulf of Thailand
- total value for interest USD150m
Total net producing footage offshore Thailand 160,000 feet
Plans to drill two exploratory wells offshore Australia

SO WE HAVE A DOWNSTREAM AND


UPSTREAM ACCOUNT

We need to have a brainstorming session, call for the


A Team.
Justin Blackmore Downstream
Mike Newsome-Davis Liability

AND

HARD WORKING REGIONAL DIRECTOR


JOE HASSETT

TWO PRIORITIES
1. Programme Design
How are we to create a programme that gives the widest cover for the
best available terms and conditions?

2.

Marketing Strategy

Which insurers are we going to approach to give us the best deal?

These two items are linked and need to be considered together

PROGRAMME DESIGN
Four areas of coverage to consider:

Downstream
Physical
Damage
Upstream
Physical
Damage

Upstream
Control
of
Well (COW)

Upstream
And
Downstream
Liabilities

PROGRAMME DESIGN FOUR OPTIONS


Option One place four separate policies in specialist markets
1

Downstream
Physical
Damage

Upstream
Physical
Damage

Upstream
Control
of
Well (COW)

Upstream
And
Downstream
Liabilities

PROGRAMME DESIGN FOUR OPTIONS


Option Two - Place three separate policies
- Bundle Upstream PD and COW
1

3
2

Downstream
Physical
Damage
Upstream
Physical
Damage

Upstream
Control
of
Well (COW)

Upstream
And
Downstream
Liabilities

PROGRAMME DESIGN FOUR OPTIONS


Option Three - Place three separate policies
- Package all Upstream
1
2
3

Downstream
Physical
Damage

Downstr
Liabs

Upstr
Liabs

Upstream
Physical
Damage

Upstream
Control
of
Well (COW)

Upstream Package

PROGRAMME DESIGN FOUR OPTIONS


Option Four Place one composite policy
(one policy five sections)
Section.1

Section.2

Downstream
Physical
Damage

Sect.3
Downstr
Liabs

Upstr
Liabs

Section.4

Upstream
Physical
Damage

Section.5
Upstream
Control
of
Well (COW)

PROGRAMME DESIGN
What is the best option, or options, for New Asia?
Vote:
1. Option One - place four separate policies in specialist markets
2. Option Two - place three separate policies, bundle Upstream PD
and COW
3. Option Three - place three separate policies, package all
Upstream
4. Option Four - place one composite policy (one policy five
sections)

MARKETING STRATEGY
Which markets to approach?
1. Regional Markets, i.e. markets located in Asia (Singapore, Hong
Kong, China, Japan etc)
2.

European Markets

3. London Markets

Questions:

Does market appetite vary depending on the class of business


i.e. Upstream, Downstream, Liability?

How much regional capacity is genuine additional capacity?

Global companies with regional focus

MARKETING STRATEGY
Vote

What is going to be the best market for New Asia Oil


Co?
1. Regional
2. European
3. London

PROGRAMME AND MARKETING


STRATEGY OUTCOME
Our plan is to try for an integrated package with
regional markets

NEWS FLASHNEWS FLASH


.NEWS FLASH
New Asia Oil Co announce the
purchase of a new refinery in
Argentina.
The purchase price is USD2bn.

PROGRAMME AND MARKETING


STRATEGY UPDATE
Does this new information change our strategies?
Greater downstream emphasis, does our proposed market have
sufficient capacity?
Do we need to review the liability limit?

Is this still regional business?


Where do we access the markets?

NEWS FLASHNEWS FLASH


.NEWS FLASH
New Asia Oil Co announce the
purchase of a 20% interest in the
SKARV field offshore Norway.
The asset value is USD2bn (100%)
or USD400m for interest.

PROGRAMME AND MARKETING


STRATEGY UPDATE
Does this new information change our strategies?
Greater upstream emphasis, does our proposed market have
sufficient capacity?

Do we need to review the liability limit?


Is this still regional business?

Where do we access the markets?

Is New Asia now a Global Account?

MARKETING STRATEGY
Vote
What is going to be the best market for New Asia
Oil Co?
1. Regional
2. European
3. London

Is the Insurance
Market Fit for
Purpose?