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Renewable Energy Exposures, Claims and Claim Services. Derek Patterson, Crawford & Company Middle East. AGENDA. Crawford and Company Claims Process World Trends Exposures/ Risks Sharing Risks Linked to Renewables Focus on Wind Energy Claims Types Challenges in dealing with Claims - PowerPoint PPT Presentation
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WORKING TOGETHER:
the Crawford Difference
Renewable EnergyExposures, Claims and Claim
Services
Derek Patterson,
Crawford & Company Middle East
WORKING TOGETHER: the Crawford Difference
AGENDA
1. Crawford and Company
2. Claims Process
3. World Trends
4. Exposures/ Risks Sharing
5. Risks Linked to Renewables
6. Focus on Wind Energy
7. Claims Types
8. Challenges in dealing with Claims
9. Crawford Brochure
2
WORKING TOGETHER: the Crawford Difference3
1. Crawford & Company Inc, Atlanta
• Crawford & Company – 70 countries – 8,000 staff – US$1.2 billion – Property & Casualty division; Crawford & Company– Financial Services; The Garden City Group– Healthcare + TPA Administration; Broadspire
• Property & Casualty Division– America’s: USA, Canada, Central and Latin America– EMEA AP: Asia, CEMEA, UK
• CEMEA– Middle East : Part of CEMEA– Derek Patterson, Regional MD - Middel East– Renewable Energy Practice Leader– Mark Vos, Head of Global Technical Services CEMEA– David Dimelow, Global Technical Services UK
WORKING TOGETHER: the Crawford Difference
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2. Claims Process
Important to start on the right foot - set the tone
for the way the claim will proceed
Has the policy been triggered?
Plan of action
Communicate loss to insurers
Prove your claim!
What is the desired outcome?
Collection of funds
Are the clients rights being protected?
Notification and Acknowledgement
Coverage
Claim Strategy
Insurer Contact
Information Gathering and Analysis
Negotiation
Settlement
Subrogation Management
WORKING TOGETHER: the Crawford Difference66
Insurance Claim Timeline
Claim Closed
Date Of Loss -
Loss Notification
Loss Adjuster Visit
RCA
Adjusters Preliminary Report is issued to
(Re)Insurers
Initial Coverage Analysis
Interim Report issued recommending Advance
Partial Claim Submission
Settlement NegotiationsFinal Report
Final Claim Submission
Final Coverage Analysis
Sign Proof of Loss
Collect and transfer funds
Insurers Agreement
WORKING TOGETHER: the Crawford Difference77
Claim ProceduresPost incident actions
• Take all reasonable steps to prevent further damage. Acting at all times as a prudent uninsured.
• Prior to commencement of dismantling/repair work, take photographs of the incident scene and the damaged equipment/parts– use of video footage is becoming more common
• Preserve damaged equipment/parts for further inspection by the appointed Loss Adjuster / External Experts– protect from the elements– Designated ‘Lay Down Area’
• Notification to third parties holding them responsible for loss in order to preserve Insurer’s rights of recovery.
WORKING TOGETHER: the Crawford Difference88
Claim ProceduresPost incident actions
• Investigate the loss & identify cause(s)– Root cause analysis essential to the adjustment of the claim essential to prevent recurrence– secure documents, drawings, specifications etc.– obtain witness statements
• When a Loss Adjuster is appointed, agree expenditure and actions in advance with him– need to establish a primary contact for communications with the
Loss Adjuster
WORKING TOGETHER: the Crawford Difference9
Post Incident ActionsThe importance of Cause and Origin
Underwriting– Statistics– Loss prevention
Subrogation• Not employees
• Equipment vendors
• Contractors
World class experts in relevant specializations may be
employed to determine cause.
WORKING TOGETHER: the Crawford Difference10
Claim ProceduresPost incident actions - PD Assessment Protocol
• Inspection• Determination of most economic repair options• Options discussed with BI team for their approval• Agreement on methodology of testing and interpretation
of results• Agreement with Insured on proposed repair-replacement • Discussion with BI team on economics of expediting;
overtime, air-freighting, domestic or import procurement• Review all tender bids and appraise final choice• Preparation of critical path schedule for repair stages
WORKING TOGETHER: the Crawford Difference1111
Claim ProceduresPost incident actions
• Effect temporary / emergency repairs required to resume operations.
• Obtain witness statements as soon as possible while memories are clear.
• If applicable restore fire protection to site.
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Claim ProceduresPost incident actions
• Open a claim file Keep duplicates of all information given to other parties (loss
adjusters, brokers, contractors, licensors, suppliers, vendors, consultants etc.)
Document everything.
• All expenses relating to the loss should be carefully recorded via allocated cost-center including:– repair and replacement costs
– labor & supervision (time sheets)
– expenses incurred to mitigate the loss (labor, emergency response, equipment etc.)
WORKING TOGETHER: the Crawford Difference1313
Claim ProceduresPost incident actions
• Third partly liability claims:– Do not admit to or assume responsibility / fault for the injury or
damage (even verbally)– Cooperate fully with legal authorities– Do not guarantee payment for any damages or injuries– Open a claim file in which duplicates of all relevant
documentation should be held– After initial contact, limit communications with any third party
claimants– Any communication received from a third party should be
forwarded without reply to Risk Management.
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Claim ProceduresPost incident actions
• Claims progress reporting• Preservation of recovery opportunities
– protect insurers rights of recovery against third parties – do not prejudice possible subrogation actions
– disposal of scrap and debris, salvage etc. to be agreed with Loss Adjuster
WORKING TOGETHER: the Crawford Difference15
3. World Energy Consumption
• World Consumption is 15 Tera Watt (TW)
WORKING TOGETHER: the Crawford Difference16
Energy Resources
• Energy resources, which can be tapped.
WORKING TOGETHER: the Crawford Difference17
4. Exposures
• 1: Profitability– Governments or Private Energy Suppliers– Subsidies, Profit & Loss < -- > CO2 Consumption
• 1kWh = 0,7kg CO2 = 110 Trees CO2 Annual Consumption
• 2: Feasibility of Energy Resource– Do we have the right location.– Which concession do need to consider.
• 3: Reliability of Technical Operation– Continued demand pushes ‘continued prototyping’
• 4: Life Cycle of Investment– Replacement versus Technology
WORKING TOGETHER: the Crawford Difference18
4.1 Exposures & Risk Sharing
• Financial Risk Sharing– Banks (investment + cashflow protection to investor) – ALOP/
DSU– Public-Private Partnership (PPS); subsidy – ALOP/ DSU
• Operational Risk Sharing– Availability / Performance Risk [energy source and generator
(BI)]– Investment protection (PD, MB, BI) – Environmental regulation (Liability) – Public/ community (Liability)
• Technical Risk Sharing– Technical Design and Maintenance (PD + MB)– Proto-typing and serial risk (Warranty, Guarantee)– Investment and design (CAR, EAR, PD+MB)
WORKING TOGETHER: the Crawford Difference19
5. Renewable Energy Hazards
• Bio Energy– Bio-gas (methane gas-mix /explosion & sulphur corrosion)– Bio-fuels; pulp / algae / Canola seed oil (agricultural risks) – Bio-energy research: living organism & light (natural risks)
• Hydro Energy– Hydro power: Rainwater, rivers and glacier rivers (climate/
natural/ engineering)– Tidal power: Efficiency & Location (natural/ engineering)
• Geo Energy– Thermal pumps: small scale applications (natural/ engineering)– Volcanic areas larger potential and application like Iceland
WORKING TOGETHER: the Crawford Difference20
6. Renewable Energy Projections - Wind
• Wind Energy – Subsidies Europe– The costprice of wind energy (net cost) at 1.760 “ full load hours"
is 11 cent per kWh for a period of 15 years of projects awarded in 2008. The subsidy balances the right value vs the electricity price. At 3,330 (full load hours) €1,7 cent subsidy/ kWh.
– At 1,760 hrs projects receives a subsidy of: "1.760 * (11,0-7,8) * project capacity in kW". A turbine of say 3 MW (3.000 kW) received in 2008: (maximum) 1,760 * 0,032 * 3.000 = € 168.960.
• New Zealand, Australia, Aruba,Turkey = No subsidy
WORKING TOGETHER: the Crawford Difference21
0.15 MW
10 m,26 ft
AltamontRegion
6.1 Wind Industry Growth Trends
• Larger multi-MW turbines• Demand for new innovative technologies• Led by European investment• Offshore & low wind regime focus in U.S.
Vestas V112 3 MW 2009
Blade Tip Max 200 m/s=720km/h
WORKING TOGETHER: the Crawford Difference22
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• Energy resources, which can be tapped.
WORKING TOGETHER: the Crawford Difference
Typical Wind Turbine Construction
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Rotor –gear box – control panel – contactor panel - generator setRotor –gear box – control panel – contactor panel - generator set
Rotor –gear box – control panel – contactor panel - generator set
WORKING TOGETHER: the Crawford Difference25
7. Most Common Types Of Claims
Erection (EAR/CAR)• Transport – Damage to blades and nacelle / turbine• Handling – Damage during erection • Natural Perils• Fire damage during commissioning• Design – monopile connection to transition piece
Operational (PD / MB)• Weather – lightning strikes / storm / hail (solar arrays)• Fire – malfunction and maintenance activity• Machinery Breakdown – braking system / Generator shorting /
- control panel electronics / mechanical
WORKING TOGETHER: the Crawford Difference
Typical Fire Damage
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WORKING TOGETHER: the Crawford Difference
Typical Damage
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WORKING TOGETHER: the Crawford Difference
7. Most Common Type of Claims
Financial (BI) • Triggered by Material Damage or Machinery Breakdown• Loss of Capacity / Revenue• Time deductible / Waiting period
Liability (Public Liability / Product Liability / Prof. Indemnity• Claims against wind turbine manufacturers & wind farm operators• Excessive noise, damage to property, economic loss, emotional
distress• Injunctive relief, costs and punitive damage• Contravention of enviromental legislation• PL claims for non-performance• PI claims for design failures (monopile)
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WORKING TOGETHER: the Crawford Difference
Cost Structure
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WORKING TOGETHER: the Crawford Difference
Claim Challenges
• The claim process remains the same• Challenges in respect of logistics / costs related thereto• Logistics / costs for marine offshore spread US$ 100k
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WORKING TOGETHER: the Crawford Difference35
9. Crawford Renewable Energy Practice
WORKING TOGETHER: the Crawford Difference
Crawford - Global Technical Services
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