The International Association of Engineering Insurers (IMIA) recently held its annual conference in Istanbul to discuss the challenges the engineering insurance industry is facing worldwide.
Underwriters, brokers and loss adjusters shared their experiences of the sector, discussing new technology trends and sharing knowledge and experience on emerging and critical issues relevant to the industry.
Over the course of three days, the 2009 conference discussed a wide variety of subjects, ranging from the impact of the worldwide recession on the construction sector to the underwriting considerations of onshore and offshore wind energy projects. Here is a summary of the discussion.
The Marmaray project
The Marmaray project involves connecting two continents by means of a high-speed train tunnel beneath the Bosphorus Strait. This project has been shown to be one of the most challenging infrastructure projects in the world today.
The presentation explained how constructors are applying a new technique of connecting round drilled tunnels with rectangular immersed sections in a watertight way. The challenging nature of this project, combined with the employment of a new technique, highlighted the importance of a considered approach to risk management that construction of such a large project brings.
The rapidly developing wind turbine industry was discussed, centring around the potential for an increase in the size and frequency of physical damage claims and how serial defects, poor-quality components and insufficient internal controls translate into multiple business interruptions.
The impact of wind energy was highlighted as something that all engineering insurers should be aware of. For insurers, developing and maintaining expertise is critical if the industry is to successfully underwrite emerging technologies such as this.
This talk highlighted the fact that the development of tunnel-boring machines has presented insurers with several challenges.
Being an extremely specialist piece of machinery, a thorough awareness and understanding of the nitty-gritty is a primary challenge. Tunnel-boring machines bring a range of hazards when in use, but an underwriter will need to write risk dependent on the type of machine proposed and the environment in which it will be used.
The year ahead
Looking ahead to 2010, the association already has a number of project groups under way that are examining several topics of interest. The output of this will be presented at next year’s conference, and include:
- insurance of both second-hand plants and equipment;
- claims issues with rapidly developing technology, incorporating engineering insurance issues related to inland transit;
- risks and insurance of petrochemical, oil and gas-processing constructions; and
- insurance issues, losses and infrastructure exposure, relating to the construction of transmission and distribution lines.
Providing insights and recommendations on these topics will continue to aid understanding on an international scale and, because of the technical quality of the work submitted, we should in the future explore whether or not it would be feasible to seek accreditation from recognised industry bodies such as the CII. This would not only aid the learning and development of the IMIA membership, but also hopefully attract new members.
IMIA recognises the importance of moving with the times and will be looking to further enhance its global reach using online networking, webinars and other media facilities to support its membership.
I have some ambitious plans for the future and am keen to raise awareness of the association as ‘the knowledge hub for engineering insurance’.
We already have a strong and growing membership; we are keen to build on that foundation and, in order to do so, it will become more important than ever for us to promote best practice within this industry. Without the hard work of associations such as IMIA, the fear must be that industry expertise in this specialist domain will wither on the vine.
Sustaining the life blood of technical engineering insurance knowledge through an ever more vibrant network of industry experts is what IMIA is all about.
The next IMIA conference will be held in Berlin, Germany on 11-15 September 2010. IT
Neil Clutterbuck is chairman of IMIA and director of Allianz Engineering