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ARK SYNDICATE MANAGEMENT LTD
Offshore Windenergie – Aus Sicht des Londoner Marktes
Lloyd’s Meet the Market, Frankfurt 21/04/2015 Simone Streidl – Underwriter Renewable Energy
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Content
• Ark Syndicate 4020
• Offshore Wind Industry Update
• Loss Statistics
• Wordings
Contingent Business Interruption (CBI)
Multi-year policy periods
Increasing sub-limits
Design error / Defective parts (LEG 3)
• Conclusion
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Inhalt
• Ark Syndicate 4020
• Offshore Wind Industrie
• Schadenstatistiken
• Vertragsklauseln
Zulieferer und Abnehmer bedingte Betriebsunterbrechung
Versicherungspolicen mit mehrjaehriger Laufzeit
Ansteigende Haftungsbegrenzungen
Designfehler und schadhafte Teile (LEG 3)
• Zusammenfassung
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Ark Syndicate 4020
• Syndicate 4020 at Lloyd’s
• Diversified and balanced portfolio of reinsurance and insurance business
• Experienced team of underwriters in their specialist areas
• Clear understanding of our clients and producers
• Long term relationships
• Lloyd’s market ratings: AM Best: A (Excellent) / S&P’s: A+ (Strong)
• The Renewable Energy team at Ark
Worldwide portfolio
Construction All Risks and Operational All Risks
Products: Onshore and Offshore Wind Farms - Solar (PV and Thermal) –
Geothermal - Wave & Tidal - Hydroelectric
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Industry Update
Source e: EER, BTM; Global Data; Roland Berger
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Industry Update
Source: EER; BTM; Global Data; Roland Berger
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Loss Experience
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Offshore Wind Construction Claims Spread of Costs
Cable claims 40.3 %
Collision 6.9 %
Electrical 12.5 %
Foundations 15.3%
Fire 1.4 %
Lightning 2.8 %
Blades 4.2 %
65% 1%
16%
5%
5% 8%
Vessel Charges =65%
Special Machinery(Third Party) = 1%
Site Works(contractor labour)= 16.5%Materials = 5%
Engineering (survey/ consultants) =4.5%Admin (overhead /legal / insurance) =8%
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Wordings
Broad Scope of Cover
• Contingent Business Interruption
Potential bottlenecks on the supply side for components
Very broad covers including weather risk, vessel availability
• Multi-year policy periods for operation after the construction phase
• Increasing sub-limits
• Design error / Defective parts (LEG3)
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Bottlenecks
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Contingent Business Interruption (CBI)
• Offshore converter stations
Bottleneck
Long lead times due to limited number of suppliers and delivery time from 30 to 50 month
• Offshore HVDC cables and cable laying
Only few suppliers. Shortages may occur
• Installation vessels for converter stations
Only few vessels can install converter stations >10,000 t
• Transmission system operator (TSO)
TenneT to provide grid connection for all projects in the German North Sea
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Contingent Business Interruption (CBI)
Wording
• Contingent business interruption for the following scheduled assets:
The export transmission system (from the wind farm operator owned assets
until connection with onshore national grid) as owned by grid operator
• Überblick der Haftung gemäß EnWG §17e ff. – Belastungsausgleich
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Multi-year policy periods for operation after the construction phase
• CAR policy period up to 60 month
• 24 month maintenance and discovery period
• 12 month visits maintenance
• Up to three years operational policy period without break clause
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Increasing sub-limits
TIV or CSL PLUS:
• Sue and Labour 25% of Sum Insured
• Removal of Debris 25% of Sum Insured
• Extra Expenses 25% of Sum Insured
WINDCAR Wording:
Sue and Labour: additional limit of EUR 25,000,000 each occurrence and subject to a combined
aggregate limit for the period of section I of EUR 50,000,000 with the Removal of Wreck
provision.
Removal of Wreck: additional limit of EUR 25,000,000 each occurrence and subject to a
combined aggregate limit for the period of section I of EUR 50,000,000 with the Sue and Labour
provision.
Extra Expense Clause: additional limit of EUR 25,000,000 each occurrence
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Design error / Defective parts
What is a defect?
• Defect of design, plan, specification
• Defects of Materials
• Defects of Workmanship
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Damage vs. Defect
• Question: How to distinguish “damage” from “defect”?
• A defect can be defined as follows:
• A condition causing premature failure which is present in the relevant part… When
it is constructed or installed… Or which comes into existence as a result of the way
in which the relevant part was designed, constructed or installed.
• Traditional distinction between “defect” and “damage” is that damage requires
some kind of occurrence whereas defect is a state of affairs.
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Design error / Defective parts
London Engineering Group (LEG) defects wordings
• LEG1/96
Outright defects exclusion – all costs are excluded
• LEG2/96
Cost excluded is the cost that would have been incurred to replace the defective part had it been
established that they were defective prior to failure.
• LEG3/06
It is only the additional cost of improving the design that is excluded
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Design error / Defective parts (LEG3)
Wordings
LEG 2/96 applicable to turbines
LEG3/06 applicable to all other property
However:
• Offshore Wind - mobilisation / vessel costs!!
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Conclusion
• Technological Development
• Pressure to reduce costs
• Increased risk
• Pressure on Terms and Conditions
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Questions? / Fragen ?
Simone Streidl
Underwriter
Renewable Energy
Syndicate 4020 at Lloyd’s
Ark Syndicate Management Ltd
30 Fenchurch Avenue
London EC3M 5AD
D: 020 3023 4062 M: 07950 832542
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