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There are a number of trends clearly detectable in the UK markets that have the potential to change radically the approach of major and medium sized companies to insurance. Although [...]

Financial reinsurance plans provide petroleum and gas companies with a potent risk management weapon. Such plans fully reflect the risks represented by the companies and allow the insured to benefit from a good loss experience. They are also subject to a definite limit of liability and cover a wide range of issues, such as exposure to weather losses and other natural catastrophes which are not covered by conventional insurance premiums., Safety conscious and well-managed companies are becoming concerned that their insurance premiums do not fully reflect the risk they represent. The development of new types of financial reinsurance offers innovative [...]

Insurance brokers are caught between the insurance industry and oil company clients, who often see brokers as bearers of bad news, of higher prices for less cover. Oil companies are now moving away from conventional insurance to self-insurance and mutuals, and this business is likely to be lost for good. However, smaller companies cannot afford self-insurance, and need a healthy insurance market. Brokers are responsible for ensuring a balance is maintained between the need for higher premiums to offset higher claims, and the need to retain clients., AN INSURANCE broker is a middleman, positioned between the insurance buyer and the insurance provider. It is often the case that a middleman is seen as being 'the enemy' by [...]

Crisis simulation will help the energy industry personnel to control the situation when the real catastrophe occurs. In crisis simulation, the company prepares detailed emergency plans to deal with the immediate catastrophe, the physical response, the long-term business response and the media response. Then, a non-destructive test is performed to evaluate and correct the flaws of the emergency plan. In addition, crisis simulation is an effective training tool for enabling the staff to cope with any stressful situation., DESPITE all the media coverage of the state of the energy insurance market as a result of the swinging losses of the past few years, the energy industry is no [...]

The steps for a successful insurance review or tender are discussed. The first step involves planning, which includes setting the time frame for the review. The second step is pre-selecting the brokers. The third and fourth involves giving adequate information and access to the company to the brokers, respectively. The fourth step is assessing how the company relates with potential brokers during discussions. This is important in gauging how well the company will be able to deal with the brokers once the contract is signed. The selection of the broker is the final step in the process., You suspect that next renewal is going to be bad. You expect an increase in cost, probably linked to some pressure on cover or limits (or even both). You have [...]

The EC is planning to set up a formal structure for tendering insurance. This means that oil companies seeking insurance will have to select an insurance company on the bases of the price it offers or some other preset criteria. However, observers are predicting that cost is not going to be an important factor in the years ahead because demands for professionalization within the insurance industry will lead to the standardization of premiums being charged by the industry., The one question every company asks its insurance broker is: what's the bottom line? In other words: how much is it going to cost? There are plenty of questions that [...]

Self-regulated energy industry mutuals with environmental liabilities are the only solution to the complex problem of ensuring the oil industry. The energy industry needs a mutual for environmental hazards that will provide and require large funding. Adequate environmental engineering standards will be needed. Moreover, benefits could offset cost reduction and expansion schemes and could be utilized by members of the mutual rather than the insurers., Everyone knows how it is. People meet. They realise how much they have in common -- particularly in contrest to others. Their interests are similar. They understand each other. They [...]

Over-capacity in the energy insurance market has led to increased professionalism among insurance underwriters. Professional underwriters are those that evaluate the probabilities of loss, base premiums on risk profiles, calculate estimated losses and estimate major product liability exposures. With professional underwriters, insurance buyers will focus on the value of insurance coverage rather than just prices. Underwriters that retain their professionalism are those that will remain in business., The author would just like to point out that this company does not necessarily endorse any of the comments made in this column. In order to be even safer, the [...]

Insurance companies have traditionally been given the burden of paying for the environmental liabilities incurred by the various industries, especially the petroleum industry. However, it is becoming extremely apparent that the insurance companies cannot adequately cover the growing number of potentially damaging petroleum ventures. Moreover, the question arises whether the insurance industry alone should bear the financial burden of environmental damage, when in fact such damage is often inevitable. The only possible solution for this dilemma is the imposition of a global ecotax to cover the costs of environmental cleanups., Oil is tricky stuff. It is a totally natural product, but the only place it is halfway safe is whereever it is first found. From the moment it is taken [...]

Why should Petroleum Economist devote a page a month to a column on insurance? It is, after all, supposedly one of the most boring topics of conversation in the universe. [...]