Last month, Bin Wang, an Underwriter for Offshore Energy, Builders Risk & Special Risks at Norwegian Hull Club, presented at the 2016 Houston Marine Insurance Seminar.
With an audience of several hundred including brokers, risk managers, insurers and lawyers, Bin spoke about the evolving risk profiles facing today’s North Sea offshore industry, and how marine and energy insurers may assist the industry to meet and overcome these emerging challenges by providing market solutions.
Low oil price and over-capacity of insurance capital are some of the major challenges currently facing the offshore marine and energy insurance market. Bin examined these challenges, focusing on how insurers like Norwegian Hull Club can overcome the prevailing market conditions through innovative solutions founded upon industry expertise, underwriting flexibility, and supporting the new and unique insurance needs of each client. In particular, Bin highlighted lay-ups and wet tows as two areas in which an evolving risk picture has emerged due to today’s uniquely challenging market conditions.
Lay-ups of offshore platforms have increased in recent years reflecting the continued flattening of global oil prices and demand. This prolonged downturn has blurred the line between traditional understandings of “hot” and “cold” lay-ups as rigs remain in stack for unforeseen durations. Unprecedented and extended durations in lay-up pose unique challenges in terms of both risk management whilst laid up and reactivation when the time comes. Rig builders, in fact, have often become de facto caretakers of laid up, brand-new rigs, which presents new and unique challenges. Bin suggested that updating insurance industry standards and common best practices would assist in better visualizing and defining this new emerging risk picture, thereby aiding underwriters in their continued role in providing complete coverage solutions to their clients during these challenging times.
With regard to wet tows, Bin stated that the North Sea had been the scene of a number of broken tows recently. He questioned whether sufficient focus is given to other factors such as rogue waves, time of the year, and distance to shore; as opposed to simply looking to the traditional variable of distance of the tow, especially when tows are included within an insurance package. Unforeseen exposures to wet tows also include the risk of a broken tow followed by drifting into additional third party property, as well as the difficulty today in assessing valuations in the event of a claim. By updating industry-accepted criteria for risk assessment, Bin foresees a better opportunity for the insurance industry to help clients mitigate these exposures.
In conclusion, Bin maintains that in current market conditions, it is more important than ever for insurers like Norwegian Hull Club to bring value to the insurance buying chain. Helping clients to better manage and mitigate their risks, and to innovate and create new, unique and flexible insurance products able to provide a market-based solution to the evolving risk picture faced by clients in the prevailing challenging industry environment.
If you would like further information, please contact Bin Wang at bin.wang@norclub.com
More about the Houston Marine Insurance Seminar:
Houston Marine Insurance Seminar, Inc. is a non-profit organisation committed to providing and promoting educational opportunities in marine and energy insurance and admiralty law. For over 50 years, it has hosted an annual seminar to provide a networking experience for insurance professionals, keynote speeches from industry veterans and continuing education requirements. The seminar has more than 550 attendees every year. http://houstonmarineseminar.com/