Standing On The Wall

1
Standing On The Wall

• An Engineers Role in Risk Management and
  Insurance

2
What is Standing on the Wall?

• You are The Corporations Sentry
• Son, we live in a world that has walls. And
  those walls have to be guarded by men with guns.
  Whos gonna do it? You? I have a greater
  responsibility than you can possibly fathom. And
  my existence, while grotesque and
  incomprehensible to you, saves lives. You dont
  want the truth. Because deep down, in places you
  dont talk about at parties, you want me on that
  wall. You need me on that wall.
• Jack Nickelson
• A Few Good Men

3
Engineers Role in Risk Management and Insurance

• Engineering as the Corporations Sentry
• Engineering Factors that Influence Insurance
  Carriers
• Integral Role of Engineering In The Insurance
  Placement Process

4
Engineering As the Corporate Sentry

• Acquisition Due Diligence
• Environmental Surprises
• Historical Failure Analysis
• Deal Veto Power
• Operational Risk Management
• Quality of Construction
• Environmental Safegaurds
• Loss Lessons Learned

5
Acquisition Due Diligence

• Environmental Surprises
• Are there processes in place to catch data gaps
  in integrity data?
• Where does construction integrity data stop?
• What was cause of historical failures?
• Will your processes/protocols change this?

6
Acquisition Due Diligence

• Deal Veto Power
• If you cannot get comfortable with assets, can
  engineering stop a deal?
• Can engineerings input effect the construction
  of the Purchase Sale Agreement?

7
Operational Risk Management

• Quality of Construction
• Are there specific construction related issues
  that have lead to pipeline failure?
• Poor pipe quality
• Climate conditions
• Corrosion protection failures
• Ability to set/control materials construction
  specifications
• Adaptation of New Construction methods

8
Operational Risk Management

• Environmental Safeguards
• Leak Detection Processes
• Additional Leak Prevention/Leak Control Measures
  in Sensitive Areas
• Adaptation of New Detection technologies

9
Operational Risk Management

• Loss Lessons Learned
• Process of Failure Analysis
• Process Modifications as Result of Failure
• Implementation of Process Modifications

10
Engineering Factors that Influence Insurance
Carriers

• Engineerings Up-to-Date Technology Knowledge
• Engineerings Ability to Control Losses
• Engineers Emphasis on Protecting Environment

11
Engineering Factors that Influence Insurance
Carriers

• Engineerings Up-to-Date Technology Knowledge
• Are control systems latest technology
• Are their documented failures with control
  technology
• What training is provided to operators of
  technology

12
Engineering Factors that Influence Insurance
Carriers

• Engineerings ability to control losses
• Access to Sr. Management
• Ability to Control Construction Process
• Ability to Control Loss Control Process
• Ability to Effect Organizational Change

13
Engineering Factors that Influence Insurance
Carriers

• Engineers Emphasis on Protecting Environment
• Engineerings involvement in E H and S statement
• Engineering has a proactive versus reactive
  engineering approach
• Engineering is educated on environmental
  regulations to stay in compliance and out of the
  regulatory doghouse

14
Integral Role of Engineering in the Insurance
Placement Process

• Engineering should be part of every insurance
  market presentation
• Engineering Risk Management present unified
  front of loss control being Priority One
• Engineering can eliminate any market hesitations
  due to past losses/fast growth
• Engineerings role in claim/incident reporting
  process

15
Integral Role of Engineering in the Insurance
Placement Process

• Engineering should be part of every insurance
  market presentation
• Role is to show skill as corporate sentry with
• 1st hand knowledge/expertise of pipeline
  construction methods, intergrity testing methods
  and results
• 1st hand knowledge/expertise of corporate due
  diligence standards
• 1st hand knowledge/expertise in incident
  examination/corrections

16
Integral Role of Engineering in the Insurance
Placement Process

• Engineering Risk Management present a unified
  front that loss control is Priority One
• Role is reinforce Corporate position of safety
  loss control
• Examples of loss control efforts effects
• Engineerings role in crafting corporate
  environmental safety statement
• Examples of how cooperation has positively
  effected claims/incident frequency

17
Integral Role of Engineering in the Insurance
Placement Process

• Engineering is part of claim/incident reporting
  process
• Role is to show proactive, cooperative effort to
  address any failure or incident through
• 1st hand knowledge of loss signals
• 1st hand knowledge of response process
• 1st hand knowledge of loss control/process
  modifications to reduce frequency severity
  potential

18
Questions?