Ashley McDonald Aon New Zealand WINERY INSURANCE RISK.
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Transcript of Ashley McDonald Aon New Zealand WINERY INSURANCE RISK.
Ashley McDonald
Aon New Zealand
WINERY INSURANCE RISK
TODAY WE WILL….• Seddon Earthquake
• What was the real loss
• What was the cost of Seddon
• Resulting Underwriting
• Premiums
• Coverage changes
• Conclusions
THE SEDDON EARTHQUAKE 2013
• What was damaged
• Buildings
• Tanks
• Concrete Foundations and Concrete Pads
• Wine Product
• Bottle damage
WHAT WAS THE REAL LOSS • Buildings
• Tanks
• Concrete Foundations and Concrete Pads
• Wine Product & bottle damage
• Future Sales – up to 5 years
• Effect on cash flow
• Future development of the business
• Market share
WHAT WAS THE COST FOR SEDDON?
• Seddon
• Estimated at $250 million?
• Napa
• Estimated are $300 million USD (as at 1st of Sept 14)
only 5% of people have any earthquake insurance
RESULTING UNDERWRITING• What are you doing to minimise the risk?
What % of NBS do you comply with?
What is the construction & how will it react?
What is the soil at the location like?
Fire Loading?
Accumulation?
RESULTING UNDERWRITING• What are you doing to minimise the risk?
Baffling the tanks
Strengthening of tank bases
Strengthening of the foundations
What alternative products are available e.g. plastic tanks
INSURANCE COVER• Will it be available?
• All the premiums are made up as follows
• Before the Earthquakes, it was
PREMIUMS
Acc. DamageFireBurglaryNatural DisasterImpactLightningExplosionStorm/CycloneWater DamageMalicious Damage
• All the premiums are made up as follows
• After the Earthquakes, it is now
PREMIUMS
Acc. DamageFireBurglaryNatural DisasterImpactLightningExplosionStorm/CycloneWater DamageMalicious Damage
COVERAGE CHANGES
More self-insurance required of clients
Previously 2.5% of the loss
$1,000,000 damage claim @ 2.5% = $25,000 excess
Now 5% of the site value for each and every event
$10,000,000 sum insured @ 5% = $500,000 excess
(regardless of the claim size)
COVERAGE CHANGES
• No automatic reinstatement of the sum insured unless agreed in writing and an additional premium is paid
• No repairs until the excess is paid.
• No claim for upgrading undamaged property in accordance with regulations
• Higher premiums
CONCLUSION• Higher premiums (top end of the rating scale and no chance of
reduction)
• Self-insurance levels being carried by the winery increasing
• Upgrade costs being imposed on the winery instead of being able to budget for it.
• Council problems – no code of compliance until the entire premises up to code, not just the damaged property.
CONCLUSION• Insurance companies will be looking for ‘prudent’ clients
who are managing the risk
• Insurance companies will charge the winery for the risk as they see it