IMIA WGP 102(17) Rolling Stock50th Annual IMIA Conference

Munich, Germany

Christoph GuntersweilerHead Engineering SwitzerlandHelvetia Insurance

Agenda

1 Work Group - Members

2 Content and goal of the paper

3 What do we understand by Rolling Stock

4 Rolling Stock in Engineering Insurance

5 Loss Examples

6 Underwriting Considerations

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Work Group - MembersA global topic meets a team of regional experts■ Sponsor: Guido Benz, Swiss Re

■ Members:■ Christoph Guntersweiler, Helvetia, Chairman■ Heiko Hammacher, Helvetia■ Eric Benz, Scor■ Ho Kun Hong, Scor■ Ed Chan, RSA■ Brendan Reed, Codan■ Thomas Gebert, AXA■ Denis Kocan, Swiss Re■ Darren Smart, Liberty■ Bruno Ternisien, Naudet■ Colin Hamling, High Speed 2■ Richard Day, Arup■ Raik Wittowski

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• What do we understand by Rolling Stock• Costs of Rolling Stock

Definition and Values

• Rolling Stock Industry, Rail Transport Market • Technology, Development, Maintenance, Testing, Security,

Standardisation/Regulation

Rolling Stock in Engineering Insurance

• Loss Data• Losses during Assembly, Testing, Storage and Operation

Loss Examples

• Underwriting / Pricing• PML

Underwriting Considerations

Content and goal of the paper

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Goal:Provide support and information aboutRolling Stock insurance for:

Engineering LinesUnderwriters

Risk Engineers

Claims Managers

What do we understand by Rolling Stock

in scopeout of scope

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Rolling Stock

is on dual Rails

is rolling

Passenger -

Transport

Cargo-

Transport

Infrastructure• Tunnels• Bridges• Rails / Tracks

Special vehicles / trains• Grinding Machines• Magnetic Trains• Cable Cars• Ski Lifts

Rolling Stock in Engineering InsuranceStatistics – Rolling Stock Industry

Source: SCI "The Worldwirde Market for Railway Industries 2016"

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Rolling Stock in Engineering InsuranceTop 10 Manufacturers – Rolling Stock Industry

Source: SCI "Worldwide Rolling Stock Manufacturers 2016"

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Rolling Stock in Engineering InsuranceStatistics – Rail Transport Market

Source: SCI "Rail Transport Markets – Global Market Trends 2016-2025"

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Rolling Stock in Engineering InsuranceDifferences in Regions– Rail Transport Market

Source: SCI "Rail Transport Markets – Global Market Trends 2016-2025"

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Worldwide rail freight performance 2015 (tkm, %) Worldwide passenger rail performance 2015 (pkm, %)

Maintenance of wheels

thermal cracks skidded wheels effect

Rolling Stock in Engineering InsuranceAdditional Information

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Rolling Stock

Technology

Maintenance

TestingSecurity Equipment

Standardi-sation andRegulation

Present• Dual Mode (Power)

Vehicles• Gauge Changing• Energy Storage

Systems• Hybrid Vehicles• ......

Future• Internet of Things improving availability, reducing unplanned maintenance activity

• Energy reduction reduction in weight, optimization of energy recovery system

Loss ExamplesLessons learned and Statistics

Source: eurostat "Datas from Europe 2010-2014"

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Lessons learned:Often, losses are not the result of one single root cause, but rather a chain of causes initialized by human error.

Loss ExamplesCauses of Loss

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• Testing, Speeding, Human Failure• NatCAT

Assembly, Testing & Storage

• Human Failure• Fatigue Crack• Landslide• Poor Maintenance• Flood• Fire• Brake Failure

Operational

Loss ExamplesRhätische Bahn, Landslide (1)

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Loss ExamplesRhätische Bahn, Landslide (2)

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Underwriting ConsiderationsFocus on Project and Operational

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Project (Assembling & Testing) Operational

Insurable Interests / ContractualObligations Insured Property Third party liability Type of coverage Wording / Concept ofcover Risk Assessment / Quality of Risk andPML considerations Project Period, Transfer and Storage Pricing related to the above

• Project or Operational• Insured values• Concept of Cover

Underwriting Information

• Accumulation• Period of business interruption

Risk Assessment

• Storage or Maintenance Depot (Christmas Event)• Fire• Natural Catastrophe• Equipment Failure• Collision or Derailment• Business Interruption (BI) and Contingent Business Interruption (CBI)

Loss Estimate Scenarios

PML Considerations

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PML (Probable Maximum Loss)

Based on thedefinition of IMIA

Conclusion

■Contractual obligations on Rolling Stock are complex and the insurancesolutions should be assessed by experienced underwriters

■Some losses can be catastrophic in nature, very often human error is a keypoint of failure

■Rail as a reliable form of transport continues to grow at a positive rate

■New technology, lighter weights and higher speeds will further increasecomplexity

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Thank you very much for your attention.