Reliability as a system. Organisation of insurance in energy and transport industry

Every organization should incorporate certain vitally important elements to ensure viability, safety of operation and successful development. Energy and transport are among those backbone elements of state economy.

Successful exploration of oil and gas resources in the ocean and Arctic North region has its effect not only on domestic energy development trends, but also to a larger extent on the prospective power supply to Europe, Northern America, China and other regions, and therefore, on political weight of Russia in the world. But the stronger economical and political authority means the considerably greater responsibility.

That is why global energy security became of such a big importance and got the subject of wide discussions during a number of international forums, including the most competent – G8 Summit. The very fact that the summit highlighting this subject was held this year in the country richest in energy resources is an evidence of the Russia’s exclusive place in the world and reminds once again that the history itself made this country responsible for solution this problem .

Energy reliability is a subject based on the fundamental principles of the market economy, in which economical, ecological and political aspects are closely connected . Establishing of a reliable base for dynamic and stable development of civilization calls for a system approach and the most effective financial policy and implies the necessity of realization grand energy projects on the territory of Russia. Opening the international conference on energy reliability in last March, the Minister of Industry and Energy of Russian Federation Victor Khristenko, pointed out the significance to support such projects by international financial institutions, also emphasizing the importance to make these projects more vital economically and financially, including effective insurance facilities.

Obviously, such solutions must be secure with a complex approach, by specialists fully equipped with advanced technologies. Insurance Group “SOGAZ” demonstrates the most qualified and steadfast approach towards the insurance of energy and transport projects in Russia, being the insurer for virtually every domestic backbone company: Gazprom Group, General Electric Power Systems of Russia, Rosatom, Rosneft JSC, Russian Railways JSC, and others.

SOGAZ has more than 13 years experience of complex insurance for Gazprom and its associated companies , including all maritime projects, such as construction of drilling platforms and floating facilities for the development of Arctic and Vietnam shelves, the laying of transcontinental pipelines on the sea bottom, technical facilities for maritime geologic exploration and others. The program of Arctic shelf exploration developed by Gazprom promotes solutions of energy needs and the replenishment of the country currency reserves, at the same time brings forward all-round development of social and economic infrastructure in Northern regions and presents an opportunity to conduct conversion reconstruction programmes of shipbuilding and defense enterprises, providing them with contracts. These programs, partly financed by Gazprom, largely imply the involvement of big investments from the West, which is certainly not possible without the reliable indemnity insurance.

The financing of large scale investment projects of Gazprom with credits reaching up to hundred millions and even billions of dollars is made possible by close interaction of Western banks and other investment companies with general insurer of Gazprom — SOGAZ Insurance Group and its foreign partners in insurance market.

SOGAZ insures practically any energy risks, connected with operation of drilling platforms, pipelines, compressor plants, etc. SOGAZ has a great experience of risk insurance of drilling operation in maritime conditions in cooperation with the partners of Gazprom. Here are just a few examples:

  • for several years SOGAZ insurered self-lifting drilling rig, owned by Federal State Unitary Enterprise «Arktikmorneftegazrazvedka»;
  • more then 7 years SOGAZ insurered fleet of JSC AMIGE, which includes research and drilling ships;
  • in collaboration with its Western partner Padana Assicurazioni, SOGAZ insured construction all risks of underwater section of «Blue Stream» pipeline, insured the property and liability of Blue Stream Pipeline Company BV in the framework of the project of gas transportation from Russia to Turkey via the Black Sea;
  • SOGAZ is a general insurer of gas pipeline transportation to Europe and construction of transit gas pipeline «Yamal – Europe».

Sums insured according to such contracts reach several billions of dollars.

Financial resources of SOGAZ and its reinsurance partners provide reliable protection from risks of virtually any magnitude and complexity. Thus, in the period of 2004–2005 750 million rubles of insurance money was paid by SOGAZ to Orenburggazprom and Uraltransgaz as a consequence of an accident on a helium plant in the Orenburg Region. Insurance payment for such a serious insurance event was made in several stages in 5 months – a record-breaking short terms (as a rule, even in the West such payments are extended to 2 – 3 years). The first payment made in a week allowed to take measures to prevent the further escalation of damage and ensure fast production recovery.

The great professionalism of specialists coupled with experience obtained during many years of insuring Gazprom has allowed to build one of the most reliable insurance systems in Russia, which proved to be highly appreciated and in demand by all Russia’s energy industries. At present SOGAZ has almost half of insurance premium from the whole segment of fuel and energy complex, and 65% of insurance volumes under the contract with «Nuclear Insurance Broker». SOGAZ also insures RAO General Electric Power Systems of Russia against major risks. Since the beginning of this year SOGAZ has won twenty competitions for the right to insure affiliate companies of energy holding, and as a result has become an insurer of 164 branches of RAO GEPS .

SOGAZ is actively extending its collaboration with oil companies, including Rosneft JSC, with the companies of TNK, SIBUR groups, etc. In August 2005 the Neftepolis Insurance Company got the member of SOGAZ Group, what has significantly expanded its possibilities in participation in the projects of oil refining production, transportation and processing.

Along with energy risks insurance, SOGAZ is actively developing its business in all sectors of transport: sea, air, railway and automobile, and takes active participation in the activities of almost all signify industrial and professional associations and consortiums, related to transport risk insurance.

Highly professional systematic approach of SOGAZ aims to optimize the interaction between the insurer and the insured, to adequate risk appraisal and prevention. Timely preventive measures conducted under the insurer’s supervision – repair works, worn parts replacement, etc. – minimizes accident risks and considerably reduces insurance rates.

Today SOGAZ is the leader of domestic insurance market and, according to the results of the first half of 2006, takes the leading positions in Russian insurance rating, both in total assurance premium , insurance construction all risks, liability insurance of companies involving high-risk operation at production facilities, voluntary health insurance, life insurance and personal accident and health insurance.

The top rating of reliability “A++” granted to SOGAZ by Expert RA rating agency is an acknowledgement of the high professionalism of SOGAZ managing team by independent analysts. The high rating helps the company to successfully interact with foreign partners. (in reinsurance, in particular). SOGAZ co-operates only with the leading internationally reinsurance, such as Munich Re, Swiss Re, SCOR, Lloyds of London. Highly professional SOGAZ team won respect of foreign partners in insurance market, which was proved by the many positive responses.

We hope that domestic companies will use thewide experience and international influence of Insurance Group SOGAZ to contribute to the Russia’s energy security, large scale shipbuilding programmes implementation, revival of Russian fleet, exploration of ocean shelf resources, general economic advancement and Russia’s political influence in the world.

Besides, SOGAZ is considering the possibility of opening some overseas branches. Taking into account extensive plans of Russian gas and oil companies to lay pipelines to China and the Sea of Japan, it is necessary to think beforehand of an insurance system for such projects.

SOGAZ Insurance Group

Phone: +7 800 333 0 888

Go to Index of # 4(18) 2006


# 4(18), 2006
Ocean and shelf exploration