15.07.08
Taking the strain for the train
In the first deal of its kind, Network Rail has signed an innovative six year contract with QBE, one of the UK’s largest insurers of business risk. The programme will provide working layer property, business interruption, cross class general liability and EL insurance above Network Rail’s captive retention.
Written 100% by QBE, and conceived and placed by Aon Global UK, the innovative six year contract is designed to provide Network Rail with certainty during CP4, the next phase of its government funding which runs for five years from March 2009.
QBE has been insuring Network Rail’s operations since 2002, initially providing100% of capacity on liability risks and significant QBE capacity for property risk, rising to 100% of property and liability risks at the recent renewal.
Other innovative elements of the 2008 contract include:
• A claims co-operation memorandum of understanding which is designed to provide Network Rail with the necessary flexibility to crisis manage sensitively and effectively;
• Measures to assist Network Rail manage potential EL uncertainties within its captive;
Ash Bathia, managing director - casualty, QBE European Operations commented:
“Continuity and stability are key requirements for policyholders, but particularly for those, such as Network Rail, that operate on the basis of phased funding. Our ability to respond to Network Rail’s needs with such an innovative contract reflects both the breadth and depth of the underwriting research and actuarial analysis which QBE has built up during its five year partnership with Network Rail and its broker, Aon, and our focus on taking a fresh look at business risks.”
Ian Thompson, head of Group Insurance, Network Rail added:
"QBE and Aon made it their business to understand the structure and risk management of the UK rail industry which benefited the rail sector at a period when capacity was scarce. They have used this experience and knowledge to provide a highly innovative, sustainable and equitable solution for a six year period, which provides tremendous stability, continuity and sense of partnership to both sides"
Matt Grimwade, head of risk transfer, Aon Global UK commented:
"By innovating, developing, and placing a unique programme structure such as this, Aon, Network Rail, and QBE have shown just how much can be achieved when parties work together in a tripartite manner to deliver a world class solution. This type of approach and solution has wide-ranging applications for major regulated businesses, or those with long term financial/budgetary timelines"
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