ONGC Keeps Offshore Insurance at $29M
ONGC has successfully placed its Offshore Package Insurance Policy, one of the largest insurance policies obtained by any Indian company, at an annual gross premium of approximately US$ 29.025 million, exclusive of Service Tax. ONGC has been able to maintain the insurance premium of the Policy for this Policy year 2008-09 at almost the same gross premium as last year despite an overall upward revision of around 32% in the insured asset value, from US$ 15.89 Billion to US$ 21 Billion.
The renewal program was managed by United India Insurance Company (UIIC), who led the Consortium of Nationalized Insurance Companies, comprising UIIC, NIAC, OICL and NIC. ONGC policy is reinsurance driven with the major portion of the risk being reinsured in international Reinsurance Market, with risk retention in the India Insurance Market being 10-13%.
ONGC and UIIC jointly did the marketing of the risk in London Reinsurance Market in mid-March 2008 with ONGC team led by Director (Finance) and UIIC team led by its CMD. UIIC, after following their internal procedures to shortlist the brokers, invited competitive quotes from them. Risk Survey Report issued by Paris Re, the underwriters for Policy Year 2007-08, in respect of risk survey done by them along with M/s Allianz in 2007 had a positive feedback on ONGC risk, which coupled with effective marketing of the risk by UIIC and ONGC team in London enabled ONGC to get competitive quotes.
The quotes were evaluated by M/s UIIC and quote of M/s Benefield/KM Dastur emerged the lowest. ONGCâ€™s major critical offshore operational assets viz., Production Complexes, Well-head Platforms, Pipelines, Trunklines, Drilling Rigs, Multipurpose Support Vessels, specialized vessels and third party liabilities and operational risks, are insured under a comprehensive Energy Offshore Package Insurance Policy for a Combined Single Limit (CSL) of US$ 750 Million for any one accident/one occurrence.
Operates 36 Offshore Rigs
Manages 8 Offshore Rigs
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