THE WILLIS ENERGY LOSS DATABASE 2011

OVERVIEW Background Property included Database information Purpose of database Types of reports available Information sources Confidentiality Subscriptions & Subscribers Disclaimer

BACKGROUND Idea conceived in 1994, commercially available from 1997 Created in recognition of general lack of industry information Marine and Aviation losses are well reported but not Energy unless they are major and/or involve death or injury This is a unique facility

PROPERTY INCLUDED Offshore/Onshore – E&P Upstream - Rigs/FPSOs/FSOs/FPUs etc - Platforms - Pipelines - Oil sands - Storage & offloading systems Onshore – Midstream/Downstream - Refineries, petrochemical plants etc. - Loading terminals, tank farms - Power Stations, wind farms - Gas plants, transmission stations

DATABASE INFORMATION Only for losses of US$1,000,000 or more at time of loss Information captured is from 1972 to date All amounts shown in US$ exchanged at date of loss rate of exchange Property related losses – no liability in isolation Amounts relate to PD, OEE (cost of control etc.) and BI Contains 9,000 individual records with an aggregate time of loss value greater than US$148 billion (>US$198 billion indexed) Except for BI this is a loss database not an insurance database therefore PD, OEE & S&P costs are for 100% interest FGU on the basis of no deductible and no limit – the incident does not have to have been insured but it does have to have been insurable

PURPOSE OF DATABASE To assist in the evaluation and review of current and future insurance strategies – both buying and selling, direct and reinsurance To help understand the dynamics between losses and pricing To provide activity profiles and market share analyses for contributing Loss Adjusters Subscribed to by oil companies, insurers/reinsurers and major brokers Used by academic establishments – forms part of the “Energy Insurance and Risk Management” course run by the Bauer College of Business at the University of Houston

SOME OF OUR SUBSCRIBERS…

REPORTS AVAILABLE Summary: No. of incidents, aggregate & average $ - by year - by geographical area, country or location - by cause - by property type - by month (seasonal trends) - by cost bandwidths - by well depth - any combination of the above Listings of individual losses by date or value

REPORT EXAMPLE 1: An independent oil company operating only onshore USA wishes to review their current OEE limits of $5M. What can the database tell them about the adequacy of their OEE limit in light of industry experience? Database search criteria: Country = USA, Land/Offshore = Land, Loss Type = OEE

To download into Excel just click here We will now look at 2 other reports with the same data set – firstly by location

To download into Excel just click here And secondly by cost category (using indexed as we are looking at + 30 years of data)

This tells us: An OEE limit of $5M would have been adequate for 467/711 or 66% of known OEE losses excess of $1M Increasing the OEE limit to $10M would account for 605/711 or 85% and so on…

REPORT EXAMPLE 2: Analysis of European refinery losses since 1990 based on frequency and severity excluding the causes of earthquake and subsidence Database search criteria: Year of Loss = 1990 to 2010, Area = Europe, Subcategory = Refinery, Cause = all (excluding earthquake and subsidence/landslide)

Frequency

Severity

Cause

List by value

REPORT EXAMPLE 3: A comparison of offshore pipeline losses in both the construction and operating phases in four different areas of the world. As this coverage is usually purchased on a limit rather than value basis, what is the industry experience of loss severity?

This shows where 90% of the losses reside OFFSHORE PIPELINE LOSSES BY CLAIM AMOUNT This shows where 90% of the losses reside

INFORMATION SOURCES: Willis records Willis dedicated research team located in Mumbai Loss Adjusters Insurers & Captives Historical data (London Master Energy Line Slip) The press (limited information available)

CONFIDENTIALITY: Guarantees have been given to information providers that only restricted information will be produced which means that: Names of Assureds are not revealed Names of contributors are not revealed Obvious information to aid identification such as name of facility or precise location are not revealed Access to the database is strictly controlled

SUBSCRIPTIONS: Price (on application) is for a multi-user annual licence for access via the internet. No additional software is required Subscriptions go towards maintaining and developing the database Without sufficient income the facility will be discontinued – it should be regarded as an energy insurance industry tool Subscribed to by oil companies, direct and reinsurance underwriters and major brokers

JUST ADDED: Additional fields showing Gulf of Mexico Area US Location Code (OEE only) Upstream, downstream or power Subcategory 2 (lower level description of property) The ability to generate and download custom reports based on up to 12 fields of your choice

DISCLAIMER: The entries in the database have been obtained from a variety of sources. Willis Limited does not accept any responsibility for the accuracy or completeness of the information contained therein.

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