Fractures-in-gas-turbines-cause-insurers-alarm

GE7FA/9FAFracturesingasturbinescauseinsur(2008-12-2511:48:16)转载▼ThisarticalwaspublisedinBusinessInsurancedd18June2007.ItgivesusageneralpicutreaboutrecentproblemsoccurredinGE7FAand9FAgasturbine.WehavemanysuchgasturbineunitsinChina.Wouldsaytheyareallinourinsuranceportofolio.ThisarticlewillgiveinsurersagoodremindingonhowweshouldunderwritesuchriskinChinamarket.FracturesingasturbinescauseinsurersalarmStacyShapiroInsurershavebecomecautiousaboutunderwritingpowergenerationfacilitiesthatusegasturbinesfollowingaslewofrecentcracksdiscoveredinthecompressorpartoftheengines,sourcessaid.Althoughtheyarenotincreasingpremiums,underwritersaretypicallyincreasingthetimedeductiblesbuyersmustbearandgettingtechnicalexpertstoinspectthegasturbinesforanyproblems,expertsadded.UnderwritersarecallingintechnicalengineerstoexaminethegasturbinesinlightofrecentcracksbeingdiscoveredinatleastadozenGeneralElectric7FAand9FAgascombustionturbinescostingbetween$180million(€135.4million)and$204million(€153.5million)torepair.Thereisconcernthatthisisjustthetipoftheicebergastherearemorethan1,000similarGEgasturbinesworldwide,ofwhich300to400mayhavethesameproblem.AspokesmanforFairfield,Connecticut-basedGeneralElectricCo.didnotreturnphonecalls.Underwritersalsoareincreasingtheirtimedeductiblestorepairtheseandothergasturbinesasthereisaworrythatthebusinessinterruptionlossescouldcosthundredsofmillionsofdollarsanddwarfthecostofrepairclaims.Whereasitusedtotakeaminimumof60daystorepair,nowittakesaminimumof75daysandunderwritersareincludingtimedeductiblesintheirbusinessinterruptionpoliciestoreflectthis.Brokersarealsoconcernedthattherewillbeashortageofsparestorepairturbines,whichwouldextendthedowntimeandhencethebusinessinterruptionclaims.Gonearethedayswhen[gasturbinepowerplants]canjustbeplacedinthepropertymarket.Thesolutionhastobefoundfromthespecialistenergysectorandthosemarketswillwantdetailedinformation—thespecificationoftheturbine,theoperatingregime,theplantinformation,thelong—termserviceagreementthatisavailable,saidGrahamKnight,globalmarketsinternationalexecutivedirectoratLondon-basedbrokerWillisGroupHoldingsLtd.TimeshiftWhatwillhappen,Ithink,asaresultofthediminishingsparesproblems,particularlyasaresultofthecompressorfailures,isthatthemarketwillbegintoinsistuponlongerwaitingperiodsfortheinsuredtoretain,hesaid.So,whereaspreviouslyitmayhavebeena45-daywaitingperiodor60days,thatmaybepushedoutto90daysor120days,dependingonaclient'sriskprofileandwhethertheyhaveaccesstosparesoranothercompressor.Demandforriskengineeringservicesinthepowersectorisontheincrease,addedSteveRichardson,utilityengineeratWillis.Troubleswithgasturbineshavebeenongoingsincetheirorderspeakedinthelate1990sandearly2000s,accordingtoaSwissReinsuranceCo.reportonInsuranceAspectsofGasTurbomachines.Changesinthepowergenerationmarketsuchasderegulationandprivatizationmeantthatgas-turbinefacilitieslookedmoreattractivethantraditionalfossil-fuelsteamturbineplants,itsaid.Aftergoingintocommercialoperation,however,theseheavyframegasturbinesstartedtoexperienceanumberofproblems.Theseincludedturbinebladefailuresandcompressordisccracking,Thisnewtechnologyledtotheinsuranceindustrysufferinganincreasingnumberofsubstantiallossesinvolvingbothnewandupgradedmachinesofallmajorsuppliers,saidthe2003SwissRereport.FrenchpowergenerationcompanyALSTOMsufferedhugelossesasaresultofrepairingthesemachines.AsofitsfiscalyearendingMarch31,2003,ALSTOMreachedcommercialsettlementson61ofthe80unitsofGT24/GT26gasturbinessold.TheresidualfinancialimpacttoimplementtechnicalimprovementstotheseturbineswasestimatedbythecompanyinfiscalyearendingMarch31,2003tobee1.53billion.ByfiscalyearendingMarch31,2006,76oftheseunitswerestillincommercialoperation,accordingtothecompany'saccounts.ALSTOMhadreachedcommercialsettlementsforall76unitsandalllitigationandarbitrationhadbeenresolved.Whilemanufacturershavebeentryingtoresolvetheissues,insuranceclaimshavebeenrising.Infact,whilemostoftheinsuranceworldwasfocusedonlossesfromHurricaneKatrinain2005,utilityunderwritersweredealingwiththeunderlyingattritionallossesfromthesegasturbinefailures,saidMr.KnightofWillis.In2005,underwriterssawincreasingnumberoffailures,particularlyinthecompressorpartofthegasturbine,saidMr.Knight.Thatissuehasnotbeenresolvedtodateandtherehavebeenaseriesoftheseexceeding20globally,Ibelieve.InterruptionThoughtheinsurancelosscouldbebetween$20million(€15million)or$30million(€22.6million)ifoneofthesecompressorsfails,thebusinessinterruptionlossescouldfaroutweigh(that)astheleadtimetofindtheparttofixthefaultisbecomingthatmuchgreaterMr.Knightadded.Businessinterruptionlossesvaryinmagnitude,butwhereasthedowntimeusedtobebetweenthreeandsixmonths,nowit'sbetweensixand12months,saidMr.Knight.Incrementalchangestomakemachinesmoreefficientalsocauseconcern.Thisisaproblemforinsurersbecausetheydon'tknowwhetherthetechnologytheirengineersareexaminingisprovenorunproven.ThisisparticularlytrueforGE7FAand9FAgascombustionturbines.GEhasbeenstrugglingwithits7/9FAgasturbineenginessincetheywerefirstconstructed,saidanotherengineerwhodidn