The Hindu Business Line : ONGC renews offshore package insurance at reduced premium

ONGC has finalised the renewal of its Offshore Package Insurance Policy for insured value of $11,000 million for policy year 2005-2006, beginning May 11.

The insurance premium at $19.95 million is 17.19 per cent lower than the premium for the previous year on like-to-like basis; in rupee terms the reduction is 19.12 per cent.

Over the last three years, ONGC has achieved significant reductions in the premium, which was $49.97 million during policy year 2002-03.

These reductions could be achieved due to sustained focus on safe operating practices and facility inspection and certification by the management, coupled with four consecutive years of loss/claim-free operations, a company release said.

The Risk Surveyors of the Lead Underwriters rated ONGC risk as `Acceptable' for the second consecutive year, after rigorous inspection of ONGC's biggest offshore process complex and a detailed review of the operating, maintenance and safety practices in February 2005.

The 2005-06 Policy was lead-insured through United India Insurance, selected out of the four nationalised insurance companies.

Mr N. Rangachary, former Chairman, IRDA, advised the ONGC management on the entire process.

As much as 95 per cent of ONGC's offshore risk is reinsured overseas, the company said.

For the 2005-06 renewal, United India had sought competitive quotes from selected international broking firms of repute.

A team of ONGC executives led by Mr R.S. Sharma, Director (Finance), along with the United India team led by Mr M.K. Garg, CMD, made presentations to the selected brokers and underwriters on ONGC's risk profile.

The best bid was accepted and the risk was placed at $19.95 million plus service tax.

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