The Hindu Business Line : ONGC maintains offshore cover at $29 m

ONGC has been able to maintain the insurance premium for 2008-09 at almost the same gross premium as last year despite an overall upward revision in the insured asset value.

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New Delhi, May 9 ONGC has placed its Offshore Package Insurance Policy at an annual gross premium of approximately $29.025 million, exclusive of service tax.

According to a statement issued by the company, “ONGC has been able to maintain the insurance premium of the policy for 2008-09 (May 11, 2008 to May 10, 2009) at almost the same gross premium as last year despite an overall upward revision of around 32 per cent in the insured asset value, from $15.89 billion to $21 billion.”

The renewal programme was managed by United India Insurance Company (UIIC), that led the consortium of nationalised insurance companies, comprising UIIC, New India Assurance, Oriental Insurance and National Insurance Company.

ONGC policy is reinsurance-driven with the major portion of the risk being reinsured in international reinsurance market, with risk retention in the Indian insurance market being 10-13 per cent, the company said.

UIIC, after following their internal procedures to shortlist the brokers, invited competitive quotes from them, the statement said. The Risk Survey Report issued by Paris Re, the underwriters for policy year 2007-08, in respect of risk survey done by them along with 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 UIIC and quote of Benefield/KM Dastur emerged the lowest.

ONGC’s major critical offshore operational assets – production complexes, well-head platforms, pipelines, trunk lines, drilling rigs, multipurpose support vessels, specialised 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 $750 million for any one accident/one occurrence, the statement said.