FUMA- Doug Humberstone (LMA), Paul Miller (Berkley)
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Transcript of FUMA- Doug Humberstone (LMA), Paul Miller (Berkley)
Joint Rig Committee
SO, WHAT IS THIS “FUMA” THING THAT YOU
ARE HEARING ABOUT ???
Paul Millen
Underwriter , Berkley Offshore Underwriting Managers
Doug Humberstone
Underwriting and Claims Manager, Lloyd’s Market Association
on behalf of
MARIN 32nd JIP Week
26th March 2014
JOINT RIG COMMITTEE - What is it?
An elected body of Marine Energy 14
underwriters drawn from:
• the Lloyd’s Market Association
• the International Underwriting
Association.
Joint Rig Committee – Terms of Reference
A forum for the London Marine Energy Market which:
• Discusses common issues or concerns.
• Promotes the best principles and practice of Marine Energy Insurance
• Initiates projects or sub-groups where appropriate to address specific issues.
• Supports the LMA’s provision of advice, information and technical services to the Marine Energy Insurance Community.
• Communicates with Marine Energy Insurers on issues including the its ongoing work and that of its sub-committees and working parties.
A CORE PROPOSITION OF UPSTREAM ENERGY INSURERS
Marine Energy Insurers seek to understand , support and,
where possible, add value to their Assured’s existing
Risk Management and Risk Reduction processes.
HOW DO WE DO THIS?
• Through third-party application of defined Survey and Assessment processes
• For Example • Construction Marine Warranty Survey
• Construction Yard Audits
• Drilling Well Plan Review
• Drilling Rigs Move Surveys
• Vessels Towage Surveys
• Constructive and informative processes of mutual benefit
WHY WERE THESE PROCESSES CREATED?
• A wish to understand ever-changing technology / risk
profiles
• Enable Insurers to deliver better products
• A response to recent events
HOW WERE THEY CREATED?
Consultation between:
• The Joint Rig Committee
• Industry experts (third-party engineers / surveyors)
• Industry bodies / associations
To ensure they are:
• Reasonable
• Relevant
• Practical
• Value Adding
SO WHAT ABOUT MOORING INTEGRITY?
• Insurers had relied on Classification Societies and
Operators to ensure system integrity.
• The JRC mandated the Engineering Sub-committee to
investigate the need for & development of a formal
process for the assessment of Mooring Systems
WHAT HAD CHANGED?
Increased awareness that that the Asset Base is
• Increasing
In Numbers
In Size
In Value
In complexity
• Facing new environmental challenges
Ageing
WHAT HAD CHANGED?
Awareness of :
Increasing frequency of
• General Mooring System failures
• Premature failures
Increasing quantum of Insured Losses
WHAT HAD CHANGED?
2001 to 2011
• 23 documented mooring failures
• 8 of which were systems failures (multiple line
damage and drifting)
• Of these 4 with riser failure
• Suggests a systems failure rate of 3.0 x 10-3 , an
order of magnitude worse than industry (DNV)
guidelines
Source: OTC Paper 24025
WHAT HAD CHANGED?
Failure trends?
Analysis of recent incidents shows
• A ‘shallow’ U-curve
• High failure rates during early life
• Reduction towards mid-life
• Increasing end of life failures
(Source: OTC Paper 24181)
ONCE WE STARTED TO LOOK…
…we saw that we wanted to better understand the many
factors which can affect mooring systems
Not least
• Mooring Integrity Management Processes
• Operating Standards
AND…
Lifetime Extension Processes
Classification Societies
Uninspected ‘Desk Top’ class extensions
Inconsistency of Rules
Variable application of own rules
Variable Capability
UNDERWRITERS CONCLUSIONS
• There were gaps in our understanding
• Operating and Maintenance standards are variable
• Class is variable
• Be better informed…and promote risk reduction for
Insurers and Assureds alike.
• A formalised Assessment Process was the best way
forward
ESTABLISHING THE CORE VALUES OF THE NEW PROCESS
IT SHOULD BE:
• Inclusive and promote dialogue with assureds)
• Discretionary or voluntary
• Flexible / risk appropriate
• Relevant / standards-based
• An underwriting tool
• Value-adding for assureds
ESTABLISHING THE CORE VALUES OF THE NEW PROCESS
It should generally enhance understanding of the
• Various types of mooring systems and the differing
associated risk
• Various international codes for mooring system
design and operation , installation and integrity
management
• Lifetime Extension process
• Condition, operational experience and integrity
management of specific systems
• Suitability, pre-installation, of a specific system
HOW WAS IT DRAFTED?
We followed well-trodden , proven paths
A document structured consistently with other JRC survey
documents e.g. CAR MWS / Well Plan
• Guidance Notes
• Endorsement
• Code of Practice
• Workscopes
HOW WAS IT DRAFTED?
Consideration was given to known
• International Standards
• Design Codes
• Codes of Practice
• Operation Codes
• Integrity Management Systems
• Industry Best Practice
• Defined Safe Operating Limits
Drafting and Consultation
JRC
Oil & Gas UK (including Mooring Integrity
working group
3rd party Engineers
MWS
JRC Engineering Sub Committee
OUR THANKS TO…
The Oil & Gas UK Mooring Integrity Workgroup for their
engagement
Design
Installation
Root Cause Analysis
AND THEN…
The JRC Engineering Sub-Committee delivered
its process for
Floating Unit Mooring Assessment
“FUMA”
HOW SHOULD FUMA BE APPLIED?
Intended for use with Moored Floating Units OTHER THAN MODU’s
Application is Discretionary and/or Voluntary
There is an INITIAL SCREENING PROCESS (ISP) which may indicate FUMA is NOT REQUIRED
If ISP indicates need for FUMA application it is a ‘tiered’ process
‘Technical’ or ‘Physical’
‘Remote’ or ‘Attended’
How Should FUMA be applied?
•Technical; Remote; Desk top & Correspondence
•Audit based process Level One
•Technical; Attended; Onshore
•All level One
•Assessor attendance of assured’s mooring integrity management location Level Two (a)
•Technical; Attended; Onshore/Offshore
•Level One PLUS assessors attendance of assured’s mooring integrity management location
Level Two (b)
• Inspection / Engineering
•Visual inspection (but not without prior or simultaneous application of TECHNICAL: Levels 1 and 2a)
Level Three
• Inspection / Engineering
•Enhanced visual inspection and characterisation (but not without prior or simultaneous application of TECHNICAL: Levels 1 and 2a and INSPECTION /ENGINEERING Level 3
Level Five
HOW SHOULD FUMA BE APPLIED?
Mooring Assessors ; Selection and Appointment
• Any party(ies) on which Insurers and Assureds may mutually agree
• Insurers to propose (wherever possible) a panel of potential Assessors
• Assured to select its preferred Assessor from the proposed panel
Assessors may include
• An Insurer’s internal engineering capability
• A third-party e.g. a Marine Warranty Surveyor or a specialist engineer
AND THEN…
• The workscope is applied
• The Assessor delivers its findings to the Assured and
the Insurers
FUMA & OTHER JRC SURVEY PROCESSES
A VITAL DIFFERENCE
FUMA IS NOT A WARRANTY DOCUMENT
LIKE JRC CAR MWS / Well Plan Review
FUMA provides for Assessors to make recommendations.
UNLIKE JRC CAR MWS / Well Plan Review
FUMA does NOT make provision for Assessors Recommendations to automatically become Warranties, breaches of which might invalidate coverage.
Conversion of Assessors Recommendations to Conditions, Subjectivities or Warranties requires action by an Insurer.
And Finally…
We seek to UNDERSTAND but NOT to DICTATE
We believe our Risk Survey / Assessment
processes add value in other categories of risk
We believe the same can be true for Mooring
System Integrity Management