IMIA Conference Munich, September 2017...Alvaro Jaureguizar Cervera Loss Adjuster – Engineering &...

IMIA ConferenceMunich, September 2017

WORKING GROUP PAPER 103(17)

DIESEL ENGINES1

IMIA WORKING GROUP PAPER 103(17) - DIESEL ENGINES

Working Group Members

Christina Hall Class Underwriter, Construction & Engineering

Alvaro Jaureguizar Cervera Loss Adjuster – Engineering & Construction RTS International Loss Adjusters

Christian Kolbe Loss Adjuster – Power & Construction Miller International

Dave Kent UK Trading & Underwriting Manager Aviva

Ali Arisoy Assistant Manager, Engineering & Liability VHV Reasurans AS

Sponsor: Stephan Lammle, Munich Re

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Agenda

1. Introduction

2. The Technology

3. Risk Management / Risk Assessment

4. Claims / Loss Experience

5. Underwriting Considerations / Insurance Aspects

6. Future Developments

7. Conclusion

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1. Introduction

The Scope of the paper concentrates on larger scale industrial Diesel Engines used mainly in power production, either as prime power supply or for standby power

However

It is noted that Diesel Engine technology is part of the reciprocating engine family of technologies - also commonly known as Internal Combustion Engines

Diesel Engines were first patented and built in the 1890’s

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1. Introduction

From this To this(circa 1902) (2016)

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2. The Technology

What are the component parts of a Diesel Engine?

How do they work?

What are they used for?Who makes them?

Why diesel?

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2. The Technology – Main components

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Bedplate &Crankshaft

Cylinder liner

Camshaft

Piston

Fuel Injection system

Cylinder / Engine Block


2. The Technology – How it works

STRUCTURAL PARTS RUNNING PARTS

Provide support for running parts Converts power of combustion into mechanical work

Keeps running parts in position / line

Form a protective casing

Provides passages for cooling water, lube etc

Support for auxiliaries

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2. The Technology – Who / What / Why

WHO WHAT WHY

MAN Diesel & Turbo Transportation Robust and reliable

Wӓrtsilӓ Power Generation Higher Energy Density

Hyundai Heavy Industries Emergency Power Supply Relatively low up-front costs

Mitsubishi Heavy Industries Combined Heat & Power installations Rapid start-up

Caterpillar Quick ramping to full load

Cummins Flexible load response

Operate in challenging environments

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Internal Exposures

Physical Environment

Socio-Economic &

Political

Maintenance

Operator Training & Experience



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Lead Times of Major

Components

Fuel Quality

Control Systems Fire

Protections & Fire Fighting

Availability & Performance Guarantees

Lubrication

Service Agreements



‘Operational failure is the most recurrent cause of damage . . . 50% of cases’

Followed by: External factors – 30%

Manufacturing failures – 20%

‘elements most prone to failure . . . are cylinder linings, pistons, connecting rods, crankshafts and turbo-compressors’

Accounting for approx. 80% of all claims

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What happens when Diesel Engines fail?

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Decision

What

Who

Unknown

Where



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Environmental

Wordings & Clauses

Probable Maximum Loss

Exclusions

Site surveys Health & Safety


6. Future Developments

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For investors, the drive is towards:

• Greater efficiency

• Longer overhaul intervals

• Lower maintenance costs

• Reduced emissions

For Insurers, the drive is towards:

• Fewer losses

• Less costly losses

• Better Risk Management

• Greater understanding of exposure


7. ConclusionIs there a future for Diesel Engines?

The Working Group believes, yes, diesel engines will be around for a while longer!

ReasonsOverall, the advantages outweigh the disadvantages, for example:* Can work in difficult environments (high altitude, variable ambient temperatures)* Flexible peaking and intermediate power generation (covering supply shortfall in wind & solar power)* Good stand-alone power supply for remote locations * Higher electrical efficiency than gas turbines* Robust, relatively simple, relatively low up-front costs and highly reliable

ALWAYS PROVIDED THAT THE EQUIPMENT IS INSTALLED AND MAINTAINED PROPERLY

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THANK YOU!

ANY QUESTIONS?

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IMIA Conference Munich, September 2017...Alvaro Jaureguizar Cervera Loss Adjuster – Engineering &...

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