Infrastructure Insurance - The best way to approach the insurance of a large project
Generally perceived as the greatest growth opportunity in sub-Saharan Africa, infrastructure development is a powerful force in today’s global economy. Infrastructure projects are complex, often large and long-term undertakings. The risks inherent in this sector can be challenging and have far reaching consequences for every stakeholder throughout the project lifecycle.
“The size of major infrastructure projects requires a skilled broker with the necessary resources to address multiple issues, as they can be highly influenced and affected by geopolitical risks, economic risks, country risks, political violence and terrorism” says Peter Cook, Head of Infrastructure Insurance at Marsh Africa.
These types of risk can adversely impact specific assets, capital structure and volatility of cash flows needed to service fixed obligations and underpin yield over the period of the infrastructure investment.
Approaching the insurance of such complex risks requires the expertise of a skilled and well recognised broker and risk services firm with a diverse and dedicated team of experts.
A global broker such as Marsh has the capability and expertise of mitigating large infrastructure project risks on behalf of their clients and provides diverse industry specific, insurance product and risk advisory capabilities.
Through advisory and insurance placement expertise, Marsh helps clients identify, quantify, allocate and mitigate risks associated with large infrastructure projects. The global risk services firm achieves this through the specialist teams within Marsh that have risk insurance solutions and expertise for large infrastructure projects that cover areas such as the professional risks inherent in project development, project construction including delay in start-up and Marine transit, surety risk, environmental risk as well as political risk.
Peter adds that “clients handling large infrastructure projects need a dedicated risk service provider and broker who will be there from the development, design, construction and handover to commercial operation and maintenance of a project”.
Marsh manages the complexities of major infrastructure projects through strategic risk management advice, due diligence and transactional placement services throughout the entire lifecycle of a large infrastructure project, assisting clients throughout the negotiation and execution of contractual structure, design and build, operations, maintenance and refurbishment by addressing the complex risk issues associated with the financing and development of projects.
According to Peter, insurance and risk management of large infrastructure projects requires need a dedicated risk services and skills base to provide world-class risk advisory and transactional insurance service to the infrastructure sector.
With that said, Marsh has a truly global capability to serve the needs of large infrastructure projects and investments by aligning its 500 colleagues from dedicated Industry practices focused on the key sectors of transportation, energy, utilities, telecommunications, power generation and social infrastructure.
Having dealt with large infrastructure projects in Africa, with clients varied across government, infrastructure funds, independent power producers and public private partnerships, the firm’s expertise in handling large infrastructure projects remains trusted across Africa and globally. Marsh is able discuss and formulate strategies aimed at reducing the volatility inherent in large infrastructure projects.
Peter also states that “the Marsh approach to infrastructure risk management is specific and responds rapidly to stakeholders and industry changes”. This rich pool of expertise continues to set the global standards in dealing with the complexity of large infrastructure projects.
Over and above dealing with key risk issues in infrastructure projects, Marsh understands the value of protecting the interests of the public sector (identifying all risk exposures relative to a project to enable optimum transfer of risk), equity investor needs (secure financing required to protect future revenue streams of an infrastructure project) as well as taking full responsibility through helping clients meet their infrastructure projects objectives and deliverables.
