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Gaps in Petrochemical Losses

On 17 April, 2019 Mamoon Alyah presented to a number of delegates at the OEC Dubai on major and complex insurance losses at Petrochemical plants. The conference took place at The Ritz Carlton DIFC, in the United Arab Emirates.

Mr. Alyah shared statistics on the rapidly growing sector of petrochemical manufacturing around the world in general and in the MENA region specifically. He explained how petrochemicals and polymers are expected to grow to 52% of the 220 billion US dollars, of the overall chemicals market in the Middle East by 2020. 

He also highlighted major investments by countries like the UAE and KSA in petrochemical manufacturing as a way to diversify income away from crude oil. 

Mr. Alyah cited the rapid growth in the industry, especially in the Middle East, as one of many challenges facing insurers of that sector. Most importantly, Mr. Alyah explained that gaps exist between assessing risks at time of underwriting and managing losses and resulting claims.

During the presentation, Mr. Alyah shared a number of high-profile incidents at petrochemical plants in the USA, Europe and other parts of the world. For each case, the delegates participated in extracting lessons that could be learned, especially by insurers dealing with these types of claims in these types of risks. 

In his presentation, Mr. Alyah explained that hazardous materials, operators, mechanical systems failures and management systems failures were the most identifiable causes of most incidents. He went through each of these risks and discussed how to assess them and investigate their impact after the loss.

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