Using Geospatial Analysis for Energy Network Assessment in EigenPrism
Understanding network relationships between energy suppliers, distributors, and buyers is fundamental to the timely and accurate assessment and underwriting of loss of production income (LOPI), business interruption (BI) and contingent business interruption (CBI) risk.
EigenRisk works with several energy clients and brokers that need to understand values and risks associated with upstream and downstream relationships. These assessments necessarily encompass all elements of the energy supply and distribution network – from offshore platform operations to terminals, refinery, and processing and ultimately distribution and transportation to commercial customers and retail outlets.
By mapping the network geospatially risk managers, brokers, and underwriters can obtain a clear and full view of this network of relationships along with the various potential exposures to business interruption and business interdependency risk.
Product flowlines capture relationships between assets, relationship types, such as: shipping vs. pipeline distribution; product, including crude oil vs. natural gas; volume; estimated sales contribution; capacity and unit.
This type of actionable analytics enables risk managers and brokers to negotiate limits and pricing more effectively for a complex exposure that is difficult to underwrite, and price given the scarcity of data and tools.
In addition, the process of mapping networks helps risk managers and brokers in all aspects of their planning to address a wide range of potential catastrophic events, such as man-made explosions and natural hazards including hurricanes.
Carefully constructed simulations of potential disasters and other large-scale loss events helps to quantify exposures throughout the network – from upstream operations, such as oil platforms to storage terminals, as well as downstream processing and distribution networks.
Specifically, these what-if event loss simulations can identify the impacted product, transportation mode, exposed sales contribution, volume, etc. They can also help assess critical exposures where alternatives may be available (e.g., re-routing offshore production to different hubs, using alternative storage capacity).
Furthermore, they can also support real-time pre- and post-loss assessments for major natural catastrophes such as hurricanes. During these events, shutdowns often occur even if there is no direct physical damage.
EigenPrism for Energy also has tools for risk managers, brokers, and underwriters to run exposure and accumulation analysis, financial modeling, natural hazard assessments as well as to generate real-time alerts for any or all owned companies in the network as well as suppliers, distributors, and customers.