Underwriting & Rating of oil & gas insurance risks

Peter Haenni

• 1 min read
Underwriting & Rating of oil & gas insurance risks
SIPOC process map auto generated by the ProcessHorizon web app

This SIPOC process model maps the six key components of effective underwriting and rating of oil and gas insurance risks, tailored to the complexities of this sector.

1. Risk Identification and Categorization - Analyze operations, hazards, and location risks - Identify potential risks by asset and activity

2. Data-Driven Risk Rating Models - Develop or refine statistical and machine-learning risk models - Incorporate relevant data into model calibration

3. Engineering Reviews and On-site Surveys - Conduct physical inspections and evaluate compliance with safety standards - Review blowout preventers (BOPs), safety systems, integrity of critical infrastructure

4. Safety Culture and Human Factors Assessment - Interview staff, audit training programs, assess leadership’s safety mindset - Evaluate contractor management, fatigue policies, and incident response

5. Regulatory Compliance and Legal Risk - Review operations against applicable local/international laws - Assess licenses, permits, and historical violations

6. Scenario and Stress Testing - Run simulations for blowouts, extreme weather, multi-jurisdiction liabilities - Integrate stochastic models with operational simulations

Modern Underwriting Tools and Approaches

  • AI & Machine Learning: Analyze real-time sensor data for predictive maintenance and early warning signs
  • Drones & Remote Monitoring: For facility inspection and damage assessment
  • Blockchain for Documentation: Tamper-proof logging of inspections, maintenance, and incident reports

Effective underwriting of oil and gas risks, particularly in offshore environments, must go beyond historical loss data and consider dynamic, systemic, and human factors. Deepwater Horizon highlighted the need for deeper technical reviews, a focus on organizational culture, and stronger cross-party accountability. Today, integrating engineering analysis, actuarial modeling, and behavioral risk insights is essential for accurate underwriting and sustainable risk transfer.

Using the following link you can access this sandbox SIPOC model in the ProcessHorizon web app and adapt it to your needs (easy customizing) and export or print the automagically created visual AllinOne SIPOC map as a PDF document or share it with your peers: https://app.processhorizon.com/enterprises/dL3jM7pdXNMmarLiyQpZk5E8/frontend