Themed, ‘Riding the winds of change’, the Conference provided a platform for the energy industry players to discuss and debate market issues in Asia including Upstream and Downstream risks and solutions, geopolitical risks, oil geopolitics and its challenges to Chinese companies, as well as employee risks faced by energy companies and insurance companies. Participants also exchanged views on interdisciplinary topics such as outlook of the energy insurance market, accident claims, cyber risks, and how new technologies and innovation will impact the energy sector.
One of the key discussions was the demand for clean energy such as LNG and its growth in China as the Chinese government is actively encouraging its rapid development. This has resulted in the growth of the energy sector and more emerging energy companies in China.
In 2018, China's LNG imports reached 53 million tons, with a 40 percent year-on-year increase, making China the world's second largest importer after Japan. With the trend towards clean and low-carbon energy continuing, China may become the largest importer in 2019. Strong demand for natural gas will have a major impact on China's energy industry landscape. It is foreseeable that China will increase its efforts in natural gas resource investment and infrastructure construction. Henceforth, it is important for Chinese companies to be able to identify the risks from project feasibility to operation, and the corresponding risk transfer solutions.
In addition, project such as the Belt and Road Initiative (BRI) brings both overseas investment opportunities and risks for Chinese companies. Recent developments in geopolitics have impacted companies investing overseas and their risks on a global scale with major losses that sometimes attracted widespread attention.
Wise Xu, Head of Corporate Risk & Broking, China, Willis Towers Watson said, “With the BRI progressing, risks faced by Chinese companies in the process of going global are diversified and transforming. Companies are seeking more knowledge to understand the evolving risk, and effective risk management tools that can help them manage and mitigate their risks. These have presented new requirements and adjustments for the energy insurance market. In this changing business environment, we are supporting Chinese energy companies, petroleum engineering and drilling service enterprises with innovative solutions to turn these risks into opportunities."
Since the implementation of the BRI in the last six years, Chinese companies have directly invested more than US$90 billion in countries along the route, including a large number of energy infrastructure construction projects. At the same time, some areas have undergone turbulent tensions in recent years due to geopolitical factors. Speakers at the conference presented in-depth analysis and proposed solutions to address the challenges arising from investment, project construction and operation of Chinese enterprises, as well as various people risks issues faced by overseas employees and counter-measures that can be taken.
George Nassaouati, Head of Natural Resources Asia at Willis Towers Watson, added “The international energy insurance markets remain volatile with continuous firming taking place. This is affecting budgets of energy companies on premium spent and the level of protection they can get through risk transfer. This firming is definitely slower in China where Chinese energy companies are still enjoying better insurance terms than their counterparts in the international market. With the BRI, energy companies can continue to take advantage of the China insurance market rates, terms and conditions. Furthermore, as part of the Chinese insurance market development, Chinese insurers should also look to attract international insurance buyers. The benefits go beyond better rates, terms and conditions as the buyers will enjoy good security, and most importantly, stability in their buying pattern through a stable market which is less susceptible to volatility. We will continue to work with Chinese insurers to optimise service levels and drive efficiency in claims settlement.”
The Asia Energy Conference this year brought together 170 participants including corporate risk managers, adjusters and insurers from leading oil refining and chemical companies, engineering companies, banks, domestic and international insurance companies across Asia to discuss trends and changes transforming the energy industry, and business opportunities in the region.
About Willis Towers Watson
Willis Towers Watson is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance.