Swift claims management reduces costs

Motor liability may involve a whole bridge

The risk

Unlimited covers are not only a theoretical threat. Dr. Alfons Maier reports
26 August 2004: Reports of a serious accident on the A4 autobahn are being shown on the evening news. It appears that, after colliding with a car, a tanker truck has broken through crash barriers on the Wiehl Valley Bridge and plunged some 25 metres. The force of the impact caused the 33,000 litres of fuel on board to burst into flames, and the driver was killed instantly. The full extent of the damage is not yet clear.

30 August 2004: The main third-party liability insurer affected reports the loss to us and informs us that the motor policy in question provides unlimited liability for property damage. Media reports on the accident are dramatic. Temperatures of up to 1,200 °C have had a devastating impact on the more than 700-metre-long bridge. It is feared that one of the piers is irreparably damaged. The bridge may even be a total loss if for structural reasons the pier cannot be replaced. It would have to be dismantled section by section. The whole operation, including rebuilding, could possibly take around four years. As the A4 is one of the main motorways serving Cologne, consequential costs would be immense. In the worst possible case, the loss could run to a three-digit-million figure.

Opportunity and value

Reacting quickly and competently for the best possible settlement of the claim
1 September 2004: I am a senior claims engineer and member of the Munich Re team investigating and analysing this major loss. We have been liaising with the third-party liability insurer for the last 48 hours, comparing notes and offering our support with any initial measures that have to be taken. What we urgently need now is a more accurate estimate of the loss. In order to get a better picture, I call in David McGhie, an external bridge construction specialist who has carried out other investigations for us and works closely with the primary insurer's engineering expert.

2 September 2004: Together with representatives of the North Rhine-Westphalian Highways Agency and the primary insurer, David and I visit the site to inspect the damage. The scene is catastrophic: broken crash barriers, huge scorch marks on the bridge and in the area surrounding the accident, and tons of contaminated earth. We analyse scorch marks, look for signs of cracking or spalling concrete and try to get some indication of stability, for example by searching for distortions. Our impression is that, despite the extent of the damage to the bridge, it can be repaired. Even the pier directly affected is not so badly damaged that it needs to be demolished. Working closely with the primary insurer and the engineering expert, we plan our next steps.

7 September 2004: All of the parties involved (the third-party liability insurer, the engineering expert, the Highways Agency and the reinsurer) meet in Cologne to discuss the claim. To our great relief, it is now certain that the bridge will not need to be demolished. However, further expert opinions are required. As the bridge was already scheduled for maintenance, the expenditure for this will of course have to be offset against the repair costs. Negotiations are not going to be easy. Together with the primary insurer's engineering experts, we succeed in convincing the Highways Agency and its representatives that the damage can be repaired by arguing that the busy motorway bridge near Cologne need not be closed to traffic for several years, which would be a major advantage for the public.

9 September 2004: It is now certain that the loss amount will be only a fraction of the nine-figure sum originally feared. Munich Re's share of the loss is approximately 40%.

Support and assistance with major losses like the Wiehl Valley Bridge are part and parcel of our service. Clients value our professional competence as well as our ability to act swiftly on site and to consult with everyone concerned in order to settle the claim as favourably as possible.

Loss events such as the accident on the Wiehl Valley Bridge can also be of significance for the market as a whole. It is abundantly clear from this particular incident that unlimited covers for property losses in motor liability insurance are more than just a theoretical risk for the insurance industry. Exposures of this nature prove that the case for introducing limits on liability is justified.