Risky business – the engineers who work for insurers

Insurance broker CJ Coleman has recently joined the CIBSE Patrons – the Institution’s group of ‘corporate supporters’. Ewen Rose ventured into the City of London to meet account executive Christine Shrimpton and director Mark Aspinall to find out why

Engineers have, traditionally, looked on financial professions such as accountancy and insurance with some suspicion. Technical people like to think they don’t really need to rub shoulders with ‘City types’. Yet, in reality, very few buildings or major infrastructure projects would have got very far without somebody willing to handle the finances or underwrite the considerable commercial and legal risks.

Yet it is still rare to see engineers and City dwellers sitting at the same table or attending the same meetings. However, Christine Shrimpton, who has already represented CJ Coleman at a number of CIBSE Patrons meetings, is an exception – as she is both.

CJ Coleman was founded in 1973, is located in the bustling heart of the City of London, and has close links to the world’s most famous insurance market Lloyd’s. As an account executive, Shrimpton specialises in insurance and risk management for architecture and engineering firms, covering projects and contracted liquidated damages.

She has a degree in building services engineering from London South Bank University and was a practicing engineer for almost a decade with various industry luminaries – she was latterly based in Doha as a principal engineer.

Why insurance?

‘Brokers like us have a key role to play in improving the cost performance of engineering clients,’ she says. ‘Contracts are getting bigger and bigger, which means companies are exposed to ever higher levels of risk. Managing that risk is a huge part of engineering these days and it is comforting for clients to have someone involved who understands what they are trying to achieve. ‘[Because of my background in engineering] I can demystify the insurance business for engineers and help them with their contracts, pointing out the key sections that impact on their risk.’

Christine Shrimpton

Shrimpton is a regular visitor to the Lloyd’s Building – a short walk from CJ Coleman’s headquarters in The Minories– where she negotiates with the insurance underwriters, many of whom also focus on the engineering, construction and energy projects that have become a CJ Coleman speciality. Although she has been in the insurance business for less than two years, she already knows which underwriters are most likely to help her spread the risk on behalf of clients.

Sitting across from the famous Lloyd’s ‘boxes’, and negotiating multi-million pound risk placements is a worthwhile and stimulating occupation for an engineer, Shrimpton believes, because it means ‘complex and important’ projects can be built.

She encouraged her employer to become a CIBSE Patron because she saw it as an opportunity to spread the word about the importance of insurance in construction and to improve ‘collaboration and knowledge sharing’ between engineering and finance.

‘Engineering presents particular risks from an insurance perspective because people do make mistakes and things go wrong,’ says the man who recruited her to the business, director Mark Aspinall. ‘Relationships are terribly important and we wanted someone with practical experience – we already knew Christine and realised she would be ideal.’

‘It’s very useful to have an engineer on the team because they understand the nuances of a project and how contracts work in the field,’ adds the insurance market veteran.

Infrastructure projects are notoriously complex, with many parties involved, so settling claims can take some unravelling. However, one thing Aspinall and Shrimpton stress is that a big part of their job is to steer clients away from the ‘pitfalls’ before entering into contracts because, ultimately, ‘nobody wants insurance claims’.

‘It is commercial suicide to take on projects with people who are intent on taking advantage at the end of the project, but we know people still do it,’ says Aspinall. ‘You must aim for collaborative relationships and we have a role in helping people make the right choices. However, if you are a bad contractor you are going to suffer insurance claims.’

Technology risks

The nature of construction is changing as technology plays an increasingly influential role. CJ Coleman is keen to provide ‘bespoke insurance solutions’, based on its engineering knowledge, which reflect the growing use of methods such as BIM and off-site fabrication, because these are gradually shifting the industry’s risk profile.

For example, cyber criminals are a threat to BIM models because a hacker can access information in the model – a message that came through all too clearly at the CIBSE Building Performance Conference. If data gets corrupted as a result, that could have serious implications for the project and, ultimately, result in an insurance claim.

Engineering presents particular risks from an insurance perspective because people do make mistakes and things go wrong
– Mark Aspinall

So, as well as engineers, the insurance industry is recruiting IT specialists to give them a technical edge. The ability to understand the way insurance works and the technical aspects of risk will prove increasingly valuable, Shrimpton believes.

‘We have already seen instances where HVAC controls have been used by hackers to access sensitive and valuable commercial data,’ she says. ‘Cyber terrorists have made repeated attempts to interrupt power supplies – it is a big worry. We need people who can see where the threats are coming from so we can set up proper protection.’

The specialist in the insurance field is going to become increasingly common. As Shrimpton puts it: ‘I am not losing my engineering skills; I am applying them in a different way and sharing knowledge between different parts of the supply chain. I think my biggest contribution is being able to discuss the ‘what if’ scenarios with clients so they are prepared if things go wrong.’

  • CJ Coleman and legal firm Simmons & Simmons will be hosting a special session on the management of risks related to BIM, for CIBSE Patrons members and guests, on 20 January in the City of London.
    Issues covered include: ownership of BIM; data management concerns; and cyber security. Email cbrown@cibse.org