Mactavish

Drax Power Limited owns and operates Drax Power Station, the largest, cleanest and most efficient coal-fired power station in the UK. The station meets 7% of The UK’s electricity needs and is nearly twice as large as the next biggest coal-fired power station in Britain.

Under a new management team, Drax Power has seen a dramatic improvement in its financial performance over the last few years, which has allowed for an impressive and wide-reaching investment in risk management. Having facilitated direct dialogue between senior management at Drax and both Allianz Global Corporate & Specialty and Zurich Global Corporate, Mactavish undertook a due diligence exercise focussed on providing a deeper and more rigorous understanding of the company’s Business Interruption exposure.

This dual dialogue and disclosure strategy allowed both insurers to challenge historic and inaccurate perceptions of the exposure and, consequently, both Allianz and Zurich were able to support Drax Power’s wider risk mitigation strategy with considerably increased amounts of PDBI capacity at significantly reduced rates.

“In 2007, we undertook a comprehensive review of our key PDBI policy with our brokers, Marsh. Mactavish complemented this review by bringing us into contact with Allianz, who had not previously featured on the programme, and Zurich, who held just an excess line. Mactavish helped us to communicate our strategy and investment in risk management and demonstrate that the risk had improved materially since the last review. As a result, Allianz provided a sizeable line, Zurich increased their commitment substantially and we were able to achieve significant premium savings and improvements to the policy as a result.”

Andrew Koss, Treasurer, Drax Power Limited.