Safeti Financial makes it possible to extend your traditional QRA to support decisions impacting directly on the bottom-line of your business. The business risks inherent in an operation can now be demonstrated, as can options for reducing these risks.

The ‘Q’ of QRA need not be fatalities, but could equally be effects on the environment, downtime or cost. By quantifying impacts on people, operations or assets, analysts are better able to estimate the costs of incidents in terms of downtime, asset damage, personal injury and loss of life, brand damage, environmental clean-up and so on.

By taking the ‘best’ of process QRA and some of the financial models and methodologies used when performing RBI, we have developed an approach for demonstrating the broader risks associated with process plant operation in financial terms. By looking at different operational scenarios and cost mitigation methods, it becomes relatively easy to demonstrate how business risks can be reduced, particularly with respect to improved understanding of dealing with insurable risks.

Over the past 30 years, there have been a number of high-profile accidents resulting in large numbers of fatalities and injuries (Flixborough 1974, Bhopal 1984, Piper Alpha 1988, Enschede 2000, Toulouse 2001, Fluxys 2004 and Texas City 2005). This has driven legislation which has generally been focused on reducing the risk of fatalities and injuries, and rightly so. As a result, the industry is in good shape from the point of view of safety.

However, in this same period there have been many high-profile accidents with few fatalities and injuries, but resulting in enormous cost to the operator and the environment. Companies have suffered significant financial losses, and entire countries have seen major disruption from single incidents involving relatively small direct asset loss. Examples include the Exxon Valdez oil spill in 1989, the release of dioxin at Seveso in 1976, and the gas explosion at Esso’s Longford liquefied petroleum gas processing plant in Australia in 1998.

In recent years, focus has moved from improved safety and compliance with legislation to a regime where companies need to look at improvements delivering benefits directly to their bottom line. In today’s competitive business environment, key drivers are improved financial performance, maximised up-time, reduced insurance costs or reduced risk of interruption to business.

Safeti Financial gives operators the ability to investigate their financial risk exposure. Risk to life is only one of the risks inherent in the operation of a process plant. Others include, for example, risk to the environment, risk to assets and equipment, and risk to financial performance in terms of share price. All these ‘risks’ can have a cost associated with them which can be calculated and integrated in the same way as fatality risk.

Typical uses of this kind of financial risk analysis include:

• Aiding the decision-making process with risk reduction recommendations supported by cost benefit analysis techniques
• Reducing exposure to financial risk by assessing the relative benefits of different risk mitigation strategies
• Comparison of financial risk exposure for a range of process conditions
• Financial risk trends with time
• Direct assessment of financial risks from major process plant hazards
• Better understanding of appropriate levels of insurance.

Key benefits of using this kind of model are the ability to identify key contributors to financial risk, and assess the benefits of different risk reduction strategies and their effects on the overall risk picture. The use of such models also provides an easily understandable way of assessing appropriate insurance levels, and of demonstrating to senior management the benefits of financial risk analysis and how the overall operational risks can be reduced.