Vlad Bobko, Chief Broking Officer, Director Large Accounts and Specialty Aon CEE, CIS and Mongolia

1. Welcome to:
Risk Management and Insurance Solutions
Conference for Mongolian Industries
Ulaanbaatar, Mongolia - 16th of October, 2014

2. 2
Agenda & Highlights of the Day
Registration of the participants
Welcoming coffee & snacks
Session 1:
Mining Risks
Buffet Lunch
Session 2:
Political Risks and
Trade Credit
Evening Reception
Networking for the
attendees of the Session 1
and Session 2
09:00
14:00
15:00
17:30
08:00
1st Session Highlights:
Full-cycle overview of the risks for mining assets and insurance solutions available
Health and Safety Risk - presentation by Oyu Tolgoi
- Mahoney D'Alterio, Manager HSE Risk and Management
Drafting Policy Wording: General Property vs. Mining Risks Insurance
Extended Q&A session in insurable risks with Atrium Syndicate, Munich Re, SCOR and
Aon, following the presentation by Munich Re
2nd Session Highlights:
• Protection of the interest of investors into Mongolian business (Political Risks)
• Protection of the interest of Mongolian companies having international trade
operations (Trade Credit)
• Extensive focus on real cases
Evening Reception will be held @ Monet restaurant, 17th floor, Central Tower
Language of the conference: English / Mongolian with simultaneous translation.
Please, when asking questions, use microphones. Thank you!

3. Introduction to Aon
Vlad Bobko
Head of Crisis Management
(Terrorism, K&R, Political Risks, Contingency & Agri)
Aon Risk Solutions | Global Broking Centre | London
Chief Broking Officer, Director Large Accounts and Specialty
Aon CEE, CIS and Mongolia

4. 4
Aon Worldwide | Six Core Solution Areas

5. 5
Aon Worldwide
Offices of Aon around the World
Aon plc (NYSE: AON) is the leading global provider of risk management services, insurance and
reinsurance brokerage, and human resource consulting and outsourcing.
Correspondent offices / representatives of Aon
#1 Rated risk services broker, reinsurance
intermediary, and human resource
consulting and outsourcing provider
66,000 Number of Aon colleagues around the
world
500 Number of global offices
120 Number of countries in which Aon
operates

6. 6
Aon Worldwide | Structure
HR Solutions
Aon plc
Aon Hewitt
Risk Solutions
Aon Risk Solutions Aon Benfield
• Insurance • Reinsurance • Talent
• Retirement
• Health

7. Introduction to Insurance and Risk Management
Solutions for Mining Companies
Vlad Bobko
Head of Crisis Management
(Terrorism, K&R, Political Risks, Contingency & Agri)
Aon Risk Solutions | Global Broking Centre | London
Chief Broking Officer, Director Large Accounts and Specialty
Aon CEE, CIS and Mongolia

8. 8
Aon Global Mining
 Risk Management
 Diverse Expertise
 Risk Transfer
 Global and Local
 Aon ExperienceAon is the controlling broker for approximately 500 operating mines and smelters globally.

9. 9
Asset Management across the Mine Life Cycle
Please see in your hand-outs

10. 10
Strategic Planning
Please see in your hand-outs

11. 11
External Risk Mitigation Influence

12. Insurance Solutions for Mining Risks:
General Property vs. Mining Risks Insurance
Vlad Bobko
Head of Crisis Management
(Terrorism, K&R, Political Risks, Contingency & Agri)
Aon Risk Solutions | Global Broking Centre | London
Chief Broking Officer, Director Large Accounts and Specialty
Aon CEE, CIS and Mongolia

13. 13
Mining Capacity, Bespoke Market Reviews and Benchmarking

14. 14
Capacity Available | Why the European Insurance Market?
Additional capacity
Specialists’ knowledge of your business
Contract certainty
Financial Rating – ‘A’ rated and above
Policy wordings prior to inception
FSA regulated
Leverage through increased competition

15. 15
Capacity Available | Why the Lloyd’s of London market?
Over 300 years of trading
A market place of 72 businesses (syndicates)
‘A’ rated by the world’s leading rating agencies
92% of FTSE 100 companies have insurance at Lloyd’s

16. 16
Self-Insured Retention Strategy

17. 17
17
Deductibles required by Insurers | Business Interruption
Business Interruption coverage provides for the loss/reduction in revenue following an
insured event
Three fundamental mining deductibles for Business Interruption
Wording varies per Insurer
All three based on a number of days deductible:
- Waiting period
- Average Daily Value – Loss based
- Average Daily Value – Value based

18. 18
What can you insure?
Insured to choose, but typically:
 Fixed costs only
 Marginal income
 Gross Profit
 Gross revenue less variable costs,
including fixed costs
 Fixed costs plus variable costs plus
revenue

19. 19
Average Daily Value – Loss Based
Insurers will state a set number of days, say 30, which will be the deductible from the loss. These 30
days are based on the average of the client’s loss across the period of interruption.
If an interruption to the mine was a total of 100 days, the Insurer would add up the total loss for the 100
days and then calculate the average daily amount ie:
Total 100 day interruption = EUR 50m
EUR 50m/100 = EUR 500k per day
Deductible = EUR 500k x 30 days = 15m
Deductibles required by Insurers | Business Interruption

20. 20
Average Daily Value – Value Based
Insurers will state a set number of days, say 30, which will be the deductible from the loss. The 30 days
are based on the annual BI values declared to Insurers.
The annual BI values will then be divided by 365 x 30 days ie;
Total annual BI values = EUR 300m
EUR 300m/365 = EUR 821,918 x 30 days = 24.6m
Deductibles required by Insurers | Business Interruption

21. 21
Policy Wording Drafting Services
MIG (Mining Insurance Group) unincorporated association
• 21 founding members + 12 ordinary members drawn from Mining sector leaders representing:
 Insured – mining companies,
 Underwriters,
 Brokers
 Legal communities
• Aon is a founding member and is represented on the MIG Management Committee
Web page: mininginsurancegroup.com

22. 22
Property Damage and Business Interruption Programme Design

23. 23
Mining and Property Comparison
PD/BI industry - "All Risks" wording
Mining – is a sector within PD/BI
Coverage standard "All Risks" policy with Mining extensions
Specific coverage to Mining - bespoke wording
Extent of extensions and limits offered dependant upon:
- individual Insurer appetite
- risk quality and extent of information
- Cat exposure
PD/BI WORDING
MINING

24. 24
Mining and Property Comparison
* please note coverage available and limits offered are dependent upon market capacity, appetite and quality of risk
Autoclaves as a result of gradually
developing flaws, deformation, distortion,
cracks or partial fractures
Yes * No TBA
Gas or rock burst Yes * No
A sudden and often violent breaking of a mass of rock from the walls
of a tunnel, mine, or deep quarry, caused by failure of highly stressed
rock and the rapid or instantaneous release of accumulated strain
energy. It may result in closure of a mine opening, or projection of
broken rock into it, accompanied by ground tremors, rockfalls, and air
concussions.
Collapse of/in Ore Passes Yes * No TBA
Crump Yes * No
Ground movement, perhaps violent, due to failure under stress of
ground surrounding underground workings usually in coal, so named
because of sound produced.
Dams, Dykes, Penstock Yes * No
1. A sluice or gate for restraining, deviating, or otherwise regulating
the flow of water, sewage, etc.; a floodgate.
Source: Webster 3rd
2. The barrel of a wooden pump.
3. A closed conduit for supplying water under pressure to a water
wheel or turbine.
Coverage Mining wording Property Wording Definitions of cover

25. 25
Mining and Property Comparison
* please note coverage available and limits offered are dependent upon market capacity, appetite and quality of risk
Open cast Yes *
Some property
markets
1. The mining in surface excavations. It includes placer mining, mining in
open glory-hole or milling pits, mining and removing ore from opencuts by
hand or with mechanical excavating and transportation equipment, and the
removal of capping or overburden to uncover the ores.
2. Mining at or near the surface. This type of mining is generally done where
the overburden can be removed without too much expense.
Source: Kentucky
3. The obtaining of coal from the outcroppings or by the removal of
overburden from a seam of coal, as opposed to underground mining; or any
mining at or near the surface. Also called strip mining; placer mining,
opencast; opencut mining; open-pit mining.
Source: BCI; Standard, 2
4. Extraction of valuable material by removal of overburden through
excavation methods such as "open pit" (metals and non-metals), placer
(beach and sand-bank deposits of heavy minerals such as gold), "quarry"
(construction materials), and strip mining (coal).
Permanent Ways Yes * No TBA
Pitwall Collapse Yes * No TBA
Coverage Mining wording Property Wording Definitions of cover

26. 26
Mining and Property Comparison
* please note coverage available and limits offered are dependent upon market capacity, appetite and quality of risk
Coverage Mining wording Property Wording Definitions of cover
Precious Metals Yes No TBA
Sealing of Mine Yes * No TBA
Tailings Dams Yes * No
One to which slurry is transported, the solids settling while the liquid
may be withdrawn.
Underground
abandonment
Yes * No
Abandonment of a mining claim may be by failure to perform work,
by conveyance, by absence, and by lapse of time. The
abandonment of a mining claim is a question of intent. To constitute
an abandonment of a mining claim, there must be a going away and
a relinquishment of rights, with the intention never to return and with
a voluntary and independent purpose to surrender the location or
claim to the next comer.

27. 27
Mining and Property Comparison
* please note coverage available and limits offered are dependent upon market capacity, appetite and quality of risk
Underground fire Yes * No
There are two types of underground fires: (1) those that involve
exposed surfaces and are known as open, freely burning fires and
(2) those that may be wholly or partly concealed and are invariably
caused by spontaneous heating of the coal itself, known as gob
fires.
Underground flood Yes * No TBA
Underground property
caused directly or indirectly
by water &/or other liquid
matter
Yes * No TBA
Underground shafts,
declines, inclines, stopes,
excavatations and the like
Yes * No TBA
Coverage Mining wording Property Wording Definitions of cover

28. 28
Thank you for your time and attention
Any questions?
Vlad Bobko
Head of Crisis Management
(Terrorism, K&R, Political Risks, Contingency & Agri)
Aon Risk Solutions | Global Broking Centre | London
Chief Broking Officer, Director Large Accounts and Specialty
Aon CEE, CIS and Mongolia
t. +44 (0)207 0864834 | vlad.bobko@aon.co.uk