Deepwater no 'market changer' says Marsh
Losses from the Deepwater Horizon oil rig disaster will not have the same impact on the upstream energy insurance market as other major events like 2005’s Hurricane Katrina, according to a new report from insurance broker, Marsh.
Their latest Energy Market Monitor report found that while insurers have been unsettled by the Deepwater Horizon losses, capacity has not constricted and price increases are likely to be modest in other parts of the upstream energy market unless more major losses occur. After Katrina, on the other hand, the market experienced large reductions in capacity and subsequent rate hikes.
“The Transocean loss is an important event in the history of deepwater drilling and exploration insurance but not a market changer,” said Andrew George, leader of Marsh’s energy practice in Europe, the Middle East and Africa. Capacity currently isn’t an issue and insurers seem keen to maintain their commitment to the market. This is good news for the industry.”
