Energy rates are going to increase, especially for offshore accounts in the wake of the explosion, fire and sinking of the Deepwater Horizon oil rig in the Gulf of Mexico. In its latest analysis of market conditions online insurance exchange MarketScout says the oil spill disaster is huge and will have an immediate impact on all offshore energy placements. Onshore insureds with offshore exposures may also be impacted. Richard Kerr, CEO of MarketScout observed:
British Petroleum is largely self-insured; however, energy underwriters across the globe will participate in this loss via either excess placement insurance on the non-operators (investors), drilling contractor or blowout prevention manufacturer. The non-operators, Anadarko and Matsui Oil, have extensive insurance placements, as does the drilling contractor, Transocean. It may take years to calculate the total insured loss from this disaster but premiums will increase immediately for offshore energy accounts.Ã¢â‚¬
The comments came as MarketScout reported the premium and corresponding rates for all lines of commercial property and casualty business in the United States were down four percent for the month of April 2010. D&O Liability, EPLI, fiduciary, crime and surety were the coverage classes experiencing the smallest decreases in April (down 1 percent), while general liability experienced the largest rate decrease at 6 percent. Check out the I.I.I. backgrounder on offshore energy facilities and insurance considerations.