Offshore energy sector requires reinsurance restructuring
July 20, 2010
REINSURERS need to restructure their coverages to ensure the offshore energy industry is not priced out of being able to buy protection. The fallout from the Deepwater Horizon disaster continues at pace, with insurers and reinsurers trying to count the potential cost of the event and its aftermath on their balance sheets. Although rates in the primary market have risen across the upstream sector, in some instances by up to 50% for those accounts with Deepwater Horizon exposure, the general trend has been increases of 10% to 15%. However, as reported in Insurance Day at the end of June, reinsurers will bear the brunt of Deepwater Horizon claims, and as such it is they who will have more of an impact on rates when it comes to the renewals at the beginning of next year (insuranceday.com Jun 30). This is before any...