Explosion/Oil Spill To Impact Bermuda Reinsurers
Bermuda based reinsurers are expected to be affected by the Gulf of Mexico explosion and subsequent oil spill with three locally based companies [PartnerRe, MontpelierRe, ValidusRe] already predicting combined losses exceeding $100 million.
Deepwater Horizon, an offshore drilling rig, exploded on April 20, 2010, and sank two days later, killing 11 people and causing a significant oil spill. The area of the oil slick was estimated today [April 30] to cover 6,000 square miles, or an area approximately equivalent to that of Jamaica.
The US Department of Homeland Security has designated the spill as one of “national significance”, and other experts have said the disaster may become the biggest oil spill ever. The US navy has been deployed to help avert a looming environmental disaster.
Post explosion: fire fighting and crew recovery efforts
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The incident and related issues are expected to affect the second quarter 2010 results of the [re]insurance industry. The Bermuda reinsurers already saw heavy claims in the 2010 first quarter mostly relating to the Chile earthquake.
Preliminary estimates for industry wide insured losses from the explosion range from $1 to $1.5 billion, with Bermuda domiciled companies expected to share in a portion of those claims.
Bermuda based PartnerRe has estimated claims relating to the explosion in the range of $60-$70 million. Validus expects its losses to be in the range of $38 million to $45 million from the event.
Fellow Bermuda resinsurer Montpelier Re may have costs tied to the explosion of as much as $20 million, Chief Underwriting Officer David Sinnott said in a conference call. “As the size of the industry loss gets bigger, it would be more likely for us to pick up exposure,” Montpelier Re CEO Christopher Harris said in the call.
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Category: Accidents and fires, All, Business, News
