Additional Bermuda Reinsurers Hit By Oil Spill

May 3, 2010

According to Business Insurance, additional Bermuda based reinsurers will be affected by the Gulf of Mexico explosion and oil spill, with Lancashire, AXIS and Catlin all said to have exposure from the event.

AXIS President and CEO John Charman confirmed in a conference call that it writes a $150 million layer of liability coverage in excess of $50 million for Transocean.

Spokespeople for Lancashire Holdings Ltd and Catlin Group Ltd. confirmed they are in on the risk but would not provide specifics as of yet.

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, which some experts have said the disaster may become the biggest oil spill ever.

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. According to the Association of Bermuda Insurers and Reinsurers [ABIR], 15 of the top 35 reinsurers in the world are based in Bermuda.

Three Bermuda based companies have already provided estimates for the event:

  • 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.
  • Montpelier Re may have costs tied to the explosion of as much as $20 million.

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Category: Accidents and fires, All, Business