Oil Explosion To Cost XL Capital $30 Million
During the first quarter earnings call, XL Capital Chief Executive Mike McGavick said BP’s Gulf of Mexico explosion and oil spill will cost the company $30 million.
Mr McGavick said the $30 million is property damage exposure to the rig itself, and includes $5 million in reinstatement premiums. He prefaced his comments by saying they “deeply mourn the loss of life and are watching with horror the continuing and likely environmental damage.”.
The XL chief says it equates to a roughly $900 million industry event.
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 said may become the biggest oil spill ever.
Mr McGavick said:
It’s much too early to know what the insurable losses are on the total basis and what portion of these losses XL might cover, but we can say this: We believe that our total property damage exposure to the rig itself is approximately $30m, including $5min reinstatement premiums, and we have in fact already paid much of this in claims.
Other Bermuda based companies have been affected:
- 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.
- 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.
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Category: Accidents and fires, All, Business
