Insurance News

Energy, casualty reinsurance rates unaffected by oil spill

Posted on: July 7, 2010

The Deepwater Horizon oil rig disaster has not affected reinsurance rates across the energy and casualty lines yet, as July 1 renewals in the sector were flat or down, according to a report Thursday by Guy Carpenter & Co. L.L.C.

However, the full effect of the disaster remains to be seen, and upward pressure on pricing is a possibility, the report said.

According to New York-based Guy Carpenter, the disaster did not affect quotes on international placements for marine and energy reinsurance programs, as accounts were underwritten separately based on specific account losses and exposures, the report said.

However, marine excess-of-loss pricing is expected to increase substantially for reinsurance buyers with energy exposures. At July 1 renewals, increases of roughly 10% were seen for deepwater drilling risks similar to those of the Deepwater Horizon.

Meanwhile, rates for U.S. property programs decreased between 10% and 15% as capacity remains abundant. In addition, predictions for an active hurricane season have only had a slight impact on midyear renewals for U.S. property programs, the report said.

Copyright © 2010 Crain Communications, Inc.

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