Rig losses lead to higher rates
by Richard Kilner
Story link: Rig losses lead to higher rates
Global insurance broker Willis Group Holdings has revealed that the Deepwater Horizon and Aban Pearl drilling rig losses have given upstream energy insurers a record breaking monthly financial hit of $795m.
The losses have eroded stability in the market and driven up rates, with insurers now looking to increase rates for new business.
The Aban Pearl rig was situated off Venezuela and insured to the tune of $235m, with the now infamous Deepwater Horizon rig insured for $560m.
When the Deepwater Horizon situation is fully resolved Willis estimates its total cost to the insurance sector could exceed $1.2bn.
CEO of Willis Energy Alistair Rivers has said that the Deepwater Horizon catastrophe has fundamentally altered the market.
In April, Professor Minoo Patel, director of BPP Technology Services, adressed the AEGIS London Energy Conference to state that deep sea drilling and production platforms would become more common over the next decade.
Givern the horrendous environmental impact of the Deepwater Horizon failure and the ensuing storm of bad publicity, it remains to be seen just how serious a blow deep sea drilling has been dealt by the disaster.