Operators of oil rigs in the Gulf of Mexico may have breathed a big sigh of relief as they eyed the easterly track of Hurricane Bill recently because many drastically shrank their hurricane coverage programs, insurance executives reported late last month.
"We scared a lot of clients into self-insurance by [requiring] huge premium dollars, where it might have been more intelligent...to focus on coverage," said Richard Brindle, group chief executive of Bermuda-based Lancashire Insurance, where energy insurance makes up for more than 30 percent of the overall book of business.
Mr. Brindle, who made his comments during an earnings conference call in late July, admitted to being blindsided by the decisions of many offshore energy insurance buyers to forego insurance coverage purchases for the Gulf hurricane peril. The buyers made their decisions months before the first hurricane of the season formed.
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