Last week's natural and man-made disasters in the form of deadly tornadoes and exploding oil rigs has resulted in significant exposure for insurers and reinsurers, according to two different reports from Guy Carpenter.
Yesterday, the company reported that an explosion and large fire on an oil rig in the Gulf of Mexico on April 20 left 11 workers dead and 17 others injured. Reports said the rig, which is owned by Transocean Ltd, was under contract to the oil company BP at a cost of $533,000 a day, and was conducting exploratory drilling. The rig eventually sunk on April 22, and has resulted in a leak of 1,000 barrels of oil per day into the Gulf of Mexico. The rig was located around 42 miles offshore Venice, La.
In a release dated April 26, Transocean said that the rig, named Deepwater Horizon, "had a value of $560 million and was insured for total loss coverage and for wreck removal, to the extent removal can be carried out and is required."
Several reports indicated that Transocean would likely face a deductible between $500,000 and $1.5 million for the total loss of the rig. Liability deductibles for crew injuries and third-party, non-crew claims is expected to be no higher than $15 million. Total available coverage for third-party liability is expected to top out at $950 million, which would have a significant impact on the rig's insurers and reinsurers, which have yet to be definitively identified. Guy Carpenter's full report can be viewed here.
In natural catastrophe news, at least 20 tornadoes over the weekend caused extensive damage in Mississippi and affected other southern states, including Alabama, Arkansas, Georgia, Louisiana, and Tennessee.
A report from Guy Carpenter stated that at least 900 homes were destroyed or damaged and 12 people killed by the tornadoes, one of which was reported to be one mile wide and reached speeds of 160 mph. Officials are still assessing the damage after the storms tore roofs off buildings, reduced homes to rubble, overturned vehicles, downed power lines and toppled trees.
Below are the top three insurance providers in Mississippi by line of business and market share, according to Highline Data:
AUTO (private-passenger vehicles)
State Farm (25%)
Southern Farm Bureau (14%)
Progressive (11%)
HOMEOWNERS'
State Farm (25%)
Southern Farm Bureau (16%)
Allstate (13%)
COMMERCIAL
Travelers (9%)
American International Group (7%)
Liberty Mutual (7%)
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