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Insurers Expect $1.5B Oil Rig Loss, With Limited Impact On Overall Market

Insured losses from the Deepwater Horizon Drilling Platform explosion will likely total about around $1.4 billion, but are not expected to significantly impact this niche marketplace or buying behaviors.

By Phil Gusman, Mark E. Ruquet | Updated on May 09, 2010

Insured losses from the Deepwater Horizon Drilling Platform explosion and subsequent collateral damage to the environment and impacted businesses will likely total about around $1.4 billion, but are not expected to significantly impact this niche marketplace or buying behaviors, industry officials say.

Companies with exposure to the disaster–in which 11 workers were killed–are insured for losses totaling some $1.4 billion, according to initial reports from the companies involved in the incident, as well as early insurance and reinsurance industry estimates compiled by the Insurance Information Institute.

“The insurance losses from the sinking of the Deepwater Horizon will be significant, and one of the largest losses ever for global offshore energy insurance and reinsurance markets,” said Robert P. Hartwig, an economist and president of the Institute. “The risks inherent in carrying out such a complicated endeavor, however, are well syndicated, with the insured loss spread across a broad spectrum of insurers and reinsurers on a global scale.”

Insured losses could reach $1.5 billion, according to Transatlantic Holdings Inc.

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