Marsh has teamed up with Berkshire Hathaway to create a windstorm insurance program aiming to bring capacity back to the hard-hit energy companies who operate in the Gulf of Mexico. The program has been called the Cost and Certainty Coverage Program (or Triple C for short) and carries $500m of aggregate, annual capacity.
Underwritten by members of the Berkshire Hathaway Group and sold and marketed by Marsh the program is structured to provide insurance coverage on a pooled basis, delivering pricing stability, over a period of five years. The program also offers flexibility by allowing energy companies to choose limits of between $50m and $100m per occurrence with attachment points of between $20m and $250m per occurrence.
It’s a timely move by Marsh and Berkshire. Launching this now gives oil and gas companies time to obtain this coverage before the 2009 Atlantic Hurricane Season begins. Given the fallout of the 2008 season, when Gulf oil and gas were particularly badly hit, we expect demand for this new program to be high. However any oil or gas companies with exposure to hurricanes in the Gulf who read this should also consider the alternatives (which offer just as much, if not more, flexibility) such as IFEX insurance futures and trading CME Group event linked futures.
Read more about the new program here.