deepwater horizon

Lancashire Holdings, a Bermudian insurer who focuses on short-tail, specialty insurance, has revealed its use of industry loss warranties (ILW) in its latest quarterly report. The Q3 2010 report was published on the 8th November.

Fitch Ratings are reported as saying (by Bloomberg here) that the final total for insured losses from the Deepwater Horizon oil rig disaster in the Gulf of Mexico may amount to $6B. Actual economic losses are estimated to be much, much higher at around $35B.

The Deepwater Horizon Gulf oil spill disaster will not be a watershed event for the P&C insurance industry according to Towers Watson. It could however create a market environment where tightening of insurance prices and terms within the energy risk sector becomes a possibility. The estimated market loss is currently $4b – $6b.