“Prices will have to go up in the Gulf of Mexico,” Ward, 53, said in a Bloomberg Television interview today. “We’ve seen very low prices for covering these offshore installations over many, many years. People recognize that the risks they were pricing a while ago were underpriced and they need to restore pricing levels.”
The BP disaster is likely to be the second-biggest energy insurance loss based on current estimates, said the Insurance Information Institute. The most expensive property loss for energy insurers was a July 1988 explosion aboard the Piper Alpha oil platform in the North Sea, which killed 167 people and cost insurers $3.6 billion in 2009 dollars.
Lloyd’s companies were part of a syndicate that insured the rig owned by Transocean Ltd., which exploded and sank in April. They will likely pay out between $300 million and $600 million in relation to the disaster, the market said in May.