Posted on 06 May 2010
U.S. commercial property/casualty insurance rates declined an average of 4% in April, but according to MarketScout, the Gulf of Mexico oil spill looks to harden the energy market.
All lines of commercial P/C coverage tracked by the exchange registered at least a 1% rate decline in April compared with the same month last year, Dallas-based MarketScout said Wednesday.
However, MarketScout CEO Richard Kerr said pricing for energy coverage is expected to rise.
“Energy premiums are going to increase, especially for offshore accounts,” Mr. Kerr said in a statement. “The disaster suffered by British Petroleum in the Gulf of Mexico is huge and will have an immediate impact on all offshore energy placements.
“British Petroleum is largely self-insured; however, energy underwriters across the globe will participate in this loss via either excess placements, insurance on the nonoperators (investors), drilling contractor or blowout prevention manufacturer,” he said in the statement.
“The nonoperators, Anadarko and Matsui Oil, have extensive insurance placements, as does the drilling contractor, Transocean. It may take years to calculate the total insured loss from this disaster, but premiums will increase immediately for offshore energy accounts. Also, even though onshore insureds may feel they should not suffer because of offshore losses, they too could be impacted. Many onshore insurers have some offshore exposure and may try to capture rate increases across the board.”