Chile energy losses not expected to exceed $350M
Following a review of expected claims by its energy claims specialists, Marsh has estimated that energy insurance losses from the Chilean earthquake will not exceed $350 million. The estimate does not include any future contingent business interruption claims.
Shortly after the 8.8 magnitude earthquake in Chile on February 27, Marsh sent in claims specialists from around the world to support not only its local clients, but also international clients with interests in Chile.
Marsh is the leading energy insurance broker in Chile, with extensive expertise in the oil and gas, power utilities and mining sectors.
Given the predicted escalating economic costs, international energy insurers would expect to see significant losses from the earthquake. However, despite the significant mining, power and oil processing infrastructure in Chile, research by Marsh suggests that companies in this sector have been less affected than expected.
Jim Pierce, Chairman of Marsh’s Global Energy Practice, said that Marsh’s estimate of an energy loss in the region of $350 million means that losses from the Chilean earthquake will not change the current softening trend in the global energy insurance market. However, Marsh expects that insurers will want to re-examine companies’ risk management preparedness for natural catastrophes. He said that there will also be renewed pressure from them on natural catastrophe limits of liability.
