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Member, Beacon International Group, Ltd.
LEWES, Del.—A new company, CatVest Petroleum Services L.L.C., has been formed to help businesses transfer significant oil spill risks to capital markets through insurance-linked securities.
“The time is ripe for oil companies to replicate the capital markets securitization vehicles often used by insurers to hedge catastrophe risks such as hurricanes and earthquakes,” the company said Tuesday in a statement.
The privately owned ILS provider, launched this month, is registered in Lewes, Del., with operations “globally distributed among a number of back-office locations,” Jacob Walker, a managing director of CatVest, said in an email.
CatVest said its ILS offerings would address a dearth of traditional insurance capacity exacerbated by last year’s Deepwater Horizon oil spill in the Gulf of Mexico.
Investors interested
CatVest said it will work with investors and issuers to develop the securities to cover the risk of significant spills of oil, gas, chemical or other hazardous substances.
“Having explored this opportunity with institutional investors, it is clear that they would be willing to take on much larger amounts of oil spill risk than otherwise seen in previous ILS issuances,” CatVest said in the statement.
The company said it will work with oil rig operators, tanker fleet owners and related companies as well as insurers, reinsurers and captives interested in transferring significant amounts of such risk to the capital markets.
CatVest also said it has devised the “world’s only oil spill risk model,” called SPILLRISK, “which removes many of the uncertainties around this disaster.”