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Member, Beacon International Group, Ltd.
A “fundamental rethink” of catastrophe models and a review of supply chain risks — leading to greater scrutiny from the insurance markets of natural catastrophe limits and contingent business interruption limits — is needed, says Marsh Inc. in a report on the energy industry Thursday.
“The unprecedented string of natural catastrophes over the last two years,” including the New Zealand earthquakes, the Australia floods, the Japan earthquake and tsunami, the Thailand floods and Superstorm Sandy, all point to this, says the report, “Marsh Insights: Energy Market Monitor.”
There also have been “massive changes” in the energy market itself, including the “dramatic fallout following the Deepwater Horizon blowout, which has changed, once and for all, the way energy underwriters and buyers look at liability and control of well limits.”
Despite this and other changes in the market, though, Marsh specialists’ analyses “tend to point to ‘business as usual,’” says the report. “Although a disappointment for wishful thinkers, overall it is good news for energy insurance buyers looking for a more stable environment,” it states.
The report, available here, includes individual reports on various segments of the market, as well as analyses based on geography.