Following a review of expected claims by its energy claims specialists Marsh, the world's leading insurance broker and risk adviser, has estimated that energy insurance losses from the Chilean earthquake will not exceed $350m. 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 & gas, power utilities and mining sectors.
Martin Clark, Head of Energy Claims at Marsh, said: "Our first priority is to provide our clients with operations in Chile with the highest levels of service, ensuring they have access to the best loss adjusters, that insurer payments are made rapidly, and that the process allows our clients to carry out reinstatement work as quickly as possible. Our team on the ground is making sure this happens."
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, added: "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, we expect that insurers will want to re-examine companies' risk management preparedness for natural catastrophes. There will also be renewed pressure from them on natural catastrophe limits of liability."