Explosion estimates climb in what Fitch describe as "a material event" for reinsurers

Fitch ratings has said the Deepwater Horizon oil rig explosion in the Gulf of Mexico could result in insured losses of as much as US $6bn, reports Bloomberg.

The explosion was “a material event for the reinsurance sector,” said Chris Waterman, managing director at Fitch during a presentation in Zurich.

BP, who do not have insurance, will cover the majority of expenses linked to the clean-up but Waterman said the disaster may cost insurers between $4bn and $6bn. The total economic loss is $35bn, he said.

Swiss Re, the world’s second largest reinsurer, estimated insured losses in June to be as much as $3.5bn, making it the biggest man-made insurance loss since the September 11 terrorist attacks in New York.

According to a Moody’s report from June, insurers are now charging 50% more for policies covering oil rigs after the explosion in April triggered the worst spill in U.S. history.

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