BP spill to cost insurers $1.5bn

BP’s Gulf of Mexico oil spill is projected to cost insurers up to $1.5bn, before taking into account the liabilities from environmental damage, the FT reports.

Reinsurers have begun to estimate individual exposures; these include Bermuda-based PartnerReat $60m-$70m and Montpelier Re at $20m; Germany’s Hannover Re at €40m ($53m) and Munich Re at $100m; and Transatlantic Holdings, formerly part of AIG, at $15m.

Lloyd’s of London, the insurance market, said some members had exposure to Transocean, the owner of the oil platform, but it was too early to estimate losses. “We are currently reviewing our contracts to ascertain what parties have interest in the platform and oil well other than BP and Transocean.”

The figures would have been higher if BP did not write its insurance through a so-called captive, its Guernsey-based “insurer”.

Transocean response

Guy Cantwell, director, corporate communications for Transocean told Insurance Times he did not have any information available on the firms insurance.

The Times said the cost to Louisiana’s fishing industry could be $2.5bn (£1.6bn) while the impact on tourism along the Florida coast could be $3bn, according to Neil McMahon, an analyst at the investment firm Bernstein.