Insurance broker and risk advisor March has released a report titled, ‘The 100 Largest Losses*’ that quantifies the most significant property damage losses in the hydrocarbon industries since 1972. The report finds that despite an increase in the size and scale of new energy infrastructure projects, national oil companies (NOCs) and other energy and chemical concerns are experiencing fewer and less-severe major losses than in previous years.
Speaking at Marsh’s National Oil Companies Conference in Dubai last month, Jim Pierce, Chairman of Marsh’s Global Energy Practice said, ‘Energy sector risk management has evolved into an applied science that is making a real difference to mitigating the catastrophic losses of previous years. Improved risk management techniques are even more critical in the age of the $50 billion mega project.’
Despite massive growth in the sector, the report shows that catastrophic losses at petrochemical plants, gas processing plants, upstream projects and terminal and other distribution points have declined over the last five years as companies enhance their risk management techniques.
Marsh predicts that NOCs could benefit from lower risk with a potential 20% reduction in insurance costs. Companies involved in construction projects also stand to benefit from current market conditions.
Of the 20 largest losses in the last 38 years, six occurred in the US, five in Europe, two in South America, Africa, Australia and Asia and one in the Middle East. The largest loss was the 1998 Piper Alpha explosion with an estimated $1.6 billion and 167 lives lost. More from marsh.com.
* Download from links/1003_1 (registration required).
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