Oil sees member slippage
Oil Insurance Ltd has announced that nine of its shareholder members would be departing from the energy mutual at the end of the year.
Oil Insurance Ltd – which along with Oil Casualty Insurance Ltd and sEnergy Insurance Ltd, forms the OIL Group – said in a10 November statement that the nine have elected to leave and not renew their policies on 1 January 2007.
The company would not comment on which of its members are leaving they represent approximately 12 percent of the weighted gross assets insured by OIL immediately prior to withdrawal. It did say that there was little commonality in the members’ reasons for withdrawal and added that two of the companies were leaving sEnergy.
Rating agency Standard & Poor’s changed the outlook on Oil Insurance’s A- rating from Stable to negative on 6 November, while downgrading Oil Casualty to BBB+.
Following last year’s storm losses – which led to a 2005 underwriting loss of $225mn and a $1.7bn supplemental premium call – the mutual reduced its coverage by half to $500mn.
In the October edition of The Insurance Insider, we warned of growing concerns that there could be as much as $1bn of unrecognised energy losses from Hurricane Rita still to filter through to the (re)insurance industry.