Diversifying Energy Industry Risk in the Gulf of Mexico: Post-2004 Changes in Offshore Oil and Gas Insurance Markets

摘要

Hurricanes Ivan, Katrina, Rita, and Ike had significant implications for offshore oil and gas activities in the Gulf of Mexico (GOM). These Big Four hurricanes significantly changed the perception of oil and gas industrys exposure to weather-related risks. This project surveys historic (pre-storm) offshore insurance markets and investigates insurance-related changes occurring after the advent of the Big Four storms. Each major offshore insurance type has been examined including commercial insurance coverage, mutualization coverage, insurance-linked securities, and self-insurance. The research finds that, while considerable offshore insurance changes have been made, post-storm insurance markets reacted in relatively expected ways by changing total coverage limitations, coverage terms, risk-sharing terms, and premiums. The more significant unexpected change rests with the higher annual informational requirements for insuring offshore assets and the greater degree of asset risk assessment and modeling that is now commonplace in the industry.