10 Things to Know About … Energy, Oil & Gas

1. The types of risks classified under the energy insurance category range from offshore energy (exploration and production), offshore energy construction, onshore energy (oil refining, gas processing, petrochemical plants and biomass), operational engineering (power stations, including thermal, wind, nuclear and solar), erection all risks (all industry types) and construction all risks (including waste/water and hydroelectric plants). The subject matter of the insurance is physical material damage often extended to include business interruption/delay start-up and third party liability.
Source: Navigators Group Inc.

---

2. The world’s primary energy demand grows by 1.6 percent per year on average and between 2006 and 2030 the world will experience an increase of energy demand by 45 percent. China and India account for more than half of incremental energy demand to 2030 while the Middle East emerges as a major new demand center. Both countries’ energy use is set to more than double by 2030.
Source: The International Energy Agency

---

3. According to the World Energy Outlook (WEO) 2008, the demand for oil will rise from 85 million barrels per day now to 106 million barrels per day in 2030. Demand for coal rises more than any other fuel in absolute terms, accounting for more than a third of the increase in energy use.
Source: The International Energy Agency

---

4. Modern renewable energy sources will grow most rapidly, overtaking gas to become the second-largest source of electricity soon after 2010.
Source: The International Energy Agency

---

5. Machinery breakdown is the most common type of loss in the power industry.
Source: Swiss Re

---

6. Hurricanes Gustav and Ike inflicted significant damage to the nation’s oil and natural gas infrastructure, causing devastating impacts on offshore natural gas production, shutting in production facilities and the pipelines that move the natural gas to processors along the Gulf coast. As a result of the two storms, almost all of the natural gas production and processing capacity in the area was shut in, with continued shut-ins affecting production into December 2008. There were 55 major natural gas processing plants in Texas, Louisiana, Mississippi, and Alabama that were in the path of Hurricanes Gustav and Ike, representing about 38 percent of the U.S. processing capacity.
Source: U.S. Department of Energy

---

7. The offshore energy portfolio incurred loss ratio for 2008 is likely to be significantly greater than 100 percent once the final figures are collated and adjusted.
Source: Willis Energy Market Review 2009

---

8. The market is expected to offer approximately 30 percent less capacity for Gulf of Mexico wind risk than in 2008, although this is likely to be shortly augmented by fresh capacity from Berkshire Hathaway.
Source: Willis Energy Market Review 2009

---

9. 2008 Gulf of Mexico energy risk losses could be more than $10 billion, which is more than double the estimated worldwide energy premium income.
Source: Willis Energy Loss Database/Willis Energy Market Review 2009

---

10. With little or no withdrawals from the market at January 2009, stated capacity levels for energy risks have actually increased by approximately 5 percent.
Source: Willis Energy Market Review 2009

Topics Energy Oil Gas