EQECAT Inc. plans to unveil a “state-of-the-art Offshore Energy Model” during its March Catastrophe Management Conference. “The driving factors behind EQECAT’s effort were the 2004 and 2005 hurricane seasons,” explained President Rick Clinton. “The resulting offshore energy related losses, which had a significant impact on the availability and affordability of insurance for offshore exposures, coupled with the expected increased hurricane activity over the next decade due to climate change,” required updated models to quantify the risks.
That task in the offshore energy market “is markedly different and more complicated than modeling for onshore property risks,” said the bulletin. “Most damage onshore is attributed to wind, but losses to the offshore energy market are primarily due to severe waves and currents generated by a storm, as well as undersea landslides. Moreover, while some of the risks to offshore energy include property-exposures to platforms, wellheads and pipelines, an important component of the risk in the offshore energy market is centered on continuous-production issues. The offshore energy insurance market also has some special policy conditions that have to be taken into consideration when modeling this risk.”
Clinton stated that he believes EQECAT’S model, “which takes these issues into consideration, sets a new industry standard for offshore quantification.”
EQECAT will detail the key components and advantages of its Offshore Energy Model at its Catastrophe Management Conference in Miami, March 26-28. The new model is expected to be released in the second quarter of 2007 and will be added to EQECAT’s WORLDCATenterprise ™ platform.
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