Get out of the closet and tell the world you're a life insurance agent!
The owner of the Deepwater Horizon oil rig said it's received partial insurance payments of $401 million for the rig, which was declared a total loss.
"Our underwriters declared the vessel a total loss and, as of May 5, we received $401 million as partial payment of the expected insurance recoveries," Transocean Ltd. said in a filing with the U.S. Securities and Exchange Commission.
The rig had an insured value of $560 million, subject to a deductible ranging from $500,000 to $1.5 million, the company said. "We carry insurance that covers wreck removal, if required, subject to certain limits and deductibles. We can provide no assurances as to the estimated costs, insurance recoveries, or other actions that will result from this incident," Transocean said.
Eleven people are missing and presumed dead and others were injured as a result of the explosion and fire on April 20, which resulted in the rig sinking on April 22 and a massive ongoing oil leak in the Gulf of Mexico.
While various state and federal agencies work to contain the oil spill and investigate into what happened, the company has already been hit with "numerous lawsuits filed related to the incident, and we expect additional lawsuits to be filed," Transocean said. "We expect to incur significant legal fees and costs in responding to these matters."
Insurers and reinsurers are likely to be have to pay about $1.4 billion in connection with the sinking of the Deepwater Horizon oil rig in the Gulf of Mexico, according to the Insurance Information Institute (BestWire, May 5, 2010).
The Deepwater Horizon oil rig was operated by BP Exploration & Production Inc. (BestWire, April 27, 2010).
Insurance companies have been reporting their expected losses from the disaster. Most recently, Munich Re and Lloyd's insurer Chaucer Holdings said they are expecting to pay $76.3 million and $25 million, respectively, in claims resulting from the sinking of the oil platform (BestWire, May 7, 2010).
BP's Guernsey-based captive, Jupiter Insurance Ltd., does not buy reinsurance and has an underwriting limit of $700 million per occurrence, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database. Jupiter provides cover solely for BP's subsidiaries and its equity share in joint ventures, and about 75% of its gross written premium in 2009 stemmed from property insurance and business interruption lines (BestWire, May 5, 2010).
Jupiter had $6 billion in capital and surplus at year-end 2009, according to BestLink.
(By Meg Green, senior associate editor, BestWeek: [email protected]