Scariest Energy Risk: Macondo Mach II

The Scream, by Edvard Munch (1893)In the energy industry, the unthinkable has perhaps already happened: the $40 billion in losses associated with the Macondo well that blew out last year were utterly unprecedented. Most of that risk was uninsured, so the energy market got off relatively lightly in this case.

But as the drive to drill wells similar to Macondo continues, the nightmare scenario for the energy market is the “perfect storm” of another blowout of a similar nature combined with a Gulf of Mexico windstorm on the scale of a KatrinaRita or Ike. That would almost certainly lead to underwriting losses that would be sufficient to prompt a potential capacity crisis.

This post was part of the special feature about Our Scariest Risks, published October 31, 2011. The feature also included these other risks:
Aerospace
Captive Insurance
China
D&O
Employee Benefits
Energy
Environmental Liability
ERM
Financial Services
FINEX
Global
Health Care
Middle East
Mining
Power
Real Estate
Reinsurance
Renewables
Supply Chain
Terrorism
Trade Credit

About Robin Somerville

Robin is the Communications Director for the Willis Towers Watson's Natural Resources Industry Group and is based i…
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