OCIL targets capacity gaps in all-risk property insurance
Oil Casualty Insurance Ltd (OCIL) has diversified into a new line of business. It has said its move to write all-risk property insurance on a direct and facultative reinsurance basis for energy companies will give its portfolio more diversity in a sector where it believes there is also strong demand.
The new unit will be led by Rolf Fischer; previously an underwriter for ACE (Bermuda). It plans to develop a book of onshore and offshore energy business using its Bermuda based distribution channel. The company already writes excess liability and property/casualty reinsurance.
Specifically, the sectors it will target include: refining & marketing, petrochemical & chemical, integrated oil, exploration & production, pipelines, utilities and mining companies. Property and business interruption coverage will be provided for both operational and construction exposures.
“The company was originally formed to write excess liability insurance and for many years we were something of a one-trick pony,” said Jerry Rivers, chief operating officer of OCIL. “In 2009, we started to diversify into liability reinsurance and then 18 months later into property reinsurance. So this is a natural next step for us.
“It is important to stress that all the lines of business we write remain linked to the energy business. We see opportunities in this sector as some of the larger and more complex projects need additional capacity.”
He said that despite the healthy capital levels across most parts of the industry, much of the new capital generated from alternative sources such as hedge funds is focused on property-catastrophe business. “We can offer more specialised expertise and pick up some good business in energy where other capacity might not want to play,” he said.
Rivers also stresses the key differences between OCIL and sister company Oil Insurance Limited (OIL). Although both companies are managed by a common entity that provides administrative services to each, they are distinct companies with separate ownership, balance sheets and there are no cross guarantees between the two. Rivers says this is important because clients can access both companies and have no concerns over aggregation exposures. “We complement each other,” he said.
OCIL is member-owned “non-assessable” entity that has both shareholder and non-shareholder policyholders whereas OIL is a mutual and, as such, only underwrites for its shareholder members.
