A market review by broker Willis has found a 30 percent withdrawal in capacity from the mining insurance market since the beginning of 2011.
There are several key elements influencing the tightening of insurance terms and capacity availability in that market, argues Steve Higginson, mining practice leader at Willis.
“Firstly the series of losses which have affected the industry over the past 12 months, secondly natural catastrophe exposure, especially flood and earthquake, thirdly the aggregation of exposures carried by insurers in regions such as the Pilbara in Western Australia (cyclone), the Bowen Basin in Queensland (flood and weather events) and Chile (earthquake), and finally the increased complexity of coverage for Contingent Business Interruption (CBI) caused by the globalisation of the supply chain,” he says.
During 2011 the mining market was hit by $2.7 billion in natural catastrophe losses, as well as suffering from over 60 operational losses totalling $835 million, according to the review.
Mining insurance, Willis