Markel CATCo Investment Management has announced that it has taken losses from an ongoing energy event off the west coast of Africa.
The news came as the company released the unaudited net asset value (NAV) of the company's ordinary shares and C shares at the close of business on August 31 this year.
Markel CATCo said that following recent discussions with reinsurance clients regarding potential losses associated with the ongoing offshore energy loss event in Ghana’s Jubilee oil field, which began in March 2016, the Investment Manager had recorded a specific loss reserve for this event of c.3.5 percent of NAV (included in the August NAV).
This loss reserve covers 100 percent of the company’s offshore energy exposures for any of its industry loss warranty (ILW) contracts up to an industry insured loss of $1.35 billion and represents more than 40 percent of the company’s total offshore energy exposure of around 8 percent of NAV.
The Jubilee oil field is located approximately 25 miles offshore and operates what is known as an floating production storage and offloading (FPSO) system. These FPSO systems are an alternative to a fixed platform and are typically shaped like a ship and moored in place. Technical issues with the FPSO system identified in Q1 2016 are expected to result in losses in relation to business interruption, joint hull and machinery policies.
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