Ivan Could Hurt Gulf Oil Industry

However, most of the equipment in the deeper parts of the Gulf is designed to withstand hurricanes. However, smaller rigs that lay closer inland, and are operated by small businesses, may not be able to withstand a storm the force of Ivan, Mr. Jeffers said.

"We haven't had one this big for some time," he related, adding that by this time all of the platforms have been shutdown and evacuated.

From a risk perspective, historically the larger, newer platforms have not been damaged from the hurricanes. It is the older, pumping platforms in bays that are not built to withstand the increased wave heights, which have sustained the most damage in the past, he noted.

He said the property owners retain a range of retention that can run from $100,000 for a mom-and-pop operation to between $50 and $100 million for the large corporate energy producers, adding that the retentions are probably not that far apart in relation to the scale of their operations.

The catastrophe risks, he said, are set at the most the insured can expect from a single loss, and the capacity has been "sufficient" to protect that layer in recent years.

"The market is in pretty good shape right now," observed Mr. Jeffers. "That varies year to year, but it's been a relatively receptive market and there is a fair amount capacity available in London, the U.S. and Bermuda."

One group created by oil companies was Oil Assurance Limited, a Bermuda mutual created in mid-1970. It is a principal underwriter of large clients. With that and the other carriers, capacity is not an issue, Mr. Jeffers said.

The industry is still waiting for claims figures from Hurricane Frances, but preliminary talks put the numbers far below Charley, which had estimated insurance losses of more than $6.8 billion.

Property Claim Services, a subsidiary of Jersey City, N.J.-based Insurance Services Offices, Inc., should come out with some figures on Frances sometime next week, said Dave Dasgupta.

Loretta L. Worters, vice president of communications for the Insurance Information Institute, Inc., based in New York City, said the insurance losses from Frances are not anticipated to be as large as they were from Charley. Most of the damage, she said, was from flooding, which caused damage to the crop industry of the state, "but from an insurance perspective, it is not a major storm for the industry."

White Mountains Insurance Group, Ltd., based in Hamilton, Bermuda, said it expects its pretax losses from Frances to be no greater than $40 million.