The Oil Drum

The stormy weather is coming early this year, and there has been very heavy damage across the MidWest from tornadoes that seem to have arrived a couple of months earlier than are normally expected.

With the high costs that arose last year from the impact of the hurricanes, and the other unseasonable weather impacts on the country, such as the current fires in Texas and Oklahoma brought about by the drought, the insurance industry has been starting to take a look at the levels of risk that it is now getting into.

Last year, based on info that came from the industry we posted about some of the problems that companies engaged in drilling in the GOMEX were starting to encounter in insuring their rigs. All of a sudden the condition of the rig and the level of storm that it could withstand was being considered against the likelihood of it encountering a storm of that or greater magnitude. The insurers were asking, at that time, for assurances that rigs could withstand the storms, in the form of models that would validate the design strengths that were being proposed.