The insurance industry can play a vital role in mitigating energy risks, according to Aon.
Chairman of Aon Natural Resources, Magne Seljeflot, told the UN Committee on Sustainable Energy that the insurance industry can help enhance safety standards, ensure the continued supply of energy and help reduce carbon emissions.
Seljefot said: “At the end of 2006 strong growth in demand for hydrocarbon based energy coincided with concern over future reserves, security of transmission and energy prices at an all time high. The continuing quest for new oil and gas fields takes us further into remote and ‘uncharted' territories.
“To succeed in exploring, developing and bringing energy to market can be a mammoth technological and economical undertaking. Without the partnership with insurers to reduce risk factors, this would often not be possible. Look for example at the development of the North Sea in the 1970s.”
He told the committee that in 2005 insurers paid out claims “in excess of $10bn in respect of losses to the energy sector, against $4bn-6bn in an average year”.
Seljefot added that the insurance industry can act as a valuable conduit between politicians and hydrocarbon businesses to ensure the safe and reliable supplies of energy around the world. “This is particularly important at a time of strong demand for energy from China, India and others along with rising geopolitical supply risks in the Middle East and Russia.”
