More than 4,000 offshore oil and gas platforms and nearly 12,000 active wells

in the Gulf of Mexico lie in an active hurricane corridor, exposing insurers,

owners, and investors to potential catastrophic loss with downstream impacts
to the global economy. RMS combines proprietary hurricane technology with
expertise in offshore platform engineering to create a probabilistic model
supporting the major offshore platform coverages to meet the unique needs
of the market.

Offshore Platform

S tat e - o f -t h e - A rt H a z a r d Q u a n t i f i c at i o n

Active platforms and rigs in the Gulf of Mexico account

H u r r i c a n e Ac t i v i t y R at e s :
for 25% of the United States crude oil production and
Th e M e d i u m -Te r m V i e w
are worth over $70 billion—wells are worth an additional
$150 billion. The offshore platform losses caused by Medium-term rates estimate the expected number
hurricanes in the Gulf impact not only the structures and of hurricane landfalls per year averaged over the
wells themselves, but can lead to increased operational next five years. Rates are derived from an expert
expenses and delays with potential downstream impacts assessment of a comprehensive suite of hurricane
to the global economy. To most accurately assess offshore activity models. RMS considers the medium-term
platform risk, the RMS Offshore Platform Model is founded view of hurricane activity to be the preferred view
on the underlying hazard technology of the RMS U.S. over the long-term historical view.
Hurricane Model, analyzing locations against a database
of nearly 7,000 simulated hurricanes that represent all physically possible variations of key hurricane parameters, and
incorporating the RMS medium-term hurricane activity rates to reflect a forward-looking view of hurricane risk.

C a p t u r i n g E s s e n t i a l O f f s h or e P l at f or m C ov e r ag e s

RMS supports the major insurance coverages written

for offshore platform exposure, combining all property
Alabama
Mississippi damage related components into a single coverage.
Texas To account for control of well and cost of redrill
Louisiana components, both key drivers of offshore losses due
to hurricanes, operators extra expense coverage is
modeled as a separate coverage. Time element coverage
Peak Wind
Category
TS
includes both business interruption that may arise from
CAT 1
CAT 2 damage to platforms, as well as contingent business
CAT 3
CAT 4
CAT 5
interruption associated with damage to upstream
@ Platform
facilities typically owned by third parties, such as
Maximum tropical cyclone category observed during the pipelines, processing facilities, and onshore refineries
2002-2005 hurricane seasons
and terminals. Additionally, the model simulates the
time element losses that may be experienced in post-
hurricane situations. Removal of wreck or removal Mississippi Alabama Georgia

of debris along with a framework for post-analysis Texas

Louisiana

estimation is also included. Florida

D e ta i l e d Da m ag e a n d Hurricane Ike
Significant Wave
Vu l n e r a b i l i t y A s s e s s m e n t Heights
High

The Offshore Platform Model is based on in-depth Moderate

analyses of insurance claims data, including data from Low

hurricanes Ivan, Katrina, and Rita, as well as detailed

A snapshot of Hurricane Ike’s significant wave heights as
hurricane damage analysis reports, principles of wind simulated in a hydrodynamic wave model
and wave structure interaction, and offshore platform
design regulations established by the American Petroleum Institute and the Minerals Management Service.
Ten unique classes of offshore platform vulnerability are included that are based on rig/platform type, year
of construction, and water depth in order to model physical damage accurately and to compensate for large
variations in production downtimes and resulting business interruption losses.

Platform Performance (2004-2008 Hurricane Seasons)

C om p r e h e n s i v e E x p o s u r e Data
80

The Offshore Platform Industry Exposure Database

Number of Platforms

60 includes the complete list of active platforms, rigs, and

offshore wells within the Gulf of Mexico, along with
detailed information on key characteristics that help
40

define the vulnerability for each platform and well to

20

attain maximum modeling accuracy. The database

0 also provides estimates of replacement value for each
Ivan (2004) Katrina (2005) Rita (2005) Gustav/Ike (2008)
Hurricane platform, redrill cost for wells, and assured interest for
Platforms Extensively Damaged Platforms Destroyed
all active platforms. To keep clients informed during
Number of platforms damaged or destroyed by hurricanes from hurricane season, RMS provides clients with a monthly
2004-2008
update on the location of mobile rigs in the Gulf.

Model Specs
H i s t o ry C ov e r ag e s M od e l e d

Originally released in 2003, and updated in 2006 to include  Property damage to platforms/rigs (PD)
new coverages and occupancy and construction classes  Operators extra expense (OEE) including control of
well and cost of redrill
Geographic Scope  Loss of hire
 Business interruption and contingent business
Gulf of Mexico
interruption (BI/CBI)
 Removal of wreck (RoW) and removal of debris
G e o c od i n g R e s ol u t i on
(RoD)
Latitude and longitude, county, area (e.g., Eugene Island)

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