Insurance Market Favorable for Mining Sector Despite Difficult Financial Environment
Market conditions are generally favorable for insurance buyers in the mining industry and are likely to remain so in 2016, barring unforeseen developments.
In the property insurance market, for example, competition and capacity helped rates to generally soften in the fourth quarter of 2015. Large producers, those with extensive underground operations, or those that are financially stressed may feel some pressure from insurers to increase rates. Yet, insurer competition has generally helped keep rates stable or even to decline — even for those with recent claims activity. Barring significant industry losses, these trends are expected to continue in 2016.
In the casualty insurance market, pricing remained generally stable for those companies with good loss profiles, which is also expected to continue this year barring unforeseen developments. Excess liability rates also remained generally stable.
Risk trends heading into 2016:
- Financial environment: The financial environment continues to challenge mining companies, resulting in canceled and postponed projects and major layoffs.
- Regulatory scrutiny: Increased regulatory scrutiny and environmental litigation also pose ongoing challenges.
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