Explosions remain root cause of energy sector's largest losses

Dubai, 13 January 2016 - Marsh, a global leader in insurance broking and risk management, will launch "Marsh BLAST powered by MaxLossTM" (Marsh BLAST), a cutting edge tool to model the financial impact of explosions in the energy sector, at its biennial National Oil Companies (NOC) Conference in Dubai on 22-24 March 2016. 

Developed with leading engineering consultants Baker Engineering and Risk Consultants Inc. (BakerRisk), Marsh BLAST is powered by BakerRisk's MaxLossTM technology, and for the first time in the insurance industry, employs the advanced Baker-Strehlow-Tang (BST) explosion model. Energy companies will use Marsh BLAST to calculate the maximum property damage loss across their global assets, as they undertake insurance risk assessment surveys.

Nine out of the ten largest property damage losses incurred in the global hydrocarbon extraction, transport and processing industry since 1974 were attributed to explosions. Marsh estimates that these losses are in excess of $8.5 billion, based on estimates of current property values. By having access to the level of data and analytics that Marsh BLAST provides, energy companies can develop more effective risk financing and capital management strategies.  

Andrew George, chairman of Marsh's Global Energy & Power Practice, said: "When explosions occur, their impact can be catastrophic in terms of business interruption and financial loss. Marsh BLAST is designed to help our clients quickly calculate their estimated maximum loss values, which is vital information when determining the value of the risk they want to insure versus the risk they are prepared to retain. This can help avoid potentially higher premiums that are associated with previously unquantifiable risks and provide much-needed analytics to help with balance sheet management."

Note to editors
Marsh pioneered the use of congestion-based explosion modelling for loss assessment when it developed its SLAM tool in the early 1990s. Many firms still use TNT equivalence models for estimating potential loss impact, but these simplistic explosion models do not take into account the build-up of flammable gases within the plant's structures following a release - the ignition of which being one of the most common causes of loss within the industry.

About Marsh
Marsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh's approximately 27,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With 57,000 colleagues worldwide and annual revenue exceeding US$13 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a leader in providing risk and reinsurance intermediary services; Mercer, a leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a leader in management consulting. Follow Marsh on Twitter @MarshGlobal, or on LinkedIn, Facebook and YouTube.

© Press Release 2016