Canadian Underwriter

The next big risk for the oil and gas sector?

December 13, 2017   by Greg Dalgetty, Editor

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oil-pipelineA sudden spike in oil prices could prove problematic for pipelines that aren’t currently in use, says Sean Murphy, president of Lloyd’s Canada.

“In my mind, the biggest risk is the pipelines that are currently dormant,” Murphy told Canadian Insurance Top Broker.

“If the cost of oil goes up, my concern is whether or not there are sufficient checks and balances to ensure the integrity of those dormant pipelines. You can’t just flip the switch and start pumping oil through them,” he said.

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“All of a sudden, maybe the price of oil goes up again to $70 or $75 and people start things up again. If it’s not done properly, it could be problematic.”

In a wide-ranging interview, Murphy also discussed potential growth opportunities for Lloyd’s in Canada.

“There’s huge opportunities for growth in Canada, not only in traditional business, but also in new and emerging markets such as shared economies, cyber, infrastructure spending from the provinces and federal government—we’re very much interested in that,” he said. “There’s Airbnb, there’s Lyft coming in. We’re looking at these to see how we can fit in and see what opportunities there are for Lloyd’s.”

The cyber business that Lloyd’s writes has already proven itself as a source of growth.

“It’s been increasing by 50% over last year—that’s standalone cyber,” Murphy said. “If you have any kind of IT presence, if you have any kind of personal information within your corporation that you’re holding, you need to have a proper cyber coverage—not just some read-in on a property policy.”

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This story was originally published by Canadian Insurance Top Broker.