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Chartis on hook for US plant loss: source
08 February 2010
Chartis, the property/casualty insurance operation of American International Group, is on the hook for millions of dollars of losses after an explosion at an under-construction power plant in Middletown, Connecticut.
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[chartis]
[munich re]
[ Kleen Energy Systems]
[american international group]
Chartis, the property/casualty insurance operation of American International Group, is on the hook for millions of dollars of losses after an explosion at an under-construction power plant in Middletown, Connecticut, on February 7 badly damaged the structure and killed at least five people, Reactions understands.
A market source familiar with the situation told Reactions that Chartis was the lead insurer on the risk, while Munich Re, the world’s largest reinsurer, provided reinsurance protection.
A spokesperson at Chartis confirmed that “together with several other insurance companies” Chartis does provide some insurance cover for the damaged plant. The spokesperson did not confirm that Chartis was the lead.
Munich Re was not immediately available for comment.
Fire officials said the blast occurred during testing at the Kleen Energy Systems facility, which was 95% complete and due to come online this summer as the largest electricity generating plant in the New England region.
According to reports cited by Guy Carpenter, parts of the plant were badly damaged and surrounded by debris, but other areas of the structure, its roof and its two smokestacks were still standing. Some nearby houses were also reported to have sustained some structural damage.
The explosion happened around 11am local time when tests at the plant triggered the fire. Officials have reported five people dead and 26 injured.
Kleen Energy Systems began working on the $1.35bn project in February 2008, according to reports. The company is majority-owned by Energy Investors Funds Group, a private equity firm.
Reactions understands the total insurance loss could be around $150m.