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Mining risks: The long view

The metals and mining sectors are evolving industries, with complex, large-scale risks and a sometimes volatile loss profile – which makes them a perfect long-term fit for Berkshire Hathaway Specialty Insurance (BHSI). Matthew Gooda, underwriting manager for metals and mining at BHSI, shares his insights and BHSI’s approach to its property risks in this sector.

What makes the metals and mining sector exciting to you?

Matthew Gooda (MG): For me personally, this starts with the fundamental importance of the sectors – it’s trite but true that everything we use is grown or extracted, so the extractives industries are essential to all progress beyond subsidence agriculture! If we consider development through some concrete examples, we can see the importance of the mining and metals industry at work. Since 2000, for example, we’ve gone from 78% to more than 91% of the global population having access to electricity, meaning literally hundreds of millions more people are now able to refrigerate food and light their homes after dark – very meaningful aspects of development. And not only have these industries enabled major historic societal transformations, like urbanisation, industrialisation, mass travel and electrification – they are now enabling the transition to renewable energy by providing the battery metals that are vital ingredients for energy storage.

And what makes these sectors interesting to BHSI?

MG: As an insurer, the technical nature of the industries means a deep understanding of both industry assets themselves as well as the volatility profile of the industry as a whole is essential if the sectors are underwritten successfully in the long term – and we aim to be a long-term stable partner to the industry. A patient and thoughtful approach is perfectly in line with BHSI’s culture and plays to our strengths.

In the very short term, what challenges have the industry and its insurer’s faced in 2023?

MG: There are some obvious challenges around commodity market risk for the metals and mining industries as the Chinese economy wrestles with some deeply rooted issues, as well as an uptick in recent loss activity for insurers, but if highlighting one issue I would select wildfire exposure.

Wildfire isn’t an equal threat to operations worldwide, but has certainly threatened several operations in Canada and Australia recently, and logistics channels in particular. It’s not necessarily a peril that is modelled as part of the traditional natural catastrophe modelling process, which raises questions as to how well the insurance industry is funding the exposure. But it also represents an area where the metals and mining industry may need risk transfer solutions for events outside their properties that nonetheless impact their businesses. We have seen repeatedly that one of the characteristics of wildfire events is their ability to disrupt a business when ingress or egress is put at risk, or employees are displaced – disruptions that may not be catered for by conventional insurance products. At BHSI, our catastrophe team has hired specific expertise in this area, and we have now quoted our first parametric wildfire solution. We are now in a position to respond if the industry has an interest in protection from this peril beyond conventional PDBI insurance for their own assets.

How has BHSI structured its property underwriting team for mining operations?

MG: We have a global team of mining and metals specialists in our energy teams around the world – latterly in London, as well as Houston, Toronto, Sydney, Perth and Singapore. While we focus on aligning local underwriting teams with local clients, we are a collaborative team that shares information to learn from our global experience and ensure we deliver a globally consistent response for our customers and brokers around the world.

What is your appetite in the mining space?

MG: Our goal is to be a meaningful partner to the industry – from major diversified multinationals and multibillion-dollar projects to niche, single-site operations. Our appetite is high where we believe that we can be a sustainable long-term participant. We are comfortable when we have a high confidence that we understand the exposures presented to us, and that the terms and conditions we can agree are balanced. We are very focused on trying to develop credible perspectives on the likely long-term cost of risk for assets as best we can, so that we can participate in a sustainable fashion. This does mean that, notwithstanding recent insurance market hardening, we remain a somewhat selective insurer as we believe it remains the case that not all exposures are adequately priced by the insurance market.

What are some of changes you see in the mining industry?

MG: Mining operations are always looking for new ways to become more efficient and profitable, which may often mean scaling up, adopting new technologies, as well as making the investments required to meet the world’s evolving commodity demands. Ore grade decline drives the industry towards higher volume operations, and finding technologies solutions for tough to treat ores. This can sometimes make risks larger and more complex – but at the same time, we see a keen focus on improved risk governance from many operations, and some very strong, hard-won improvements in safety performance in recent years.

At BHSI, it is a question of digging in and understanding our clients and their risks, collecting the increasingly available risk and performance data, and getting to that critical level of confidence that we understand a risk sufficiently to build a long-term partnership with our customer. BHSI has so much to offer the mining industry. Our desire to truly see through volatility to long term cost of risk, our financial strength, and our CLAIMS IS OUR PRODUCT philosophy. We are excited about the future of the mining industry – and continuing to grow our operation along with it.

Berkshire Hathaway Specialty Insurance ( provides commercial property, casualty, healthcare professional liability, executive and professional lines, transactional liability, surety, marine, travel, programs, accident and health, medical stop loss, homeowners, and multinational insurance. The actual and final terms of coverage for all product lines may vary.  It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Boston, Chicago, Columbia, Dallas, Houston, Indianapolis, Irvine, Los Angeles, New York, Plymouth Meeting, San Francisco, San Ramon, Seattle, Stevens Point, Adelaide, Auckland, Barcelona, Brisbane, Brussels, Cologne, Dubai, Dublin, Frankfurt, Hong Kong, Kuala Lumpur, London, Lyon, Macau, Madrid, Manchester, Melbourne, Munich, Paris, Perth, Singapore, Sydney, Toronto, and Zurich.

 The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.

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