The explosion and fire that destroyed the Deepwater Horizon oil rig and caused a huge oil spill in the Gulf of Mexico will not have as major an effect on the energy insurance market as Hurricane Katrina, according to a Wednesday analysis by Marsh Inc.

The brokerage arm of Marsh & McLennan Cos. Inc. said in its latest “Energy Market Monitor” that insurance capacity has not constricted and price increases are likely to be modest despite the Deepwater Horizon losses. In contrast, capacity contracted and rates increased significantly for energy risks following Hurricane Katrina in 2005.

The loss of the Deepwater Horizon rig, which was owned by Transocean Ltd., “is an important event in the history of deepwater drilling and exploration insurance, but not a market changer,” Jim Pierce, chairman of New York-based Marsh's global energy practice, said in a statement. “Following Hurricane Katrina, there was a massive change in the insurance landscape due to a lack of capacity and changes to the way in which wind insurance was sold. Capacity currently isn't an issue and insurers seem keen to maintain their commitment to the market.”

Since the April Gulf of Mexico loss, Marsh said offshore energy renewals are seeing rising pricing, but the increases are not large.

“There isn't a lack of capacity and, as things stand, no one looks as though they are ‘leaving the party,'” Marsh said in the report. “Until that happens, the offshore market will continue to drift unless the reinsurers inflict ‘market moving' reinsurance prices.”