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Survey Report

Insurance Marketplace Realities 2024 – Energy

November 9, 2023

New capacity and sustainable sector claim performance year-to-date is yielding improved results for buyers, but risk differentiation remains key to success.
Rate predictions: Energy
  Trend Range
Tier 1 (Well-engineered, clean and well-run risks) Neutral increase, (arrows pointing up) Flat to +5%
Tier 2 (Clean, but lower premium income) Increase, (arrows pointing up) +7.5% to +12.5%
Tier 3 (Loss-affected programs) Increase, (arrows pointing up) +15%+

Scrutiny on reported values remains, but the recommended rate of value increase is slowing.

  • It is important to provide details based on the replacement cost per location being used.
  • Exhibiting a reliable baseline of values being indexed is critical to successful use of these tools.
  • Concern remains in areas regarding the impact of inflation on declared values.

New capacity into the market is leading to increased competition.

  • The end of a major MGA relationship between two notable property insurers has opened up new, additive energy sector capacity as both entities will continue to write business in the space
  • A new MGA market entrant backed by a notable, domestic wholesale broking firm and a major nationwide insurer will begin writing new business in Q4 2023
  • Despite line size scrutiny by some insurers, the new capacity should more than offset some line size contraction

Risk quality and account differentiation remain critical to successful renewals.

  • While robust capacity in the space is available, deployment from underwriters depends heavily on risk quality.
  • Without adequate risk engineering reports on critical sites, including up-to-date responses to open recommendations, renewal results will suffer.
  • Risk differentiation via avenues like underwriter meetings can set risks apart from peers and yield improved results.
  • Insurer ESG positions also represent a complex market dynamic impacting results and must be addressed by insureds directly.

Business interruption (BI) volatility continues to be an area of focus as well as coverage restriction.

  • London Market Association (LMA) BI volatility clauses are now market standard in downstream with percentage caps varying based on market perception of volatility risk.
  • Market understanding of supply chain and contract strength can help alleviate some market concerns, but these clauses are likely to still be required.
  • Reporting of BI values, including monthly breakdowns, provides better coverage clarity.
  • Regimented review of reported values to validate cap adequacy paired with mid-term value adjustment can relieve recovery limitation concerns.

Underwriters are evaluating line sizes (both capacity deployed and percentage share) to improve underwriting results.

  • There remains heightened scrutiny from senior management, particularly in downstream where profitability has not met expectations.
  • Recent midstream losses have led to reevaluation of appetite in the space for some insurers.
  • Through two quarters, energy underwriting results have been excellent.
  • Increased underwriter gross written premium budgets could lead to more aggressive pricing for Q4.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).


Mike Lindsey
Director - Property Broking, Natural Resources

Ryan Medlin
Managing Director, Natural Resources

Austin Sims
Director - Property Broking, Natural Resources

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