The energy insurance market remains deeply soft, with abundant capacity, intense competition and continued downward pressure on rates.
Deteriorating loss trends, whether from heavy downstream refinery losses, upstream construction tails or liability claims inflation, have not yet driven corrective hardening. Sector loss severity remains insufficient to counteract capital oversupply, leaving pricing increasingly disconnected from underlying risk.
Capacity oversupply is the central driver, pushing underwriters to protect portfolios through aggressive rating, broadening appetite and stepping into leadership positions to maintain relevance.
What will it take to turn the soft energy insurance market?
Key energy regional hotspots
Carbon capture could be a new growth lever
The dichotomy of shrinking premium pools across all energy sectors against increasingly ambitious management growth targets is pushing insurers to find new revenue sources. In an industry where few risks are truly new, carbon capture, utilization and storage (CCS) presents one of the very few sources of genuinely new insurable activity. This Review explores how innovative, whole value chain insurance solutions can unlock CCUS investment and position insurers at the center of this emerging growth engine.
M&A activity could become a counterweight
Although today’s market remains well supplied, insurer consolidation is progressively centralizing capacity. This trend could curtail future availability as merged entities rationalize portfolios, tighten underwriting discipline or reallocate capital in response to rising loss trends. M&A trends are explored in ‘Stability, scale and strategic positioning: Energy sector M&A trends to watch in 2026’ as part of this Energy Market Review.
Looking ahead
As 2026 progresses, the energy insurance market remains highly favorable for buyers, but it is built on fragile foundations.
“With a much-reduced premium pool and marginal rate adequacy on most placements, a significant capacity withdrawal, severe loss event or shift in treaty appetite could trigger a rapid turn in the cycle. Preparedness and strategic positioning will be essential as the market moves closer to an inevitable inflection point.”Rupert MackenzieGlobal Head of Natural Resources
“With a much-reduced premium pool and marginal rate adequacy on most placements, a significant capacity withdrawal, severe loss event or shift in treaty appetite could trigger a rapid turn in the cycle. Preparedness and strategic positioning will be essential as the market moves closer to an inevitable inflection point”, Rupert Mackenzie, Global Leader, Willis Natural Resources.
Risk quality and strategic engagement matter more than ever. “High-quality engineering, clear risk data, flexible placement structures and strong broker-to-market relationships remain essential differentiators to create resilience and stability for energy companies in readiness to withstand unexpected shocks and future upturns in the market environment”, Marie Reiter, Global Head of Broking Strategy, Willis Natural Resources.
Download the full Review to find out how these trends are set to drive the 2026 energy insurance market.
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| Title | File Type | File Size |
|---|---|---|
| Energy Market Review 2026PDF | 4.9MB |
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