Unearthing opportunity: How mining liability is shifting in a softer market

While the international liability market for mining remains technical, market conditions over the past 12 months have been increasingly favorable for well risk-managed mining clients.

Mining liability market conditions are creating a new equilibrium

Increased market capacity, set against the backdrop of a benign claims environment, has created a favorable buyer’s market for international liability. Underwriters are under increasing pressure to meet portfolio growth targets, which is resulting in greater competition and a downward pressure on rates.

This trend is supported by Lloyd’s of London announcing a third consecutive year of underwriting profit for casualty as a class of business in 2024.

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Following several years of underwriting discipline and the adoption of more quota share structures, mining placements are relatively well spread across the market. This, combined with the absence of major market-wide losses, has created a new competitive equilibrium – underpinned by less focus on exposure management and leading to greater choice for buyers.”

Matt Clissitt | Head of Liability and Senior Director, Willis Natural Resources

“Following several years of underwriting discipline and the adoption of more quota share structures, mining placements are relatively well spread across the market. This, combined with the absence of major market-wide losses, has created a new competitive equilibrium – underpinned by less focus on exposure management and leading to greater choice for buyers.” Matt Clissitt, Deputy Head of Liability and Senior Director, Willis Natural Resources

The outlook for 2026 is positive, but insurance buyers should remain focused on differentiating their risks.

High-quality risk information continues to be prerequisite for underwriters to consider a risk. Securing terms from a reputable primary lead carrier with risk engineering capabilities, also continues to be the key to unlocking competitive follow and/or excess capacity.

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Insureds’ scale and geographical presence are impacting market appetite

The multidimensional nature of the mining liability market is best captured through three separate lenses:

1. 01

   Tier 1 and 2 mining companies

   While capacity available remains sufficient for the largest mining liability placements, by default, there is less non-incumbent capacity available to create competition. In addition, there are relatively few insurers with the risk engineering and multinational capabilities required to provide primary solutions for the largest mining companies. This, coupled with a preference from excess and follow markets to follow a recognized primary lead market, dampens the impact of aggressive non-incumbent capacity.

2. 02

   Smaller to mid-sized mining companies

   Capacity is abundant for most smaller to mid-sized mining companies, with there being a more limited reliance on having a primary carrier with risk engineering capabilities. This abundance of capacity is most pronounced for insureds with a well-articulated risk profile and no or little historical losses.

3. 03

   Placements with heavy-coal exposure

   Although the market stance on placements with heavy-coal exposure has somewhat softened, the capacity available still remains a small subset of the overall mining liability market. As such, creating competition among insurers is more challenging and there is a greater prevalence of opportunistic pricing.

The greatest appetite is still for those mining companies who are Canadian-, Australian- or European-domiciled, with more caution being exercised in other geographies.

Pricing is flexible, but coverage remains tight

Underwriting discipline remains, as carriers are showing more flexibility on price than coverage. Peripheral, softer-market coverages remain challenging to obtain without extensive information and at additional cost.

Evolving exposures will remain a focus for underwriters in the year ahead

There are several evolving exposures and macro factors – though ancillary to traditional liability risk factors – which are being tracked and may face greater underwriting focus.

• Changing climatic conditions: The increased prevalence of extreme rain events is leading to operators considering changing the design basis of TSFs to accommodate for increased frequency and severity of rainfall events and reduce the risk of failures or overtopping. Similarly, the increased likelihood of droughts in some regions is also leading to considerations around dust management (particularly relating to TSFs) and the impact dust can have on nearby communities
• Demand for battery materials: The demand for battery materials has grown exponentially and several countries have imposed export controls on raw materials to incentivize beneficiation in country (e.g., unprocessed cobalt in the Democratic Republic of the Congo and lithium in Zimbabwe). Similarly, there is a growing sentiment in several countries to diversify their supply and export chains away from China, adding further pressure on mining companies to invest into the beneficiation process. A greater number of mining placements are including beneficiating or refining operations altering the liability risk profile compared to a traditional mining placement
• Emissions reduction: Many companies are entering into build-own-operate or purchase power agreements (PPAs) with renewable energy companies to reduce scope 2 emissions. Reducing scope 1 emissions through the electrification of fleet vehicles has presented some greater challenges, particularly around the efficiency of using electric haulage trucks versus the traditional diesel alternative. Electrification also presents some different liability exposures to mining placements – for example, battery fires or the impact of cyber-attacks
• Military juntas: The rise of military juntas – particularly in West Africa – has led to several impacts on mining companies including the seizing of product, nationalization of mines and the revoking of licenses. While these are not traditional liability considerations, it is leading increased underwriting focus and scrutiny around certain territories

There’s ample opportunity to capitalize on increasingly favorable conditions

The mining liability market remains a multidimensional space. “Although concerns around the impacts of social inflation, insufficient loss reserving and evolving liability exposures mean that underwriting headwinds remain, well risk-managed mining clients who provide comprehensive risk information are benefiting from greater insurer choice and favorable market conditions.” Matt Clissitt, Deputy Head of Liability and Senior Director, Willis Natural Resources.

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