Energy Market Review Update 2025
Much like the international markets, market conditions are softening, capacity is stable and underwriting appetite is increasing moderately, which is fuelling the competitive pressures to maintain and grow market share among underwriters in the region. Without any major losses since our last review in April, upstream energy companies with good loss histories can expect rate reductions of 5%-15%.
Regulatory changes are holding the door open for upstream energy companies to ramp up operations and exploration in oil and gas, but an uptick in activity needs to be addressed with a responsive and tailored risk strategy.
In the downstream refining and chemicals sector, echoes from the international downstream energy insurance market aren’t quite stretching to the U.S.. Headline losses from refinery fires are not impacting premium reductions. Major losses have been covered by catastrophe bonds, and the downstream energy property insurance market fin North America has maintained its profitability streak.
“Several hurricanes in the last five years have ranked among the costliest in U.S. history”, but largely due to a benign 2025 hurricane season, underwriting profitability is cascading through the commercial market—even in typically catastrophe-prone areas such as the Gulf Coast. In some cases, aggressive reductions of 20% can be achieved, but renewals are achieving 10-15% reductions on average. A strong loss history remains a core factor in the rate reductions available.
Without any withdrawals from the market, capacity remains stable and placements are oversubscribed, keeping competitive forces at play.
Accurate asset valuation and transparent risk management remain prerequisites for smooth renewals.
In 2025, the North American energy casualty market has faced varying conditions across different sectors.
Primary liability market capacity is stable. Manageable primary limits, risk-transfer attachment points, and ample overall capacity has kept capacity stable across the primary liability market, including workers’ compensation (WC), general liability (GL), and auto liability (AL). Most sectors are experiencing flat-rated WC and GL renewals in 2025, although carriers have pushed for low single-digit rate increases on GL. AL remains the lone exception, continuing to see high single-digit to low double-digit rate increases due to claims inflation and increase in litigated claims.
General liability rates for upstream, midstream/downstream and chemical segments are seeing low single-digit increases or flat renewals. After the uptick in primary liability/lead umbrella capacity in 2024, some uncertainty remains in 2025 for offshore operators regarding available domestic capacity, as most of the capacity is now coming from the London market.
Workers' compensation remains profitable and stable for most sectors, with small rate increases requested at renewal. This line of business has kept many overall primary liability portfolios profitable for many carriers, offsetting the increasing pressure of social inflation on the AL and GL. OFS companies and industrial contractors are seeing larger rate increases if they have negative loss records, driven by an uptick in severity of workplace injuries.
Auto liability profitability is still a significant challenge for primary insurers after an uptick in litigated auto claims and settlements, particularly in areas like the Permian Basin, Louisiana, and South Texas. A well-funded plaintiff’s bar continues to focus on commercial auto litigation, and accident frequency continues to trend upwards for many insured in the energy industry.
Excess liability market (lead umbrella and first $25 million of programs) is impacted by claims inflation, causing lead umbrella carriers to focus on acceptable limits and more conservative premiums. Lead umbrella capacity remains limited for many industries, with a key market reducing lead capacity from $10 million to $5 million on energy risks. Capacity within the first $25 million remains cautious due to lawsuit abuse issues in the U.S..
Excess liability market (above $25 million) capacity remains stable, with most segments seeing a surplus of options in both the domestic and London markets. While the domestic excess liability market appears to be contracting somewhat, the London market has stepped in to fill the void in 2025.
Download the full article to find out how energy companies can prepare for these trends and move forward through 2026 with clarity.
| Title | File Type | File Size |
|---|---|---|
| From fires to fleet safety | 12.8 MB |
