Energy Market Review Update 2025
A string of substantial refining losses early in 2025 brought an end to the recent benign loss activity and recent losses in Q3 have added to the pressure. Despite significant losses now totaling between $4 and $4.5 billion, the market has shown resilience. Treaty renewals are proceeding without major disruptions, with insurers expecting their 1/1 treaties to renew with reductions.
Six of the eight major losses in the current cycle have occurred in the U.S., putting clients with U.S. exposures on the watchlist for downstream energy underwriters.
Businesses with clean loss histories continue to benefit from favorable renewal terms, with standard reductions of 10–15% and even deeper cuts in the region of 20–30% in competitive tenders.
With pricing already well below technical rate adequacy levels, insurers can simply not afford to continue to compound year-on-year rate reductions. We anticipate a slight easing of downward rating trends as we begin 2026, but absent any further meaningful loss activity, we anticipate that the market will regain its current softening momentum by late spring.
Global capacity remains stable, with no significant entries or exits. After reductions this year, the downstream book has a premium volume of around $3.5 billion.
“Bigger players are likely to engage early to obtain business, and sector-focused brokers have a critical role in assessing all available client options, including considering the relationship, quality and longevity of capacity, identifying the best point of access, and helping clients optimize their risk strategy.” Michael Buckle, Willis Natural Resources Leader, G.B.
“Different markets think we’re at different stages of the softening cycle. Some are more willing to ease certain terms and conditions than others. Long-term agreements (LTAs) experienced a vogue in the first half of 2025, but some markets are now taking this option off the table. As these nuances are worked out in individual negotiations, deductible discipline endures, suggesting we’re not at the bottom of the softening cycle just yet”, Kieran McVeigh, G.B. Head of Downstream Energy Broking, Willis Natural Resources.
“As these nuances are worked out in individual negotiations, deductible discipline endures, suggesting we’re not at the bottom of the softening cycle just yet”
Kieran McVeigh | G.B. Head of Downstream Energy Broking, Willis Natural Resources
Major insurers often underwrite risks from regional hubs that have independent portfolios of business. “These regional hubs are shielded from the impact of loss activity in different regions. Take the U.S. for example, where U.S. losses are isolated to their U.S. hub. As a result, the portfolios of these international satellite offices are highly profitable compared with smaller players who take a global view of their book. This enables the regional hubs of large carriers to offer highly competitive terms, unencumbered by the performance of distant parts of the downstream portfolio.” Andrew Brunero, Global Head of Downstream Energy Broking, Willis Natural Resources
Before the soft market cycle hits the bottom of the pricing curve, there’s still room to build an ideal risk management strategy that will pay dividends when markets inevitably harden again in the future.
Download the full article to find out which four key actions can make a difference in building resilience in a softening downstream energy market.
| Title | File Type | File Size |
|---|---|---|
| Steady up: Losses are tempering downstream energy insurance trends | 8.6 MB |
