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Survey Report

Insurance Marketplace Realities 2024 Spring Update – Energy

May 8, 2024

Sector profitability in 2023 paired with stable treaty reinsurance backing has yielded a more predictable market environment.
Rate predictions: Energy
  Trend Range
Tier 1 (Well-engineered, well-run risks with clean loss history) Neutral increase, (arrows pointing up) Flat to +5%
Tier 2 (Risks with clean loss history, but lower premium income/small insurer panels) Increase, (arrows pointing top right) +7.5% to +12.5%
Tier 3 (Loss-affected program and/or challenging risks Increase, (arrows pointing top right) +15%
General liability Neutral increase, (arrows pointing up) Flat to +5%
Auto Increase, (arrows pointing top right) +8% to +15%
Workers compensation Neutral increase, (arrows pointing up) Flat to +5%
Lead umbrella Increase, (arrows pointing top right) +5% to +10%
Excess liability Increase, (arrows pointing top right) +2.5% to +10%

*Tier 1: Well-engineered, well-run risks with clean loss history
Tier 2: Risks with clean loss history, but lower premium income/smaller insurer panels
Tier 3: Loss-affected programs and/or challenging risks

**Pertains to upstream/midstream/downstream/chemicals/mining but does not include oilfield services


Scrutiny on reported values is slowing following years of pressure and improvements by insureds in their reporting philosophies.

  • As rates of inflation rose significantly and global supply chain issues became prevalent during and after the COVID-19 pandemic, insurers pressured buyers to validate reported values.
  • Many insureds had not previously challenged the status quo of reporting philosophies and baseline values, leading to potential underinsurance for some.
  • Insureds have responded to pressure from the market by seeking third-party appraisals for key sites and improving the accuracy of renewal data, aiding the insurance-to-value ratio across the sector.
  • Despite improvements, clients must remain vigilant and continue to track value changes and trends, employing a balance of periodic appraisals and value indexing, to remain in good standing.
  • Value index rates published by several different services for varying exposure types are generally trending downward as the rate of inflation declines and the supply chain normalizes.

New and prospective capacity into the market is improving competition levels but is not enough to move the market in all segments.

  • Chubb, following the expiration of their MGA relationship with Starr Tech, has aggressively written new lines on select business.
  • A Lloyd’s syndicate known mostly for their upstream portfolio is exploring expanding their downstream and midstream energy offerings and has hired an underwriter well known in the marketplace to expedite growth in the sector.
  • Despite capacity growth, there have also been some changes, such as GSR’s venture with the backing of a large national insurer, expected to begin operations in 2023, which did not materialize.
  • Allianz Houston’s downstream book has now been relocated to London and, while long-term appetite in the space remains somewhat in question, capacity remains stable for now, and messaging from Allianz regarding their intent is positive.
  • Overall, the growth in available capacity is a net gain despite the small exits and reductions from 2023. But for many risks, the working capacity and participation limitations are the drivers of competition rather than technical capacity.

Underwriter line size and capacity deployment adjustments are no longer a common theme in the market.

  • 2022 and 2023 saw several markets reviewing capacity deployment (both dollar capacity and percentage participation) in hopes of improving results, with some making notable reductions in program shares.
  • Profitability in the sector for 2023 and stable treaties have removed energy from the spotlight of senior management for now.
  • Increased underwriter gross written premium budgets could lead to more aggressive price offerings from some insurers in 2024.
  • While the list of reliable lead markets remains relatively short, some insurers will be looking to increase participation to capture market share and increase written premiums in a stabilizing rate environment.

Environmental, social and governance (ESG) remains an important component of conversations with underwriters but is no longer a primary focus for many insurers.

  • In past years, ESG was a top priority for underwriters as they sought to understand each insured’s goals and strategies.
  • While ESG continues to be a topic in meetings with underwriters as part of renewal conversations, it is no longer the key driver that it was.
  • Insurer ESG positions can be dynamic and must be monitored for significant changes over time, but many have remained static in recent months.
  • Continental European companies continue to be the most advanced in their ESG restrictions, but appetite for a large selection of natural resource risks remains, with some exposure-specific limitations, such as coal, oil sands and arctic exploration.

A new Business Interruption (BI) Volatility Clause has been introduced in response to continued concern around BI claims.

  • London Market Association (LMA) BI Volatility Clauses remain market standard in downstream with percentage caps varying based on market perception of volatility risk.
  • The LMA has released a new version of their LMA 5515 Clause (LMA 5515A) which attempts to scale caps to account for partial income reductions as opposed to the previous clause which focused on complete site outages.
  • The ratio of property damage to business interruption amounts in claims continues to be heavily weighted to BI.
  • Insureds must continue to report BI values with a monthly breakdown and have a good understanding of the gross earning/gross profit calculations to allow for transparency with underwriters.
  • Regimented review of reported values to validate cap adequacy paired with mid-term value adjustments, as needed, can relieve recovery limitation concerns.


Auto liability remains a problem across all sectors, impacting lead umbrella pricing and capacity in 2024.

  • Despite eight to nine consecutive years of rate increases for primary auto liability, losses continue to outpace rate increases each year.
  • Jurisdictions that used to be considered neutral are now becoming plaintiff-friendly venues as well in places like the Permian Basin, where activity is concentrated and frequency of losses is high, and areas such as Louisiana and South Texas continue to be challenging.
  • The industry does not expect the 2023 auto liability combined ratio to be profitable despite eight years of steady rate increases, as Fitch Ratings predicts the commercial auto insurance combined ratio to exceed 106% in 2023.
  • Clients with heavy fleets will face increased scrutiny as larger awards and settlements are impacting lead umbrella limits and pricing due to limit vulnerability.
  • Excess carriers will continue to focus on hired auto liability exposures and contractual risk mitigation practices and third-party limits sought.

After a challenging 2023, the upstream operating segment should expect a relatively benign 2024.

  • Offshore operators and non-operators are seeing a welcomed increase in capacity with the return of JH Blades GL/$10 million liability facility (with new carrier backing).
  • Onshore capacity remains stable, and excess liability capacity remains plentiful in both the U.S. and London.
  • While we do not expect this market to soften, the large rate increases (mostly experienced by offshore companies) seen in 2023 due to the shirking of capacity should not continue in 2024.
  • We suspect that excess liability rate increases will lessen as the year continues.

Oilfield services companies are experiencing an extremely challenging marketplace in early 2024, and the horizon looks troubling.

  • The oilfield services segment continues to see the largest uptick in general liability/excess liability claims due to an increase in severity in both judgements and settlements for workplace injury lawsuits.
  • “Action-over” lawsuits appear to be increasing in frequency, and settlements continue to be paid by lead umbrella policies, impacting limit availability from certain carriers.
  • Clients with heavy fleets will face increased scrutiny as larger awards and settlements are impacting lead umbrella limits and pricing due to limits vulnerability.
  • Lead umbrella capacity is quickly shrinking and the market is quickly hardening for many companies within this sector, especially those with larger fleets or large losses.
  • We predict this will become more of an issue as 2024 develops.


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

Blake Koen
Managing Director and Global Client Advocate

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