The softening market cycle continues for most sectors and capacity is at an all-time high. But, as rates continue to fall, markets are balancing profitability concerns with pressures to grow market share. Upstream, downstream and liability energy companies have opportunities to take steps with confidence in 2025.
Even seasoned readers of this review will be forgiven for being confused by the complex and contradictory market dynamics that are emerging in 2025. The profitability tightrope is precarious, and loss activity in the first quarter of this year have the potential to tip the balance. But energy risks continue to attract large amounts of premium, positioning the class as an attractive proposal for capital providers due to the large potential returns in a profitable year. This has driven the increased investment in the sector with several insurers working hard to cement and grow their market share despite profitability concerns.
- Overall, market dynamics are complicated. Insurers are concerned about dwindling profitability, but continue to offer rate reductions to compete for business.
- Insurers are relying on their specialist underwriting teams to focus on risk selection, creating a flight to quality that has only intensified in recent years. The most favored risks are oversubscribed and receiving the best terms.
- Rate reductions are ramping up in the downstream market following a benign loss record in 2024, with markets quickly forgetting the many years of poor performance that preceded it. But losses in early 2025 have the potential to deteriorate over time.
- In the upstream market, softening market conditions have accelerated beyond expectations for the most attractive parts of the portfolio, but major construction losses and attritional losses have the potential to further deteriorate profitability – much like the downstream market.
- Directionally, the liability market is softening, but U.S.-exposed risks are seeing the greatest average rate increases driven by social inflation.
- Clean energy technologies are evolving, and according to our Global Clean Energy Survey 2025, oil and gas companies are prioritizing investment in carbon capture, biofuels, hydrogen and geothermal in the next five to ten years.[1] Energy companies’ risk profiles are changing.
- Markets that build the expertise and develop the products to support their clients’ evolving risk portfolios will be of increasing importance over the coming years.
- It is crucial for energy companies to do everything in their power to present themselves as the highest quality risk by providing detailed risk information, thorough risk engineering, loss modelling or the development of long-term relationships with key carriers.
In this review, we offer a comprehensive analysis of the three key energy insurance sectors: upstream, downstream and energy liabilities, alongside a market view from our key geographical hubs of North America, Latin America, Dubai, Norway, Singapore and China, to arm energy companies with a thorough understanding of the driving forces behind the current market trends and enable them to make considered placement decisions. Our specialists also explore key renewable trends that are impacting the energy sector, including a deeper dive into the adoption of clean technologies and the evolving risk exposures for subsea cables as part of electrification strategies.
For energy companies, there is much to be positive about when looking forward to the remainder of 2025. Although losses loom over upstream and downstream markets with the threat of deterioration throughout the year, market competition, particularly for the most favoured risks, places buyers in a strong position to achieve competitive terms and pricing.
We hope that you find the Review to be insightful and look forward to discussing any of these topics with you in more detail.
Featured articles from the review
Disclaimer
WTW hopes you found the general information provided here 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, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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| Title | File Type | File Size |
|---|---|---|
| Energy Market Review 2025PDF | 6.2MB |
Energy Market Review 2025 authors
Natural Resources contacts
In this video, Marie Reiter, Head of Global Broking Strategy, Natural Resources, shares the key highlights from the 2025 Energy Market Review.
