Gallagher Global Energy Insurance Market Update: Aug 21
Published 23 August 2021
In our August 2021 Global Energy Insurance Market Update our energy risk specialists from Australia, the United States, United Kingdom and Canada provide guidance on current market conditions and the road ahead. The report examines energy insurance trends such as price, capacity, environmental, social and governance (ESG) pressures, and movement towards green energy cover.
Key content includes
● global and local perspectives on market trends
● energy sector breakdowns for upstream, midstream, downstream, power and utilities, and renewables industry segments
● insurance market trend predictions for the rest of 2021 and beyond.
Highlights of energy insurance market trends globally for 2021
Oil prices have returned to pre-pandemic levels, but rig counts overall are still at around 50% of the levels of early 2020.
Insurance capacity shrinkage is still affecting some sectors, in particular oil sands, coal-fired power generation and some offshore drilling activity (in the Arctic region, for example).
The upstream market has been subject to single-digit rises in the range of 2.5%–10%, with underwriting scrutiny of some areas such as loss of production income (LOPI) and control of well.
With the downstream market making a profit for the first time in a number of years the rate rises of the past 18–24 months are beginning to plateau and total capacity appears to be fairly stable.
In the power market rates are still rising reduction of capacity for coal-powered generation assets continues with the Lloyd’s directive to stop writing coal-fired power plants from 2022.
2020 was a challenging year for the energy casualty sector, with withdrawal or significant reduction of key capacity but rates are now stabilising.
The renewable energy market is more stable than 12 months ago with rate increases typically 10%–25%, while some insurers are looking to increase their exposure to the green energy sector.
In the report Australian based operators can gain local insights from Ryan Mansom, our highly regarded national Head of Energy Gallagher Australia’s expert perspectives on the Australian energy insurance market.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.