Analysis of the energy insurance market conducted by WTW points to a stark divide with the emergence of a widening desirability gulf, according to the broker and risk advisory’s Energy Market Review.
Risk and performance data suggests an homogenisation of risk appetite amongst carriers, with a strong drive from most markets to grow the highly desirable, upper-tier business segment – a competitive pressure that has the potential to impact less desirable placements.
Relatively benign loss activity across all the energy sectors in 2023 saw markets return to profitability once again, with no signs of any insurers looking to withdraw from the sector. Capacity across all the energy occupancies remains abundant, albeit stabilising in most sub-sectors, the firm said.
Graham Knight, global head of natural resources at WTW, said: “This widening desirability gulf between the best and the rest is great news for those clients considered upper tier as competitive pressures for this business will most likely drive softening rate trajectories throughout 2024. Conversely this is less good news for the smaller, less desirable placements which could face more of a challenge for optimum capacity.”
