Energy Market Monitor News – December 2013

Marsh's picture
Printer-friendly versionPrinter-friendly versionPDF versionPDF version

Published:  10-Dec- 2013  

Marsh's latest reports that in the absence of a major windstorm loss in the Gulf of Mexico for five consecutive years, the energy insurance market is poised to enter 2014 with abundant capacity and competitive terms for energy firms with good claims histories.

Current capacity in the global energy insurance market:

  • Upstream risks – US$3.75 - US$4 billion.
  • Downstream risks – plateaued in final quarter of 2013, creating a slight downward trend for firms with good risk profiles.
  • Non-US risks US$3.5 billion.
  • US downstream risks US$2.5 billion.

Pricing for casualty risks is unlikely to move downwards due to a continuing lack of capacity. Marsh reports that rate increases of between 3% and 7% were not uncommon in Q4 2013. Insurers believe that their casualty products for energy risks are under-priced and the debate surrounding ‘cost of capacity’ continues to dominate the marketplace. The underwriting community is developing its awareness of what energy companies do, which in turn means that firms are being asked more far reaching questions by insurers than the simple rating metrics of the past.

Energy firms are increasingly leveraging analytical tools to differentiate their risk profiles and demonstrate superior risk management practices to insurers. Those firms that are able to present a detailed knowledge of the myriad of risks facing their businesses are in a stronger position to secure competitive programs at renewal in 2014.

News Source : Energy Market Monitor News – December 2013

Copy this html code to your website/blog to embed this press release.