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ENERGY & POWER NEWSLETTER

Energy Casualty Market Trends Q1 2021

Update on energy casualty market trends through Q1 2021.
Power plant engineer inspecting machine

29/04/2021

Overview

For now, rates in this class seem to have stabilized, following the significant price corrections that occurred during 2020. However, insurers have indicated that rates may continue to rise, and the absence of any meaningful market alternatives may enable this to happen.

The reinsurance renewals during the first quarter were manageable, increasing about 5-10%.

However, there is frustration from clients about coverage changes to certain components. For example, wildfire coverage is being targeted in territories where the loss experience does not warrant it. There are similar, continuing restrictions for some midstream businesses.

There have been encouraging signs of investment for the energy liability sector, but no confirmed mainstream entrants yet. It is clear that, for buyers and brokers, the near future looks challenging, and the remedies of 2020 will need to be applied for some time.

NEWSLETTER

The Energy & Power Newsletter

April 2021 Energy & Power Newsletter considering the insurance trends over the last quarter.

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Bermuda Casualty

As we head into the second quarter, there is cautious optimism that capacity has stabilized in some sectors but that won’t be known for certain until portfolios are reviewed after the heavy renewal periods. There have been two new market entrants and more are expected during the year. Pressure continues on rate correction, and the tightening of some terms and conditions. For example, communicable disease and cyber wordings are being adapted, there is a growing interest in climate change and ESG programs, and wildfire exposures continue to be monitored.

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“Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”