Rate softening in the energy market shows no signs of abating, according to Willis

LONDON, Nov. 13, 2025 (GLOBE NEWSWIRE) — Insurance buyers remain in a strong position to optimise both cost and coverage as the market moves into 2026, according to the Energy Market Review Update published today by Willis, a WTW business (NASDAQ:WTW).

After experiencing another record year of low loss activity, attributed to improved baseline levels in risk management and asset quality, the upstream energy market continues to deliver profitability for insurers. Market softening has accelerated even further for the class since the previous Energy Market Review was published in April, with long-term relationships being rewarded as insurers prioritise retention of well-managed risks.

Downstream insurers, on the other hand, have suffered around US$3.5 billion of losses so far this cycle, with claims already equaling market premium. Six of the eight major losses in the year have occurred in the US, largely in the refining sector, putting clients with US exposure under scrutiny. Businesses with clean loss histories continue to benefit from favorable renewal terms in downstream, while companies with loss activity should expect markets to be somewhat more conservative, although rate reductions may still be available. Standard 10-15% reductions, up to 20-50% in competitive tenders, have been observed.

The report outlines some of the trends Willis will be watching in 2026:

• Upstream construction: long-tail risks remain a perennial challenge, but underwriters are more accommodating of these less favored risks where an operational relationship already exists. Leaning on operational relationships to bolster a construction placement is becoming a key strategy.
• Subsea construction: capacity remains restricted for subsea construction, creating a micro-hard market. In a soft market where winning new business is a key focus, some are considering writing small amounts of subsea construction to boost much-needed premium income.
• Upstream reinsurance treaty renewals: if insurers continue to purchase high-level top-up layers on capacity assets, this will provide an indication of their future strategic direction in maintaining and growing market share versus adjusting budget expectations downward for 2026.  
• Liability market: Healthy capacity and generally positive loss ratios have helped to positively impact conditions and move the international market from a hard to a softening rating environment, in strong contrast to conditions in the US casualty market. Social inflation and nuclear verdicts in the US continue to drive reductions in lines and programs with exposure. In Europe, insurers are increasingly concerned about new legislation making it easier to bring a class action, which could lead to a material knock-on effect on liability claims costs.

Rupert Mackenzie, global head of natural resources at Willis, said: “Insurers have reported strong financial results at the end of Q3. The ongoing oversupply in capacity and insurer appetite for growth is simplifying previously complex verticalised placement structures, yielding premium savings for clients. This means that energy companies renewing in Q4 2025 and looking forward into 2026 are in a strong position, with room to negotiate conditions in addition to price.”

The complete report can be downloaded here.

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