Some energy insurance buyers seeing rate relief: Amwins

Some energy insurance buyers are seeing rate relief and increased capacity in property lines, but the impact of an active hurricane season remains uncertain, according to Amwins.

Downstream energy companies can expect property rate decreases of 2.5% to 7.5% as the market softens and capacity increases, Amwins said in its energy state of the market report.

The softening reflects a market adjustment following rate hikes of up to 30% last year for policyholders with significant losses.

Before Hurricane Francine, softer conditions and favourable reinsurance renewals were expected to continue for the remainder of 2024 and into 2025, with underwriters maintaining terms and conditions, Amwins said.

“Whether this holds true after the flooding in Louisiana, the impacts of Hurricane Helene and the final two months of the season remains to be seen,” according to the report.

Energy companies are also seeing rate relief in professional lines, Amwins said.

Directors and officers liability rate trends are favourable and despite a lack of new players, capacity remains plentiful, the report said.

“Companies with proven financial strength are seeing more aggressive pricing, with some able to negotiate renewals at a double-digit rate decrease,” Amwins said.

Cyber continues to be the exception in a hard market, with renewals coming in at level or below expiring pricing.

“We have seen upwards of 30% decreases in premiums since 2023. Although claim activity continues to increase, underwriters are taking a positive approach to placements and renewals,” the report said.

Until loss ratios begin to produce widespread concern, cyber market conditions will remain soft, Amwins predicts.

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