Gallagher has released its latest Global Energy Market Insurance Update. The report examines the energy marketplace by industry portion and considers the impacts on the market from the COVID-19 pandemic, the Ukraine conflict, and increasing interest in environmental, social, and governance issues.
Among the reports’ key findings were:
Upstream: Both offshore and onshore energy clients are starting to use carbon capture and storage in markets across the globe as an option for conventional decommission. Carbon capture and storage are also being used as normals for generating extra revenue and tax credits, where applicable.
Downstream: The sector may be approaching the end of a hard market cycle for downstream risks, which will benefit insureds with good loss records that can show effective supervision of natural catastrophe exposures.
Renewable energy: The renewable energy market is now more stable and profitable, the report found. However, certain trends will need to be monitored, including the effect of unpredictable global weather patterns on projects in locations with high exposure to natural catastrophes, underwriter uncertainty over some new technologies, and supply chain disruption.
Cyber: Insurers have been hiking their rates by as much as 25% to 40% in response to a recent spike in ransomware attacks.
The sector has also seen ceaseless disruption linked to the COVID-19 pandemic, and the impact of the Ukraine conflict has reached well beyond Eastern Europe, the report found.