Energy Insurance Capacity Tops $10B as 2025 Losses Reach $6.8B
WTW’s energy insurance review reports upstream capacity at record levels above $10 billion and downstream gross losses hitting $6.8 billion in 2025 under intense competition and persistent rate declines. Despite mounting social inflation, geopolitical volatility and escalating claims, the market remains soft with no clear catalyst to drive pricing hardening.
1. Record Upstream Capacity and Rate Pressure
Upstream energy insurance capacity has exceeded $10 billion, driven by new market entrants and expanded broker facilities, intensifying competition and exerting downward pressure on rates. Excess capital supply and aggressive underwriting have sustained a buyer-favorable market with no immediate signs of pricing recovery.
2. Escalating Downstream Losses
The downstream segment recorded gross losses of $6.8 billion in 2025, with continued loss deterioration into early 2026. Elevated refinery and construction claims have failed to prompt market tightening due to ample capacity cushioning rate adjustments.
3. Liability Market Dynamics
International liability remains broadly profitable with healthy capacity levels, yet growing global litigation, insufficient reserving and claims inflation heighten concern. Despite these challenges, strong competition maintains favorable terms for policyholders without indications of imminent market hardening.
4. Geopolitical Volatility and Client Guidance
Heightened Middle East tensions amplify exposure uncertainties, but the market’s soft conditions persist. WTW urges energy firms to review business interruption declarations, prioritize clear risk data and leverage flexible placement structures to enhance resilience against potential shocks.