Conditions still favourable in energy insurance market, despite NatCats: Marsh

Conditions remain favourable for most energy insurance buyers, despite an unprecedented number of natural catastrophes, Marsh reports.
Negotiations for many buyers have become more difficult, because underwriters are showing greater price discipline, requesting more data from insureds and rates have risen for some segments of the market, according to Marsh’s Energy Market Monitor. That said, most buyers continue to benefit from strong capacity and excess capital.
Primary energy insurance markets have suffered relatively few direct losses as a result of recent sizable earthquakes in Japan and New Zealand, according to Marsh’s report. However, reinsurance market losses could affect primary insurance rates in the future.
Driven largely by an absence of natural catastrophe losses, the Middle East and North Africa remain an attractive market for underwriters. Continued political unrest in the region is an issue to watch, the report notes.
There are notable exceptions to the mostly favourable insurance market conditions. These include, according to Marsh:
• deep water drilling and control of well, where capacity is strained; and
• excess casualty in the United States, following the departure of several underwriters in the wake of the Deepwater Horizon loss and other recent events.