Energy insurance market outlook: Property softens while casualty stays disciplined

John Jones ; 2025-12-05 15:22:34

Insurers are seeing divergent conditions across P&C lines

Insurance News

By Josh Recamara

Nov 30, 2025Share

As the energy sector evolves, insurers are seeing divergent conditions across property and casualty lines, shaping coverage options, pricing and risk management strategies for 2026.

According to Amwins'State of the Market Report: A Focus on the Energy Marketplace, property markets are broadly softening due to abundant capacity, while casualty markets remain constrained by rising claims severity, litigation costs and social inflation.

Downstream property insurance softens

The downstream energy property market has experienced consistent rate reductions even after early 2025 losses at PBF Energy’s Martinez and Varo Energy’s Bayernoil facilities. Insurers are offering larger line sizes and incentives such as long-term agreements and no-claims bonuses.

However, underwriters are increasingly scrutinizing safety procedures, vendor qualifications, and risk management frameworks, reflecting lessons from recent loss events.

Power and renewables coverage

Insurers remain active in power and renewables, providing coverage for established technologies like battery storage and solar installations.

On the other hand, new or untested technologies faced limited capacity and stricter terms. Insurers are also leveraging AI-driven modeling and advanced analytics to underwrite these exposures, requiring detailed submissions from insureds to secure optimal terms and pricing.

Midstream and upstream risk management

Midstream property markets saw selective rate relief for high-quality, well-managed assets, while loss-affected risks face stricter underwriting.

Casualty insurers continue to manage volatility through tighter appetites, higher attachment points, and careful limit deployment, particularly in litigation-prone jurisdictions like Texas and Louisiana.

Meanwhile, upstream casualty coverage relied on multi-carrier placements to manage reduced market participation, maintaining stability through disciplined underwriting and reinsurance support, according to the report.

Professional and cyber lines

D&O coverage remains stable with competitive capacity, while cyber insurance showed flat or slightly declining premiums, reflecting improved claims experience and underwriting practices.

Ransomware and class action privacy exposures persist, but capacity and competition outweigh claim volatility in most cases.

London continues to anchor complex, international energy placements, offering capacity and competitive pricing for property and casualty risks. Property markets have entered a softening phase, while casualty underwriters maintain caution around emerging risks, including PFAS and cyber exposures.

Insurance implications

Insurers must balance capacity deployment with disciplined underwriting, especially in casualty lines. For insureds, understanding shifting coverage conditions, evolving risk assessments, and enhanced underwriting scrutiny is essential.

Strategic engagement with brokers and specialized underwriting teams will remain critical to securing optimal terms and maintaining portfolio resilience in 2026.