Amwins Releases State of the Market Report: A Focus on Energy

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Oct 30, 2024, 09:00 ET

CHARLOTTE, N.C., Oct. 30, 2024 /PRNewswire/ -- Today, Amwins, a leading distributor of specialty insurance products and services, released their State of the Market report focusing on Energy, providing a comprehensive overview of key market trends across the downstream, mid-stream and upstream sectors, analyzing the impacts of catastrophic events, premium changes, modifications to terms and conditions and advancements in technology while equipping brokers and clients with valuable insights to navigate the complex energy insurance market.

"The energy market continues to evolve, and our latest report offers brokers a clear view of the current conditions as well as strategies to navigate this complex environment," said Rob Battenfield, executive vice president at Amwins Brokerage in Houston. "We continue to support our clients by keeping them informed of market shifts, helping them manage risks more effectively."

Market Overview

Downstream Energy: After years of a hardening market, 2023 saw little initial change. However, as the year progressed, fewer shock losses and natural catastrophes allowed insurers to regain profitability. This, coupled with ample supply, has created more favorable conditions for insureds in 2024.

Power Sector: The casualty market within the power sector remains challenging, with key players exiting and new gaps emerging. Technological advancements, including the growth of electric vehicles and AI, are increasing demand for power, while the infrastructure struggles to keep pace. Battery storage facilities, in particular, have seen rapid growth, with insurers offering increased capacity for proven technologies. Large technology companies have recently announced large investments in SMR Nuclear technology to keep up with rapid demand increase.

Solar Power: Solar installations continue to expand, driven by clean energy investment. However, the severity of hailstorms presents a rising risk to solar farms, leading to heightened losses.

Mid-Stream Sector: Persistent M&A activity and regulatory constraints are reshaping this segment. Although competition is increasing, the market remains challenging due to third-party litigation funding and escalating nuclear verdicts.

Key Insights and Emerging Trends

Changing Premiums and Natural Catastrophes: While the downstream sector is seeing some rate relief, natural catastrophe severity remains a major concern for energy clients. The impacts of the 2024 hurricane season, along with ongoing wildfire threats, may slightly temper rate drop in Windstorm and Wildfire prone areas.
Capacity Constraints in Upstream Energy: Capacity within upstream energy has been constrained due to key carriers exiting the market, particularly in Texas and Louisiana, where energy accounts dominate. These regions are experiencing heightened challenges in securing coverage, especially for casualty lines.
Cyber Market Trends: Interestingly, the energy sector is also impacted by the softening cyber market, which has seen up to 30% decreases in premiums since 2023. However, challenges such as ransomware and class action lawsuits related to data privacy continue to demand attention.

"Understanding these trends is critical for brokers advising clients in the energy space," said Battenfield. "As the market continues to shift, our team is committed to delivering the expertise and innovative solutions our clients need."

To read the full report, please visit: Amwins State of the Market Report 2024: A Focus on Energy.

About Amwins

Amwins is the largest independent wholesale distributor of specialty insurance products in the U.S., dedicated to serving retail insurance agents by providing property and casualty products, specialty group benefits, and administrative services. Based in Charlotte, N.C., the company operates through more than 155 offices globally and handles premium placements in excess of $33 billion annually. For more information, visit amwins.com.

For further information contact:
Amwins
Lisa Kuszmar
Telephone: 704.749.2780
Email: [email protected]

SOURCE Amwins