Published on 21 July 2025
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Casualty Energy Market Update H2 2025
Published on 21 July 2025
As reported in our last publication, the London market is experiencing a significant increase in opportunities within the US energy liability sector, driven by a shift away from US domestic insurers.
It is particularly noteworthy that the most substantial growth in new business is occurring within the first USD 25 million of an insured's towers. Historically, domestic insurers have dominated the pricing for General Liability and have led USD 25 million umbrellas for smaller, mid-market insureds.
The London market for US energy liability continues to exhibit an upward trend; however, the rate of increases appeared to be moderating as we approached the end of the first half of 2025. Underwriters specialising in upstream risks report rate increases of approximately +2.5% for the first half of the year. Meanwhile, downstream and midstream risks placed in London from the US are experiencing higher single-digit increases, around +7.5%.
Due to some poor back-year deterioration, distressed placements are seeing double-digit rises. The significant increase in claim costs is primarily due to soaring settlement amounts, particularly in cases involving personal injury or major pollution, leading to losses from underpriced previous years. Claims related to auto exposure continue to present challenges. The remediation efforts by London underwriters since the end of the soft market appear to be effective, as insurers are absorbing these losses without significant issues. Underwriters have been deploying smaller line sizes in recent years to mitigate exposure to losses exceeding the middle to higher excess layers. Markets that diversify across both onshore and offshore risks appear to maintain a well-balanced risk spread. There is a marked preference for insureds with smaller auto schedules, with a stronger appetite for Exploration and Production (E&P) companies over oil and gas contractors. Furthermore, markets that have traditionally focused on upstream risks are now diversifying into midstream and downstream, albeit with a disciplined approach. The international market is softening progressively. The underwriting community is witnessing a steady influx of new entrants, and long-established insurers are experiencing significant staff turnover as underwriters are attracted to start-ups or enticed by more senior roles. Desirable business from Canada and Australia is experiencing the largest reductions.
Global capacity for energy liability remains stable; however, there is a discernible trend towards reducing line sizes. Bermudan-based excess liability insurers are now offering lower capacity down towers while trimming lines to reduce treaty purchases and limit exposure to individual losses. This approach mirrors the strategies adopted by the London market during and towards the end of the soft market.
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Billy Quelcutti
Billy returned to London in 2021 having been on a secondment to the US where he was working for Alesco’s regional office in Houston as a local wholesale energy broker. Having spent over 5 years in both the London and Houston energy markets, Billy has extensive knowledge of the global energy space from both an insurance and customer perspective. Billy originally joined Alesco in London in 2014 where he was recruited to focus on North American energy casualty business. Billy specializes in all aspects energy, power and renewables.
Billy started his career in 2010 for Price Forbes & Partners as an energy casualty technician and after a few years added some broker responsibilities to his skillset and began designing and placing large multinational energy casualty placements across the London, European and International markets.
