Published on 03 August 2026

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NATURAL RESOURCES MARKET UPDATE H2 2026: DOWNSTREAM

Published on 03 August 2026

The Downstream Energy market remains delicately poised following significant loss activity in 2025 and a continued pattern of events during the first half of 2026.

The following summary outlines the key trends, challenges, and developments shaping the market.

MARKET PERFORMANCE AND LOSS TRENDS

• 2025 Performance: The gross losses, currently settled or reserved, to impact the downstream market in 2025 stand at approximately USD6.7 billion, far exceeding the global premium pool of less than USD3.5 billion. This was largely driven by an increased frequency of losses in the refining sector.
• 2026 Developments: The trend of multiple losses has persisted into 2026, with over USD850 million in reported losses during the first half of the year. This figure has potential to rise significantly following the recent Qatar Energy incident, which could become a major loss event.
• Prior to the Qatar Energy incident, the most significant loss to date in 2026 is the refinery fire in Cartagena, Spain, with reserves currently estimated at USD508 million.

MARKET CONDITIONS AND PRICING TRENDS

Despite the ongoing losses, the downstream market continues to soften, with the rate reductions of 2025 further observed in 2026. Key pricing trends include:

• Rate Reductions:
  • Medium-sized accounts without losses are seeing reductions of 7.5% to 12.5%.
  • Larger accounts with significant premiums are experiencing reductions of up to 20%, however in some extreme, or regional cases, where there is less capacity requirement, we have seen reductions in the region of 25%.
• LNG Sector: The LNG sector remains highly competitive, with underwriters offering significant rate reductions and lenient terms and conditions to secure these risks. It remains to be seen if this trend continues following the recent Qatar Energy incident.
• Refining Sector: Refining remains under intense scrutiny due to its contribution to the three largest losses of 2025, however with Refining contributing to around 70% of the global downstream premium the rating outlook remains competitive. However, with the recent loss activity underwriters are maintaining discipline in policy coverage and deductibles, emphasising the importance of insureds demonstrating their robust risk management and high operating standards via a well-managed risk engineering program.

KEY DRIVERS OF MARKET TRENDS

The following factors are influencing the current trends in the London and European downstream markets:

• Increases in working capacity, and a willingness to deploy more capacity, has led to heightened competition.
• Traditional Property Markets. These markets are now writing more downstream business, adding to the competitive landscape.
• New Capacity. New entrants, including Hiscox, have introduced additional capacity to the market.
• Increased Competition for Lead Positions. More markets are broadening their appetite and are willing to take lead positions to protect their signings.
• Use of Facilities. Markets are striving to protect their orders amidst the growing use of broker facilities.
• Regional Capacity Growth (DIFC). Significant challenges have arisen in the London/European markets for MENA business due to the expansion of regional capacity and increased competition from players such as AIG, Markel, and Starr operating out of the Dubai International Financial Centre (DIFC).

CONSIDERATIONS FOR INSUREDS

With regard to key issues under market review, it is important to note that, as highlighted in previous reports, the trend of losses occurring during restarts following turnarounds or maintenance procedures has persisted into 2026. This issue has once again captured the attention of underwriters, particularly in light of the recent Qatar Energy incident which reportedly occurred two days after restart.

Accuracy in assessment and reporting of Business Interruption (BI) sum insured values remains a critical concern, particularly in light of the recent volatility driven by the delicate geopolitical situation in the Middle East. While many insureds have adjusted their values upwards, it is essential that these are accurately maintained, especially as oil prices decline following the recent ceasefire.

OUTLOOK

The downstream insurance market is at a critical juncture. While the LNG sector remains a bright spot with favourable conditions for insureds, the refining sector continues to face challenges due to its loss history. The recent Qatar Energy incident could further exacerbate market conditions if it results in a significant loss.

To navigate these challenges, it is imperative for well-managed risks to demonstrate their operational excellence through comprehensive risk engineering surveys. This will be key to securing favourable terms and conditions in an increasingly competitive and capacity-driven market.

This summary provides an overview of the current state of the downstream insurance market, highlighting the challenges and opportunities for stakeholders in 2026.