Published on 12 September 2025
Share:
Upstream Energy Market Update H2 2025
Published on 12 September 2025
The Upstream Insurance Market in H1 2025 played out as we suggested it would in our previous report, with softening momentum building as capacity significantly exceeded demand for most risks, and capacity surplus driving carriers to compete aggressively for market share.
Losses in the upstream sector remain minimal, and it has been over a decade now without a market loss in excess of USD 1bn. This favourable loss environment has contributed to a continued downward trend in rates, with buyers benefiting from reductions ranging between 5% and 30% in H1 2025.
The extent of these rate reductions is influenced by the loss record, the risk location and the asset type and whilst reductions vary, as a macro theme in the upstream market, rate is coming off across the portfolio.
While softening markets benefit clients by reducing insurance spend as a percentage of CAPEX, they also present challenges across the value chain. For markets, repeated double-digit reductions strain margins, while brokers must balance market coverage with managing signings and relationships. For H2 2025, upstream brokers face the challenge of pushing incumbent leaders for necessary reductions, only to see business won by other markets offering better terms. For operational risks with large premiums, renewals are becoming increasingly unpredictable, with savings of 20–30% achievable. This level of reduction is unsustainable over several renewals.
Brokers must work closely with clients to navigate this soft cycle while maintaining relationships for the inevitable market turn. Without a series of major upstream losses, the next 12–24 months will remain challenging for the upstream insurance business. Brokers will need to offset costs to protect margins, potentially impacting service levels, while underwriters face diminishing returns on capacity deployment.
Share:
Matt Byatt
Matt began his career at the JLT Group specialising in energy package programmes with a strong emphasis on North American business. After 14 years, Matt moved to Alesco with a significant development role in terms of new business, placing and implementation of complex programmes worldwide. Matt’s extensive international Upstream marketing and placement experience aligns with clients’ needs, and he will work closely with his broking colleagues and our servicing team, including claims when the situation arises.
