UK Utilities Risk Report 2026

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Marsh is pleased to present the fifth consecutive UK Utilities Risk Report, produced in partnership with Utility Week.

This edition offers a practical, sector-focused view of the risks shaping utilities today — and clear priorities for utility leaders seeking to protect service delivery, balance sheets and long‑term investment plans.

Uniquely this year, the 2026 report comes in two parts with part 2 – which will be published in May – focusing on Cyber Security.

A note on timing: The research for this report was completed before the recent escalation of conflict in the Middle East. While survey responses reflect conditions at the time, many top risks already align with emerging global pressures. Further geopolitical instability may amplify cost and supply chain pressures in the months ahead.

Why this report matters? Utilities operate at the intersection of critical infrastructure, regulation and fast‑moving technology. Our 2026 findings translate rigorous research into actionable guidance so leaders can strengthen resilience, make better investment decisions and manage evolving insurance market dynamics.

What the 2026 report covers

The top risks facing UK utilities in 2026 and how their relative importance is changing
Market and insurance placement trends affecting capacity, pricing and coverage
Practical resilience measures and risk‑financing options tailored to utilities
Sector‑specific implications for water, electricity, gas and digital infrastructure
Short checklists and board‑level actions to close critical gaps

Use this report to:

Gain a clear picture of the most pressing risks affecting UK utilities in 2026
Inform strategic decisions on investment, procurement and risk financing
Prioritise board actions and operational measures to protect service delivery
Understand insurance market trends and alternative solutions to fill protection gaps

Headline report findings

Cyber risk remains the leading concern. Attack frequency and severity increased through 2025, and the sector’s growing reliance on smart technologies and AI makes stronger cyber resilience and incident readiness a priority.
Regulatory risk is a major, recurring theme: four of the top ten concerns relate to regulatory change, from business plan appeals to sector overhauls that affect capital and investment capacity.
Cost pressures are rising. Early indicators following recent geopolitical events point to higher energy and input costs, which are particularly significant given the way regulatory settlements and business plans are structured.
Supply‑chain and contracting risk are contributing to operational fragility. Contingency planning and clearer contractual risk allocation are now essential across procurement and outage management.
Insurance market dynamics remain challenging for certain perils. Capacity and pricing constraints for windstorm, flood and cyber exposures are driving greater use of alternative risk solutions.
Digital infrastructure demand (data centres) is creating new stresses on utilities – more grid connections, higher power requirements and increased water use for cooling – requiring coordinated planning across networks and planners.

Sector implications

Financial resilience: With budgets built on forward‑looking cost assumptions, utilities that have not secured price stability (for example, via long‑term power purchase agreements) face a growing risk of actual costs materially exceeding forecasts.
Investment and delivery: Accelerating regulatory changes and compressed policy timetables heighten uncertainty for capital programmes and could limit investment capacity unless risk‑adjusted planning is adopted.
Operational resilience: The pace of change across cyber, climate and market risks is increasing the operational burden on asset owners. Prioritised mitigation and maintenance programmes are needed to protect service continuity.

Practical actions highlighted in the report

Strengthen cyber controls, run targeted resilience testing and update incident response playbooks to meet evolving insurer and regulator expectations.
Reassess procurement and contracting strategies to embed contingency provisions and clear risk allocation with key suppliers.
Apply a risk‑reduction ROI framework to prioritise capital projects that improve insurability and reduce net cost of risk.
Consider layered financing: use primary insurance for more frequent losses and captives, parametric or hybrid structures to bridge capacity and tail exposures.
Coordinate cross‑sector planning for digital infrastructure growth to ensure reliable connections and sustainable resource use.

Why act now?

The risks identified in this fifth edition will be familiar to many — but they are evolving faster than many organisations can adapt. Strengthening cyber and physical resilience, aligning investment planning with regulatory expectations, and expanding financing options are critical to safeguarding services and enabling the sector to meet future demand.

Download your copy to access the full UK Utilities Risk Report 2026 for detailed analysis, case studies, and practical checklists.

FAQs for the UK Utilities Risk Report 2026:

The UK Utilities Risk Report is an annual sector-focused publication produced by Marsh in partnership with Utility Week, providing practical insights into the key risks facing UK utilities and guidance for managing these risks effectively.

Utility leaders, risk managers, and decision-makers in the water, electricity, gas, and digital infrastructure sectors should read this report to inform strategic decisions and strengthen resilience.

The 2026 report is unique as it is published in two parts, with the second part focusing specifically on Cyber Security. It also reflects evolving risks amid recent geopolitical tensions and emerging global pressures.

The report is based on rigorous research including surveys and analysis completed before recent geopolitical events, offering a comprehensive view of current and emerging risks in the utilities sector.

It provides actionable guidance on risk priorities, resilience measures, investment planning, insurance market trends, and practical checklists to protect service delivery and manage evolving risks.

Previous editions can be accessed through Marsh.com where the UK Utilities Risk Reports are published and available for download.

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Report

UK Utilities Risk Report 2026