Energy Casualty Market Trends Q1 2021

Overview

For now, rates in this class seem to have stabilized, following the significant price corrections that occurred during 2020. However, insurers have indicated that rates may continue to rise, and the absence of any meaningful market alternatives may enable this to happen.

The reinsurance renewals during the first quarter were manageable, increasing about 5-10%.

However, there is frustration from clients about coverage changes to certain components. For example, wildfire coverage is being targeted in territories where the loss experience does not warrant it. There are similar, continuing restrictions for some midstream businesses.

There have been encouraging signs of investment for the energy liability sector, but no confirmed mainstream entrants yet. It is clear that, for buyers and brokers, the near future looks challenging, and the remedies of 2020 will need to be applied for some time.

Bermuda Casualty

As we head into the second quarter, there is cautious optimism that capacity has stabilized in some sectors but that won’t be known for certain until portfolios are reviewed after the heavy renewal periods. There have been two new market entrants and more are expected during the year. Pressure continues on rate correction, and the tightening of some terms and conditions. For example, communicable disease and cyber wordings are being adapted, there is a growing interest in climate change and ESG programs, and wildfire exposures continue to be monitored.

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Energy Casualty Market Trends Q1 2021

Overview

Bermuda Casualty

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