Power and Utilities Market Update 2017
Soft market conditions prevail across the majority, if not all, product lines in the power generation sector and the property sector in particular. Several market commentators have reflected on what they called “the softening of the softening”, but in the power generation sector there is little evidence that the softening process is slowing.
The latest Power and Utilities Market Update from Marsh’s international placement division, Bowring Marsh, analyses current global insurance market conditions for power generation risks. It provides insight into changes within the property market, available capacity, and the underwriting approach of the world’s leading insurers across six regions – Asia, Bermuda, Europe, Latin America, the Middle East and Africa, and the United Kingdom.
Key findings include:
- Continued low interest rates mean few opportunities for investment income therefore we have seen little capacity, if any, withdraw from an already overcrowded marketplace.
- Market continues to soften; year-end renewals saw further premium rate reductions which in some instances were combined with coverage enhancements.
- Although the sector did experience losses in 2016, some power generation insurers expect to make a modest profit - given the soft market conditions it remains to be seen if this can be continued in 2017.