The global offshore energy insurance market remained under pressure in 2025-2026, with premium growth largely driven by currency movements and changes in business mix rather than genuine market expansion, according to the International Union of Marine Insurance.
Global offshore energy premiums reached $4.8 bn in 2025, rising only 0.1% from the previous year. The total likely includes some double-counting linked to domestic policies placed through the London market and retrocession arrangements.
London remained the dominant offshore energy insurance centre, accounting for about 60% of worldwide premiums through Lloyd’s and the International Underwriting Association. Its share stayed broadly stable during 2025.
Michele Cibrario, Chair of IUMI’s Offshore Energy Committee, said premium growth reported across individual regions needs to be viewed against exchange-rate movements and the structure of international reinsurance placements.
Headline growth in several markets did little to change the broader commercial picture. Offshore energy insurance remained highly competitive throughout 2025, with available underwriting capacity continuing to exceed demand.
Many insurers remained focused on expanding premium volumes even as profitability came under increasing pressure. Limited large-loss activity also reduced the immediate pressure for substantial rate increases.
Claims conditions were relatively benign during 2025, with no single large event producing losses substantial enough to alter results across the wider offshore energy market. Smaller attritional claims moved in the opposite direction, steadily eating into underwriting margins.
That combination leaves insurers more exposed when a severe loss eventually arrives. Current profitability depends partly on the absence of large claims rather than stronger pricing across the market.
Loss ratios remained unusually low at the beginning of 2025, partly because the year avoided large offshore losses. Those ratios are expected to increase as claims mature, and loss activity during 2026 is already running above the level recorded at the same stage last year.
Capital expenditure across the energy sector is expected to rise during 2026, driven heavily by energy-security concerns and renewed investment in production infrastructure.
A number of offshore facilities have still not returned to full operation following disruption linked to geopolitical events. As operators restart projects and commit additional capital, insurers face more construction, testing and commissioning exposure.
These risks differ from established operational assets. Construction and commissioning periods concentrate values during phases when equipment remains untested, contractors work simultaneously and project delays create larger business interruption losses.
Investment is also moving into LNG infrastructure and newer energy projects alongside conventional oil and gas developments. Higher asset values increase the amount of insured exposure attached to individual sites and interconnected projects.
Renewable energy represents another large source of premium opportunity, though underwriting profitability remains difficult. Around 30% of offshore energy premium written in the London market already relates to renewable energy.
The investment pipeline is substantial. Global energy investment reached about $3.3 tn in 2025, with roughly two-thirds directed towards renewable energy, according to figures cited by IUMI. Investment during 2026 is expected to continue in a similar direction.
Offshore wind and other renewable projects bring different loss patterns from conventional oil and gas infrastructure. Construction periods are lengthy, equipment values continue rising and projects rely on interconnected infrastructure whose failure sometimes affects several insured assets at once.
The volume and technical complexity of energy risks are increasing as investment expands, yet insurance pricing remains constrained by abundant capacity and competition between carriers.
Inflation is adding further pressure. Repair expenses have increased alongside business interruption costs, making individual claims more expensive even where claim frequency remains manageable.
Attritional losses also continue building across portfolios. A market with thin margins and limited pricing movement has less room to absorb those recurring claims before a major offshore loss reaches the balance sheet.
Construction exposure introduces another concern. New projects often remain insured for long periods before entering normal operation, leaving insurers exposed to changing project schedules, cost overruns and higher replacement values.
More interconnected energy infrastructure increases accumulation exposure as well. A single event affecting one part of an offshore network sometimes produces losses across production assets, pipelines, power connections or associated facilities.
Ownership changes, government policy and subsidy structures add further uncertainty to long-duration projects. Insurance terms agreed during development sometimes remain in force while economics, contractors or operating structures change over the life of the project.
These pressures arrive while excess underwriting capacity continues to limit pricing power. Without substantial large losses forcing a market correction, insurers remain under competitive pressure to defend existing business and pursue new premium.
For offshore energy insurers, the issue is becoming less about premium growth itself and more about whether pricing properly represents the risk being assumed. Expanding energy investment increases insurance demand, but it also raises insured values and concentrates exposure across increasingly connected assets.
IUMI said insurers need stronger underwriting discipline, better accumulation management and careful use of reinsurance as the sector moves through another investment cycle.
The market enters 2026 with relatively low recent loss ratios, growing investment opportunities and no shortage of underwriting capacity. At the same time, rising attritional claims, inflation and construction exposure are putting more pressure on margins before the next large offshore loss arrives.
