The International Union of Marine Insurance (IUMI) has highlighted a mixed outlook for the offshore energy insurance sector at its annual conference in Singapore. In 2024, global premiums for the sector decreased by 7.9%, totalling $4.34 billion. This decline was most notable in Europe, whilst Japan, Malaysia, and Egypt experienced stable-to-downward trends. Conversely, Norway reported a significant 27% increase in premiums.
The reduction in premiums is attributed to depressed oil prices, competitive pressures, and increased market capacity. Whilst 2024 saw few large losses and no catastrophic events, indicating improved operational safety, attritional losses remained high at an estimated $2 billion, challenging profitability.
Melanie Raven, Chair of IUMI’s Offshore Energy Committee, warned of the pressures on profitability due to reduced premium levels and increased market capacity. “We must remain mindful of our exposure should a significant event occur,” she stated. Raven also noted a shift towards commercial practices in underwriting, such as auto-buying and smart follow facilities, cautioning against losing technical expertise.
Despite these challenges, Raven expressed optimism about the sector’s future, citing growing investment in offshore renewables and the role of gas as a transitional energy source. She noted that traditional energy underwriters face low barriers to entering the green energy space, which is proving beneficial for many insurers.
Safety improvements continue to enhance confidence in the sector, with the absence of large losses underscoring the resilience of offshore operations.
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