Insurance buyers are set to remain in a strong negotiating position for both cost and coverage as the market moves into 2026, according to the Energy Market Review Update published by Willis, a WTW business.
Since the last Energy Market Review in April, Willis notes that market softening has accelerated, with insurers focusing on retaining well-managed accounts and rewarding long-term client relationships.
In contrast, Willis highlights that downstream insurers have recorded approximately US $3.5 billion in losses this cycle, with claims now equaling overall market premium. Six of the eight major losses occurred in the United States, primarily in the refining sector, placing additional scrutiny on businesses with US exposure.
According to Willis, companies with strong loss records continue to benefit from favourable renewal terms, while those with recent claims are facing a more cautious underwriting stance. Nevertheless, rate reductions remain achievable, with typical decreases of 10–15% and, in some competitive placements, reductions reaching up to 50%.
Willis identifies several key trends shaping the outlook for 2026. In upstream construction, underwriters are showing greater flexibility toward long-tail risks where established operational relationships already exist.
Willis observes that leveraging these relationships to enhance construction placements is becoming an increasingly important tactic. In subsea construction, capacity remains tight, creating what Willis describes as a “micro hard market.” Some insurers, in an effort to support premium growth within an otherwise softening environment, are selectively writing small subsea construction risks.
For upstream reinsurance treaty renewals, Willis notes that insurers’ decisions on maintaining high-level top-up layers for capacity assets will indicate whether their strategies focus on expanding market share or adjusting budget expectations for 2026.
Finally, Willis reports that the liability market continues to benefit from strong capacity and healthy loss ratios, contributing to improved conditions and a gradual shift from a hard to a softening rating environment globally. This contrasts sharply with the US casualty market, where social inflation and large jury awards are still constraining lines and program sizes. In Europe, Willis points to growing insurer concern over new class action legislation that could increase liability claim costs.
Rupert Mackenzie, Global Head of Natural Resources at Willis, commented: “Insurers have reported strong financial results at the end of Q3. The ongoing oversupply in capacity and insurer appetite for growth is simplifying previously complex verticalised placement structures, yielding premium savings for clients. This means that energy companies renewing in Q4 2025 and looking forward into 2026 are in a strong position, with room to negotiate conditions in addition to price.”
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