At the 150th annual conference of the International Union of Marine Insurance (IUMI) in Berlin, it was reported that global premiums in the Offshore Energy sector reached USD 4.6 billion in 2023, a 4.6% increase from the previous year.
Premiums in 2023 were reported as USD 4.6 billion representing a 4.6% increase on the previous year. This was largely on the back of the oil price having stabilised at a relatively healthy level which was driving renewed offshore activity. Although claims from reactivation had been largely benign, 2023 witnessed an increase in losses which was impacting on overall loss ratios which were beginning to underperform when compared with the years 2020-2022.
Society needs energy companies to continue to invest in fossil fuels to enable more efficient and less carbon intensive extraction. This will allow a more effective and manageable transition to renewable energy sources. Recently, the IEA reported a USD 3 trillion global energy investment with two-thirds of this going to clean energy technologies.
… said Melanie Raven, Chair of IUMI’s Offshore Energy Committee, noting that forward-thinking energy insurers are already strengthening their long-term relationships with clients to better understand the innovative activities currently underway or in development.
She acknowledged that these new, imaginative projects are often difficult for underwriters to fully grasp, requiring them to adapt their current practices. Since underwriters typically assess risk based on historical data, which does not exist for these emerging technologies, they will need to work hard to build deep, trusting partnerships with their clients to create relevant insurance products.
Finally, she highlighted the importance of securing support from capital providers and predicted that, as projects progress, there will be a growing need for on-site surveyors to monitor developments and report on the evolving risk profiles.
