The energy market continues to soften but rests on a “profitability tightrope” as it tries to strike a balance between profit and market share at a time when capacity is at an all high, according to the Energy Market Review published by Willis, a WTW company. In the downstream market, Willis said 2024 had been a benign loss year, but warned that potential losses in Q1 2025 already threatened to exceed those recorded in 2024. In the upstream market a 5% increase in capacity was maintaining downward pressure on premiums.

Rupert Mackenzie, global head of natural resources at Willis, said: “With energy generating significant premium volumes, the sector remains highly attractive to capital providers, fostering increased competition among insurers.

“As underwriting teams sharpen their focus on risk selection, we are seeing a clear ‘flight to quality’, where the most desirable risks secure the best terms. However, profitability remains a critical challenge for insurers.”