Willis’ recently published Power Market Review details how returning capacity and increased competition to underwrite power and utility companies has led to mid to high double-digit rate reductions for property damage and business interruption policies. It said the softening impact was less pronounced in liability markets due to climate change and decarbonisation pressures.

Rupert Mackenzie, global head of natural resources at Willis, said: “The energy sector sits at the centre of an electrified future, yet it faces challenges from geopolitical volatility and climate-driven disruption to underfunded transmission networks and aging infrastructure.

“Demand is increasing exponentially, and future-ready power companies are responding by leveraging insurance strategically in today’s soft market. For power and utilities leaders, there is a clear opportunity to optimise risk strategies, control costs and position capital for sustainable growth in a rapidly changing landscape.”

The report also outlines the increasing use of captives and alternative risk financing by power and utility companies.