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ENERGY INSURANCE MARKET UPDATE Q1 2022 alescorms.com
Alesco – Energy Insurance Market Update
ABOUT
ALESCO
Alesco is a fast-growing and dynamic
insurance broker that specialises in
property, liability, accident and health,
contingency and other related lines
of business across a diverse range of
industries, from energy and construction,
to marine, aviation and fine art, just to
name a few. Combining the strength
and reach of a global brand, with the
service levels and flexibility of a specialist
independent broker, Alesco is committed
to building confidence and creating
certainty in your business.
Clients across the globe rely on Alesco to identify,
manage and mitigate risk, and to provide them
access to the international insurance and reinsurance
markets. Should clients require support in an
individual specialism or the development of a single,
comprehensive proposition across their portfolio, we
have the proven skills and connections to serve both
national and international interests.
HOMEAlesco – Energy Insurance Market Update
CONTENTS
1. INDUSTRY OVERVIEW 2. UPSTREAM ENERGY 3. MIDSTREAM ENERGY 4. DOWNSTREAM ENERGY
8. OIL RECENT
5. CASUALTY 6. POWER 7. RENEWABLE ENERGY DEVELOPMENTS AND
MARKET INTELLIGENCE
HOME1. INDUSTRY
OVERVIEW
HOMEAlesco – Energy Insurance Market Update
INDUSTRY OVERVIEW
At the time of writing, prices have risen to over Environmental, Social and Governance (ESG) The hard-market cycle appears to be coming to
USD140 a barrel of Dated Brent with some analysts continues to be a hot topic in the insurance an end in the Downstream market. For clients
suggesting we could soon see a prolonged period market. Initial underwriter stances on risks with good loss records, low Nat Cat exposures and
at these prices. This is mainly as a result of an like coal generation have developed into visible good quality risk engineering, we are seeing flat to
increase in global demand; more stringent capital company-wide strategies with almost daily news single-digit rises at renewal. Underwriting discipline
discipline by oil producers having a knock-on bulletins about new sustainable energy teams, the largely remains intact, particularly with management
effect on supply levels; and in recent weeks, the appointment of heads of ESG and ESG scorecards. scrutiny in this class meaning that we’re not yet at
escalating crisis in Ukraine. the stage of rate reductions being offered.
The Upstream market is trying to hold firm going
One of the five key trends identified in the Deloitte into 2022 with underwriters determined to achieve The trend of rate increases slowing up at the end
2022 oil and gas outlook1 is the effect rising oil overall rate increases across their portfolios. of 2021 has continued into 2022 in the Power
prices might have on those energy companies However, there is still an excess of capacity for market. The factors behind this are new pockets of
transitioning to renewables. The conventional many upstream accounts, especially those with capacity opening up, a slow down in rate increases
view was that high oil prices would mean oil scale and a good loss record. Where competition by underwriters in the Property market (many of
and gas companies would focus on their core can be established and placements remarketed we whom also write Power) and the loss of commercial
business rather than investing in new sustainable are seeing some rate reductions. Outside of rating, market premium to OIL, as two large US accounts
opportunities. However, 76% of surveyed oil and we have seen an increasing focus on deductible became members. Physical engineering inspections
gas executives stated that above prices per barrel in levels and minimum premiums, which we expect to are starting to be booked in with our clients and it
excess of USD60 would likely “boost or complement continue throughout 2022. will be interesting to see what impact this has on
their energy transition in the near term”. It will clients and underwriters who have been reliant on
The Midstream market (made up of upstream and
be interesting to see how capital expenditure desktop reviews for the best part of two years.
downstream underwriters) continues to harden,
plays out in 2022 under the backdrop of high
however with an increase in year-on-year capacity
commodity prices.
we are starting to see this slow, with Upstream,
Downstream and Domestic markets all quoting
high single-digit to low double-digit rises.
HOMEAlesco – Energy Insurance Market Update
INDUSTRY OVERVIEW — CONT’D
In the North American energy Casualty sector OIL continues to perform well with losses below
there is still a lack of dedicated markets that can their long-run average. This has resulted in
put out a significant limit on a lead umbrella. New dividends to members, in June 2021 totalling
entrants, however, are keen to support placements, USD380 million, and also flat 2021 premiums and
and with aggressive domestic competition, this is stable Theoretical Withdrawn Premium (TWP). The
giving insureds some respite in pricing. We continue new USD450 million per occurrence limit is now
to see prior year reserve deterioration, which, available (from 1 January 2022). There were four
coupled with inflation and sizeable settlements, has new members in 2021 from the power generation,
put pressure on P&Ls. That being said, the excess utilities, and renewables sectors, which OIL is keen
market continues to have ample capacity which has to diversify into.
seen rates stabilise, with some reductions being
achieved. The international energy casualty market
continues to have sufficient capacity which has seen
rate increases soften, with renewal conversations
typically starting at +5%.
The Renewable energy market is now more
stabilised and accommodating for insurance buyers
following the hardening of the market since 2019.
Underlying rating on renewals, excluding Natural
Catastrophe rating, is between flat and 10%. Trends
amongst underwriters when assessing risk are
becoming more evident, with Nat Cat exposures,
rapidly evolving technologies, large growth in
offshore wind and supply chain issues driving the
deployment of underwriting capacity.
HOMEAlesco – Energy Insurance Market Update
WEEKLY OIL PRICES SINCE (JAN 2017–DEC 2021)
OIL PRICES — WEEKLY
120
100
80
60
40
20
0
06/06/2017
11/06/2017
09/06/2018
07/06/2019
12/06/2019
10/06/2020
03/06/2021
05/06/2020
08/06/2021
01/06/2022
01/06/2017
04/06/2018
02/06/2019
WESTERN TEXAS INTERMEDIATE BRENT EU
Source: https://fred.stlouisfed.org/tags/series?t=oil
HOME0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
JAN 00
JUL 00
JAN 01
JUL 01
JAN 02
Alesco – Energy Insurance Market Update
JUL 02
JAN 03
JUL 03
Source: https://rigcount.bakerhughes.com/intl-rig-count
JAN 04
JUL 04
JAN 05
JUL 05
JAN 06
JUL 06
JAN 07
JUL 07
JAN 08
JUL 08
JAN 09
JUL 09
JAN 10
JUL 10
HOME
U.S.
JAN 11
JUL 11
JAN 12
JUL 12
JAN 13
JUL 13
CANADA
JAN 14
JUL 14
JAN 15
MONTHLY RIG COUNTS (JAN 2000–NOV 2021)
MONTHLY RIG COUNTS (LAND AND OFFSHORE, ALL ASSETS)
JUL 15
JAN 16
JUL 16
JAN 17
JUL 17
INTERNATIONAL
JAN 18
JUL 18
JAN 19
JUL 19
TOTAL
JAN 20
JUL 20
JAN 21
JUL 212. UPSTREAM
ENERGY
HOMEAlesco – Energy Insurance Market Update
UPSTREAM ENERGY
Going into 2022, the upstream market continues entrants with modest line sizes. In our last issue, Within the industry itself, commodity pricing has
to hold the line with rate and seems determined we noted that the first examples of reductions rebounded and clients face the best economic
to achieve an overall rate rise across the portfolio. were evident at the end of 2021 and we expect environment for several years. However, the
The market has bifurcated the portfolio into distinct this trend to continue going forwards, particularly COVID-19 pandemic continues to challenge this
pools of risk and clients can expect different where market competition can be established and and there remains caution on investment and
treatments depending on their asset type and placements are able to be successfully remarketed. preserving cash flow. There are early signs that
scale. Whilst the large national oil companies’ and clients are looking to revalue their portfolio back to
Smaller-scale clients will still face headwinds
international oil companies’ offshore portfolios higher levels and that utilisation both offshore and
regarding minimum premium as across the
attract flat to low single-digit rises, the mid-market onshore is set to rebound. As a result, the market is
upstream sector the market seeks to maximise
onshore portfolios continue to draw high single- prepared for a stronger year for premium levels but
their return on capital. Increasingly, underwriters
digit to double-digit rises for clean business. As is wary of a potential increasing loss environment
are imposing minimum premium levels on small
indicated in the last issue, certain coverages such and, as ever, are focussed on profit, not income.
business, or introducing artificial rate rises to
as Control of Well or Loss of Production Income
satisfy this requirement. Mostly, we are seeing this
(LOPI) are being particularly scrutinised and these
up to USD50,000, however, capacity is limited at this
sections are attracting the highest rises, impacting
level and so more frequently we are experiencing
the stand-alone and smaller-scale placements
minimum premiums of USD75,000 with the very
in particular.
real possibility that, as the year develops, this
could be anything up to USD100,000, with markets
CAPACITY & PREMIUM
demanding minimum premiums on each section
Notwithstanding the above, there still seems to insured. Paired with this is a drive to increase
be excess capacity for most upstream accounts, minimum retentions and in some sectors (namely
especially for business that is larger in scale and onshore property) we have seen this jump to
with attractive loss records. Capacity overall has USD50,000.
increased in 2022 with several new follow market
HOMEAlesco – Energy Insurance Market Update
UPSTREAM ENERGY — CONT’D
ESG & ENERGY TRANSITION OFFSHORE CONSTRUCTION
Global trends towards the Energy Transition and a 2021 also saw another increase in offshore
focus on ESG have seen investors pressure clients construction activity. As market cycles have shown
or withdraw entirely from the Oil & Gas space, us before, in line with the barrel price rebounding,
creating a challenging environment for CFOs. oil companies shift their focus to growth, and as
Carbon Capture and Storage (CCS) is a popular such, the projects that have been put on hold start
sector that is gaining much momentum globally as to get sanctioned. This upshift in activity always
clients, both offshore and onshore, who once were attracts insurers to look at this quick fix for new
prepared to decommission assets, instead switch premium and annual growth. We have seen some
to utilising these for extra revenue and tax credits, fierce competition between leading insurers to
depending on the territory. The upstream insurance secure certain construction projects if they fit a
sector is prepared to cover these types of exposure preferred structure between operator and principal
and it is a generally held notion that CCS will contractor and type of build—surface over subsea
become a strand of the upstream sectors portfolio. always being a preference. However, the appeal
Focus on ESG within the market has followed the for this class of business has not waned with some
investment space and the Joint Rig Committee insurers. The attrition of post-year losses continues
(JRC) have published guidance for underwriters to damage the book and, as result, ratings and
to assist them in differentiating between clients. retentions are being increased marginally with a
Presently, Lloyd’s stance on various sectors such shift to only accepting a minimum rate on line for
as Arctic Drilling and Canadian Oil Sands cause a any construction.
significant challenge for those clients who now seek
to showcase their ESG credentials to the market.
It is only a matter of time before this trend bleeds
into other sectors of the upstream world and so
clients should be prepared to field these questions
at market presentations.
HOMEAlesco – Energy Insurance Market Update
UPSTREAM ENERGY LOSSES 2021
TOP 10 LARGEST UPSTREAM ENERGY LOSSES IN 2021
UP/DOWN/POWER LAND/OFFSHORE COUNTRY CAUSE CATEGORY SUBCATEGORY TOTAL/ACTUAL USD
Upstream Offshore Malaysia Leg punch through Rig Jackup 136,000,000
Upstream Offshore USA Blowout no fire Well Well 70,000,000
Upstream Offshore USA Windstorm Platform Platform 38,000,000
Upstream Offshore USA Blowout no fire Well Well 36,500,000
Upstream Offshore Guyana Unknown MOPU FPSO 31,000,000
Upstream Land USA Fire + explosion/VCE Well Well 28,000,000
Upstream Offshore USA Windstorm Rig Drillship 27,000,000
Upstream Offshore Norway Impact SSCS SSCS 17,700,000
Upstream Offshore Norway Supply interruption Platform Platform 16,400,000
Upstream Land Russia Collapse Rig Land Rig 15,760,000
Losses are incurred actual amounts, as reported, not indexed, sourced from the
Total 2021 Upstream Losses (70): USD 757,896,020
Willis Towers Watson’s energy industry loss database for ground up losses of
Total Top 10 Losses: USD 416,360,000 = 55% USD1 million or more at the time of loss. Note that 2021 figures are subject to
Operational (55): USD 645,986,020 further development, both in terms of frequency and severity of losses.
Construction (15): USD 111,910,000 As at 21 Feb 2022.
HOME3. MIDSTREAM
ENERGY
HOMEAlesco – Energy Insurance Market Update
MIDSTREAM ENERGY
Going into 2022, midstream clients remain able to Interruption coverage which may require an projects. Upstream capacity has expressed a
purchase their coverage from both the upstream uplift to cater for increased revenue. Increasing particular interest in writing CCS within their
and downstream sectors. Both markets continue Business Interruption purchases is likely to midstream portfolio and expects to see this become
to harden, however, an increase in year-on-year become a significant talking point for the markets, a fast-growing sector for new business.
capacity means that rate rise percentages are in particular the ratio of an Insured’s Indemnity
softening from the last quarter of 2021. Upstream, requirements versus their Scheduled Values.
downstream and domestic markets are all quoting Underwriters continue to favour clients with a ratio
high single-digit to low double-digit rises, with the weighted towards Physical Asset purchase, and
upstream capacity continuing to be on the softer accounts that are heavily Business Interruption
edge of this range. weighted are challenging.
CAPACITY INVESTMENT
As remarked in previous issues, upstream capacity There continues to be a significant midstream
continues to offer more competitive terms for this investment opportunity for Private Equity (PE)
sector, particularly ‘in-field’ asset base, and the companies but the strategy has shifted. While the
movement of clients from the downstream market focus is still on gathering and processing, PE firms
remains where appropriate. For growing clients, are primarily targeting growth through bolt-on
upstream capacity maintains the mantra of offering acquisitions and expansion rather than funding new
credits for scale, something not typically seen in the greenfield projects.
harder downstream market.
ESG & ENERGY TRANSITION
In the industry itself, commodity price rebounds
have given a boost to clients who have faced Consistent with global trends and ESG initiatives,
consistent headwinds for several years. It is there are increasingly more opportunities in energy
imperative that clients review their exposures in transition-oriented projects, such as Carbon
light of this change, in particular their Business Capture and Storage (CCS), as well as Hydrogen
HOME4. DOWNSTREAM
ENERGY
HOMEAlesco – Energy Insurance Market Update
DOWNSTREAM ENERGY
As 2021 drew to a close there were certainly signs Although pricing conditions are improving for under great pressure to review their downstream
that we were nearing the end of the hard market most insureds as we have described above, there portfolio with a particular emphasis on the ‘E’ of
cycle, particularly for those insureds with good continues to be a push for tightening of terms ESG. There is currently no market consensus on
loss records and engineering, and where Nat Cat and conditions where possible. We have seen this how the downstream market will be impacted in the
exposures can be managed. Underwriting discipline in three main areas: Testing and commissioning years to come, what we can say is that we expect
largely remains intact, particularly with management with the push for the new LMA5197A Clause; the insurers to require more focus on their clients’
scrutiny in this class meaning that we’re not yet at reversion to the Cyber Exclusion Clause NMA2916A ESG policies in order to demonstrate to their own
the stage of rate reductions being offered but we do over LMA5400; and in relation to Business management and shareholders that they have taken
seem to have reached a levelling off where flat to Interruption values with the new LMA5515 Clause. this into account when determining the balance of
single-digit rises can be achieved. However, for those their portfolio.
With the prospects of an improving COVID-19
insureds with a combination of poorer loss records or
situation around the world, onsite engineering
located in heavily Nat Cat exposed areas, double-digit
visits are expected to increase. It remains to be
rate rises are still being seen.
seen whether this will have an impact on the
perceived quality of the engineering at certain
CAPACITY & PREMIUM
locations following the last two years when insureds
Through the first quarter of 2022 capacity has and insurers alike have had to adapt to ‘virtual
remained broadly stable, we would estimate engineering’.
realistic capacity available is in the region of
USD4 billion for international programmes and ESG & ENERGY TRANSITION
USD2.5 billion for North American. The amount
There continues to be an ever-greater focus on
of capacity available has helped to prevent lead
Environmental, Social and Governance (ESG) issues
insurers from imposing harsher terms in the last
across the globe and this will undoubtedly impact
couple of years than there would have been had
almost all fossil fuel programmes sooner or later.
capacity in this class reduced.
Many insurers, through corporate requirements, are
HOMEAlesco – Energy Insurance Market Update
DOWNSTREAM ENERGY LOSSES 2021
TOP 10 LARGEST DOWNSTREAM ENERGY LOSSES IN 2021
UP/DOWN/POWER LAND/OFFSHORE COUNTRY CAUSE CATEGORY SUBCATEGORY TOTAL/ACTUAL USD
Downstream Land USA Ice/snow/freeze Petrochemical Olefins 640,000,000
Downstream Land USA Windstorm Petrochemical Olefins 381,000,000
Downstream Land Russia Unknown Refinery Secondary process 180,000,000
Downstream Land USA Fire no explosion Chemical Chemical 178,000,000
Downstream Land Saudi Arabia Unknown Petrochemical Olefins 162,876,712
Downstream Land USA Fire no explosion Petrochemical Petrochemical 146,000,000
Downstream Land Russia Fire and explosion Gas Plant Gas processing 130,000,000
Downstream Land USA Ice/snow/freeze Petrochemical Petrochemical 115,300,000
Downstream Land Saudi Arabia Unknown Petrochemical Olefins 114,700,000
Downstream Land USA Ice/snow Petrochemical Olefins 105,000,000
Losses are incurred actual amounts, as reported, not indexed, sourced from the
Total 2021 Downstream Losses (92): USD 4,077,922,293
Willis Towers Watson’s energy industry loss database for ground up losses of
Total Top 10 Losses: USD 2,152,876,712 = 53% USD1 million or more at the time of loss. Note that 2021 figures are subject to
Operational (83): USD 3,650,003,293 further development, both in terms of frequency and severity of losses.
Construction (9): USD 427,919,000 As at 21 Feb 2022.
HOME5. CASUALTY
HOMEAlesco – Energy Insurance Market Update
CASUALTY
NORTH AMERICAN ENERGY CASUALTY Although back year claims have seen deterioration, Rate increases continue to soften with renewal
As we begin 2022, the market now has more there remains ample capacity, especially on discussions typically starting around +5%, this is off
options when putting together the lead umbrella, excess layers. This has therefore had a welcome the back of meaningful year-on-year increases over
however, there remain very few markets dedicated stabilisation effect with rate growth slowing the last 36 months. There has been an increase
enough to the space to put out a significant limit on dramatically, and even the occasional reduction in insurers looking to impose climate change
a meaningful basis. That being said, new entrants being achieved. exclusions, however, as of yet, brokers/insureds
are keen to support placements, which, coupled have been successful in pushing back against
New entrants of 2020 and 2021 now have a book of
with aggressive domestic competition, especially on restrictive language; we will continue to monitor
business from which to grow, helping to drive the
loss-free business, is easing the pricing to insureds. this in 2022.
competitiveness of the market into 2022. Brokers
Deterioration in prior year claims has put pressure should be aware ahead of renewals that they
on the P&Ls of the established markets, with may be able to requote placements with capacity
reserves continuing to prove to be insufficient. available to fill layers. Nonetheless, challenging
Inflation, both real and social, along with nuclear pockets of the market remain, principally in the
verdicts/settlements remain a concern, but these wildfire and midstream subsectors.
issues do not appear to have fed through to the
treaty reinsurance market at 1/1. INTERNATIONAL ENERGY CASUALTY
Underwriters continue to manage their line sizes, Overall market capacity is sufficient, and generally,
with a push to pull back on large limit stretches. buyers have an adequate choice when selecting
Our Alesco Excess Liability Facility remains a stable their insurers. New entrants continue to arrive,
home for our upstream clients, with the ability to alongside established markets, some of which have
deploy significant limits excess of USD20 million. ambitious growth targets.
HOME6. POWER
HOMEAlesco – Energy Insurance Market Update
POWER
Despite significant cumulative loss activity in factor in a successful placement outcome. The This change in strategy is something which we are
the power sector in 2021, rates have only risen Omicron variant of COVID-19 dictated that desktop monitoring very carefully with a view to supporting
modestly. Factors which have contributed to this engineering reviews still prevailed in Q4 but as this clients in “Future Proofing” their business.
are a significant slowing of rate increases by shows signs of slowing significantly, we are now
underwriters in the property market, some of whom seeing plans for physical inspections being put in
also write power. There have been new pockets place. We are now working with our clients to get
of capacity emerge which have had the inevitable back to this position as it is most beneficial to them.
effect of creating an increase in competitive tension.
Q4 also saw two large US accounts leave the COAL ACCOUNTS
conventional market in favour of OIL; this saw a 1 January 2022 saw the introduction of the new
substantial loss of premium to certain markets and Lloyd’s directive as regards to coal; with the initially
a need to write more income. proposed stance being that no new coal business
Clients with substantial Nat Cat exposure have also was to be underwritten from that date. However,
seen a similar situation. Whilst there is still clearly in light of subsequent discussions between
a hesitancy and rigid control regarding deployment various parties, there has been a subtle change of
of capacity, Q4 wind-exposed renewals in particular emphasis with each syndicate now having a more
also saw lower rate increases than in previous years. individual responsibility towards their attitude to the
new coal business. Many have chosen to remain
CAPACITY with the existing policy of not putting any new coal
accounts onto their books; but others have adopted
Markets still continue to remain disciplined in
a policy of accepting new business where the client
their underwriting. Provision of recent/
can demonstrate a clear approach to working
high-quality information is still a major determining
towards an orderly transition to renewable energy.
HOMEAlesco – Energy Insurance Market Update
POWER ENERGY LOSSES 2021
TOP 10 LARGEST POWER ENERGY LOSSES IN 2021
UP/DOWN/POWER LAND/OFFSHORE COUNTRY CAUSE CATEGORY SUBCATEGORY TOTAL/ACTUAL USD
Power Land UK Fire no explosion Power substation Substation 440,350,000
Power Land UK Fire no explosion Power Thermal Gas 83,870,000
Power Land USA Collapse Power Other Coal 74,550,000
Power Offshore Netherlands Unknown Power T&D Cable (elec/control) 65,000,000
Power Land Argentina Mechanical failure Power Thermal Multifuel 37,600,000
Power Land UAE Fatigue Power Thermal Gas 55,000,000
Power Land USA Ice/snow Power Renewable Solar 21,000,000
Power Land Oman Unknown Power Thermal Multifuel 20,698,300
Power Land Thailand Fire no explosion Power Thermal Gas 20,966,000
Power Land USA Mechanical Failure Power Thermal Solar 18,340,000
Losses are incurred actual amounts, as reported, not indexed, sourced from the
Total 2021 Power Losses (39): USD 988,045,246
Willis Towers Watson’s energy industry loss database for ground up losses of
Total Top 10 Losses: USD 837,374,300 = 85% USD1 million or more at the time of loss. Note that 2021 figures are subject to
Operational (32): USD 958,470,646 further development, both in terms of frequency and severity of losses.
Construction (7): USD 29,574,600 As at 21 Feb 2022.
HOME7. RENEWABLE
ENERGY
HOMEAlesco – Energy Insurance Market Update
RENEWABLE ENERGY
There is now more optimism in the renewable • Rapidly evolving technologies presenting These trends will require serious considerations by
energy market as insurers are experiencing healthy challenges to insurers. Underwriters tend to the insurance market and the careful deployment of
profits resulting from the consistent hardening of be more comfortable with certain technology underwriting capacity.
the market since 2019; capacity withdrawal was advancements (e.g. upscaling of wind
technology and solar systems) than others With the growth in the Offshore Wind sector the
also less than expected in 2021. The market is
(e.g. floating technologies, battery energy market will become increasingly supported by
now stabilised and more accommodating for
storage systems, anaerobic digesters, energy the upstream oil and gas market as traditional
insurance buyers.
from waste, biomass, geothermal). upstream companies become involved in delivering
Renewable underwriters, when assessing projects within this sector.
• The large growth in the offshore wind sector
a particular risk, are mainly focussing on
in the North Sea, Asia, North America and
performance and perceived Nat Cat exposure. beyond continues to present both high levels
Expectations for renewals are generally flat to 10%, of risk and opportunity for reward for insurers.
excluding Nat Cat rate and capacity considerations. The technologies in development, i.e. floating,
Trends that should be carefully observed and are often seen as prototypical in design and
managed in the future include: there continues to be concerns regarding risk
aggregations in high Nat Cat prone areas.
• The increasingly unpredictable global weather
patterns. New renewables projects are • Increased supply chain issues and labour
regularly deployed in high Nat Cat exposures shortages which are driving up expenses.
e.g. North America, Asia.
HOME8. OIL RECENT DEVELOPMENTS
AND MARKET INTELLIGENCE
HOMEAlesco – Energy Insurance Market Update
OIL RECENT DEVELOPMENTS AND MARKET INTELLIGENCE
Gallagher have been closely involved in monitoring • OIL paid a further dividend of USD380 million in This should benefit long-standing members through
OIL developments over the past 25 years and at June 2021 a higher pool premium and reduced risk/volatility.
various times have provided direct consultancy • OIL have increased their limit from USD400 million to • OIL are taking a different approach to renewables
advice to OIL in terms of the Rating & Premium USD450 million from 01/01/2022 (see five-year strategic plan).
Plan and capital modelling.
• OIL have increased their aggregation limit from • OIL are attracting new members as environmental
• Total Shareholders Equity at 30/09/2021 was USD1.2 billion to USD1.35 billion from 01/01/2022 lobbying (ESG) is impacting the commercial market
USD3.91 billion (30/06/2021: USD3.87 billion, capacity in some sectors (oil sands, fracking,
• The final loss position for 2021 above has resulted
31/03/21: USD3.77 billion, 31/12/2020: coal power, coal mining) and likely to continue as
in flat 2022 premiums and a stable TWP position for
USD3.95 billion) Lloyd’s and other major insurers implement ESG
most members
• Written premiums for 2020 were USD474 million underwriting criteria.
• Overall membership is now 65
(2019 was USD468 million) but with additional
retrospective premiums of USD43 million so the - New members in 2020: United Refining; Pembina
combined premium was USD517 million (2019 Pipelines; Ecopetrol; Federated Co-operatives
was USD478 million) - New members in 2021: North West Redwater
• 2020 was an average loss year (USD448 million) Partnership; Formosa Plastics Corporation,
resulting in underwriting income USD67 million Edison International; Los Angeles Department of
Water & Power
• The 2020 losses included two claims from Hurricane
Laura (total USD167 million as reported at 30 - Husky acquired by Cenovus
September 2020) - New member in 21022: CEZ
• 2020 investment income was USD420 million • The OIL pool continues to grow with a target to add
• OIL has outperformed the commercial market more international (non-U.S.) members and diversify
(resulting in dividends and now increased limits) into the lower risk Power and Renewable sectors.
HOMEAlesco – Energy Insurance Market Update
CURRENT OIL MEMBERS
65 AS AT 1 FEBRUARY 2022
Asia (1) Europe (15) United States (30) Marathon Oil Company
CNOOC Limited
BASF SE CEPSA S.A Apache Corporation Marathon Petroleum Corporation
Australia (5)
CEZ a.s. Arena Energy, LLC Motiva Enterprises LLC
Beach Energy Limited
Electricité de France (EDF) Buckeye Partners, L.P. Murphy Oil Corporation
BHP Billiton Petroleum (Americas) Inc.
Eni S.p.A. Chevron Phillips Chemical Occidental Petroleum Corporation
Santos Ltd
Company LLC Phillips 66 Company
Equinor ASA
Origin Energy Limited
Chevron Corporation Plains All American Pipeline, L.P.
Galp Energia SGPS S.A.
Woodside Petroleum Limited
CITGO Petroleum Corporation Sempra Energy
Lyondell Basell Industries
Canada (11) ConocoPhillips Company
MOL Hungarian Oil and Gas PLC The Sinclair Companies
Bruce Power L.P.
Delek US Holdings, Inc. The Williams Companies, Inc.
OMV Aktiengesellschaft
Canadian Natural Resources Limited
Drummond Company, Inc. United Refining Company
Ørsted A/S Repsol, S.A.
Cenovus Energy Inc.
DTE Energy Company Valero Energy Corporation
Royal Vopak N.V.
Federated Co-operatives Limited
Edison International Westlake Chemical Corporation
TOTALEnergies SE
Inter Pipeline Ltd.
Energy Transfer LP
Yara International ASA
North West Redwater Partnership
Formosa Plastics Corporation, USA
Latin America (3)
NOVA Chemicals Corporation
Hess Corporation
Braskem S.A.
Paramount Resources Limited
HollyFrontier Corporation
Ecopetrol S.A.
Pembina Pipeline Corporation
LOOP LLC
Puerto Rico Eletric Power
Suncor Energy Inc.
Authority (PREPA) Los Angeles Department of Water
TransCanada PipeLines Limited and Power
Source: https://www.oil.bm/current-members/
HOMECONTACT US
FOR FURTHER INFORMATION CONTACT:
Jonathan Smith Upstream Power
Managing Partner, Energy Matt Byatt Jon Parker
Jon_Smith@alescorms.com Matt_Byatt@alescorms.com Jon_Parker@alescorms.com
Julian Raven Midstream Renewable
Deputy Managing Partner, Energy Rob Neighbour Duncan Gordon
Julian_Raven@alescorms.com Rob_Neighbour@alescorms.com Duncan_Gordon@alescorms.com
Patrick McMurray
Downstream OIL
Executive Partner, Energy
Glyn Davies Derek Thrumble
Patrick_McMurray@alescorms.com
Glyn_Davies@alescorms.com Derek_Thrumble@alescorms.com
Casualty
William Holden
William_Holden@alescorms.com
CONDITIONS AND LIMITATIONS:
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such. It should not be regarded as
a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from
third parties and we make no claims as to the completeness or accuracy of the information contained herein. It reflects our understanding as at
20.10.2021, but you will recognise that matters concerning COVID-19 are fast-changing across the world. You should not act upon information in
this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. Our advice to our clients is as an insurance broker
and is provided subject to specific terms and conditions, the terms of which take precedence over any representations in this document. No third
party to whom this is passed can rely on it. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from
the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law. Should you
require advice about your specific insurance arrangements or specific claim circumstances, please get in touch with your usual contact at Alesco.
Alesco is a trading name of Alesco Risk Management Services Limited. Alesco Risk Management Services Limited is an appointed representative of
Arthur J. Gallagher (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building,
25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 1193013. FP315-2021 Exp. 01.03.2023. ARTUK-3560 WWW.ALESCORMS.COM
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