The energy sector insurance market has historically been cyclical, but right now it's in an interesting place: stable overall, softening in some areas while presenting challenges in others. For insurance agents, understanding where conditions are favorable and where capacity is tightening is key to advising clients. John Windeler, RPS underwriter/broker in Denver, and Jeff Webb, RPS senior area vice president/broker in Salt Lake City, provide their insights on the status of the energy insurance market.

A Softer Landscape With a Few Tight Spots

Competition among carriers has increased, thanks to new entrants and a lack of significant catastrophic losses in recent years. This competition has led to lower rates in many segments. Downstream operations — refining and distribution — have benefited the most. With decades free of large-scale losses, this area has become highly competitive.

But it's not all good news. Commercial Auto and Excess Liability insurance are still proving difficult. Oilfield driving often takes place on rough, unpaved roads in remote areas, which leads to more frequent and severe claims, according to Windeler: "Auto is very tough to write, because carriers don't want to sit on those risks."

Excess Liability is also challenging, with carriers pulling back from the bottom of towers and shrinking the limits they're willing to offer. Webb noted, "There's more capacity out there, but markets want to provide smaller limits, so you have to build a tower with multiple carriers." As a result, insureds face more complex placements and potentially higher overall costs.

For agents, placing programs for clients with heavy trucking operations or significant excess needs requires extra preparation. Markets are out there, but piecing together the right structure may take more work.

Oil, Gas and Renewables

On the oil and gas side, US production is booming. Drilling and fracking have surged across the South, driving record output. Federal policy has encouraged more domestic production, and while demand has grown only modestly, supply continues to climb.

This increase in production has led to falling crude oil prices, and low demand has caused fewer contracts to be issued to smaller contractors and consultants and more to the larger firms that can support the lack of growth.

Despite the slowdown in business from smaller companies, the insurance industry is writing more lease operators that are pushing production right now, as well as the aforementioned large consultant firms and contractors. That said, the outlook within the insurance industry is stable for now, and we're anticipating better growth in 2026.

Investment in clean energy remains strong, and insurance markets are offering broad rate reductions — generally 5% to 15%. Solar has been the outlier, struggling with heavy hail losses that make underwriting more difficult. Still, wind and other renewable projects are benefiting from strong capital inflows and expanding insurance capacity.

Consultants and Workforce Trends

A shift is happening with consultants in the energy space. During past boom times, consultants struck out independently, creating a wave of small accounts for insurers. That trend has slowed. With lower gas prices and less demand, many consultants are returning to larger firms rather than operating solo.

Workforce shortages are also shaping the market. Oil and gas producers continue to grapple with labor gaps, while renewables attract workers and capital investment. This dynamic may tilt future growth toward clean energy, even as fossil fuel production remains high.

The Bottom Line

The energy insurance market is stable overall, but it's fragmented. Many downstream and renewable risks are enjoying favorable pricing and abundant capacity, while Commercial Auto and Excess remain difficult and require careful navigation.

Agents should know their clients' exposures, prepare them for the tougher conversations about trucking and excess placements, and look for opportunities where competition is driving rates lower.

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