Power ahead: an opportunity for liability buyers to capitalize on stability and softening conditions

Following a relatively benign year for loss activity, rating pressure in the international liability market has continued to soften, but power companies will need to address key trends to build longer-term resilience.

The international liability market has stabilized with a small uptick in capacity and softer market conditions, leading to greater competition and downward pressure on rates.

Power liability market trends to watch in 2025

• While greener technologies are welcomed by underwriters as a means of diversifying underwriting portfolios, evolving technologies carry inherent risks which create additional layers of complexity – and on occasion, cost – to placements.
• Increased prevalence of wildfire and flooding are keeping climate change a focus for underwriters. Power companies need to look intrinsically at the impact of their operations and externally at their exposure to climate-related risks.
• The market position on coal is not black and white and power companies still need to demonstrate a compelling energy transition plan to secure capacity.
• The incorporation of per- and polyfluoroalkyl substances (PFAS) exclusions into reinsurance treaties, and subsequently some market standard wordings, has led to a more widespread and consistent application of PFAS exclusions within policy wordings.
• Placements containing coal and/or wildfire exposure continue to face greater scrutiny, as do those with significant United States (U.S.) exposure.

The balance is shifting in buyers’ favor

After a sustained period of unprofitability for casualty as a class of business, in 2023, Lloyd’s of London announced a second consecutive year of underwriting profit. A more buoyant underwriting environment, combined with limited loss activity and pressure to achieve topline growth targets, is driving the softening of the international liability market. The emergence of some new capacity, coupled with a greater willingness from existing insurers to deploy their full-line size, has driven competition and enabled buyers to better optimize their program structures and terms.

Generally, underwriters are increasingly willing to challenge technical pricing and take a longer-term view on programs that they are keen to retain. This is borne out of a growing recognition that it may be more challenging to regain positions on sought-after programs in a softer market.

Forward-thinking liability buyers are mobilizing to capitalize on increased market stability and softening conditions.

Download the full article to find out how to navigate key trends in the year ahead.

Authors

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Matt Clissitt

Senior Director and Deputy Head of Liability, Natural Resources

email Email phone +44 7951 553953

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Raj Vora

Associate Director, Natural Resources, UK

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Blake Koen

Managing Director and Global Client Advocate, Natural Resources

Blake is Managing Director and Global Client Advocate for North America and has over 20 years of experience in the energy Liability market.

email Email phone +1 713 927 8216

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Contact

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Rupert Mackenzie

Global Head of Natural Resources

Rupert Mackenzie is the Global Head of Natural Resources for Willis. He has over 32 years of experience supporting clients in the Global Energy sector. He is an accomplished Chief Executive Officer with a multidisciplinary background in Property, Casualty and Claims, who has managed a broad and diverse range of Client and Market-facing roles throughout his career. Rupert is responsible for leading and driving the global execution of Willis' Risk and Broking strategy for Natural Resources, working across the four subsectors of Oil, Gas & Chemicals, Power & Utilities, Renewable Energy and Metals & Mining

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Graham Knight

Chairman of Global Natural Resources

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