WTW Energy Market Review 2023
In our November 2022 Update to last year’s Energy Market Review, we did our best to remain upbeat about the prospects for Downstream buyers as the January 1 reinsurance market renewals season approached. January is always a gloomy month in London but this year it was made much worse for downstream insurers by an extremely late and punitive reinsurance market renewal season. Most had realised quite early on in proceedings that matters were not going to be straightforward, and the Christmas break arrived with many reinsurance deals not yet over the line. Even as this Review was going to press in March, it was still not clear as to the full impact of the reinsurance treaty rate rises, nor indeed how the increased treaty costs would be allocated within individual insurer operations.
One thing, however, has been clear: this has been one of the toughest reinsurance renewal seasons on record. We therefore have little alternative but to advise downstream buyers of a re-hardening of this market for all but the most sought-after business — just when buyers had hoped that the turning point of the old market cycle had been reached last year. It must be said that this is an unusual phenomenon in this market; history shows that after a period on rating increases, new capacity usually floods into the market and the next phase of the underwriting cycle begins. Instead, nothing of the kind has happened; in essence, we are left with a very similar market to the one buyers have had to cope with for the past four years or so.
But is this all bad news for the buyer? In the short term yes, but in the long term, perhaps not. As ever in this complicated and diverse market, things are never quite what they seem, and it may be that some chinks of light will appear for buyers before the year is out.
To read more, please download the full article, below.
| Title | File Type | File Size |
|---|---|---|
| Global Downstream: Hardening re-intensifies – for now | .9 MB |
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