Price Pressure Continues in Asia Energy Insurance

Asia’s energy insurance market continues to favour buyers, as limited regional losses and surplus underwriting capacity offset wider geopolitical and economic pressures. Despite heightened global volatility in energy markets, pricing conditions across Asia remain competitive, particularly in oil, gas, refinery, and petrochemical segments.

According to Willis, a business of Willis Towers Watson Public Limited Company, losses linked to oil and gas production in Asia have remained relatively low through 2025. The absence of major claims in the region has helped position Asia as one of the stronger-performing areas within global energy insurance portfolios.

Insurers continue to view Asia as an important growth region, especially for established oil and gas operators with strong safety records and consistent claims histories. This has enabled buyers to maintain access to competitive premiums, even as global risk perception increases.

Conditions remain broadly favourable for coverage of refineries and petrochemical facilities heading into early 2026. Market capacity is described as ample, supported by sustained insurer appetite and the lack of significant large-scale losses in the region. Although rates continue to decline, the pace of reductions has moderated compared with mid-2025.

At the same time, insurers are applying greater scrutiny to assets with exposure to the United States, where recent loss activity has been comparatively higher. Willis expects the softer pricing environment in Asia to persist at least through the first half of 2026.

Globally, the energy insurance market continues to face pricing pressure. Capacity for oil and gas production risks is now estimated to exceed $10 billion, reflecting continued inflows of capital and the entry of new underwriting platforms, including managing general agents and Lloyd’s of London market participants.

Loss activity in downstream energy segments has been more significant globally. Gross losses at refineries and petrochemical plants reached approximately $6.8 billion in 2025 and extended into early 2026. However, this has not been sufficient to materially tighten market conditions.

Insurers continue to expand capacity despite concerns regarding pricing discipline and the persistence of unused capital. As a result, competitive tension remains high, particularly where local insurers or captive insurance structures participate alongside international markets.

Geopolitical developments, including conflict in the Middle East, have increased focus on energy supply risks. However, insured losses directly attributable to these events have remained limited to date. According to Willis, losses have not yet reached levels that would absorb excess capital, meaning pricing remains only loosely correlated with underlying risk.

Economic spillovers also present indirect pressures. S&P Global Inc. has noted that insurers in Asia-Pacific face exposure to supply chain and energy disruption risks due to the region’s reliance on imported energy. In its base case scenario, S&P assumes disruption to the Strait of Hormuz eases during April, though residual supply constraints may persist. Under that outlook, Brent crude oil is projected to average around $92 per barrel in the second quarter and approximately $80 per barrel across the full year.

Key Market Indicators

Overall, the combination of light regional losses and strong underwriting capacity continues to sustain soft market conditions in Asia’s energy insurance sector, despite elevated global uncertainty.