Continued Downward Pressure in Asia Energy Insurance

Asia’s energy insurance market continues to be characterised by soft pricing conditions, supported by low regional loss activity and sustained excess underwriting capacity, even as global geopolitical tensions and economic uncertainty persist.

According to Willis, a business of Willis Towers Watson Public Limited Company, losses associated with oil and gas production in Asia have remained subdued through 2025. The absence of major claims during this period has contributed to the region’s continued strong performance within global energy insurance portfolios.

Insurers maintain a positive outlook on Asia as a growth market, particularly for established oil and gas operators with strong operational controls and favourable claims histories. This underwriting profile has enabled insured parties to continue securing competitive pricing, despite broader global risk pressures.

In the downstream segment, conditions for refineries and petrochemical facilities across Asia are expected to remain favourable for buyers into early 2026. Market capacity remains ample, and insurer appetite continues to be strong, supported by the lack of significant large-scale losses in the region. Although pricing continues to decline, the rate of reduction has slowed compared with mid-2025, indicating a gradual stabilisation in market movement.

At the same time, insurers are applying more detailed scrutiny to risks with exposure to the United States, where loss activity has been relatively higher. Willis expects the softer pricing environment in Asia to persist at least through the first half of 2026, barring any significant shift in loss experience.

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

Downstream losses remain more material on a global basis. Claims related to refinery and petrochemical incidents reached approximately US$6.8 billion in 2025 and continued into early 2026. However, these losses have not been sufficient to significantly tighten overall market conditions.

Insurers continue to deploy additional capacity despite ongoing concerns about pricing discipline and the presence of surplus capital. Competition remains particularly strong where local insurers and captive insurance structures participate alongside international markets, reinforcing pressure on premiums.

Geopolitical developments, including conflict in the Middle East, have increased focus on energy supply risks. Nevertheless, insured losses directly linked to these events have remained limited. Willis notes that loss activity has not yet reached levels that would materially absorb excess capital, meaning pricing remains only loosely aligned with underlying risk.

Economic and supply chain factors also continue to influence the market indirectly. S&P Global Inc. has highlighted that Asia-Pacific insurers face exposure to potential disruption in energy supply chains due to the region’s dependence on imports. In its base case scenario, S&P expects disruption in the Strait of Hormuz to ease by April, although residual constraints may persist. Under this outlook, Brent crude is projected to average approximately US$92 per barrel in the second quarter and around US$80 per barrel across the full year.

Key Market Indicators

Overall, sustained low regional losses combined with strong competitive capacity continue to underpin soft pricing conditions in Asia’s energy insurance market, even amid elevated global risk and ongoing macroeconomic uncertainty.