Energy market uncertainty set to continue, but insurance price pressures may ease

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[{"type":"text","content":"LONDON, April 04, 2023 (GLOBE NEWSWIRE) -- Market volatility is very likely to continue for the global energy sector, which remains beset by challenges including: the necessity of net zero transition,dramatic price fluctuations,immature alternative development and adoption strategies, and a fluctuating regulatory backdrop. The uncertainty resulting from these market disruptions is one factor fuelling continued insurance price increases across the sector, according to the Spring, 2023 WTW Energy Market Review published today by WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company. In Part One the Review considers the future beyond “peak oil”. Its sweeping survey of the energy industry highlights the challenges it faces, but also illuminates opportunities. “Security of supply will remain a top priority for governments,” the Review states. “The US is responding to higher prices by striding ahead in all areas of energy production. If international governments follow suit, then operators and contractors are set to benefit.” Contributions to the Review come from a range of WTW experts and cover subjects including: risk optimization strategies for a potential recession,maximizing Return on Capital through an assessment of insured values,understanding supply chain risk, and tackling the “competence barrier.” In Optimising risk: Strategies for a looming recession, Andy Smyth, who leads the WTW Risk & Analytics team in London, says insurance managers need to understand fully their key risk drivers, how they may be mitigated, and how different strategies balance cost and the need for protection. Justin Paglio, Senior Director for Risk, Forensic Accounting, and Complex Claims at WTW, says in Reviewing insured values: How to maximize return on capital, that the new inflationary environment has altered the value of assets. Risk managers should reevaluate them to optimize risk transfer and support a broader exploration of vulnerabilities and resource deployment. Jim Walker, a Risk Control Engineer in WTW’s Natural Resources business, shows how a lack of competence contributed to many high-profile, historical offshore losses. He explains how a Competence Management and Assurance Scheme can reduce risk. Part Two of the Review discusses the current state of energy insurance markets. It begins with a Q&A between Tom Houston...

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