{"id":10163,"date":"2025-09-24T05:18:10","date_gmt":"2025-09-24T05:18:10","guid":{"rendered":"https:\/\/www.advantagego.com\/en-us\/?p=10163"},"modified":"2025-09-24T05:41:36","modified_gmt":"2025-09-24T05:41:36","slug":"is-the-offshore-energy-market-facing-a-structural-shift","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/is-the-offshore-energy-market-facing-a-structural-shift\/","title":{"rendered":"The Big Question: Is the offshore energy market facing a structural shift?"},"content":{"rendered":"\n

Over 700 delegates from 37 countries were in Singapore for the International Union of Martine Insurance (IUMI) annual conference and while geopolitical risks were high on the agenda the offshore energy market and its future was put in sharp focus.<\/em><\/p>\n\n\n\n

While global insurance premiums increased, IUMI\u2019s data charted  a shift in the global offshore energy insurance landscape. Premiums for the sector declined in 2024, to a total of $4.34 billion, representing a 7.9% decrease compared with the previous year. <\/em><\/p>\n\n\n\n

While there were major loss events in 2024 for the offshore market attritional losses remained high, with an estimated $2 billion reported for the year – posing a challenge to profitability, especially in the event of a major loss.<\/em><\/p>\n\n\n\n

Aside from the falling premium levels Melanie Raven, chair of IUMI\u2019s Offshore Energy Committee, cautioned there is now a key structural shift within the industry.<\/em><\/p>\n\n\n\n

\u201cOffshore energy underwriting is inherently technical, but in recent years we\u2019ve seen more commercial practices such as auto-buying and smart follow facilities entering the space,\u201d she explained. \u201cWhile innovation is welcome, our market must not lose the deep technical expertise that enables us to provide robust cover at sustainable pricing levels.\u201d<\/em><\/p>\n\n\n\n

The warning has come as a shock to many outside the class at a time when technology is redefining the way underwriters transact business and the increasing use of artificial intelligence is creating new opportunities in many classes of business.<\/em><\/p>\n\n\n\n

Ian Summers, Global Business Leader, AdvantageGo.<\/em><\/strong><\/em><\/p>\n\n\n\n

Matt Holmes, head of P&I Club NorthStandard\u2019s<\/a> newly created Upstream Energy operations, says the concerns expressed by Raven are justified.<\/p>\n\n\n\n

\u201cFirstly Mel is right in her statement, there is already a slow movement to a structural shift,\u201d he explains. \u201cWe are seeing change with the arrival of new offshore energy underwriting platforms<\/a> and capital available.<\/p>\n\n\n\n

\u201cWe are seeing significantly more commercialisation, auto buying and with it just follow systems.\u201d<\/p>\n\n\n\n

Holmes adds: \u201cThere are pros with technology. It brings with it an increase in efficiency but it cannot come at the expense of the experience and underwriting knowledge we have in the sector.<\/p>\n\n\n\n

\u201cThese are complex risks and you have to factor in claims experience and engineering. For me in the 30 years I have been in the sector these three elements have been the bedrock of the industry. \u201c<\/p>\n\n\n\n

He continues: \u201cWe cannot deny that technology can bring with it efficiencies. But we are being asked to underwrite multi-billion dollar assets some of which are in extremely challenging environments.<\/p>\n\n\n\n

\u201cWe do not just need data but also, we require a real world understanding of the risks. There is a real need for good technical underwriting which comes with the experience not only in terms of understanding the risks but factoring the claims history and the engineering reports.<\/p>\n\n\n\n

\u201cWe need to understand technical underwriting is only part of that process, but it is how we as a sector ensure our sustainability for not only use as insurers but also for our clients.\u201d<\/p>\n\n\n\n

Holmes continues: \u201cArtificial learning for the claims side is less developed. We are at a real risk of not being in a position to rectify past mistakes.  The technology and artificial intelligence systems may well fall down because they do not have the capability to factor these issues in. The technology is not at a point where it builds in, for instance the engineering assessments.<\/p>\n\n\n\n

\u201cPricing needs to be at a level which is not only profitable, but also at a level to support the ability to pay the claims.<\/p>\n\n\n\n

\u201cWe need to understand the technical areas such as the regulations, the environment and the jurisdictions that play a part in the risk. You have to have that old school underwriting experience to properly understand and price the risks given the complexity.\u201d<\/p>\n\n\n\n

Holmes adds: \u201cThere is no doubt that innovation will continue and technology will play a major role in in that future innovation.<\/p>\n\n\n\n

Technology can reduce frictional costs and speed the processing of business and it is something those in the London market and beyond are keen to deliver.<\/p>\n\n\n\n

\u201cThere is little doubt that technology and artificial intelligence will continue to evolve but we have to be clear that the need is for tools or support for technical underwriting and not to replace it.<\/p>\n\n\n\n

\u201cWe are already embracing technology with scenario analytics, modelling and data and what the market is keen to see is how modelling can help bridge some of the gaps that still remain with the ability to underwrite and price with a full knowledge of the risk.<\/p>\n\n\n\n

\u201cHowever I cannot reiterate that this technology needs to be partnered with underwriting expertise and experience as we cannot afford for the algorithms to miss.\u201d<\/p>\n\n\n\n

Holmes adds:\u201d The future is exciting but we need to ensure that we get the balance right. However, we are a long way away from that at present.<\/p>\n\n\n\n

\u201cThe benefits that could be delivered by AI, data and analytics has the ability to build a new future for the oil and gas sector.\u201d<\/p>\n\n\n\n

He adds if you take technology and expertise<\/a> the key is how you can double down in what is a very changeable landscape.<\/p>\n\n\n\n

\u201cWe have always looked at the risks with a combination of the claims, engineering and underwriting data and expertise given the complexities of the offshore energy market. Communication between these three disciplines if absolutely vital, but you have to ensure that you are talking with your brokers and your clients.<\/p>\n\n\n\n

\u201cIf you are not talking to the brokers and the clients you may very well be missing the point and this again goes to the need for these relationships and the balance between technology.<\/p>\n\n\n\n

\u201cIt is likely that we will see technology and AI begin to handle the more mundane tasks  with the underwriters and those with the expertise handling the detail, the pricing, coverage and with it the sustainability.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Over 700 delegates from 37 countries were in Singapore for the International Union of Martine Insurance (IUMI) annual conference and while geopolitical risks were high on the agenda the offshore energy market and its future was put in sharp focus. While global insurance premiums increased, IUMI\u2019s data charted  a shift in the global offshore energy […]<\/p>\n","protected":false},"author":2,"featured_media":10165,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[7,26],"tags":[34,35,10,38,14],"line-of-business":[23,20],"class_list":["post-10163","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs","category-latest-insights","tag-exact","tag-exact-max","tag-exposure","tag-technical-vision","tag-underwriting-workbench","line-of-business-energy","line-of-business-property"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/10163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/comments?post=10163"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/10163\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/10165"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=10163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=10163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=10163"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=10163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}