Ironshore’s global property energy division boosted its capacity limits from $25 million to up to $35 million, even as the sector faces increasing competition in the face of plunging oil prices.

Executives with the billion-dollar insurance holding company said the move, effective in April, is designed to help propel global expansion for Ironshore in a key sector.

“Access to deeper capacity will enable us to pursue continued growth within specialty energy markets on a global scale,” Tony Mammolite, Ironshore’s president, global property, said in prepared remarks.

Peter Coleman, leader of Ironshore’s Energy Industry Practice Group, said in a statement that initiative reflects a push to expand an energy sector market presence Ironshore has had since 2007.

Ironshore’s strategy to go after more business in the global property energy space comes as the energy underwriting landscape faces increasing challenges.

Falling oil prices, for example, have led to cutbacks in the North Sea oil and gas industry, struggles in the U.S. shale industry, and pullbacks from energy development projects around the world, Willis noted in an April 9 posting of its WillisWire blog (an excerpt from its Willis Natural Resources Market Review: 2015).

This reality is leading to more M&A activity in the energy sector, which will mean less premium hitting insurance markets, according to the Willis blog. The companies that remain will likely reduce their risk management budgets, too. That, combined with higher global insurance/reinsurance capacity puts significant competitive pressures on the direct energy insurance market, Willis said.

Adding to the issue are merger announcements concerning companies such as Catlin/ XL, and Brit/Fairfax Holdings which are designed, in part to reduce operating costs, but won’t cut back on overall capacity, Willis said.

Sources: Ironshore, Willis

Topics Property