Market Update: elseco Energy 2.0
The purpose of this Market Update is to provide the latest news on our Energy portfolio and elseco’s offering in this line of business going forward.
First and foremostly, it is and has always been elseco’s goal to add value to our Members and all our stakeholders. With this in mind we have been working hard to formulate a sustainable and new plan for our Energy book, namely elseco Energy 2.0.
This week we have launched the elseco Energy 2.0 capacity raising placement campaign and have instructed a group of leading global brokers to help deliver our new offering.
In summary our message for elseco Energy 2.0 is as follows:
• Responding to a new risk landscape: Huge changes brought about in the Energy industry and the world economy in general in recent times by Climate Change and the Covid-19 Pandemic. The world economy moves towards much greener and more sustainable energies supplies, renewables are in focus.
• Centralising of operations from one location: Keeping greater control and having all areas of expertise (underwriting, claims, operations, accounting and technology platform) working together from our head office in Dubai at the DIFC.
• Trading electronically: Energy 2.0 will be traded on ATOM V.2, our pioneering fully integrated underwriting solution platform. This will help ensure seamless transactions and administration processes going forward plus also great opportunities for new business production.
• Looking global: We will no longer write a follow London book with small shares on small risks. We will look to maximize our shares on significant business and to be amongst the leaders on the majority of the risks we write. This approach will aid our ability to analyse, process and report on the business written. We will operate with a reduced focus of Afro-Asia for Upstream business with World-Wide only for Downstream and Renewables to reflect current market conditions and the likely state of the market for the next three years.
• Balancing the book: Upstream is currently quite flat pricing-wise with only marginal pricing increases as capacity has remained high in relation to market demand. We see this segment beginning to harden further in 2020 but due to the Covid19 effect on the oil price we see Upstream activity (particularly drilling and construction) as being pretty low. However we know that the Upstream business in this footprint has been consistently profitable and less volatile than Downstream so we want to have a balanced book.
• Downstream opportunities: Downstream is the hot area right now with average rate rises of over 30% but with some major accounts paying up over 100% where there is loss activity. We know that we can profitably utilize every dollar of capacity we can raise.
• Renewables increased focus: Renewables will have an increased focus with concentration on the more developed technologies of Hydro and Wind. We will look at the developing areas of Biomass, Wave etc but this will not be a large part of the portfolio.
• Covid-19 and Cyber: At the time of writing there is not much evidence of many BI related claims in Energy. Going forward we will use all agreed market clauses and exclusions to ensure that there is no Pandemic exposure. Same approach will be taken to all Cyber related coverage.
If you wish to discuss the elseco Energy 2.0 proposition further please do not hesitate us.
Contact details are as follows: Lucy Gilchrist, Chief Member Officer, lucy.gilchrist@else.co