Oil And Gas Insurance Market Size, Share, Growth, and Industry Analysis, By Type (Gas Insurance & Oil Insurance), By Downstream Industry (Dealers & Manufacturer), and Regional Insights and Forecast to 2033

• 

  Request a Free sample to learn more about this report

OIL AND GAS INSURANCE MARKET OVERVIEW

The global oil and gas insurance market was valued at USD 18.75 billion in 2024 and is expected to grow to USD 20.63 billion in 2025, reaching USD 44.32 billion by 2033, with a projected CAGR of 10.03% during the forecast period 2025-2033.

The oil and gas insurance market provides insurance policies covering the risks of exploration, extraction, distribution, and refining in the oil and gas industry. It covers policies offering protection against property-related loss, liability, environmental risk, and business interruption arising out of financial protection for accidents, spills, and operational failures associated with such undertakings. Increased energy demands worldwide and increased regulatory scrutiny have also resulted in insurers customizing solutions to challenge sectors. Technological advancements, volatility in oil prices, and changing energy transition policies are some of the factors driving growth in the market. As the industry transforms itself, so will the insurers, who will respond to all new parameters of risks, including cyber threats and the incorporation of renewable energies.

COVID-19 IMPACT 

Oil And Gas Insurance Industry Had a Negative Effect Due to reducing demand and increasing underwriting losses during COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The oil and gas insurance market faced adverse effects from COVID-19. There was a significant fall in energy demand globally as well as crashing prices of crude oil. The syndrome even cascaded with lockdowns and travel restrictions that brought down industrial activities. Many oil and gas businesses reduced their activities or even stopped them wholly, thus creating a bastion of dwindling demand for insurance coverage. Rising claims due to business interruptions and supply chain disruptions created liabilities from workforces, thus rendering the underwriting earnings to be "gradually not bright." Investments lagged while losses were incurred as the contract experience became applicable to tighter underwriting, higher premiums, and reduced capacity. Overall, the pandemic has had a downturn in the oil and gas insurance market, with recovery very slow as the industry adapts to new challenges after the pandemic.

LATEST TRENDS

Market growth faces challenges from climate risks, regulations, and rising premiums

The oil and gas health insurance industry at present has been the most affected by contemporary developments, which would make a significant bang in the market—higher premium prices, tighter underwriting policies, and the extension of climate-related risks. Central to the industry is constant debate on insurers supporting projects of fossil fuels amidst increasing pressure from climate change. Some of the insurers have begun banning coal-utilizing policies, whereas about 80% of the remainings continue financing oil and gas-related projects. This has also stirred criticism from the climate advocacy groups. Simultaneously, some of them are suffering more losses due to extreme climate occurrences that are over $100 billion these days—another factor causing some companies to move out of such regions. They have been pressurizing due to their authorities, especially the European Union's Solvency II rules, in making life insurers disclose all fossil fuel investments and transition plans into net-zero emission targets.

OIL AND GAS INSURANCE MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Gas Insurance & Oil Insurance

• Gas Insurance: Gas insurance is defined as insurance covering risks related to acquiring, processing, storing, and distributing natural gas. Coverage can differ among individual policyholders, with every type ranging from loss and scrapping pipeline leakage to third-party liability insurances. As increased scrutiny and environmental factors come into play, coverage on injection and explosion risks and non-compliance are emerging concerns for the insurers. An increasing demand for liquefied natural gas (LNG) increases the need for due insurance solutions in place of worries from geopolitical uncertainty.

• Oil Insurance: Oil insurance is an insurance policy under which exploration, drilling, refining, and transportation could be carried out for petroleum. This particular policy might apply to offshore and onshore operations, which protect them from equipment failures, spills, fires, and natural disasters. Climate losses continue to rise, and environmental legislation is toughened. Hence, insurers have changed the definitions of the clauses of coverage under which they operate. It also varies with some who, despite the various energy transition policies, continue with strict terms and higher premiums, giving coverage.

By Application

Based on Downstream Industry, the global market can be categorized into Dealers & Manufacturer

• Dealers: Oil and gas dealers require insurance against the risks associated with fuel distribution, storage, and sale in the oil and gas trade. Insurance covers property, environmental contamination liability, and, due to supply chain disruptions, business interruption. Increasing regulations require dealers to also follow safety procedures to minimise risks associated with spillage, leakage, or fire. Such transitions mean insurance firms are adapting policies to harness new hazards such as cyberattacks targeted at digital fuel management systems and fluctuations in the price of oil.

• Manufacturer: Oil and gas manufacturers take insurance as a shelter against risks related to refining, processing, and production of equipment. Thus, coverage includes loss for machinery breakdown, accidents caused in workplaces, or liability from defective products or industrial hazards. Many manufacturers in the carbon-intensive operations moved under the umbrella of insurers providing environmental liability coverage, especially as sustainability becomes the name of the game. Advanced manufacturing technologies such as increased automation and a higher amount of monitoring through AI also raise new operational risks that need to be addressed by the kinds of insurance solutions that are evolving.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Market growth is driven by regulations

Environmental concerns and stringent regulations have been the two major driving forces behind the Oil And Gas Insurance Market Growth for years. With laws worldwide becoming increasingly stricter regarding emissions, drilling operations, and prevention of spillage, liability and environmental insurance coverage increase in tandem. Companies find themselves facing increasing regulations on carbon emissions and safety protocols. Consequently, failure to meet them can lead to huge fines and indirect damage to a company's image. For this reason, insurers now offer special policies defending against liability for environmental issues, remediation costs, and legal expenses.

Market growth rises with cyber threats

The oil and gas industry is facing threats from the failures of operation and access equipment along with possible interruptions in the supply chain. Indeed, the cyberattacks to which the industry infrastructure, mostly promisingly with increasing automation through IoT and artificial intelligence-enabled monitoring systems, is now highly exposed have sent the entire sector into an upsurge in demand for cyber insurance coverage. Natural disasters and geopolitical tensions with fluctuating international oil prices introduce uncertainties, hence business for serious insurance concerns. Insurers interested in industry turnover would underwrite their policies for both physical and digital threats to encapsulate all risk coverage.

Restraining Factor

Market growth slows as high premiums limit coverage for risky operations

High costs of premiums are one of the major constraints in the oil and gas insurance industry from eventually being able to afford an all-inclusive full coverage by companies. This has driven the higher premiums and more stringent underwriting standards by insurers, now because of the rising environmental liabilities and frequent operational risks coupled with increasing claims. There are many insurers who are now cutting their exposures to fossil fuel projects on sustainability grounds. Thus, coverage becomes limited for high-risk operations, notably offshore drilling. This factor makes it impossible for small and medium-sized oil and gas companies to afford proper insurance, affecting their financial stability and risk management capability.

Opportunity

Market growth increases as insurers expand coverage for renewable energy transitions

Increased market for oil and gas insurance can be realised by increasing coverage of companies that are converting to renewable energy. Many oil and gas companies are going into cleaner energy solutions such as hydrogen, carbon capture, and biofuels; hence their demand for specialized insurance policies to manage new risks. Insurers can develop tailor-made products covering infrastructure development, regulatory compliance, and operational risks in hybrid energy models. Transition policy demand is expected to increase along with governments going for net-zero targets and corporations seeking financial security during the process. The result will create a very lucrative market for insurers willing to innovate and give support to the energy transition.

Challenge

Market growth is challenged by rising climate risks and higher premiums

A major reason behind the rising claims and financial losses in the oil and gas insurance area is the increasing frequency and intensity of climate-related disasters. Hurricanes, wildfires, and other extreme weather create havoc and can cause operations to stop, infrastructure to be damaged, and liabilities from damage to their environment. Insurers face problems of not being able to renegotiate the profitability dual-step, yet coverage for these risks intensifies. This leads to increased premiums and also lesser availability of covers for fossil fuel projects. This has led to some of these companies being stranded when it comes to getting good insurance, resulting in their exposure to uninsured losses and increased financial instability.

• Request a Free sample to learn more about this report

•  

OIL AND GAS INSURANCE MARKET REGIONAL INSIGHTS

• North America

Market growth in North America thrives on investments, regulations, and technology advancements

North America leads the market courtesy of token volumes that substantiate a well-entrenched energy sector that accommodates major investments in exploration and production while retaining the largest insurance companies. This region employs advanced risk management methods whose creative regulation is a driver to further develop this insurance market. The United States Oil And Gas Insurance Market plays a noticeable role in this control of growth with its widespread energy reserves, offshore drilling, and comprehensive coverage for almost all risks that are being accepted in the industry. Yet again, with the presence of leading global insurers in the U.S., the very growth of this market is further fuelled upwards. This development would also be sustained through the advancement of technology and regulatory imperative compliance.

• Europe

Market growth in Europe is driven by regulations, innovation, and ESG mandates

Europe holds a notable Oil And Gas Insurance Market Share through its leading insurers, AXA, Zurich Insurance, and Munich Re, with their energy sector risks. The regulatory environment in the region is well-advanced and exerts influence over global insurance standards and risk-assessing practices. In line with the needs dictated by world-class developments in the energy sector, European insurance actively invests in innovative and advanced risk management solutions, especially in digital analytics and climate risk modelling. Furthermore, within this region, the ESG (Environmental, Social, and Governance) mandate is forcing insurers to offer specialized coverage for renewable energy projects in addition to their traditional oil-and-gas insurance.

• Asia

Market growth in Asia is driven by energy demand and investments

Asia stands firmly as a player in the oil and gas insurance market due to burgeoning energy demand, increased offshore exploration activities, and an expanding refinery backbone. It is the investments in energy projects from countries such as China, India, and Indonesia that drive the markets, usually requiring substantial insurance to cover risks of operational nature. Besides, the enforcement of environmental laws and geopolitical instability in the region may prompt special insurance legislation that encompasses natural calamities and consequences arising from political instability. This would go on to ensure that as Asia continues to up the street with its energy sector and advanced risk management initiatives, the market shall be poised for further growth.

KEY INDUSTRY PLAYERS

Market growth thrives on innovation and technology

The oil and gas insurance markets have developed change models through innovation-driven offerings in risk mitigation. Chubb, AIG, AXA, and Zurich comprise the prominent insurance houses in the oil and gas insurance market these days. They harness the potential of modern technologies that include advanced artificial intelligence, drones, and big data analytics to enhance their risk assessment and underwriting profiles, besides niche underwritings for exposure in areas such as cyber threats, environmental liabilities, and geopolitical risks. Indeed, as regulatory scrutiny increases and the energy markets of the world transition toward renewables, these insurers are transforming their product offerings to stay relevant in the market while managing soaring premiums and volatile operational risks.

List of Top Oil and Gas Insurance Companies

• Munich Re (Germany)
• Chubb (U.S)
• Zurich Insurance (Switzerland)
• Liberty Mutual (U.S)
• AIG (U.S)

KEY INDUSTRY DEVELOPMENTS

January 2024: Aon plc, a leading global insurance brokerage, partnered with Occidental Petroleum (Oxy) and its subsidiary, 1PointFive, to develop a first-of-its-kind carbon capture and sequestration insurance product. This insurance solution is designed to mitigate risks associated with carbon capture, utilization, and storage (CCUS) projects, ensuring long-term security for energy companies investing in decarbonization initiatives.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential application that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.