Discipline and resilience have characterized the energy insurance market in recent months according to Marsh's latest Energy Market Monitor.

While the market as a whole has remained predominantly flat over the last quarter, it is questionable whether the current underwriting discipline can continue in the light of record capacity levels and an overall benign loss environment for the first six months of 2012.

Contrary to the widely held market belief that offshore construction business has not been profitable, Marsh data suggests that the market loss ratios are comfortably within acceptable underwriting results. The findings show that the loss ratio for offshore projects from 2001 to 2008 was 65%.

We have had a consistently high market share over the years in question and that gives us confidence that our loss ratio data is an accurate representation of the market experience as a whole, despite the common misconception regarding supposed unprofitability of offshore construction business.

The true test of market capacity for mega projects in offshore construction, which are deemed to be the most profitable, is yet to come. Third party property risks appear to be driving liability coverage significantly upwards, particularly where there are exposures for consequential losses so the future looks set to be unpredictable.

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