Atrocious loss records, a depleted premium pool and increased operating costs have put a squeeze on the downstream energy insurance market, Willis Towers Watson says.

The group’s Energy Market Review says underwriting capacity for international business fell to $US6.2 billion ($8.7 billion) this year from $US6.8 billion ($9.6 billion) last year, its first significant decline since 2001.

Capacity for US business has fallen below $US4 billion ($5.63 billion).

“We have seen an increasingly hard market developing,” the review says, labelling the line “traumatised and challenging”.

“From London to Miami, from New York to Dubai, from Zurich to Singapore, the story has been the same – consistent underwriting losses that have brought downstream portfolios all over the world under increasing scrutiny from regulators and management.

“Furthermore, we are seeing a marked willingness from several insurers to walk away from business if their own terms cannot be agreed.”