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How low oil prices affect the insurance industry | Canadian Insurance
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How low oil prices affect the insurance industry

Beazley saw premiums in its energy sector fall by 17 percent last year

Oil’s tumbling prices are starting to hurt the insurance sector as cancelled oil and gas projects drive down premiums in the already soft market.

Some of Willis Towers Watson’s largest energy clients have reduced their coverage limits, which obviously reduces the premiums they pay.

Read: Falling oil prices, rising floodwaters and an NDP government shape Alberta’s insurance industry

“If premium income levels continue to deteriorate, and capacity does not withdraw… at some stage this portfolio is bound to become unprofitable,” Nick Dussuyer, Willis Towers Watson’s global head of natural resources, told Reuters.

Brokers are predicting at least a 20 percent premium drop, and insurer Beazley already saw premiums in its energy sector fall by 17 percent last year.

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