Keep your head up, brighter days are ahead is the advice for brokers with clients in the oil and gas industry from the founder of Oil Patch Insurance.
The sunny message follows the International Energy Agency’s announcement that the world oil surplus could disappear in the first half of 2017 if OPEC nations keep to their production slashing agreement.
“The industry is bouncing back and your oil and gas clients are going to grow. Strengthen your relationships now with your oil and gas underwriters,” Josh DeBoer, Oil Patch Insurance’s founder said. “Make sure you know each oil and gas insurers’ appetite. This will reduce your time spent marketing your client’s account.”
If the industry does make a return, it will be a departure from a prolonged downward trend.
“Insurers have lost a lot of revenue due to returning premiums, the exposures have been down, contractors work has gone down, the sector’s lost business, what insurers are collecting currently has decreased quite a bit,” DeBoer said.
Because of the potential for a quick turnaround, DeBoer advised brokers to expect a rocky rebound.
“Be proactive and try to anticipate the ‘growing pains’ your clients will go through as the industry bounces back. Provide them with as many resources as possible to alleviate their future pains,” DeBoer said.
So now the oil and gas game is revving its engines again, will insurers outside the market rush into the industry?
“I believe a few insurers would broaden their appetite to include oil and gas related risks. Insurers understand how to invest their premium dollars, but do they have the expertise to underwrite oil and gas related risks?” DeBoer said. “I would imagine there would be a heavy recruitment of oil and gas underwriters in order to ensure their company’s success within the oil and gas industry.”
DeBoer said he believes Donald Trump was a friend of the energy industry and his administration would help the oil and gas sector.
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