Experts in the energy field believe insurance market pricing will remain flat for the next 12 months despite early concerns that the Deepwater Horizon spill would drive prices higher.

At Chicago-based insurance broker Aon's 10^th Middle East Energy Conference in Bahrain, 300 energy industry experts were polled on their thoughts concerning insurance pricing and market direction.

The survey found that 41 percent expect premium prices in the energy insurance market to remain flat for the next 12 months. An additional 37 percent said they expect prices to decline slightly.

Aon said the results confirm the opinion of many in the marketplace that "while there was a rapid price increase in the energy insurance market in response to the significant losses endured by the industry earlier in the year, the effect was short lived and previous trends have been reasserted."

The survey found that 53 percent of the respondents believe that it would take an additional $5 billion loss in the energy market to turn around the current cycle.

In a report from insurance broker Marsh on the overall insurance market titled, "Insureds Net Benefits As Downward Rate Pressures Persist, Marsh U.S. Insurance Market Report 2010, Third Quarter Update," the broker said "Energy accounts and risks with pollution exposures may be underwritten more closely as a result of the Deepwater Horizon event."

The broker further observed that, barring "market-changing events," the umbrella and excess market would likely remain stable into next year.

Attempts at rate increases may come from incumbent lead carriers, Marsh noted, and could be successful in markets where there is little competition "for the risk class or attachment point."

The broker further pointed out that flat premiums should translate into rate decreases as insureds purchase additional limits "due to the abundance of capacity and the relatively low price in those layers."

In the Aon survey, one thing that concerns energy experts is company ratings. This is a key issue for everyone in the sector, Aon said, as 37 percent of those surveyed said they saw it as the most important factor in their choice of insurance partner.

Technical capability was the second most important factor at 26 percent of those surveyed. Competitive pricing was also a significant concern among 23 percent.

Latif Alrayes, chairman and chief executive officer of Aon in the Middle East, said in a statement, "While the energy industry has weathered many storms over the past few years, barring any disastrous losses, the industry should be able expect flat or even declining insurance premiums over the next year. This should provide the sector with a level of relief and certainty around their operations and investments."