Despite the high volatility and steep loss ratios borne out by an above-average number of significant man-made and natural catastrophe losses in the past few years, the energy market has remained relatively stable. That stability was due in large part to the continuing availability of capital in the marketplace, insurance industry experts say.

"Energy is very competitive," said Carmella Capitano, senior vice president, Primary and Excess Energy Casualty, Starr Companies, Inc. "There are a lot of new entrants into the marketplace, a lot of capacity," she added. "Finally, the industry got ahead of the downturn. Oil prices keep changing, but they are not going down to the lows of two years ago, nor will they get to the peaks of four years ago. That wild ride has stabilized."

Loss of appetite for risk

"The risk appetite of insurers regarding utilities with California wildfire exposure is limited due to frequent, extremely high losses," explained Christian Fuhrmann, chief executive, Global Clients/North America 1, Munich Re, based in Munich, Germany. He sees growing demand for reinsurance protection of Combined Cycle Power Plants (CCPP) with the latest eco-friendly technology and solar or wind parks, operational as well as under construction.