Willis reports mining insurance market softens as capacity rises

The influx of capacity has intensified competition amongst insurers.

The global mining insurance market has softened over the past year as capacity and competition increase, according to Willis Natural Resources. 

Capacity for any single mining risk is now estimated at about $1.5b, supported by new reinsurance capital across both risk and catastrophe lines.

The influx of capacity has intensified competition amongst insurers, driving down property damage and business interruption (PDBI) rates. 

“Undoubtedly it is a good time to be a buyer of insurance, however, we encourage all insureds to consider the cyclicality of the insurance market – the components for a potentially aggressive correction are being assembled now,” said Will Fremlin-Key, Global Mining & Metals Leader at Willis Natural Resources. 

Whilst large loss events have been limited, attritional claims from natural catastrophes and weather-related incidents have eroded profitability. 

Some specialist markets have reached “walk-away” points on pricing, according to Willis.

In this soft market, insurers are showing more flexibility on coverage and are using higher deductibles to maintain balance. 

Despite the softer conditions, underwriting remains cautious. 

Following leach pad failures at mines in Turkey and Canada, carriers have tightened terms around leach pads, seismic risks, and tailings facilities. 

Insurers are increasingly requiring miners to align with the Global Industry Standard on Tailings Management (GISTM) to access broader coverage.

Willis noted that miners with strong data, transparent risk management, and established broker relationships will be best positioned to secure favourable terms as market conditions evolve.