In energy, 2025 saw continued technological advancement and notable geopolitical shifts. In 2026 we expect insurers to continue to see the impact of changing risk profiles.
Global investment in renewables, energy storage and modular nuclear research has accelerated. Of particular note was increased UK-US co-operation on nuclear energy, which was formalised under the Atlantic Partnership for Advanced Nuclear Energy in September 2025. This agreement aims to accelerate the development of nuclear power in both countries including by lowering regulatory barriers and is tied to over USD100 billion in commercial nuclear agreements relating to reactors, fuel supply chains, waste management, and engineering services. Further agreements and investment may result in 2026 being the start of a new “golden age” of nuclear power.
Construction and operational risks
Staying with nuclear, one particularly interesting development in 2025 was the announcement in June that the UK government would be building the country's first Small Modular Reactors (SMRs) in Wales, with Rolls Royce being selected to lead the initiative. SMRs are small advanced nuclear power units designed to be assembled in factories for deployment. Due to their smaller design, they are easier to scale and install in remote areas and can adapt more easily to the country's changing energy needs. Given that no SMRs outside of China or Russia have yet reached commercial operation, insurers will be aware of the lack of any operational track record for the technology as it begins its journey to deployment in the UK over the next few years. Regulatory issues, supply chain challenges, nuclear waste disposal and asset security are all yet to be fully resolved. Insurers will therefore need to closely monitor the Welsh deployment to assess the construction and operational risks. Insurers will also wish to monitor the geopolitical angle as this is a novel technology that has already created geopolitical tensions, with the US in particular raising concerns in November 2025 that the UK's domestic centred approach could slow global SMR deployment and innovation.
Increased tariffs
Despite the continued global push towards renewable energy, geopolitical changes in 2025 could lead to a momentum shift going into 2026 and beyond. In 2025, the US, EU, and China all imposed new or increased tariffs affecting energy products, equipment, and materials. These measures will continue to reshape global supply chains, increase costs, and create uncertainty for energy companies worldwide. The tariffs on, amongst other things, steel, aluminium and wind and solar hardware will continue to have a particularly profound impact on renewable projects, slowing the pace of new installations and perhaps making some projects uneconomical. Financial issues like these will of course impact insurance underwriting and claims handling. Whilst US policy has been more favourable to the oil and gas industry, with raw products like crude oil being mostly exempt from tariffs, the impact of tariffs will still be felt by energy projects where tariffs are applied to the steel used in pipelines and mechanical components. As a reaction to the geopolitical uncertainty, energy companies could shift to local production, forming alternative partnerships and/or using new supply chains, which means insurers will have a host of new and evolving risks to grapple with in 2026.
