Insurance is about parsing the known risks. But OneBeacon has just launched a foray into volatile new turf – energy insurance.

Global warming worries have rattled the energy industry out of its decades-long oil-and-gas rut, and brought a host of alternative energy startups to the fore. But the changing landscape has forced traditional energy companies to invest millions into new ventures.

Into that, OneBeacon is launching a six-person business unit dedicated to insuring risks for both traditional and renewable resources.

Still, “We’re not trying to be all things to all people,” said Daniel Guida, head of the business unit. To begin with, OneBeacon is sticking with the middle-market, leaving the Chevrons of the world to get their insurance elsewhere.

Onward And Upward

OneBeacon is insuring the “upstream and midstream” companies, which includes the companies that explore, produce, store and transfer oil, gas or whatever natural resources are being tapped for energy. That means it covers equipment breakdowns, liability issues, income lost from work stoppages, and more.

Guida said OneBeacon had wavered between covering only traditional energy companies or going full-throttle into the alternative markets, but decided to do both – and in that way, they’re echoing the energy companies themselves.

Just about every major gas company, with the exception of Exxon, has decided to invest in alternative fuels, said Tad Brundage of International Energy Insurance Brokers’ Boston office.

“Even the black-gold people are joining the wave,” he said. And there’s no doubt, energy insurers and brokers are moving with the times.

But in this chaotic chapter, no one’s entirely sure which fuel method will present itself as the dominant new technology, on top of the already volatile oil-and-gas sector. Of those new fuel methods, the risks are much harder to figure, although Brundage noted they’re generally less dangerous than the gritty work of extracting traditional fuels.

To respond, brokers and insurers are doing whatever they can to learn about the industry and identify the players who will get a handle on how to produce and distribute fuels best, not necessarily on which outfit has the flashiest new technology, Brundage said. For its part, International Energy has recently dug into learning about insuring ethanol risks.

“The industry is changing, so we want to get involved with it,” he said.

Old Economics v. New Technology

For other energy insurance underwriters and brokers, old-fashioned economic forces are of more concern than how to adapt to, say, the burgeoning solar energy sector.

The global economic crisis isn’t expected to have a lasting impact on the market, according to the Insurance Information Institute. Robert Hartwig, president of the III, says demand for energy slumped last year, but that demand will creep back up by the end of this year.

And although alternative energy is getting a lot of fanfare these days, worldwide demand for traditional sources such as coal are going to be around for a long time, he reported in a presentation on the subject – as of 2030, coal is still predicted to make up almost half of the world’s energy sources.

It’s been years since an underwriter jumped into the sector, Brundage said. Barriers to entry are high because some aspects of energy insurance are typically expensive and high-risk, and is typically the province of giants such as Zurich Financial Services or Chubb Group.

It’s particularly interesting for OneBeacon to jump in, as energy insurance differs from OneBeacon’s general property/casualty background, he said, adding that he was “very surprised” at the move.

But the foray into energy insurance is in keeping with OneBeacon’s stated strategy to home in on specialty niche markets, such as insuring collectors’ cars or doing liability insurance for members of the entertainment industry. Guida says OneBeacon intends to eventually expand the company, and indicated the company kept the western states in mind for expansion.

But for the moment, the unit is going to stay “small and focused,” and work on its particular niche, he said, with the support of OneBeacon.

“They have a very good philosophy, and understand that this is going to develop over time,” he said.