Re/insurers have pivotal role supporting shift to renewable energy: Howden Re

The re/insurance industry has a pivotal role to play supporting the global shift towards renewable energy, which is crucial for the climate and the future of the global economy.

That is according to a report published September 6 by Howden Re, titled “Watt Now? Reinsuring the Renewable Energy Transition”, which examines the growth of the renewable energy sector and its associated opportunities and risks from a reinsurance perspective. 

“The renewable energy insurance market is experiencing robust expansion.”

As governments worldwide increasingly incentivise renewable adoption in pursuit of energy security and a cleaner power system, Howden Re’s report projects that renewables will account for 74 percent of the growth in global primary energy consumption by 2030. 

This substantial shift towards cleaner energy sources, driven by the declining costs of technologies such as solar and wind, presents significant growth opportunities for the re/insurance sector. The renewable energy insurance market is experiencing robust expansion, with notable premium potential in solar, onshore wind, offshore wind, and battery energy storage systems (BESS).

The report emphasises that re/insurance is essential to the energy transition, highlighting the need for greater transparency and collaboration among all stakeholders to ensure risks are appropriately placed and managed. It highlights the varied risks associated with onshore and offshore wind, solar, and BESS, bringing awareness to how manufacturers, producers, cedants, and reinsurers can navigate these challenges together. 

For instance, severe convective storms now account for 36 percent of global insured natural catastrophe losses, underscoring the importance of robust risk management strategies.

James Metcalf, associate director Marine, Energy & Terror at Howden Re, commented: “The renewable energy sector is evolving rapidly, bringing a unique set of challenges and opportunities. Collaboration across the industry is vital to support the sustainable growth and resilience of renewable energy projects worldwide.”

Simon Brooks, managing director, Marine, Energy & Terror at Howden Re, added: “The renewable energy sector is at a critical juncture. As we navigate the complexities of natural perils and evolving technologies, our focus remains on delivering innovative and tailored risk management solutions to support the sustainable growth of this vital industry.”

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