XL & Munich Re partner on fuel cell portfolio
XL Group’s complex accounts unit, Munich Re’s green tech solutions team, and consultants New Energy Risk (NER), have teamed up to deliver an insurance policy for a portfolio of fuel cell servers installed across the US.
The $99 million bond issued to help finance the portfolio of servers was granted investment grade rating. It is the first time that an insurance coverage, provided by XL Group and Munich Re, has contributed to a financing bond receiving investment grade rating, thereby becoming more attractive to a wider range of investors.
The insurance cover provides critical support for the project financing by insuring the fuel cells’ performance over 15 years, should the manufacturer be unable to meet its warranty obligations.
Mike McGavick, XL Group’s chief executive officer (CEO), said: “Helping move new ventures forward is exactly what insurers need to do in today’s market. Our clients need strong innovative partners to help manage their risk and I am delighted that we worked together with Munich Re and New Energy Risk to deliver this unique product.”
Thomas Blunck, the Munich Re Board member with oversight for this segment, added: “This shows clearly the importance of insurance in making the project significantly more attractive to investors. In analysing and assessing the risks and giving a long term insurance cover we signal a certain level of security for all stakeholders.”
XL Group launched this insurance cover in 2013 along with specialised consultants New Energy Risk. The fuel cell technology covered in this deal will enable a grid-independent energy supply for several companies.
“Each of these companies brought valuable expertise that, combined, led to a unique insurance solution for a new technology. This collaborative approach could pave the way for further business in this and other energy-related fields,” said Tom Hutton, CEO of New Energy Risk.
