McGill partners with Renew Risk to build new cat models for offshore wind
Global boutique specialist re/insurance broker McGill and Partners has partnered with Renew Risk to develop catastrophe models for offshore wind portfolios.
Renew Risk is a risk analytics SaaS provider for renewable energy assets. Using deep data science-driven patent-protected methodologies, the firm has built an initial five models in the Oasis framework, an open-source Cat model platform, covering Northeast US hurricane, Taiwan earthquake and typhoon and Japan earthquake and typhoon.
The partnership will allow McGill and Partners to use these cutting-edge models to better understand natural peril risks, determine appropriate insurance limits, and grasp risk aggregation across multiple windfarms in a region. McGill is the first in the market to license the models.
McGill said the demand for in-depth catastrophe modelling has increased in response to offshore wind projects venturing further into high-risk areas.
Traditionally, the catastrophe risk to offshore windfarms has been quantified with general rules of thumb for different regions, or by modelling the risks as onshore. To date, there are no commercially available models for offshore wind farms in the areas of interest where many offshore assets are increasingly being built, frequently in areas that are highly exposed to natural catastrophe perils, the company explained.
Tom Sexton, partner and head of renewables, power and energy at McGill and Partners, said: “There has been a pressing need for a custom-built offshore wind catastrophe model to accurately assess the probability of loss for this rapidly developing asset class in high-risk zones. These models will assist both offshore wind clients and insurers to access more efficient risk transfer capital. They will enable insurers and reinsurers to price coverage more accurately, understand asset class aggregations, and assess offshore wind's impact on other lines of business - previously inaccessible insights. This will give insurers and reinsurers the confidence to provide greater capacity at more appropriate pricing levels to our offshore wind clients in high catastrophe zones.”
Catherine Tillyard, partner in treaty reinsurance at McGill and Partners, added: “McGill and Partners is also part of the Sustainable Markets Initiative, something we’re immensely proud of and that shapes how we look to develop our business. Without sufficient insurance, offshore developers are unable to access credit for these large-scale projects. These catastrophe models provide all parties with a more accurate assessment of the risk, enabling such projects to become a reality – crucial if we are to transition to renewable energy sources.”
Ashima Gupta, chief executive officer at Renew Risk, said: “Offshore wind plays a pivotal role in the transition to a renewable energy economy. But as the industry witnesses a surge in new projects located in regions susceptible to natural disasters, it is important to have robust risk models which will allow (re)insurers to appropriately assess the risk of these billion-dollar assets constructed in the deep sea. With our state-of-the-art data science-driven risk models, we can enable our clients to thoroughly assess the intricate risks associated with natural disasters, thereby instilling the confidence needed to furnish these projects with precisely tailored insurance coverage. By offering this robust risk management solution, we are actively contributing to the progress towards a greener and more sustainable energy landscape.”
Joshua Macabuag, chief product officer at Renew Risk, added: “Renew Risk brings the best in Engineering and risk modelling to provide risk analytics designed and built specifically for renewable energy. McGill and Partners have been the ideal collaborators, resulting in the world’s first commercially-available catastrophe models built from the ground up specifically for offshore windfarms. We look forward to continued collaborations to provide leading risk analytics for renewables, and accelerate the transition to a renewable energy economy.”
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