The rapidly growing renewables sector can offer insurers and reinsurers many opportunities for growth, despite it being a busy marketplace already. But only for companies willing to innovate and create solutions around the new risks emerging in this market, according to executives at Munich Re.
The German reinsurer, through its insurance subsidiary Great Lakes UK, has begun offering serial loss cover to the offshore wind turbine industry. Fixing broken turbines is expensive and the policy covers the cost of repair or replacement of defective turbines, as well as individual components if there are serial losses affecting several elements. The policy also covers the costs of deploying the special vessels required.
“We see renewables as a growth area,” said Dr Mathias Hörmann, underwriter for the Green Tech Solutions unit at Munich Re. Hörmann is part of a team that has spent five years identifying gaps in the renewables insurance market. This latest product has emerged from that process.
Given the potentially high cost of claims in an industry such as this, Hörmann said that it is essential those writing such business have a strong financial backing – as Great Lakes UK does in the form of parent Munich Re. The coverage also provides much-needed certainty to investors in such projects, helping companies secure financing to build them in the first place, according to REpower, the client on this deal, and Nordwest Assekuranz, the broker.
Thomas Haukje, managing partner of Nordwest Assekuranz, a broker that specialises in renewable energy, said: “With this insurance solution we are again breaking new ground in the cover of special risks for the booming offshore energy industry. It marks a milestone in the field of major offshore wind projects."
Munich Re Board member Dr Thomas Blunck added: "With innovative solutions like this serial loss cover, we create investor security and help new technologies for the production of renewable energy gain a foothold in the market."
Munich Re, Green Tech Solutions, renewables