GCube is committed to sharing its expertise with the renewables insurance community – and the wider renewables supply chain – to encourage transparent dialogue within the industry on key risk issues. As part of this commitment, our underwriting and claims teams regularly contribute to the financial, renewables and insurance press on emerging trends and topics. Covering the wealth of projects that we do, and for as long as we have, gives us exclusive insight into how the industry is developing and key things that need to be done to support its growth.
With extreme weather and rising offshore wind industry claims emerging as key topics of debate in 2021, GCube launched two reports focused on these issues. Highlighting how GCube has responded to these market challenges, we shared our insight on these problems, and how the industry can work towards fixing them. Below are some of the 2021 highlights.
The Texas freeze of February 2021 opened up an important discussion point around the resilience of renewable energy as part of a grid threatened by extreme weather and climate enomalies. Brian Tyluki, GCube Senior Vice President, flagged the growing challenge of managing cold weather and explained how it has become a major area of concern for the renewables industry. Tyluki detailed how GCube is adapting to address the unpredictability and unmodelled nature of these challenges.
As the market was coming to terms with losses from the Texas freeze, GCube launched its claims report ‘Hail or High Water’, which detailed the threat of extreme weather to the renewables industry. Analysing the rising effect of Nat Cat losses in both wind and solar over the past decade, the report explains the need for insurers to factor extreme weather into their risk assessment going forward.
Building on the advice in the report, Fraser McLachlan, GCube CEO, highlighted the need for wind farm operators to have a clear winter storm action plan in order to minimise losses from increasingly extreme weather conditions, noting the downtime losses from turbine failure in particular.
Offshore Wind Biz
With GCube’s offshore wind report in development to be released later in the year, Andries Veldstra, Senior Underwriter at GCube, wrote in Offshore Wind about the risks in the supply chain for offshore wind, identifying quality control and risk transfer as key focusses for the business. He also expanded on the effect that these types of risks have for the insurance industry more broadly and how GCube is adapting to meet these challenges.
In the wake of the launch of the ‘Hail or High Water’ report, GCube joined its colleagues from across the insurance market in highlighting the importance of sustainable terms and pricing, faced with Nat Cat losses. Within this article, Fraser McLachlan, GCube CEO, addresses the need for the renewable energy market to factor in extreme weather as an increasing obstacle.
Turning to more practical recommendations, Fraser also shared GCube’s expertise on how extreme weather impacts solar insurance. Detailing the exponentially increasing risk profile for this part of the renewables industry, he expanded on the growing risk of extreme weather for the renewables industry generally, beyond just solar.
In June, Orsted A/S announced that they would be paying divers to place covers over the now well-publicised Cable Protection System (CPS) issue, with as many as 10 of their offshore wind farms in need of repairs. Fraser McLachlan, GCube CEO, gives insight on the problem, issuing a warning for the future, with more damages set to emerge from previous structural weaknesses.
In order to draw attention to the threat wildfires are having on the growth of the solar industry, GCube issued an announcement in July. This article presents the details of the press release, utilising the insight from GCube’s ‘Hail or High Water’ report as well. The business’s use of a “case-by-case” approach in order to overcome this industry challenge is highlighted in contrast with the blanket exclusions policies adopted by other insurers.
With the influx of new capacity in the renewables industry comes new strains on the insurance industry behind it. Brian Tyluki, GCube Senior Underwriter, gave his insight on the dynamic growth of the market and what this means for insurers.
Edinburgh Renewable Energy Risk Seminar
September saw GCube host a highly successful Renewable Energy Risk Seminar in Edinburgh, featuring leading speakers from offshore wind, onshore wind, solar, operations and risk management. Drawing together speakers across different stakeholder positions, this event created a forum to share ideas and insights on where the industry is and where it needs to go.
In November, at the GCube Advisory Council meeting, GCube launched its report ‘Uncharted Waters’, which delved into the issues behind the swift growth of the offshore wind industry such as continued cost-cutting jeopardising quality. Highlighting key statistics such as contractor error and component defect accounting for 55% of claims by frequency and 83% of total claims spend, with the launching of this report, GCube pushed for more transparency and accountability across the market, in order to help further the growth of offshore wind.
Later in November, GCube also launched its market-leading ‘Smart Insurance’ offering. Taking advantage of the latest data and AI analytics, through GCube’s partnership with Clir Renewables, this product aims to offer enhanced terms and reduced premiums to support the renewables industry. As the market faces up to evolving risks – not only in offshore and driven by Nat Cat – this transparent approach to working with Insureds, mirroring other sectors, may be essential in the coming years.
This month, we were delighted to announce further investment in our underwriting teams in the US and the UK, an outcome of continued growth under our new parent Tokio Marine HCC, and responding to the the market’s growing need to address extreme weather and the rising claims in the offshore wind industry. With knowledge being at the heart of what we do, we always strive to fill our team with the expertise that is essential to maintaining our position as the leading underwriter of renewables projects.