GCube held its 17th Advisory Council in Newport Beach, California on the 4th and 5th of March. The event saw a series of talks, discussion panels and group sessions led by specialists across the insurance, risk management and renewable energy sectors. This year, the Advisory Council discussed the changing risk landscape for natural catastrophes, grid resilience ahead of increased renewables development in California, and best practice when closing cases following a major claim in an increasingly hard market.
The event was opened by GCube’s Chief Executive, Fraser McLachlan, who welcomed the attendees with the news of the company’s acquisition by Tokio Marine HCC. Tokio Marine HCC has been underwriting energy related business for more than 20 years and has been a capacity provider for GCube throughout much of this period. The two teams already have a strong, long-standing working relationship and the acquisition, currently undergoing regulatory approval and due to close in June, forms a natural next step for both.
Extreme weather, extreme claims
Jatin Sharma, GCube’s President, provided the Advisory Council with a brief, high-level overview of GCube’s activity over the past six months, before examining the effect of extreme weather on the renewables insurance market. In particular, he highlighted the increased frequency and severity of NatCat has led to more “billion dollar disasters” across infrastructure and property in the last decade than ever before. The industry must adapt to extreme weather, or risk claims becoming too large to sustain.
Jatin introduced the first speaker, Daniel Kirk-Davidoff, Research Scientist, UL, who continued the insights into extreme weather patterns with his analysis of trends in disaster exposure for renewable generating assets. Given the changing climate and the rapid expansion of renewable energy projects across the United States, he highlighted how projects were beginning to spill over into tornado, hail, ice storm, and hurricane risk territories.
Managing fire risk and claims
Daniel was followed by Hafiz Bello, Technical Project Engineer and Energy Systems Modeler, California Energy Commission, who outlined the challenges in meeting California’s target for 100% renewable energy generation. Risk managers will increasingly play a role in ensuring grid resilience in the coming years, particularly in the context of transmission disruption as a result of increasingly frequent and severe wildfires.
Following this, the Council split into break-out sessions to explore best-practice for renewables claims. To develop this understanding further, Danny Wells, Vice President, Legacy Consultants closed the first day of presentations with his insights into driving best-practice for claims as a result of electrical fires, and what to consider when investigating the root cause. Danny explored some of the common causes of fires for wind and solar, and how to ensure project case files are closed in a timely manner.
Disasters on the horizon
Roy Munoz, GCube’s Head of Claims, and Chris Bender, ran through some of the most complex claims, with causes ranging from extreme weather to mechanical failure, of the last 6 months in a special roleplay edition of “Better Call Roy”. He briefly analysed emerging trends around rotor locking pin damages and coronavirus claims, before exploring in more detail the major challenges involving contract allocated risk and business interruption in 2019, in order to advise attendees on how to manage claims for the coming year.
As business interruption and delay in start-up become more pressing with uncertainty around the length of lockdown measures, best practice in managing these claims will be more important than ever. From the Advisory Council to our upcoming Future Risk Landscape webinars, GCube aims to share these insights to ensure the industry stays resilient through supply chain disruption.
The Advisory Council is an annual event, bringing together senior representatives from the North American insurance and risk management communities for a behind closed doors discussion of key renewable energy market issues.
Additionally, throughout the year, GCube will be running a number of webinars to help bring the industry insight into the current risk landscape.