At our Offshore Wind Risk Seminar in late September, we talked about the need for the market to ‘face up to a new risk landscape’.
It may be starting to sound like a familiar refrain, but it’s a message that needs to be heeded. It rings true not only for those pioneering renewable energy firms commercialising new technologies in far-flung markets, but also those in established markets like the US, where the resilience of the industry continues to be tested.
It applies in equal – if not greater – measure to the insurance markets, which must now take a hard line on terms and pricing in order to continue delivering the vital support the renewable energy sector needs as it expands.
GCube has recently experienced one of the largest claims the renewable energy market has ever seen.
It’s probably just as well that we got the loss, as I am sure some of our competitors would have floundered under such a financial burden. But GCube remains open for business and will remain open for business as we go into 2020, with a clear and committed underwriting strategy with regard to underwriting and administration of claims. We have been the lead in renewables for almost 25 years and we will continue to lead the market and support our clients.
However, while we have benefitted from a unique position of strength – enabling us to pay large claims like this and others – it’s important to acknowledge the impact a difficult marketplace has had on GCube, and more so, its competitors.
Rates and premium have been coming down year on year. More competition has entered the space, brokers have largely dictated terms and the net result is that the market, as a whole, is losing money in the renewable energy sector. Just last month yet another prominent insurer exited the space due to poor results.
As a business, we share an opinion with the majority of our clients that current pricing, deductibles and terms are unsustainable. We will not have a market for our industry if we do not take corrective action now to reset the book to a sustainable level for all.
So yes, we are increasing premium, changing terms and increasing deductibles. This is necessary and many of our peers agree – as we found at our Advisory Council in Chicago in September.
Yes, we have experienced one of the largest claims ever in renewables. That’s why we are here. To pay valid claims promptly, without dispute, and support the growth of the industry.
As we continue delivering against this promise, it is pleasing to report further progress within the business:
- We have opened our new ‘Brexit ready’ office in Amsterdam, bringing on board two new Senior Underwriters with a long-term pedigree in the renewable energy space, supporting our ongoing expansion in Europe and further afield;
- In the USA, we are hiring new underwriters to boost our team and deliver unwavering support to our clients;
- We have recently hired two new loss adjusters to help make the claims process even more streamlined;
- And, while we join our peers across the industry in adjusting our terms, our capacity remains fixed at USD/EUR500,000,000 on- and offshore – far in excess of our nearest competitor.
In short, GCube is fully open for business, and we look forward to working with you all throughout 2020 and beyond as we collectively ‘face up to a new risk profile’.