ASIA, January 13, 2022 — The accelerating growth of the renewable energy sector continues as companies are looking to transition to a low carbon environment. The speed of growth is also creating significant demand for building resilience against climate change, according to WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company, at the launch of its annual Renewable Energy Market Review.
The last year has been a significant one for renewable energy, with increased focus on commitments made to fight climate change, especially on the back of global climate forums such as UN’s COP26 summit. Unprecedented growth in renewable energy capacity additions have called for additional rates to double in the short term, together with an increasing interest in Net Zero and transition plans. Risk implications for the renewables industry are outlined in this report, providing a framework for which organisations can establish where they are on their journey towards being Net Zero, as they continue to expand and navigate their way through the evolving and challenging risk environment.
The report also outlines how the renewables insurance market is stabilising with low to single-digit price increases expected in 2022. Some of the key challenges besetting the renewables insurance market include aged assets, operation & maintenance and spares, natural catastrophe risk, contractor experience, lender obligations, the pace of technological change and COVID-19 related supply chain interruption risks.
George Nassaouati, Head of Natural Resources Asia, WTW, said: “The renewable energy industry is transforming at a speed which can be difficult to track. This can be seen in the record growth in solar PV and wind capacity additions - beating previous year’s record, as well as the increasing interest from insurers in offshore wind and hydrogen, where synergies in environment and technology strategies are available. This creates an incredibly complex and fast evolving environment for the sector, so it is essential that organisations understand how to manage not only the speed of growth but also the emerging risks that arise, such as supply chain issues.
Asia is seeing a rapid expansion of the renewable energy industry and WTW continues to support renewable companies navigate their risk terrain which is increasingly more complex. The renewable energy insurance market remains heavily influenced by Natural Catastrophe (Nat Cat) exposure and the type of Nat Cat season experienced by individual insurers. In Singapore, insurers are showing a stronger appetite to support businesses with a good loss history, and Lloyd’s Asia has started the renewable consortium supported by several major syndicates. With an increase in renewable activity in Asia, we believe there is a huge opportunity for new insurers to enter the market that will inject fresh capacity and more robust competition in the marketplace. At WTW, we are providing innovative solutions to help renewable energy companies mitigate risk in this fast-growing sector.”
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
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