The renewable insurance energy market in Asia saw a moderate loss last year, with upward rate movements of 10% to 15%, according to Aon’s Asia Market Review 2022.
According to the global insurance brokerage, cable-related claims continue to make up a majority of reported loss activities. These losses, which include errors in installation design and manufacturing, are estimated to represent more than 50% of overall claims.
The rapid development of technologies by manufacturers has forced insurers to keep up through deeper technical underwriting assessment and updated available policy terms. There was increased interest and appetite for newer technologies, such as offshore wind, floating solar, and battery energy storage systems.
Markets continued to take a conservative nat cat approach, limiting capacity for highly exposed risks, leading to increased interest in alternative risk transfer solutions, where traditional markets are only willing to offer limited cover, Aon said.
For 2022, Aon expects flat to +10% rate movements, with reinsurance capacity remaining largely intact. However, the industry will continue to be tested as newer technologies emerge. Defects in design, workmanship or materials will remain a leading cause for losses, so insureds can expect tighter terms and policy exclusions.
“A deeper scrutiny of policy wording/language, particularly around policy extensions and exclusions will prevail, with several key areas of change to note depending on the technology used (e.g., serial loss clauses),” Aon said.
