Despite facing significant constraints such as climate variability, supply chain disruptions, casualty deterioration, social inflation, and geopolitical tensions, the renewable energy sector remains resilient and optimistic this year, according to WTW.
The broking giant’s Renewable Energy Market Review 2024 report, however, indicates that achieving overall profitability continues to be a challenge due to variable results within different energy classes.
The report by WTW features a detailed examination of the insurance markets for renewable energy, as well as insights from international experts, providing a thorough analysis of the risks and opportunities in 2024.
Several key trends highlighted in this year’s review include climate volatility and weather patterns, supply chain instability, technological advancements and market adaptation, energy storage innovations, and resource skills gap.
“Recent challenges have tested the insurance markets, but resilience has improved,” stated WTW’s natural resources global renewable energy leader Steven Munday (pictured). “While surplus capacity exists for proven technologies, caution remains.
“The ongoing competition and potential for a La Niña year keep rates steady, with parametric solutions gaining traction despite integration challenges. To capitalize on emerging opportunities, renewable energy risk and insurance buyers should continue to engage with advisors and markets, employing smarter solutions to navigate the complexities of the evolving landscape.”
According to WTW, the market has increased its general resilience to unknowns following several unprecedented challenges.
Munday noted: “In more recent years, unprecedented challenges resulting from the global pandemic, supply chain volatility, inflationary factors, and increased frequency and severity of natural catastrophe events created headwinds in the insurance markets.
“Today, the market has increased its general resilience to unknowns, resulting in a more profitable and sustainable relationship with insurance buyers, particularly when worst-case natural catastrophe events do not materialize.”
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