INDUSTRY UPDATE NEWS & EVENTS
INSURANCE & RISK MANAGEMENT
As a leading global insurance broker and risk management consultant focusing on specialist lines business, wave and tidal is a key focus area for JLT Specialty Limited (JLTSL).
EXPERIENCE
Over the last five years their dedicated Renewable Energy Practice has worked closely with these rapidly growing and ever evolving industries, to develop innovative new risk management and insurance solutions at increasingly competitive prices.
The majority of their experience has been gained to date by working on UK wave and tidal devices and arrays/projects, however increasingly they are beginning to engage with this type of business in other countries and regions including; Canada, USA, Chile and Australasia.
INDUSTRY SUPPORTING ROLE JLT and the wider insurance community have a key role to play in supporting the continued growth of these industries. At present, insurance costs for such devices and projects represent some of the largest elements of their Capex and Opex expenditure, and moreover coverage is limited when compared to what is on offer for offshore wind devices and projects.
BEST PRACTICE GUIDE TO WAVE AND TIDAL POWER RISK AND INSURANCE
The only way that this situation will continue to change is through closer co-operation and earlier engagement between the wave and tidal industries and the insurance industry. This is something JLTSL are keen to promote, as evidenced by the ‘Best Practice Guide to Wave and Tidal Power Risk and Insurance’ they co- produced with RenewableUK back in 2012 for these industries.
Specifically, the specialist insurance community can help these industries to improve risk management practices, contracting strategies and standards. All things being equal, this should lead to the benefits of lower insurance premiums and therefore lower cost of energy, as well as the provision of wider coverage and ultimately in the eyes of potential financiers a more ‘bankable’ investment.
SPECIALIST HUBS
Specialist wave and tidal insurance hubs have developed in London (Lloyd’s of London and the London Company Insurance markets), Denmark, Germany and Switzerland – all markets JLTSL works closely with.
Many of the insurers in these hubs are already leading the way in offshore wind project insurance; knowledge gained here being essential for the development of wave and tidal technology and arrays/ projects too. For example, lessons learnt and on-going work being done to reduce the cost of cable losses in the offshore wind arena should be benefit the first commercial wave and tidal arrays.
FUTURE
Looking forward, based on both the company’s own experience and discussions with leading insurers in this area they believe that within the next five years wave and tidal gross premium will rise to approximately GBP 5,000,000 to 7,000,000 per annum, and therefore this type of business will continue to grow in importance for the insurance community.
JLT Specialty Ltd
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www.wavetidalenergynetwork.co.uk
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