Howden Re has released a report analyzing the growing renewable energy sector and its impact on the reinsurance industry.

The report, titled “What Now? Reinsurance for the Renewable Energy Transition,” highlights the role of the reinsurance industry in supporting the global move towards renewable energy, a shift that is critical to both climate goals and the future of the global economy.

The report notes that as governments around the world increasingly provide incentives to encourage the adoption of renewable energy, demand for clean energy systems is growing. Howden Re predicts that by 2030, renewable energy will account for 74% of the growth in global primary energy consumption.

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This shift, driven by the costs of technologies such as solar and wind, presents significant growth opportunities for the reinsurance sector, particularly in areas such as solar, onshore wind, offshore wind and battery energy storage systems (BESS).

Howden Re stresses the central role of insurance and reinsurance in facilitating the energy transition, noting the need for greater collaboration and transparency among stakeholders to ensure risks are properly assessed and managed.

The report identifies the risks associated with different energy sources, such as onshore and offshore wind, solar, and a sustainable and inclusive energy system, and points to the importance of manufacturers, producers, underwriters and reinsurers working together to overcome these challenges.

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Severe storm surges now account for 36% of insured natural catastrophe losses worldwide, highlighting the growing need for comprehensive risk management strategies in the renewable energy sector.

James Metcalfe (pictured above left), Associate Director, Energy, Marine and Terrorism at Howden Re, said the renewable energy sector is evolving rapidly, creating both challenges and opportunities. He stressed the importance of cross-industry collaboration to ensure sustainable growth and resilience for renewable energy projects worldwide.

The renewable energy sector is at a critical juncture, facing complex natural hazards and rapidly evolving technologies, said Simon Brooks (pictured above right), managing director of marine, energy and terrorism at Howden Re.

The report also calls on reinsurers to improve their approach to risk assessment, and provide tailored solutions that address the challenges, characteristics and construction needs of different power generation technologies.

Concessionaires are encouraged to clearly articulate their risk exposures, taking into account the variable risks associated with construction schedules, asset design, and environmental factors.

The renewable energy insurance market is growing steadily, with significant potential to drive premiums across the solar, wind and battery storage sectors.

As the global energy landscape transforms, the reinsurance industry is expected to play a critical role in managing risk and supporting the expansion of renewable energy infrastructure.

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