Extreme weather pushing premiums

GCube Insurance, which describes itself as the leading provider of renewable energy insurance services, has highlighted the need for renewables to prepare for out-of-season extreme weather damage. In recent years, extreme weather events such as wildfires and hurricanes have been occurring outside of expected times and locations and increasing in severity.

Insurers including Swiss Re and Munich Re have reported that 2018 saw the fourth-highest natural catastrophe losses of all time. In renewables, GCube highlights that extreme weather losses jumped to 15% of all claims, which was almost double that of previous years.

As the global climate shifts, the nature of extreme weather is likely to change. This means that damage will be caused outside of season and in unexpected locations. Fraser McLachlan, GCube Insurance CEO, said, “Every so often, the market gets caught out. As the climate changes, so must our expectation of when and where losses will occur.”

In particular, GCube highlights the way that projects are often sited next to areas of high hazard natural catastrophe exposure (Nat Cat), based on historical data. Projects sited on the edge of these zones, where insurance premiums have historically been lower because they have been perceived as non-critical Nat Cat areas, now carry the same degree of risk.

In recent years, GCube has seen several losses as a result of inadequate preparation for extreme weather.

By Jake Frith