New technologies and stakeholder pressures drive bespoke comprehensive insurance solutions

The continual evolution of the renewable energy sector is a crucial factor in enabling the European Community to achieve its objectives. By 2010 renewable energy will represent 12% of the Community’s primary energy portfolio, as laid out in the Renewable Energy White Paper published in 1997. As well as achieving this objective the use of sustainable energy supplies will help the EC to fulfil its obligations to the Kyoto Protocol.

European governments’ incentive measures to encourage the production of energy from renewable sources are rapidly increasing as the cost of fossil fuels soar. The significant investment in the construction and operating infrastructures of renewable energy projects is mirrored by the development of the new technologies to improve the efficiency and productivity of areas including biomass, bio fuels and solar and wind power. As technology and production techniques advance so the need for risk management and insurance to keep pace becomes a priority.

The new challenges faced by businesses are by no means insignificant. For example, the exposures created by building these new, and sometimes prototype, facilities and the transportation of large volumes of combustible materials are fairly obviously areas of attention for the risk and insurance communities. Added to these are the liabilities coming as a result of failures in the operation and monitoring of highly technical locations and ever more stringent emissions requirements.

The wide ranging implications of renewal energy have generated investor pressure to optimize returns while at the same time both political and non-governmental focus is brought to bear on ethical and sound operating principles. As a result, there is a direct need for comprehensive and seamless insurance solutions that respond to the emerging risks the sector faces. Complex risk transfer solutions backed by strong and innovative underwriting and multi-line engineering expertise in these rapidly developing technologies will certainly prevent losses or mitigate their consequences.

Gilbert Flepp, technical lines manager – Continental Europe, ACE European Group