Keeping up with innovation
The green energy market continues to grow and is developing quickly both from a business and a technology point of view. According to the International Energy Agency, “The global energy crisis has triggered unprecedented momentum behind renewables, with the world set to add as much renewable power in the next 5 years as it did in the past 20.”
Nordic companies continue to play an important role in this area, not to mention the broader international players, all of which are experiencing a high level of growth. The new geo-political situation has also accelerated investments into green energy, as nations seek to find alternative solutions for oil & gas.
In May 2022, the World Economic Forum (WEF) highlighted that the transition to renewable energy sources is “not keeping pace with the growing urgency for change.”1
There are many issues slowing the green energy transition. Highly volatile markets continue to impact pricing, raise energy security concerns, and limit access to energy. As the WEF report highlights, there needs to be “adequate enablers and support mechanisms to maintain the momentum despite the challenges.”
One of these enablers, are the insurance companies. Insurers are often challenged by clients about their risk appetite for underwriting renewable energy projects and insuring new technologies. Arguably, without insurance companies, it is difficult to make progress and deliver innovation. Risk adverse insurance companies will only slow the green transition and impact financing for future projects and hinder climate change target ambitions.
At If Insurance, we believe an insurer must keep up with innovation, the best way to do this is to work with our clients to understand where they are heading and how will they get there. We know that traditional energy production will continue and is desperately needed to power progress and innovation.
Insurers must also be bold enough to support these traditional players in the energy market. In the end, oil and gas are part of the energy mix and desperately needed to power the progress of renewables. Therefore, it is imperative that we understand the risks relating to renewables and innovative new technologies, to get there more expert resources are needed. The best place for an insurer to be, is working side-by-side with our client to find the solutions that will help them grow.