Sustainable energy starts and runs with insurance
Insurance is essential to economic progress. Without the right coverage, projects, e.g., a new Solar plant, will not be built. And when those projects are good for society as a whole, then insurance is especially important. Swiss Re is excited to contribute to the development of renewable, resilient energy with innovative risk assessment and risk transfer mechanisms.
I recently had the opportunity to discuss our vision for sustainable energy during a panel discussion sponsored by the Clinton Global Initiative (CGI). As governments and private operators invest in wind, solar and other forms of power generation, the risk tolerance of these investments is critical. I shared that at Swiss Re we work to understand the risks and put our capital behind projects to ensure the construction and uninterrupted revenue stream from operation.
We work to mitigate risks throughout the life cycle of a project: from construction through operation. Our agreements are supported by risk engineering services, where we consult with the project sponsor prior to and during construction to confirm that the steps are being taken to reduce risks to make the project insurable.
Swiss Re works with state-owned companies, governments and multilateral development banks across the region to secure the future of these projects providing indemnification or parametric solutions. In both cases we pay if something 'bad' happens and conditions are met, so the project can get back on track or operations can resume swiftly. Examples where we secure projects include solar energy facilities from Brazil to Puerto Rico. Our parametric agreements include not only wind and earthquake but also protecting the running of hydropower facilities from drought. Across Latin America more than one-fourth of our engineering portfolio is in renewable energy, this share is even higher for the Caribbean.
According to CGI, “a coordinated effort to advance renewable energy is one of the most compelling pathways to support job creation, economic diversification, and climate resilience” in the Caribbean region. We couldn’t agree more and are proud to be a part of it.