The insurance industry may turn its back on the renewable energy sector if it endures another year of unprecedented natural catastrophe losses like 2022.CatastropheExcess & Surplus Lines
That’s the view of Fraser McLachlan, CEO of GCube Insurance, which recently published its North American Nat CAT Update report.
The study has found the North American renewable energy industry sustained record losses running to the hundreds of millions of dollars from extreme weather events this summer, with McLachlan telling Risk & Insurance that he estimates total losses to be around $700 million, excluding Hurricane Ian, with insured losses coming in between $350m to $400m.
‘It’s by far the worst year for natural catastrophes that we have seen to date,’ said McLachlan. ‘And the trend is only going to get worse, as we have seen in previous years.
‘It’s the perfect storm: there have been a plethora of catastrophic losses in a very short timeframe; insurers have been hit with $50 billion to $70bn in losses from Hurricane Ian; and reinsurers need to increase pricing to cover their costs. And my biggest fear is that, if we have another year like this, insurers could decide to stop offering coverage for renewables altogether.’