The global energy and insurance industries need to work together to reduce the number of claims being made and meet climate change head on, according to speakers at the Energy Insurance London event on 3 July 2025.
“We can’t just stop paying out on claims, so we need to try and limit them by using better planning and clear energy demand modelling,” said Mike Gosselin, executive director and chief underwriting officer, AXA XL’s UK & Lloyd’s division.
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Insurance has become increasingly important for energy providers in recent years due to the complex nature of the energy transition and new emerging threats to the industry.
Large energy projects with huge upfront costs require insurance to mitigate significant financial risks associated with potential damages and delays, as well as problems during construction and operation. The necessity for energy insurance was highlighted in May 2019, when a relatively short-lived but severe hailstorm in western Texas damaged more than 400,000 solar panels at Midway solar farm, resulting in losses of more than $70m.
Meanwhile, according to the 2024 European Union Agency for Cybersecurity Threat Landscape Report, the energy sector was the tenth most targeted sector by cyberattacks, leading to business interruption, extortion and data breaches.
Recent analysis from Marsh Commercial, a group of small business insurance specialists within global brokerage Marsh, also cited protecting renewable energy providers against cyber threats as an increasingly important area of business.
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By GlobalDataAnd one way to reduce claims is “moving from payout to partnership, working more closely with our clients to determine what they need,” Gosselin noted.
Swiss Re, a global provider of reinsurance and insurance, has previously pointed to the use of “tailored underwriting” during an energy project’s construction phase as an example of increased partnership, incorporating “data gathered from previous experience to help balance out uncertainties”.
It added that with a with a “unique perspective on the risks involved, the energy industry can share insights to inform new projects, helping address risks and volatility without sharing proprietary information”.
Gosselin said that in general terms “insurance is also a really good way to provide stability for longer term investments [and] the next shock to the energy industry won’t necessary come from falling oil prices, but from our failure to adapt”.
But for some of the big players in the energy industry, he added, “insurance is still an afterthought”.
“We must play more of a role in risk reduction, all through the value chain.”
Andrew Herring, chief executive officer, energy and power at Marsh Specialty, one of the world’s leading insurance brokers, added that “lots of insurers want to get into the renewable space [to offer tailored insurance products to energy companies], and we have a very opportunistic market”.
“Supply and demand dynamics are all in favour of the client at the moment,” he added, pointing to “an abundance of insurance capacity”, prompting a fall in premiums and a drop in insurance revenue.
A 2024 insurance market report from insurance brokerage Gallagher stated that a “downward premium rating turn of the market” has started for “clean, well running accounts, where competition among insurers for market share is taking place”.
Herring continued that we “still haven’t got the message right about the energy transition”, with clients unsure if we’d supply the insurance needed for changes in energy production, mainly the transition from fossil fuels to cleaner sources.
His comments were particularly relevant as around 50 protestors from Extinction Rebellion – a global environmental movement which wants a move away from hydrocarbons – were positioned at the event’s main entrance.
Asked why they were focussed on energy insurers, a representative of the organisation told Power Technology that “escalating extreme weather poses a grave threat to human civilisation, and insurers have calculated the extent of the damage as well as anyone”.
They added that many are “talking increasingly urgently about the climate crisis” while simultaneously “stoking the crisis by enabling fossil fuel expansion projects [which] cannot proceed without insurance”, which is needed to cover the risks associated with rising costs, supply chain disruption, and changing regulations.
When asked about the protestors, Herring said that the insurance industry often “tackles climate change risks alone”, stressing the need for more partnerships and collaboration with the energy industry.
Gosselin added that he “likes and respects the protestors” but the energy industry should also be proud of providing the power that drives the economy.
“If the energy transition is going to be viable, we need to have multiple sources of energy spread all over the world to provide stability. We need action now on climate, and we’re lying to ourselves if we think this is not a major issue,” Gosselin concluded.
