Renewable energy insurance

MARK COLEGATE: Vicky Kent is Head of the Renewable Energy team at Aviva, she joins me now. Vicky, can you start by telling us a little bit about the book of business and the team that you're responsible for?

VICKY KENT: Sure Mark. So Aviva made the decision back in 2019 to exit the fossil fuel power generation market and instead refocus on the renewable energy market. So the book's been up and running now for about five or six years. It's growing significantly. It's grown in the right way. We're now about five times the size. The portfolio is about five times the size of the fossil fuel book that we exited back in 2019. And also along with that, we've grown the underwriting team. So we went from two of us back in 2019. We are now a team of 11 dedicated renewable energy underwriters. And then also we've positioned ourselves well as a lead market in that time. And to support that, we've grown out our risk engineering team. So we now have four dedicated specialist renewable energy risk engineers within the Aviva Risk Management Solutions team.

MARK: Renewables encompasses a pretty broad range of technology. So what are your main specialisms within that?

VICKY: So our core appetite, technology-wise, is onshore and offshore wind, solar PV and battery energy storage. We mainly work with large global corporate clients and we offer cover for the lifecycle of a project. So from the marine cargo to the constructional risks, including DSU, the operational risks, including BI, the third-party liabilities and also terrorism if needed.

MARK: Looking back on 2024 so far, what have been the key deliverables for you and the team?

VICKY: We've had a really busy 2024 so far. We've had a very productive H1. We're always looking at ways that we can expand our appetite to support our clients, to support the net zero transition and also Aviva’s own sustainability ambitions. So if I take us back a little bit to 2023, the beginning of '23, we moved into the offshore wind space. Again, this is to support our existing renewable energy clients in their needs. And we've brought underwriters in to do that. We've also brought, we've extended the capabilities within our risk management team. We've brought someone in specifically from the offshore wind industry who has got experience in cables and also marine warranty surveying, which is great because that positions us well to be a strong leader in the offshore wind space like we are in the onshore renewable space.

MARK: And so what's been the reaction from brokers and their clients over the last 12 to 18 months?

VICKY: Very positive. They are, as projects get bigger and more complex, they're happy to see more capacity coming into the space and also capacity that is committed to this area and investing in the people to support their growth.

MARK: So that's a recent decision to stamp your mark on one part of this market, but what are some of the other technologies that you're now beginning to look at and build capacity in?

VICKY: Yes, so the beginning of 2024 we expanded further into sort of broader wider, what we're calling green energy technologies, but essentially more renewable energy technologies such as green hydrogen, hydroelectric, geothermal, biomass, concentrated solar.

MARK: One thing that's always in the headlines at the moment is this whole issue about electric vehicles. There's never enough charging points. Does that sort of cross your desk as a topic?

VICKY: It absolutely does. There needs to be a better EV charging point infrastructure within the UK if we're going to move away from petrol and diesel vehicles to electric vehicles. We recognize this and we build a product in the UK, an EV charging point product, and this year following really the ask from our brokers and our clients to offer a solution for overseas exposures, we've built an international EV charging point product to cater for this.

MARK: But with all of this really rapid change going on in the markets, how do you make sure that your policy documents, your wordings, are completely up to the minute in sort of reflecting the latest thinking and trends and developments in the market?

VICKY: So something else we've done this year and we released these to our brokers earlier on in 2024 was produce, well, update really, the Aviva wind solar and battery energy storage wordings to make them suitable for use with our international clients. And really, as a lead market, it's fitting that we have our own wording offering. We've not done anything, nothing crazy with it, it is in keeping with the sort of coverage our clients are used to. But the idea is to make sure that the cover is clear for our clients.

MARK: We've had a recent change in government here in the UK very keen on wind power, particularly onshore. So what is the significance of that for Aviva?

VICKY: It's very positive, it's fantastic news. And Aviva have got this ambition to be the number one insurer of renewable energy assets in the UK. So that clearly aligns nicely with our own goals. And of course, as well, the UK is a core market for Aviva. So we're well positioned as a leader, as already mentioned, and we can continue to be a competitive lead insurer for those clients looking to develop projects in the UK. And then also additionally, I believe we have the largest specialist risk management team for renewable energy in the UK, which means we're well-positioned to talk to our clients and engage with them early. And even new developers, people we don't have a relationship with yet, we welcome discussions with those and early engagement is key.

MARK: And what would you say the main challenges that brokers in the market as a whole are facing in this space?

VICKY: Well, I think clearly there's a lot of growth and there's a lot of opportunity in the renewable energy space, which is great news, it's very positive. But I think it's critical that the insurance community continues to invest in its people and also bring new talent into the market, so that we have the capacity and the resource to be able to deal with this growth. So there are several challenges within the renewables market, which brokers, clients and insurers are facing and we have to face them together. But now we have agent technology issues, obsolete technology issues. And then conversely, we've got the power race. So new technology being developed very quickly, new wind turbine models being brought to market very quickly, much larger. The scale, the complexity of projects is increasing, supply chain issues, they haven't gone away. We have Chinese technology coming into market now, coming outside of the Chinese market that we need to learn about and understand. And then of course, weather-related incidents, the severity and the frequency of weather events globally is increasing, and whether that's flood or wind storm or hail or tornado or wildfire - these are all challenges that the insurance market and the renewables industry is having to deal with. And then equally, we have, there's an influx of capacity, insurance capacity coming into the market. And while that can make the insurance market challenging for insurers already in that space, it's also a positive thing, as mentioned, with the challenges we're facing. It's a good thing that this capacity is coming in. And from my perspective, it's coming in as a follow market capacity behind leaders such as Aviva who are more technical and positioned to lead.

MARK: Well, there's obviously a huge amount going on in this market. So if you had a piece of advice for a broker that's thinking about getting involved in this market, what would it be?

VICKY: Partnership, I'd say. I think it's really important that brokers and clients and insurers are partnering and sharing knowledge and expertise. And at Aviva, we've got one of the largest underwriting teams and risk management teams in the London market. So please come and talk to us, have a conversation and engage with us early. We're very happy to support.

MARK: We have to leave it there. Vicky Kent, thank you.

VICKY: Thank you.