An innovative solar energy insurance product from kWh Analytics and JLT Re shows how InsurTech is already creating new markets for insurance.
By Gregg Holtmeier, Executive Vice President, JLT Re
JLT Re recently worked with leading solar industry risk management provider kWh Analytics to create a new insurance-backed product for the solar energy industry, using real-time data to cover shortfalls in solar energy output.
The property/casualty industry already provides the solar energy sector with traditional physical damage and business interruption cover for natural catastrophes and the like.
However, solar asset owners and lenders are also exposed to variability and unpredictability in the output of solar energy facilities.
The new product looks to address this problem by covering shortfalls in output from a range of risks, including variations in weather conditions, shading, faulty equipment or installation.
This pioneering product is only made possible by kWh solar energy performance database, the industry’s largest.
The growth of solar
As the world looks for alternative energy sources to meet growing demand for power, solar energy has been a star performer. Of all the renewable energy added in 2016, solar accounted for around 47%.
The sector is now on track to become $1 trillion market, doubling in size by 2020.
The performance cover helps further boost solar utilization, bringing liquidity to the growing solar industry.
By using insurance security, it is possible to reduce the overall cost of financing for asset owners and reduce the risk of loss for lenders.
More in the solar pipeline
The solar performance cover is a perfect example of how data and analytics are already providing new sources of income to insurers.
In this instance, data enabled JLT Re to take this previously unquantifiable and uninsured exposure and make it insurable.
At a time of excess capital and limited growth, InsurTech innovation will create more opportunities like this for insurers.
There are many more risks in society that could be made insurable if brokers and insurers partner with InsurTech firms to create the right data.
Please contact Gregg Holtmeier on +1 415 930 9077 or firstname.lastname@example.org