Businesses are rapidly adopting green energy solutions like solar, wind, and geothermal. This shift is driven by a desire for sustainability and profitability. Insurance companies are adapting, and Philadelphia Insurance Companies (PHLY) is at the forefront, supporting companies as they transition away from traditional energy sources.
Jamie Langes, Vice President of Environmental Underwriting at PHLY, explains, “Insurance can champion this repositioning by supplying financial support needed to companies engaged in green transformation through policies and programs.”
The Appeal of Green Transformation
The interest in green energy is growing. Companies are seeking renewable energy sources, and insurance companies are taking note. Carriers are even reducing support for established energy sources to encourage greater investment in green energy. According to Langes, “Carriers are actively engaged in identifying strategies to deploy their capacity, and making conscious determinations regarding coverage offerings that… we have committed to allot to green transformation.”
Green energy offers businesses a renewable energy source. As businesses ramp up their use of solar, wind, and geothermal, financial resources for these efforts are increasing. “The more companies dive into green transformation, and the more insurers support those operations fiscally, we’re projecting this could easily set a market pace in the billions in a very short time,” Langes predicts.
How Insurance Supports Green Initiatives
Venturing into green energy requires expert support. Companies in the alternative energy sector need insurance to secure liability transfer and effectively manage rising risks. Insurance provides the financial backup companies require to function effectively in this changing landscape. PHLY supplies a risk management perspective that assists with costs and exposures to help these businesses get started.
Langes notes, “Insurance capacity is growing, and rate is supporting new ventures from a balance of coverage and premium.”
“Green transformation is being leveraged as one component of our environmental approach,” says Langes, “and with [PHLY’s] expertise and experience, that approach is finding new ways to do business—including collaboration and a long-term vision, which embraces our role as a financial vehicle for progressing and assisting green transformation and technology through insurance.”
Balancing Traditional and Alternative Energy
A key consideration for underwriters is the availability of historical data. Traditional energy has a long history, providing abundant actuarial data for risk assessment. However, “Green energy and design risks don’t have that much value proposition data yet since these exposures are still relatively new in the insurance marketplace as an insurable risk.”
Underwriters must carefully assess green ventures by reviewing rates, coverage options, and other relevant details to find the right solutions. The industry acknowledges that traditional energy companies will continue operating alongside green initiatives, and underwriters must navigate this transitional period.
Environmental Underwriting Expertise
Insurance thrives on a strong understanding of the insured’s risks. PHLY is invested in fully understanding its clients’ businesses. They proactively engage with clients’ needs and remain up-to-date on trends in the renewable energy sector.
Langes continues, “We’re proactive in our approach, more than reactive. This means that what’s next, what’s new, what our insureds’ needs are, remains at the forefront of our decision making.”
PHLY can also leverage expertise from its parent company, Tokio Marine Group, to understand societal changes, community interests, and client needs. PHLY has built a team of expert underwriters who bring technical expertise from consulting backgrounds to their work.
Langes states, “We not only have the experience but also the expertise. Many of our underwriters come from the consulting field, so they also understand the technical aspects of sustainable energy solutions. We leverage that into collaboration, and towards being a resource for brokers to help them support their clients for insurance. Tokio Marine and PHLY bring all of that expertise to the table on products and service.”
This dedication has allowed PHLY to provide tailored coverage. Underwriters are paying special attention to companies moving to alternative energy and related areas to support their clients.
