Philadelphia Insurance Companies Bolsters Companies in the Green Transformation
The shift toward green and alternative energy is well underway, prompting businesses to seek partners in environmental insurance to manage the associated risks and stay informed. This “green transformation” signifies a societal move toward environmentally sustainable energy sources, like solar, wind, and geothermal.
“As companies invest in the green transformation and start shifting their business models away from traditional energy sources like petroleum and coal, they are beginning to explore alternative energy options,” explained Jamie Langes, Vice President of Environmental Underwriting for Philadelphia Insurance Companies (PHLY). “Insurance can support this transition by providing financial backing to companies engaged in this transformation through tailored policies and programs.”
This represents a promising growth area for both environmental insurers and their clients—one that insurers are increasingly eager to foster and support.
A Growing Interest in Green Transformation
Businesses are drawn to green and alternative energy solutions for a variety of reasons, including a focus on sustainability and the potential for profit. Insurance companies are also observing this trend with interest, with some reducing their support for traditional energy sources to encourage investment in green energy.
“Carriers are proactively identifying strategies to deploy their capacity and make conscious decisions regarding the coverage offerings that we, as a marketplace, have committed [to] green transformation,” Langes noted.
Green energy is crucial for the future of businesses by providing a renewable energy source. As interest in solar, wind, and geothermal energy grows, so does the financial support needed to sustain these endeavors.
“The more companies focus on green transformation, and the financial support from insurers for those operations, we anticipate the market could easily reach billions in a very short time,” Langes stated.
How Insurance Supports the Green Revolution
Entering the green energy sector requires expert support. Environmental underwriting teams with specialized knowledge can provide essential support for businesses exploring alternative energy options. The insurance market plays a key role by providing financial support to these companies, allowing them to manage risk effectively.
“Insurance capacity is expanding, and rates are supporting new ventures with a balanced approach to coverage and premiums,” Langes said.
Insurance also brings a risk management perspective that aids companies in managing startup costs and exposures to liability. Experienced underwriting teams can be the defining factor between sound risk management and success or failure.
“Green transformation is one component of our environmental approach,” Langes stated. “With PHLY’s expertise and experience, we are finding new ways of facilitating business—including collaboration and a long-term vision, [which] embraces our role as a financial vehicle for advancing and helping green transformation and technology through insurance.”
Traditional and Alternative: Balancing Underwriting
An important consideration for underwriting teams assisting clients in their green transformation is the historical data available for traditional energy sources. “The insurance marketplace has extensive actuarial data to accurately gauge pricing parameters and risk acceptance vehicles from insuring traditional sources of energy long-term. As a result, insurers understand how to write that risk explicitly to ensure they can support the business and maintain the profitability to support their insureds should a claims situation arise,” Langes explained.
In contrast, “Green energy and design risks don’t have that much value proposition data since these exposures are still relatively new in the insurance marketplace as an insurable risk.” To successfully embrace green alternatives, underwriters must navigate this transition with a grasp of both sides of the energy sector.
“The businesses have to coexist,” said Langes. “Existing traditional energy sourcing companies that are investing in green solar, wind, or geothermal will still have their original exposures; just less over time. The underwriting challenge, therefore, is that we must underwrite the two dichotomies, green transformation along with traditional, as companies transition forward.”
Environmental Underwriting Expertise at Your Service
Insurance is best when it’s a partnership, built on a deep understanding of the insured’s risk management needs. PHLY’s team strives to deeply understand its clients’ businesses. The environmental underwriting team at PHLY provides this same level of understanding to companies making the green transformation.
“We’re proactive in our approach, more than reactive,” Langes continued. “This means that prioritizing our insureds’ upcoming and evolving needs remains central to our decision making. Investing in green transformation is a fairly new endeavor for many insurance companies, but we at PHLY, have the advantage that we’re always willing to be engaged in the evolving conversation.”
“We are integrating green transformation solutions into our coverage positions, investing in these initiatives as we would for any operation,” Langes said.
Further, PHLY, as part of Tokio Marine Group, can leverage insurance experts within the umbrella to evaluate at the highest level, societal changes and community interest in green transformation and what clients are seeking from their financial insurance partners. PHLY has also created an environmental underwriting team with extensive experience in the market.
“We not only have the experience but also the expertise,” Langes said. “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 to be a resource for brokers to help them support their clients for insurance. Tokio Marine and PHLY bring all of that expertise to the table.”
This commitment to green transformation has enabled PHLY to provide tailored coverage for clients. Underwriters continue to closely monitor companies transitioning to alternative energy solutions and are paying close attention to related fields to stay informed.
To learn more, visit: https://www.phly.com/ESdivision/es-environmental.aspx
