Philadelphia Insurance Companies Fuels the Green Transformation
Businesses are actively embracing the ‘green transformation,’ and they’re seeking expert partners to manage the associated risks. Philadelphia Insurance Companies (PHLY) is at the forefront, providing environmental underwriting support for companies venturing into sustainable energy sources, like solar, wind, and geothermal.
“As companies invest in the green transformation and shift away from traditional energy sources like petroleum and coal, they’re exploring alternative energy options,” says Jamie Langes, Vice President of Environmental Underwriting for PHLY. “Insurance can provide the financial backing these companies need through tailored policies and programs.”
This area represents a promising growth opportunity for environmental insurers and their clients. Here’s a closer look at the increasing interest in green transformation, the underwriting challenges, and the benefits of strong partnerships.
Growing Interest in Green Transformation
There are multiple reasons businesses are drawn to green and alternative energy solutions. Sustainability and financial incentives both play a major role. Insurance companies are also showing increased interest, with some adjusting their support for traditional energy to focus on green energy investments.
“Carriers are actively identifying strategies to deploy their capacity and make conscious decisions about coverage offerings,” Langes explains.
Green energy offers a renewable energy source, which is important for the future of many businesses. As interest in solar, wind, and geothermal increases, so does the corresponding financial support. “We project that the market could easily reach billions of dollars very quickly as more companies transition and insurers provide fiscal support,” says Langes.
How Insurance Supports Green Transformation
Entering the green energy sector requires diligent work and a deep understanding of the risks. Businesses need support from the insurance market to secure adequate liability transfer and decrease emerging risks.
PHLY plays a significant role by providing the financial support to meet these needs. “Insurance capacity is growing, with rates supporting new ventures,” says Langes. Additionally, insurance provides a comprehensive view of risk management, which reduces start-up costs. Having an experienced underwriting team can be the difference between solid risk management and failure.
“We integrate green transformation options into our coverage positions and invest in these initiatives as we would for any operation,” Langes stated. As part of Tokio Marine Group, PHLY leverages the expertise of the insurance experts within the umbrella to evaluate the changing requirements.
“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 to be a resource for brokers to help them support their clients for insurance.” Tokio Marine and PHLY combine their expertise in products and service to deliver outstanding results.
This commitment has allowed PHLY to provide competitive and tailored coverage for businesses transitioning to alternative energy solutions. Underwriters stay informed about the latest advancements in alternative energy and the related fields.
Underwriting Balance
Underwriting for traditional energy sources has the key advantage of historical data to guide decision-making, which green energy is still accumulating.
“The insurance marketplace has ample actuarial data to gauge pricing parameters and risk acceptance vehicles from insuring traditional sources of energy long-term; as a result, insurers explicitly understand how to write that risk,” Langes explained. “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.”
To facilitate the green transition, underwriters must stay in tune with both traditional and alternative energy markets. This includes a careful review of rates, coverage options, availability, as well as the terms and conditions of each policy.
“Existing traditional energy sourcing companies that are investing in green solar, wind or geothermal will still have their original exposures; just less over time,” Langes said. “The underwriting challenge, therefore, is that we must underwrite the two dichotomies, green transformation along with traditional, as companies transition forward.”
Environmental Underwriting Experts
At PHLY, the team strives to thoroughly understand its client partners’ businesses. Companies can feel confident knowing that PHLY’s environmental underwriting team provides the same level of understanding and a proactive approach to insurance needs.
“We’re proactive in our approach, more than reactive,” Langes continued. “This means that what’s next, what’s new, what our insureds’ needs are remains at the forefront of our decision making.”
