Philadelphia Insurance Companies and the Green Energy Revolution
Businesses are increasingly recognizing the importance of sustainable energy. This shift, often called the “green transformation,” involves moving towards environmentally friendly solutions like solar, wind, and geothermal power. To help companies navigate this transition, Philadelphia Insurance Companies (PHLY) offers specialized insurance and support.
Jamie Langes, Vice President of Environmental Underwriting at PHLY, notes that the insurance industry can play a vital role in supporting this change. As businesses invest in green initiatives and move away from traditional energy sources like coal and petroleum, they are looking for partners who understand the unique risks and opportunities of the alternative energy sector. Insurance provides financial support to these companies.
A Growing Interest in Green Energy
Companies are embracing green and alternative energy sources for various reasons, namely sustainability and the profit potential of these markets. Insurance companies are also observing this transition, with some minimizing support for traditional energy to boost investment in green energy initiatives.
“Carriers are actively identifying strategies to deploy their capacity, and making conscious determinations regarding coverage offerings that, as a marketplace, we have committed to allot to green transformation,” Langes said.
Green energy provides businesses with a renewable energy source, making it an essential part of their future. As solar, wind, and geothermal gain popularity, the financial backing to sustain these projects also increases.
“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 said.
How Insurance Supports Green Transformation
Venturing into green energy needs careful planning. Businesses need reliable support from the insurance market to secure adequate liability transfer. Insurance provides the necessary financial backing for companies involved in green energy.
“Insurance capacity is growing, and rate is supporting new ventures from a balance of coverage and premium,” Langes said.
Insurance also offers risk management perspectives that help handle initial costs and liability exposures, and having an experienced underwriting team is critical for effective risk management and ensuring operational viability.
“Green transformation is being leveraged as one component of our environmental approach,” said 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
Underwriting for traditional energy sources benefits from established historical data, which guides decision-making.
“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 understand how to write that risk explicitly to make sure they’re able to not only support the business but also have the profitability to support their insureds should there be a claims situation,” Langes explained.
In contrast, new and emerging green energy risks have limited data, requiring underwriters to navigate this transition carefully while keeping an eye on both traditional and alternative energy. This involves a comprehensive review of rates, coverage choices, and detailed terms to best serve green transformation companies.
“The businesses have to coexist. 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
PHLY’s team is dedicated to understanding clients’ businesses thoroughly. They apply this knowledge to help companies join the green revolution.
“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. 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.”
PHLY leverages the expertise within its parent company, Tokio Marine Group, to assess societal changes and community interest in green transformation. Their environmental underwriting team has significant industry experience and can offer competitive, customized coverage. PHLY is focused on understanding and supporting its clients’ needs in the evolving landscape of alternative energy solutions.
