The Trilemma, encompassing stress between energy security, affordability, and sustainability, has led to continuing volatility in the power sector. The uncertainty is amplified by the global polycrisis, including the rising global cost of living, supply-chain disruptions, and geopolitical tensions. With potential recession looming and sustained inflation, the power sector faces the risk of assault on multiple fronts, the report explains.
The Review highlights the changing panoply of risks challenging the power sector. It includes insightful articles which discuss:
- ways to optimize risk strategies as budgets tighten and premiums rise;
- the often-overlooked vulnerability of water supplies;
- potential risks involved in asset life-extension strategies;
- complex dynamics in the cyber insurance market; and
- the potential benefits of parametric insurance for power risks.
Power Market Review also considers the current state of the insurance market. Data and commentary covers areas including:
- Profitability in the power insurance market: Guest contributor
Ian Green , Head of Power at Rokstone Underwriting, considers the future of the current hard market, which follows 15 years of sliding rates and widening terms. - Property risk pricing: The balance of positive and negative influences over prices suggests that the best programs will see a 2.5% to 5% rating increase, compared to a flat 5% rise last year.
- International liability: The market appears more focused on rate adequacy than rate movement, with prices stabilising for favoured risks, and average rate increases falling to mid-single digits.
- Construction: Two decades of falling rates and broadening coverage have since solidified into a hard market. Construction-risk pricing is now stabilising, but project-specific geographical, economic, political, sociological, contractual, and technical risks mean power construction projects face increased insurer scrutiny.
“On the other side of the equation,” he continued, “the crisis in the
“All of these issues are creating uncharted waters for the power sector, as generators of all types, conventional and renewable, seek to balance competing demands for energy security, affordability, and sustainability. That trilemma is as challenging as ever.”
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
Learn more at wtwco.com.
Media contact
Sarah.Booker@wtwco.com
Source:
2023 GlobeNewswire, Inc., source