Take a look at why insurers and brokers need to work together to offer accurate risk assessments, appropriate coverage and effective claims handling for green initiatives to thrive.
For many countries, renewable energy represents opportunity. As more and more people invest in green energy, jobs tied to the industry begin to take shape and the possibility of moving out of recession becomes all the more tangible. As with any major global shift, however, there are a number of risks that must be considered before change is able to take full effect.
Governments will be central to setting the stage for change, but consumers must do their part as well; the true cost of power is largely unpaid by the public, and while this is only one piece of the puzzle, the country’s leaders will need to support proven programs, such as a feed-in tariff (FIT), that will motivate continued progression. Further, though the long-term benefits of renewable energy are very clear, the costs – all short-term – are intimidating. It is an unattractive venture for investors who are naturally averse to instability, and just one of many challenges the sector faces.
Another major issue exists on the infrastructure side where a big shift from giant distributed power to community power is needed to enable greater efficiency.
With solar energy in particular, delays and government red tape have halted a flourishing industry, and painstaking regulations are holding Canada behind European and Asian countries whose leniency allows them greater access to capital.
Though businesses and governments have a lot of work ahead of them to help realize the full potential in the energy sector, Canada sits fourth globally in the forward-thinking position of renewable investors. That said, being ahead of the pack does not necessarily mean being ahead, as large-scale transition to renewable energy will continue to throw up specific challenges, particularly for the insurance industry.
For example, the associated technology is typically new or at the prototype stage, which can make the assessment of risk difficult. Additionally, sites are commonly in remote and often inhospitable areas, making access for maintenance and repair difficult.
Despite these setbacks, however, renewable energy is still a growth industry. As it progresses, clients are seeking carriers that can understand the associated planning and management, as well as provide reliable loss control services.
The skill and experience of brokers and insurers will be crucial, therefore, to ensure that existing, new and emerging risks are managed effectively, and that manufacturers are properly supported. Both critical links in the supply chain, brokers and insurers should strive to be included in the project from an early stage to be able to give the most accurate risk assessments, the most appropriate coverage and the most effective claims handling. These contributions will help propel the existing aspirational green initiatives forward, and only then will the renewable energy sector be poised to thrive.