Originally published on PV Tech
By Bobby McFadden, kWh Analytics, and Keaton Carlson, Renewable Guard
As a renewable energy managing general agent (MGA) and a broker, one of the most common questions we hear from solar and battery asset owners is: “Why do my insurance premiums keep rising, even though I haven’t had a claim?” It’s a frustrating and often confusing situation for many in the industry, but the answer lies in the changing landscape of natural catastrophe (nat cat) risks.
For certain carriers, when a significant loss is incurred, the pricing approach for comparable accounts in the book could be affected as well, adjusting insureds’ rates with no claim activity come renewal. Over the past few years, however, nat cat events have taken a major role in driving insurance premiums across carrier’s books. Nat cat risks are changing, and locations with historically temperate weather are experiencing extreme disasters.
As global temperatures rise, we are seeing more intense hurricanes, prolonged droughts and heavier rainfall events. These changes in weather patterns are altering the risk landscape for businesses, specifically impacting industries with exposed assets, such as renewable energy. Climate change is affecting the frequency and severity of natural catastrophes, making it more difficult for asset owners to secure affordable insurance coverage.
