I recently gave a talk at the insurance session of the HYDRO 2016 conference in Montreux, Switzerland. This annual gathering brought together the who's who of the international hydropower world to discuss various inter-disciplines in the field. A new feature this year, in honor of the 350th anniversary of the Great Fire of London, was the first-ever session on insurance for the hydropower industry.
In my speech I started by outlining the key concerns for reinsurers covering hydropower projects during their construction. The regular conference goers had limited knowledge of this topic and were interested in understanding the reinsurers' view about risk and risk transfer solutions. I focused on the key concerns for underwriters when it comes to this risk category, loss examples, lessons learned from the past and on the product offerings and knowledge a large reinsurer like Swiss Re can offer beyond the standard risk transfer solutions. My message was not to view insurance as a necessary evil that needs to be fulfilled, but rather to take full advantage of our risk management and sustainability solutions by making us an active stakeholder in the projects.
I pointed out that a proper risk management strategy can play a crucial role in avoiding future losses. All parties can benefit. Nowadays sustainability is a key criterion for any hydropower project. Companies are unlikely to secure financing and insurance for projects unless they adhere to international standards. Swiss Re has a dedicated team that can assist and advise clients on how to ensure their projects meet all sustainability requirements. We are unique in the industry in this respect.
My presentation was well received and sparked interesting discussions on how insurance can make itself more relevant in the process. The idea of involving reinsurers earlier in the planning process resonated well with the audience. Other talks in the insurance sessions also advocated cooperation and transparency in the process. The World Bank and Swiss Re Corporate Solutions, for instance, discussed how parametric "lack of water" covers can be used to protect from downside risks in the event of low hydrology, and thus support the growth of renewable energy. Gothaer Insurance compared hydropower insurance with the insurance challenges of new renewables such as wind, emphasising that, for accurate underwriting, it was important for insurance companies to fully know and understand what clients wanted to insure.
Our participation at the conference gave us an opportunity to get closer to the hydropower industry and the people involved. We were able to promote Swiss Re as a thought leader and knowledge company in the field. Our presence has already sparked interest with investors and consultants on hydropower projects and demonstrated an appetite for further information in this regard at future conferences.
Category: Sustainable energy, Other
Location: Montreux, Switzerland