Innovation is a hot topic for the re/insurance industry these days. New products are being developed in order to close the "new" gap that will come with the so called "Fourth Industrial Revolution". Adapt and create new solutions to support the insurance needs in a world that is constantly evolving is one of the main challenges for our industry going forward.
This new reality was one of the main topics of discussion at the 7th Brazilian Reinsurance Meeting, which took place in Rio de Janeiro last month, with Swiss Re Brazil as one of the main sponsors. The meeting featured two days with the presentation of current themes that are also seen in diverse markets around the world, like cyber, transactions and innovation.
All new technology increases our needs for electricity and the challenge is to grow in a sustainable way. Fossil fuels, the basis of the world's current energy matrix, are losing space. The well-known negative environmental impact caused by these elements is making the renewable sources the preferred choice when we talk about the construction of new power plants.
Governments all around the world are setting new targets to increase renewable generation and promote a low-emission energy future. On the other hand, the gathering pace of renewable energy generation is accompanied by the inherent unpredictability of this power source and the financial risk this poses. Weather plays a crucial role in the power output of the main renewable energy segments of wind, solar and hydropower. Any shortage of renewable resources can critically affect the power production potential.
In Brazil, where the renewables represent more than 70% of the energy matrix, this is a constant concern. The investments in clean energy are increasing year by year, driven by the reduction of the implementation costs. Since 2010, the prices dropped 25% for the wind generation and 73% for the solar photovoltaic. In 2017, the total invested was USD 6.2bi and can reach USD 237bi until 2040.
The index-triggered solutions developed by Swiss Re for wind volatility, luck of sun and lack of water helps to better manage unpredictable earnings fluctuation and associated financial distress due to wind resource volatility, lack of solar irradiation or lack of water. Already widespread in other countries, this product is now available in Brazil and will help to close the gap between the renewables rising and the reliability of the system.
An increase of renewable energies presence in the world's energy matrix is vital to ensure a sustainable future. All efforts to achieve this target are an essential contribution to help the world to be more resilient.
Category: Sustainable energy: Solar, Wind