Que: How is the insurance sector evolving to meet the complex needs of large-scale renewable energy projects globally?

Ans: Insurance always follows the projects, it truly does. Insurance should be seen as an enabler, especially as projects become larger and more complex. Historically, insurance has often been treated as an afterthought, a back-office function that is addressed only after the critical decisions around the project are made. That mindset must change.

For large, complex renewable energy projects, insurance must be integrated strategically from the start. The role of insurance and risk managers should be elevated. Risk management needs to become a strategic function within organisations, if not directly in the boardroom.

When we talk about large-scale projects, especially in the renewable space, insurance markets have evolved. I’ve seen it firsthand. I used to be an underwriter for offshore wind projects for the world’s leading offshore wind insurer. We specialised in complex projects.

Insurers are often cautious with new technologies or models. Offshore wind, for instance, was historically a niche area with high risk, and only a limited number of insurers were active in that space. As the sector grows and gains technical maturity, more underwriters are developing expertise, and the market is expanding.

Part of this growth is also driven by the broader push for energy transition and the ESG commitments insurers are making. While some clients are returning to fossil fuels, insurers globally want to support the energy transition, and that is drawing more players into previously niche sectors. However, we will still need deep technical underwriting expertise to support this evolution.

Que: India is undergoing a rapid energy transition. What lessons can it learn from the global market? Can India adopt any best practices?

Ans: India is in a unique position to leverage the lessons others have already learned. This allows India to avoid common mistakes and enter this journey more smoothly and strategically.

For large-scale projects such as offshore wind, solar, batteries (which have doubled in capacity and are continuing to grow) a major challenge has been supply chain constraints. This is a global issue, and one of the biggest frustrations I’ve had as an underwriter and client representative.

Geopolitical tensions add to this uncertainty, so it is critical to know who you’re working with and to have a robust and reliable supply chain, especially for critical components.

India is well-positioned to build such a supply chain and, if it does so, will be in a very competitive position globally.

Que: With the increasing frequency of climate-related disruptions, what emerging risks are you observing in this sector?

Ans: Beyond energy transition, geopolitical tensions such as war and cyber risks are increasingly impacting the insurance landscape. These affect all industries, including renewables.

From an energy transition perspective, we’re seeing a broader set of natural catastrophe risks emerge. In the past, we focused primarily on earthquakes or tsunamis, such as in the case of Fukushima. But now we must consider hailstorms, droughts, floods, and wildfires much more seriously.

Climate change is increasing the frequency and severity of extreme weather events. The risk landscape is no longer limited to just technical failures like turbine breakdowns or battery fires. We are now dealing with more systemic disasters, and that represents a significant increase in risk.

Que: What role does insurance play in de-risking innovative financing models like green bonds?

Ans: Historically, insurance hasn’t played a major role in de-risking green bonds, even though the products have existed. But that is starting to change.

Every problem creates an opportunity. As the industry seeks to tackle climate risk, our primary mission at Howden is to be a force for good. We’re committed to finding creative ways to unlock capital and minimise the financial damage caused by climate-related disruptions.

Green bonds, which essentially function as loans, can be difficult to finance. This is where insurance can play a critical role. Surety bonding is not my personal area of expertise, but it's a significant focus for many clients involved in the energy transition. There is a growing push to use insurance mechanisms to support the financial structures of green projects.

This all feeds into a larger narrative: insurance should play a much bigger role in enabling the energy transition than it has historically.

Que: Is the company exploring any new partnerships or products in the insurance sector?

Ans: We are always innovating, we’re in this for the long term.

We have a Climate Risk and Resilience division with over 100 people dedicated to researching, modelling, and developing financial solutions for climate risk. Our goal is to unlock capital and alleviate financial pressures associated with the energy transition.

We also have long-term strategies specific to India. We are deeply active in India, in areas such as warranties, bonds, and tangible property insurance.

So yes, we absolutely have big plans and ongoing innovation.

Que: As global insurers align with net-zero goals, how are you integrating ESG principles into your operations?

Ans: Our goal has always been to support clients on their journey, wherever they are.

When the green wave initially took off, many insurers made sweeping declarations like refusing to insure fossil fuels. But that approach doesn’t help a community in Africa that relies solely on coal power. Cutting off support to satisfy your own ESG score isn’t being a force for good.

We don’t take that approach. We support clients wherever they are in their transition and help guide them forward.

One of our latest initiatives is Humanity Insured, which is very active in India. It was launched by Howden and is one of our strongest statements of commitment to supporting the energy transition and mitigating the effects of climate change.

We think about the energy transition in everything we do. From my corner—renewable energy—we’re already working with clients on offshore wind projects that may be years away. But by helping them make the right decisions now, we reduce costs, mitigate future risks, and improve project quality in the long run.

Que: When it comes to border areas such as during conflicts between two countries, do current insurance policies offer coverage for war-related risks?

Ans: Traditionally, large-scale projects, including offshore wind, could include an element of war cover by way of an exclusion buy-back as part of their property damage policies, as the risk was considered negligible However, as war risks have become more likely, it now requires a very different approach.

While there are still insurance markets that write war risk policies, they require far more diligent underwriting than before. These are typically handled by specialised markets known as political violence insurers.

This has become a major issue. For example, during past tensions between India and Pakistan, many developers found that their assets in border regions were not covered for war risks even though they had invested hundreds of crores.

It's essential to treat war risk as a separate coverage category now. It must be approached with dedicated, specialised underwriting and cannot be assumed as part of standard property insurance anymore.