Climate Innovation Showcase: Mitigating new technology risks to enable renewable and climate projects

30/08/2022
Climate Working Group

AXA XL give an overview of their performance insurance solution for mitigating new technology risks, in an “innovation showcase” series sponsored by the BU Climate Working Group  

Simon Morden, Underwriting Manager, and Jiten Halai, Head of Structured Risk Solutions, from AXA XL London office discuss their performance insurance product and its application to new technology as an enabler for renewable and climate projects.

Topics covered include:

  • Defining performance insurance as a mitigant to specific technology risk relating to a new or renewable project
  • Conditions to trigger the policy considering when the technology fails to perform; warranty clauses; existing debt service or contingency reserves
  • Benefits to the lender to cover the gap in debt obligation, with the length of the policies matched to the term of lending, typically over 5 -15 years
  • Benefits to the insured in order to get better interest rate on debt financing, or even achieve financing where they otherwise couldn’t
  • Types of technologies covered include green energy related as well as other technologies, with data points availability required from prior testing   

Also covered: the size of the projects, underwriting in the early stage of financing, bespoke nature of the policies, and collaboration with various stakeholders.

The video concludes with a case study to summarise AXA XL’s experience gathered from 20 projects over the past 10 years.  

Visit the link below to access the video on the BU CWG homepage.   

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