The renewables sector often experiences:
Financing risk and future cash flow uncertainty due to varying availability of natural resources
Insufficient insurance coverage: financial loss due to low water discharge are excluded from traditional 'all risk policies'
Disruptions and delays during transportation & construction
Clients forced to pay significant additional project costs due to weather-driven damage/delays
Key benefits
Fresh capacity:
Parametric products offer an alternative to un-insured risks
Customised protection:
Flexible and straight-forward structure tailored to clients needs
Transparency:
Certainty of indemnification with pre-agreed thresholds & payout amounts
Timely claims payment:
On-site monitoring, weather stations, & location data permit for real-time claims assessment & quick payout following a triggering event. Allowing clients the flexibility to allocate funds towards repair costs that help speed up the return to full-operation
case study example
Hydroelectric power company in East Asia
Learn how a parametric cover could cover a hydroelectric power company in East Asia:
Problem
A large hydroelectric power company in East Asia was exposed to the risk of decreased power generation due to low water levels. However, such financial losses were excluded from their insurance program, thus the client was left with an uncovered revenue gap of $6M in recent years, impacting their profit margins and financial goals.
Solution
With a parametric cover, the client would receive a cover that is triggered when the daily river flow falls to critical levels, resulting in a reduced power generation capacity of 20% or more.
Result
At the end of the risk period, the client would be swiftly paid a corresponding indemnity for each day that the water level fell below the predefined power generation index, stabilizing their revenue and retaining their profit margins.
The client would receive $6M USD
Interested in a solution ?
