As renewable energy markets expand, climate risks increasingly affect energy production and infrastructure. Both offshore and onshore projects face a wide range of exposures throughout their lifecycle, from extreme natural catastrophes to everyday variability in energy output.
Traditional insurance can leave important gaps, including:
- High deductibles for natural catastrophes
- Coverage exclusions or sub-limits for certain perils
- Limited protection against production variability
- Slow claims processes after extreme events
These limitations can create revenue volatility for project developers and investors.
Parametric solutions complement traditional insurance by covering exposures that are typically not addressed, such as weather-driven production variability and revenue fluctuations.
Descartes’ parametric insurance solutions protect renewable energy projects against a wide range of weather-related risks, focusing on two key areas:
- Natural catastrophe protection for energy assets
- Energy production variability cover
1. NatCat Parametric Cover for Energy Assets
Energy infrastructure is highly exposed to natural catastrophes such as hail, storms, floods, cyclones, or earthquakes. Traditional insurance policies often include high deductibles or limited coverage for these events.
Descartes offers parametric NatCat insurance solutions designed specifically for energy infrastructure.
Solar Farms
Solar farms are highly exposed to natural catastrophes such as severe convective storms, hurricanes, floods, and wildfires. Our parametric NatCat insurance for solar farms provides rapid payouts triggered by predefined weather thresholds, helping operators quickly recover and protect project revenues.
Distribution Networks
Electricity transmission and distribution infrastructure can suffer major disruptions following extreme weather events. Our parametric cover helps utilities manage financial exposure by providing fast liquidity after hurricanes, storms, floods, or earthquakes.
2. Energy Production Variability Cover
Renewable energy production is inherently dependent on weather conditions. When wind speeds or water flows fall outside expected ranges, energy output can drop significantly, impacting revenues and debt servicing.
Descartes provides parametric insurance solutions that protect energy producers against production shortfalls caused by weather variability.
Hydropower Generation Protection
Parametric solutions can compensate hydropower producers when water inflows fall below predefined thresholds, helping stabilize revenues during drought conditions.
Wind Availability Cover for Wind Farms
Wind farms can experience significant revenue volatility due to insufficient wind speeds. Our wind availability parametric cover provides payouts when wind speeds remain below expected levels for a defined period.
Parametric Coverage in 4 Steps
1. Risk assessment
Descartes analyzes the client’s exposure to weather or natural catastrophe risks using historical weather data and risk modeling.
2. Trigger design
A transparent trigger is defined based on objective parameters such as wind speed, rainfall, temperature, or hailstone size.
3. Policy activation
The parametric insurance policy is put in place with predefined thresholds and payout amounts
4. Automatic payout
If the trigger threshold is reached, the payout is automatically released without the need for loss adjustment.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
Benefits
Key advantages of parametric solutions include:
- Fast payouts triggered by objective weather data
- Protection against production and revenue volatility
- Complement to traditional insurance programs
- Support for project financing and debt servicing
- Flexible triggers tailored to specific energy assets
Who This Solution Is For
Our solutions are designed for all stakeholders in the renewable energy sector, including:
- Independent Power Producers (IPPs)
- Renewable energy developers
- Utilities and grid operators
- Energy traders
- Project finance lenders and investors
By covering both tangible and intangible losses, we help safeguard balance sheets.
Using a data-driven, index-based approach, our parametric insurance ensures rapid payment when predefined events occur, without the need for on-site loss adjustment. This provides clients with the financial certainty needed to operate resilient energy projects and support the transition to renewable power.
Our success story
Contact Us
Whether you're quoting a complex risk, looking to break into new markets, or just curious about parametric insurance, our team is here to help you win. Reach out and we will get back to you within 48 hours.
