Insurers urged to step up from capacity providers to enablers of energy transition, finds Axis poll

Insurers have a critical opportunity to shift from being viewed as capacity providers to becoming proactive partners and enablers of the energy transition, according to Axis Capital. A survey by the insurer found that energy producers view the insurance industry primarily as a service provider that protects customers through traditional risk transfer solutions rather than a strategic partner that can help spark investments and support innovation in the energy transition. The report, Navigating Risk in the Energy Transition, based on a survey of more than 600 energy producers, industrial energy buyers, and specialist insurance brokers in the US and UK, found that currently fewer than half of energy producers (49% US, 42% UK) perceive insurers as strategic partners that help secure investments related to the energy transition. In addition, close to a third (31%) of energy producers believe the insurance industry currently hurts innovation in the energy transition – and attribute this to the lack of comprehensive and multiline coverage options. Richard Carroll, global head of energy resilience at AXIS, said: “The report highlights that energy firms recognise that significant investment in technological innovation, risk management, and long-term strategic thinking are key to achieving net-zero goals. The energy transition also requires an insurance industry with deep specialty knowledge of the risks associated with the transition, and of the complexities of deploying the technologies to make global net-zero ambitions a reality.” The Axis report revealed that a third (31%) of energy producers believe the insurance industry currently hurts innovation in the energy transition, attributing this to the lack of comprehensive and multiline coverage options. Axis said this highlights the need for more holistic insurance solutions that cover multiple lines, rather than fragmenting policies across multiple providers. According to the survey, more than a quarter of respondents report difficulty receiving early-stage risk mitigation advice, while 92% of respondents agree that governments need to play a more active role in working with insurers to create a backstop mechanism in case of severe weather and climate events. Climate change is both a driver of change and a source of risk for businesses, impacting the operational landscape while also influencing other key risk factors, according to the report. It also found that climate-related weather events pose a direct threat to companies’ physical assets and an indirect threat to their wider business operations, and there is a gap between the urgent desire to advance the transition and the logistical reality of meeting net-zero targets. “The shift to a lower carbon economy is among the greatest challenges of our day and requires all of us – businesses, governments, communities, and individuals – to work together to achieve our climate goals,” said Vince Tizzio, president and CEO at Axis. “In publishing this report, Axis aims to elevate understanding of the risks and challenges involved in the energy transition and to identify how energy industry stakeholders can proactively and collaboratively support businesses on their journeys.” The survey found that more than two-thirds (69%) of industrial energy buyers anticipate the climate crisis will impact their company’s business performance, including revenue, costs, and investments. The most common drivers for businesses to take proactive climate action are long-term business viability (49%), regulatory compliance (49%), and climate concern (47%).

Insurers urged to step up from capacity providers to enablers of energy transition, finds Axis poll

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