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Commercial Rooftop Solar - Getting it right!
Relevance of (technical) risk for insurance & innovative product solutions
Randolph Moses Oliver Straubenmueller Malte Johannes
Workshop PV in South Africa Johannesburg, 23 July 2015
Commercial Rooftop Solar - Getting it right! Relevance of - - PowerPoint PPT Presentation
Commercial Rooftop Solar - Getting it right! Relevance of - - PowerPoint PPT Presentation
Commercial Rooftop Solar - Getting it right! Relevance of (technical) risk for insurance & innovative product solutions Randolph Moses Oliver Straubenmueller Malte Johannes Workshop PV in South Africa Johannesburg, 23 July 2015 Agenda
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We are among the top reinsurers in the world
3 Commercial Rooftop Solar - Getting it right! Source: A.M. Best (September 2014) 1) Net premium earned 2) Reinsurance only
Premium ranking 2013 in m. USD Rank Group Country GWP NPW 1 Munich Re DE 38,333 36,638 2 Swiss Re CH 32,934 30,478 3 Hannover Re DE 19,225 16,833 4 Lloyd's 2) UK 15,614 11,329 5 SCOR FR 14,116 12,570 6 Berkshire Hathaway Inc. US 12,776 12,776 7 RGA US 8,573 8,254 8 China Re CN 7,936 7,523 9 Korean Re KR 5,623 3,635 10 PartnerRe BM 5,562 5,391 11 Everest Re BM 5,219 5,005 12 Great West Lifeco CA 4,206 4,089 13 Transatlantic Holdings US 3,423 3,248 14 MAPFRE RE ES 2,524 2,227 15 General Insurance Corporation of India IN 2,377 2,139
1) 1)
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Hannover Re Africa
Who we are
4 Commercial Rooftop Solar - Getting it right!
100 % subsidiary of Hannover Rück SE Trading in South Africa since 1953 Property & Casualty and Life Reinsurer Business model includes Agency shareholding through Lireas and Compass
Insurance company (100% owned)
High level of autonomy and local underwriting mandate Access to a global pool of skills
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Agenda
Introduction Hannover Re – a global reinsurer
Learning from experience: Relevance of (technical) risk in insurance
Designing innovative product solutions for Commercial Rooftop Solar
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Solar capacity has grown significantly between 2003 and 2012
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Overview installed capacity (in MWp) 2000-2014 in Germany First wave of claims 2003-2006 - roughly 40% attributable to mismanagement
First claims wave Reduction of new capacity in 2013 due to subsidy cuts
42 78 118 139 670 951 843 1.271 1.809 3.806 7.408 7.500 7.600 3.303 1.015 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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Solar boom also had negative effects for insurers
11 Commercial Rooftop Solar - Getting it right!
Key Facts Solar Insurance Germany Insurers are waking up and verifying their U/W strategies in solar ► 1.4 million installed PV facilities in Germany (End 2013)
- 30% thereof have an operating time > 5 years
- 0,1% have a an operating time of >= 20 years
- 60% were erected during a period of relentless growth
► Estimated 700,000 PV facilities have been declared deficient: for instance statics, laying of cables or missing project documentation ► 40% of the installers have exited the market (estimate) ► 70% of the PV facilities never encounter a professional review again
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Main claims drivers with 44% of costs are storm and lightening
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Distribution of Claims Costs Germany 2003-2013
25% 19% 17% 11% 10% 7% 4% 3% 2% 2%
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Ensuring sustainable managment of PV-systems
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Success factors in managing in force solar portfolio ► Ensuring sustainable facility operations via qualified maintenance
- Certification if third party systems including the removal of deficiencies
- Regular check of the complete facility (revision of electrical appliances,
monitoring of roof, statics and others)
- Event related check of high risk systems and perhaps also in case of
extraordinary events ► Extension of Service Contracts provides great advantage for surviving market players to attract more business by:
- offering a wider array of services for self installed systems
- and also for abandoned facilities due to bankruptcy, sales etc.
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Agenda
Introduction Hannover Re – a global reinsurer Learning from experience: Relevance of (technical) risk in insurance
Designing innovative product solutions for Commercial Rooftop Solar
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HR solution focuses on erection & operations
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Overview Conceptual Components
- 2. Erection
1. Design & Transport
- 3. Operations
Property Insurance Business Interruption Third Party Liability
+
Operational All Risk Cover
2
Third Party Liability Property & Equipment
Erectional All Risk Cover
1
Output Performance
3
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HR solution focuses on erection & operations
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Overview Conceptual Components
- 2. Erection
1. Design & Transport
Third Party Liability Property & Equipment
Erectional All Risk Cover
1
Offering a comprehensive package for the whole solar plant
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Erectional Phase (during first 4-6 months) - At a glance
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Insured: Contractor and/or Project owner Covered Risks: „All Risk Cover“ Cover of all unforseen loss
due to damage or destruction (i.e. Fire*, lightning strike, explosion, testing
& commission, natural events such as storms, earthquake, lightning, hail, snow load, frost, theft by outside parties, sabotage, Operator control error, accidental damage, negligence and execution faults, Force majeure, impact damage)
Covered Components: all (i.e. installer equipment, Solar modules,
Inverters, Substructure, Instrumentation and control components, Power supply and draw meters)
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HR solution focuses on erection & operations
21 Commercial Rooftop Solar - Getting it right!
Overview Conceptual Components
1. Design & Transport
- 3. Operations
Property Insurance Business Interruption Third Party Liability
+
Operational All Risk Cover
2
Output Performance
3
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Operational Phase Insurance - At a glance
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Insured: Project/asset owner Covered Risks: „All Risk Cover“ Cover of all unforseen loss due
to damage or destruction (i.e. Fire*, lightning strike, explosion, Natural
events such as storms, lightning, hail, snow load, frost, Electrical short‐circuit, voltage surge, burglary, sabotage, vandalism Operator control error, accidental damage, negligence, material, design and execution faults, Force majeure)
Covered Components: all (i.e. Solar modules, Inverters, substructure,
Instrumentation and control components, Power supply and draw meters)
Obligation in order to get cover:
- PV-modules from accredited manufacturers
- Commissioning certificate from accredited third party
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Performance Guarantee Insurance - At a glance
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Insured: Contractor or Project Owner Covered Risks: Underperformance of the PV installation Obligations/prerequisite:
- Commissioning certificate from accredited third party
- Yield assesment through specially educated staff with
standardized software Highlights: 5 year contract without cancellation right of the insurer in cases of a claim, optional prolongation for further 5 years
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