Insurance broker McGill and Partners has joined forces with risk analytics provider Renew Risk to develop a series of catastrophe models tailored specifically for offshore wind portfolios. These models, crafted within the Oasis framework, an open-source Catastrophe model platform, cover a range of natural perils including Northeast US hurricanes, Taiwan earthquakes and typhoons, and Japan earthquakes and typhoons.
The primary objective of these meticulously crafted models is to provide McGill and Partners with a comprehensive understanding of the natural peril risks associated with offshore wind assets. By doing so, the partnership aims to determine optimal insurance limits and gain insight into risk aggregation across multiple windfarms within a single region.
Tom Sexton, Partner and Head of Renewables, Power, and Energy at McGill and Partners, emphasized the critical need for custom-built offshore wind catastrophe models. He stated, “There has been a pressing need for a custom-built offshore wind catastrophe model to accurately assess the probability of loss for this rapidly developing asset class in high-risk zones.”
These innovative models hold significant promise, not only for offshore wind clients but also for insurers and reinsurers. They are expected to streamline the process of risk transfer capital allocation, enabling insurers to price coverage more precisely. Additionally, they will provide a deeper understanding of asset class aggregations, shedding light on offshore wind's impact on other lines of business—an aspect that was previously elusive.
Ultimately, these advancements are poised to boost insurers' and reinsurers' confidence in providing greater capacity at more appropriate pricing levels to offshore wind clients situated in high catastrophe zones. This collaboration marks a significant stride toward enhancing risk assessment and coverage for the rapidly evolving offshore wind industry.
