Insurance Underwriters (Risk Insurers)
Key Information & Criteria: Insurers that underwrite climate tech projects (e.g. insuring new energy technologies or facilities) need detailed risk data and technical validation. Because many climate innovations lack long loss histories, underwriters require as much performance and reliability data as possible to convert uncertainty into quantifiable risk. This often means:
Technical Performance Data: Proof from pilots or prototypes (e.g. failure rates, output efficiency, safety tests) to assess the likelihood of claims. Underwriting first-of-a-kind technology demands transparency from firms about test results and risks.
Risk Mitigation Measures: Information on any warranties, safety certifications, or risk transfer structures in place. For example, insurers may look for performance guarantee insurance on renewable energy output or warranty agreements from equipment suppliers. Specialized insurance products are emerging – e.g. policies covering hydrogen project hazards or geothermal drilling risk – which reduce uncertainty for investors by guaranteeing certain outcomes.
Pooling & Scale: Because large insurers are cautious with small or novel risks, they may require risk pooling (e.g. Aggregated data across multiple ventures and longer time series helps insurers price risk more confidently.
Regulatory and Climate Risk Data: Insurers also consider external climate factors – e.g. location-based physical climate risks (flood, wildfire) to the project, and compliance with any emerging climate disclosure norms. As climate change progresses, insurers are intensely modeling catastrophe risks and may use new climate-tech to inform underwriting.
Risk Profile Considerations: Insurance underwriters typically seek to avoid unquantifiable “unknown” risks. For nascent climate tech, lack of actuarial data is a hurdle. Thus, they often partner early with innovators to engineer out risk or involve government backstops. Early engagement is critical: surveys of insurance executives show 95% agree insurers can play a strategic role by getting involved at pre-commercial stages to advise on risk management. New frameworks like an “Insurability Readiness Framework” have been proposed to evaluate emerging climate tech on factors important to insurers (supply-chain resilience, regulatory context, safety) and bring insurance capacity in sooner. Ultimately, insurance underwriters need data-driven confidence that a climate tech project’s risks (whether technological failure, construction delays, or output variability) are understood and either mitigated or shared (via reinsurance or public co-insurance). When those conditions are met, insurance can significantly de-risk investments – for example, offering output insurance that guarantees a renewable project will produce a minimum energy output to secure its revenue. This gives other capital providers greater comfort that downside risks are capped.
