How can we help

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Introduction

Aon has dedicated power specialists who focus on supporting the risk management and insurance needs of our clients in the power generation and utility industries worldwide. We are able to share detailed insights into the regulatory, financial, technological, environmental and geographic aspects of global power generation.

Responsible for vital infrastructure, the power industry is continuously evolving to meet the needs of a growing population and power utilisation – significantly impacting risk profiles.

The power sector is seeing significant deal activity, with greenfield, brownfield and refinancing activity at record levels.

The power industry is continually changing due to innovation, regulations and increasing competition.

Risk Optimisation

Responsible for vital infrastructure, the power industry is continuously evolving to meet the needs of a growing population and power utilisation – significantly impacting risk profiles. As a result, stakeholders are focused more than ever, on data-driven decision making to reduce the total cost of risk and meet their growth objectives.

Identifying, quantifying and mitigating key risks are essential for power companies looking to optimise their risk management strategy. From risk identification through to claims, it’s vital that power companies employ adequate controls and procedures to protect their bottom line.

Local knowledge, global presence

In pursuit of new growth opportunities and against a backdrop of a more interconnected grid infrastructure companies are expanding their footprints overseas in the power sector. Our worldwide presence allows us to provide a dedicated local risk management and insurance service for our clients in the power industry, backed by global power and utility resources and expertise.

The combination of global strength and local knowledge helps in the in the deployment of efficient global insurance programmes that leverages the international insurance market, assessing and mitigating against political risks and maximising claims outcomes.

Power specific focus

With expertise in all areas of power generation including fossil fuels, sustainable and renewable energy and nuclear power, we help clients identify, manage and mitigate risk exposures by providing:

  • Due diligence consultancy and lenders insurance advisory services
  • Understanding how different technologies will affect risk profiles and insurance programme design
  • Knowledge sharing around emerging risks and best practice
  • Benchmarking risk management and insurance programme design
  • Access to the global insurance market and innovative product areas including parametric solutions and exclusive capacity arrangements
  • Specialist consultancy services from risk engineering through to cyber risk analysis

Case Studies

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Uncertain that their current arrangements were delivering both the security and value they expected, Aon was approached by the developer of a large off-shore wind farm in Northern Europe.

However, this was not a straightforward matter of needing insurance. There were several challenges to overcome, including:

Renegotiation of a debt finance agreement

Time constraints

Renegotiation of construction and supply contracts

Resubmission of the project to the insurance market

The wind farm had been concerned about the piecemeal approach by their previous broker and turned to Aon for a more holistic solution. Benchmarking current arrangements, it was clear the proposed policy was overpriced and full of gaps in cover. With so many intertwined elements to deal with at once, a detailed risk scenario analysis took place.

By tackling these issues at the same time, Aon delivered a bespoke and comprehensive insurance programme, while saving the client millions of dollars.

The client operated a portfolio of gas transmission, power transmission and power generation across several countries. Its (re)insurers required a sample of assets to be risk surveyed and revalued each year.

Working closely with the client, Aon identifived a number of assets to be surveyed and valued each year. A visit schedule was proposed to maximise expertise and efficiency, calling on international resources when required.

Aon has now delivered the survey programme for several years, able to assist with sharing best practice across locations and countries.

Aon’s range of expertise across all areas (power, gas and valuations) allows for a solution with all services delivered through one point of contact.

Growth enablers

The power sector is seeing significant deal activity, with greenfield, brownfield and refinancing activity at record levels. Aon support clients through this process in:

Through a wide range pre-transaction due diligence services providing qualitative and quantitative insight across a range of risk categories.

Through structuring of insurance solutions & financial instruments by transferring transaction related and contingent liabilities to the insurance market.

In addition, utilising insurance to obtain credit solutions is increasingly an important financial option for power companies to help free up capital and protect revenue flows economic uncertainties. Aon offers an integrated product that can include credit, surety and financial solutions to provide balance sheet protection and improve cash flow.

Case Studies

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A UK based renewables fund faced challenges while negotiating the acquisition of several UK wind farms.

During negotiations it became apparent that the private equity seller refused any post-closing recourse for breach of warranties under the SPA. The client sought to address the liability gap with Warranty & Indemnity insurance.

Aon successfully placed W&I cover which enabled the transaction to proceed. Under the same policy, Aon was also able to obtain cover against the risk of contractor insolvency

A leading European energy supplier and trader had significant exposure to a large number of buyers across Europe. New business was constrained by internal credit limits on buyers where there were large credit concentrations. The client needed a non-cancellable solution to protect them against this exposure.

In response, Aon sourced comprehensive non-payment credit insurance on the client’s behalf, securing payment from a number of key buyers. Aon was able to review, cancel and rewrite cover ensuring a 12-month revolving coverage for longer term supply contacts.

Future Proofing

The power industry is continually changing due to innovation, regulations and increasing competition.

Aon is committed to offering power risk management and insurance solutions to the challenges that the industry faces around the world from helping to managing the threat of cybercrime through to helping companies navigate the pensions risk landscape and support employee health and well-being. We continually engage with our clients to help understand their risk landscape as it continues to evolve. Highlights from our Global Risk Management Survey include:

Aon may have its roots in the insurance industry, but it has an in-depth understanding of the global power industry. This means it is able to offer expertise in risk management, talent, retirement and health solutions, as well as data and analytics insight. This support can help businesses when making decisions, approaching challenges and managing risks.

Case Studies

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A large power company with multiple offices across EMEA faced challenges in attracting and retaining talent. With most administration carried out manually, it was especially difficult for the firm to administer benefits to employees.

Aon reviewed and redesigned the benefits package to deliver technology that automates the health and benefits function for thousands of employees. Aon also developed a mobile app to connect with employees who work remotely.

A large, global client was unable to quantify their cyber exposures due to a very complex IT network and did not know the appropriate level of cover required.

Based off the network exposure identification, Aon developed a model to quantify the loss exposure and use this to optimise the client’s insurance strategy.

As a result, Aon obtained over USD 200 million of cyber coverage for the client, and helped the client identify vulnerable areas in the organisation which required further protection.

 

Aon UK Limited is authorised and regulated by the Financial Conduct Authority. FP.GBC.205.JJ