Following the latest edition of our North American Risk Seminar in Newport Beach, California, Tokio Marine GX Chairman, Fraser McLachlan and our Head of Renewables, Olly Litterick, ask whether the market is learning fast enough from its losses. Drawing on our latest report, Expecting the Worst, they set out why softening rates and changing loss patterns are putting pressure on margins, and why the industry needs to collaborate before a loss, rather than after it.
Fraser McLachlan, Chairman
Since we launched Tokio Marine GX (TMGX), I have been asked more than once what has changed. The honest answer is a great deal.
Our ecosystem now spans nine specialist partners across nuclear, marine, carbon credits, clean energy technology and private credit. Our offering covers eighteen areas of green transition risk, and – driven by TMGX – decarbonisation premiums across Tokio Marine HCC International reached ¥55.5bn in FY2025, a year ahead of the Group’s FY2026 target.
A year on, that progress is also being recognised by our peers in the market. We’re a surprisingly humble team but we were nonetheless proud to receive the Underwriting Innovation of the Year award at the Insurance Insider UK Honours, followed by shortlistings for two awards at the upcoming Insurance Times Awards.
But while our business has grown, the key question remains: is the market learning from changing loss patterns fast enough?
Renewables remain the foundation of our business and the sector in which we have earned our credibility. Sustainable growth in new areas depends on maintaining a healthy core, and right now that core is being tested to the limits.
The market is softening quickly, even as losses become more severe, arrive earlier in the year and emerge in locations once considered relatively safe. These were among the issues addressed at our recent North American Risk Seminar in Newport Beach, California. Bringing the industry together to discuss these challenges is an important part of what we do at TMGX. No single insurer, broker, developer or risk manager has all the answers. We need to share experience, challenge assumptions and learn from losses if we are to build a more resilient market.
Our latest report, ‘Expecting the Worst’, draws on 19 years of our claims data to examine how renewables losses have evolved across regions, technologies and perils. The findings reinforce the need for greater urgency. The resilience of the market cannot be built by individual insurers alone, and the value of events such as our Risk Seminars lies not simply in presenting data, but in bringing different parts of the industry together to compare experiences, question established approaches and identify practical ways to improve how we prepare for and respond to losses.
Every loss offers an opportunity to learn. The question is whether we can turn those lessons into meaningful change before the next one occurs.
Olly Litterick, Head of Renewables
As Fraser highlights, the challenge facing the renewable energy insurance market is whether our approach to understanding, preventing and recovering from losses is evolving quickly enough. At our North American Risk Seminar in October, I set out where we are: an aggressively softening market, against a backdrop of claims inflation and more frequent attritional losses.
This is the fastest rate decline I have seen in this class in twenty years. The pressure is particularly pronounced in territories with relatively little catastrophe exposure, including Brazil and Spain. We have seen this cycle before: the insurance market lost money through much of the soft market between 2016 and 2020, with combined ratios returning below break-even only as the market hardened from 2021. Capacity is abundant today, but the risks are not getting any easier to carry.
Industry-wide, severe convective storms accounted for $51bn of the $107bn of global insured natural catastrophe losses in 2025[1] . Losses are emerging in locations such as South Dakota and Indiana that have not historically been regarded as highly exposed.
According to our recent report, utility-scale solar now accounts for 80 to 90 per cent of annual financial losses globally, while hail averages around $9.1mn per claim. Meanwhile, lead times for critical components are in most cases more than double their pre-Covid levels.
‘Expecting the Worst’ shows how losses are changing, but understanding the patterns is only the starting point. We must translate those insights into better risk management, more effective products and closer engagement across the project lifecycle. More severe losses can mean longer periods of downtime, complex repairs and greater uncertainty for project owners and investors, and with critical component lead times still elevated, the financial consequences can persist long after the initial damage has occurred.
The contributors we brought together for ‘Expecting the Worst’, spanning risk management, EPC, claims management and loss adjusting, independently reached the same underlying conclusion: the tools we use to prepare for and recover from major losses have not kept pace with the risks themselves. Our report identifies three priorities:
- Greater transparency in data and analytics
- An insurance market willing to innovate while maintaining a sustainable long-term offering
- Closer collaboration before a loss occurs, rather than after it
Too often, the parties involved in a major claim meet one another for the first time once the damage has already been done.
The purpose of ‘Expecting the Worst’ is not to suggest that the industry should retreat from the risks ahead. It is to help us understand them better, prepare more effectively and build a market capable of supporting the next phase of the green transition.
Together, these trends are likely to challenge margins in this class like nothing we have seen before. The industry does not need excessive margins, but it does need sustainable ones. We need to reinvest, improve our products and maintain the capacity required to support the green transition over the long term. At TMGX, we remain committed to providing continuity of capacity, sharing risk insight through data and maintaining stable but competitive long-term pricing.
The lessons are there. Our responsibility now is to learn from them together.
[1] Swiss Re (2026) Natural catastrophes in 2025: the persistent rise of wildfire and storm risk