TMGX Newsletter - Autumn / Fall 2025:
“It’s Not Easy Writing Green”

Tokio Marine GX update – Fraser McLachlan, Chairman
The pace of change in the global renewables market never ceases to amaze and excite me. Earlier this month, the Tokio Marine GX (TMGX) team were at RE+ and, in between meeting some of you and navigating the enormous floor space at the event to get a coffee, I was struck by the realisation of how much our industry has evolved. 27 years ago, just 30 of us in a basement room at a Holiday Inn in San Francisco made up what now is RE+, a 45,000-person event hosted in Las Vegas.

The figures across our desk today, starting from humble beginnings in the then-nascent offshore wind sector, are just as impressive. We have paid over $1bn in claims to the renewables industry, insure over 100GW of assets, and write projects in over 40 territories.

This month, we also celebrated the launch of TMGX as a fully operational underwriting business within the Tokio Marine group and hosted our annual Advisory Council, this time in Deer Valley, Utah, introducing top underwriters, brokers, developers, and industry specialists from across North America to our new business.

Across two days of insightful presentations and incisive discussions, change was a recurring theme for speakers and guests alike. Adapting to the shifting U.S. landscape of renewable energy deployment, managing supply strain amid trade tariff uncertainty, mitigating climate risks that are escalating with global warming, and getting comfortable with the new breed of large-scale and co-located assets pushing forward the green transition. Our collaborative forum was focused on proactively identifying and tackling problems emerging from this changing space.

As I outlined at the start of the event, the momentum of the green transition is such that analysts suggest that $9.2 trillion in green investment is required annually by 2030 to keep pace with global decarbonisation goals. We estimate that roughly $8bn of insurance premium will follow this investment over the next decade.

Seizing this once-in-a-generation opportunity is not solely about capitalising on new possibilities, it is also about recognising the growing pressures – economic, political, and technical – that complicate the progress of the green transition and demand leadership and experience to service changing needs.

However, one of the greatest pressures we foresee growing in the future is insurance market instability. The clean technology sector has reached a point of development that the insurance market would be foolish to ignore – to sustainably support the next phase, the role of insurers must evolve, and this is precisely what TMGX is primed to do.

Protecting the future of the clean technology sector, TMGX aims to be at the forefront of a resilient insurance market in the following ways:

• Providing additional capacity in local markets
• Using our technical insurance and industry expertise to support the growth of new clean technologies
• Underwriting a profitable portfolio on behalf of TMHCC in green initiatives
• Backing new MGAs operating in the green transformation space
• Increasing investment in businesses that assist asset performance and data analytics
• Pioneering innovative insurance products

But perhaps most importantly of all - as I recently shared in an insight piece reflecting on the evolution of the renewables insurance market - we are proud of being a key enabler for many industry successes to date and plan on becoming the enabler of many more. This is why our emphasis on cross-sector cooperation and collective problem-solving, through events such as our series of advisory councils and risk seminars – is of such enduring interest and value.

The more we can share perspectives and ideas from different vantage points, the better we can enable progress in the green transformation.

Fraser

 

Renewables Market Outlook - Olly Litterick, Head of Renewables

As Fraser rightly points out, we operate in a market that never stands still and that has consistently overcome setbacks to support the roll-out of the green transition.

However, some things do not change. Underwriting green initiatives is challenging – it always has been.

In 25 years of underwriting renewable energy projects our guiding principles have stayed the same, and successfully so. Simply put, our job is to transfer as much risk as we can at a fair price and within our financial means. Continuity in the way that we serve our clients and manage changing risk profiles is a crucial part of the philosophy that has positioned us as leaders in renewables underwriting.

To help protect assets, enable progress, finance innovation, and build resilience in the insurance market, we also have a long track record of sharing insights and data on renewable energy underwriting trends, the complex risks emerging in the industry, and how we as insurers, brokers, developers, and policymakers can overcome challenges. Today’s latest market insights report, ‘It’s Not Easy Writing Green’, continues this commitment to support the sector’s resilience through knowledge sharing – readers can get their copy here.

2025 has, so far, been a year marked by uncertainty for renewables. Our report looks in detail at a perfect storm of seven challenges looming ominously over the market from extreme weather risks and supply chain constraints to ageing infrastructure and the deployment of new technologies at breathtaking pace and scale. We see these challenges as connected because they emerge from a broader environment of uncertainty driven by:

• The intensifying impacts of climate change
• Exploding energy demand both publicly and privately (for data centre growth, for example)
• Shifts in energy policy and legislative support
• Fluctuating trade tariffs
• The rapid evolution of new and bigger technologies

This is a key moment for the US renewables insurance industry since buyers of insurance look to us for certainty - in their pricing terms, in stable capacity, and in long-term commitment when claims arise or when incentives expire.

As the industry has developed, the severity of losses has escalated due to the increasing value of assets and the complexity of repairing them. While technological and operational advancements have done a good job of managing the frequency of losses, the sheer volume of projects coming online and their exposure to increasingly extreme weather conditions means that the frequency of loss events also continues to increase. These trends underline the importance of disciplined, experienced underwriting in the sector.

In particular, insureds are increasingly seeking assurance that the true cost of downtime, and not just physical damage, is reflected in specific loss of revenue coverage. This points to a wider caution around fragile global supply chains and the permutations of proposed tariff hikes. As such, the insurer’s role has moved on from simply covering property damage. It must now work across risk transfer, capital allocation, and resilience planning.

Meanwhile, the combination of rising energy needs, inadequate grid infrastructure, and the challenge of deploying new renewables in a narrow time window to access tax credit support raises the possibility of the industry prioritising speed over sustainable practice. This too is where a robust insurance market focused on industry longevity is critical for the development of US renewables.

In our long experience, short-term opportunism in the renewables sector has led to costly results and, ultimately, market withdrawal. But given what is at stake – both financially and in terms of our decarbonisation goals – the oscillation between hard and soft insurance markets as capacity reacts to each challenge and each opportunity individually cannot support the growth of the green transition in the long-term. We must learn from the past and apply lessons to the future.

The green transition is no longer a niche, and renewables are no longer a sideline business for insurers. Now is the time for us to double down on our support of the industry’s sustainable growth.

On behalf of the entire TMGX team, Fraser and I wish you every success for the rest of 2025.

Olly