Known Unknowns

As the renewables sector expands into new geographies at record speed, one challenge is becoming increasingly urgent: how to maintain project insurability and bankability in the face of rising natural catastrophe (Nat Cat) and extreme weather risk.

 

In the United States, repeated high-value losses from hail, wildfires, and Severe Convective Storms (SCS) have fundamentally reshaped how risk is priced, underwritten, and financed. Nat Cat and extreme weather events are no longer considered exceptions - they are now central to how the market considers risk.

 

But while the US has been the focal point, Nat Cat and extreme weather are increasingly being witnessed outside of the US. In Europe, the Middle East and Australia, similar patterns are emerging. What were once considered stable markets are now facing unexpected losses - from severe flooding in the Gulf to hail and windstorms across Europe – and developers, insurers and lenders are grappling with incomplete data, outdated modelling, and new types of exposure.

 

This is the core dilemma facing the global renewables market today: rising awareness of climate-related risks, without the full understanding or insight to fully quantify them.

 

For insurers, it’s driving tough decisions around capacity, coverage terms and pricing. For financiers, it raises new questions about risk appetite. For developers, it means adjusting to a world where insurance coverage and finance may be conditional, constrained – or not available at all.

 

GCube’s Known Unknowns report, our first market insights report of 2025, unpacks these themes. It explores how Nat Cat and extreme weather exposures are evolving across key regions, drawing on our claims data and market expertise. It also features insights from a leading European renewable energy financier, who explores how insurability and bankability are changing – and what role the financiers, insurers and developers must play in keeping projects viable.

 

As renewables projects move into new terrain, the ability to manage these risks will determine whether the sector can scale sustainably. Addressing the known unknowns of Nat Cat and extreme weather is now essential for securing future investment, ensuring insurability, and preserving confidence in the wider green transition.

 

GCube's market insights reports are available exclusively to GCube's insureds and brokers.

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