Willis: Abundant insurance capacity and softening rates for the renewable energy market, but underwriting more technically demanding

LONDON, June 18, 2026 The renewable energy sector is entering a new phase of accelerated growth, shaped by rapid technological innovation, intensifying global competition and increasing geopolitical pressure on energy security. While opportunities are expanding, so too are the complexities behind successful projects. For the insurance market, this fosters a technically demanding underwriting environment, according to the Renewable Energy Market Review published today by Willis, a WTW business (NASDAQ: WTW).

Against a backdrop of strong sector performance, many insurers are looking to diversify their portfolio by broadening their renewable energy book. Breakthrough technologies such as green hydrogen, next-generation geothermal, and space-based solar are changing the narrative on what's possible. Success in all areas of renewable energy will increasingly depend on execution: managing complexity, anticipating systemic risks, and aligning engineering, finance and insurance strategies.

Key trends to watch:

• Abundant capacity and strong competition are driving a sustained softening phase for the renewable energy market, but well-performing, data-rich risks are benefiting the most.
• For 2026, pricing trends indicate reductions between 20-30% for Tier 1 risks (well-engineered, clean, large premium income accounts) and reductions of up to 10-15% for Tier 2 (clean but lower premium income). For loss-affected programmes, renewal will depend upon the quantum of the loss.
• Overall, combined ratios were maintained, with a sub-90% average.
• Further softening is expected, increasing quarter by quarter.
• A majority of insurer portfolios have a ~50% US weighting, with many looking to diversify their account base internationally.
• The urgency and strategic value of energy security through diversified and renewable fuel sources is becoming increasingly important for companies and their risk profiles.
• Geopolitical volatility and growing electrification are compressing timelines for renewable deployment, placing a premium on scale, speed and delivery certainty. These forces are deepening reliance on Chinese suppliers, who dominate original equipment manufacturing, particularly in solar and battery technologies.
• In emerging technologies, the role of insurance is evolving from a transactional requirement to a strategic enabler. Early integration of risk engineering, clear allocation of liabilities, and credible performance data will be critical to unlocking investment and scaling deployment.
• Insurance markets are keen to establish longer-term relationships with key clients, with a resurgence of low claims bonuses (LCB) collected up front at inception subject to strong performance, and long-term agreements (LTA) with discounts between 5-10% for year two.
• Insurers are increasingly aware of aggregation, delay scenarios and recovery realism and how it affects project resilience. For lenders, dependency management has become a financing issue as insurance availability, terms and pricing increasingly rest on credible recovery evidence, not simply technical compliance at commissioning.
• Positive outlook for the sector with expectations of large-scale construction of new battery storage systems (BESS) in North America, Europe and the Middle East, alongside a boom of solar projects in North America, the Middle East and Asia.

Rob Hale, global power and renewable energy leader at Willis Natural Resources, said: "Competitive advantage is shifting towards renewable energy projects that can demonstrate strong engineering standards, robust maintenance practices and credible, data-driven risk insights. Risk is shifting from isolated component failures to systemic dependency risks, with a clear need for companies to map and manage recovery timelines, contingency planning, as well as the alignment between procurement, contracts and insurance structures. The next phase of underwriting will be defined less by price alone and more by the quality of information, analytics and long-term risk management strategies."

The report includes analysis by region (North America, China, Rest of Asia, South Africa, Latin America, Australia, Nordics and CEEMEA) and specialty (wind, solar and space-based solar, green hydrogen, geothermal, property, liability) and can be downloaded here.

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