Marsh Launches First Green and Blue Hydrogen Project Risk Insurance Facility

Marsh announced the launch of a first-of-its-kind insurance and reinsurance facility providing dedicated insurance capacity for new and existing green and blue hydrogen energy projects. Developed by Marsh in collaboration with insurers Liberty Specialty Markets, part of Liberty Mutual Insurance Group, and AIG, the facility provides up to US$300 million of risk coverage for the construction and commissioning phases of hydrogen projects worldwide.

Investment in green and blue hydrogen initiatives is estimated to exceed US$150 billion by 2025, as traditional energy operators, governments and hard-to-reduce industries compete to meet their carbon reduction obligations; However, operators have found it particularly difficult to ensure adequate insurance market provision for these new and emerging technologies.

The facility provides up to US$300 million of risk coverage.

The Marsh facility is supported by a panel of A-rated global insurers, led by Liberty Specialty Markets and AIG. It provides capacity up to $300 million per risk and is flexibly structured to allow clients, from small operators to multinational organizations, to choose coverage for the construction or commissioning phase, or a combined risk policy that extends to the first year of operations. In addition to providing risk transfer options for all property damage risks in the construction and operation phases, the facility includes ocean cargo insurance, business interruption, general liability to third parties, and contingent delay in commissioning.

“The Marsh facility is an important development for the insurance industry that will help accelerate the global energy transition to renewables,” commented Andrew George, global head of Energy and Energy at Marsh Specialty. As the global hydrogen industry, especially green hydrogen, grows rapidly to meet demand, the facility will reduce the complexity of securing risk transfer options for operators of all sizes and increase investor and lender confidence to achieve the ambitious timelines of their projects.”

George said: “Marsh continues to make significant investments to support the diversification of energy systems and is challenging insurance markets to keep pace with the industry and improve risk management approaches and options. We are committed to working with investors in all phases of their projects, to support their energy transition goals.”

Lesley Harding, Global Head of Energy at Liberty Specialty Markets, said: “We are delighted to collaborate with Marsh to bring this solution to market. This is another example of how Liberty provides industry-leading technical expertise to assess, quantify and underwrite emerging technology risks. Our ambition is to be the strategic insurance partner for customers committed to the energy transition.”

James Langdon, Head of Energy and Construction, AIG UK, said: “At AIG we are eager to raise the industry standard, so we proactively collaborate with our partners to design new and impactful insurance solutions in support of our customers’ changing needs. This innovative solution is one of many initiatives we are working on with our customers and broker partners in support of the energy transition and our net-zero commitments.”

Source: Valor Compartida