Broker and MGA unveils new capacity in response to increased need for severe convective storm cover
London, 29th January 2025 – NARDAC, the specialist energy and infrastructure broker and Managing General Agent (MGA), has today launched a new facility to offer additional severe convective storm cover (SCS) for renewable energy project development and operations. NARDAC will provide up to USD 20,000,000 in additional standalone SCS cover for projects in the U.S. as the first of several natural catastrophe facilities planned over the course of 2025.
In December 2024, Swiss Re reported that losses from SCS in the U.S. over the prior 12 months totalled in the region of $51bn1. In the wake of increasing claims payouts, underwriters have reduced available capacity for SCS events. This has left insureds with inadequate protection and has endangered the viability of new project development in SCS-exposed areas.
While SCS is often typified as a hail risk for solar projects in the southern U.S., weather events covered generally also include tornadoes, lightning strikes or powerful derecho winds. Outside hail, tornadoes, lightning and extreme winds are expected to increasingly impact renewables developments in states with growing bases of solar generation – such as Louisiana, Ohio, North Carolina, and Kansas.
NARDAC launched the new facility following its work to secure additional SCS coverage for a 2 GW solar portfolio concentrated in Texas after a massive hail loss exhausted its SCS limit with existing insurers. Securing more coverage for the portfolio highlighted a market need to have a facility with standalone SCS capacity. With the new facility, NARDAC is able to offer indications for coverage in 48 hours or less.
“The increasing incident rate of natural catastrophe events, and in particular severe convective storms, is leading to unsustainable losses for traditional insurance carriers. This is forcing many insurers to reduce their cover,” said Jatin Sharma, Managing Partner, NARDAC. “This poses an existential threat to the continued build-out of onshore renewables across a number of U.S. states.”
“By bringing greater natural catastrophe capacity to the renewable energy market, and directly linking this facility with NARDAC‘s specialist broking knowledge and track record, insureds will benefit from critical additional cover that protects operational projects and assets in development.”
“As climatic change continues to impact renewable energy project development and operations, we look forward to leading asset protection with creative new facilities that provide the market with the solutions needed to secure the energy transition.”
Sources:
- https://www.swissre.com/press-release/Hurricanes-severe-thunderstorms-and-floods-drive-insured-losses-above-USD-100-billion-for-5th-consecutive-year-says-Swiss-Re-Institute/f8424512-e46b-4db7-a1b1-ad6034306352#:~:text=Insured%20losses%20from%20SCS%20are,USD%2070%20billion%20in%202023 ↩︎
About NARDAC Insurance Services
NARDAC is a specialty wholesale, reinsurance broker, and Managing General Agency (MGA) that offers a unique combination of technical resources to successfully navigate the challenging and ever-evolving risk and insurance landscape.
Founded in 2020, the NARDAC team seeks to deliver innovative solutions at the nexus of broker consolidation, a frustratingly challenging underwriting environment, and a dynamic risk landscape. NARDAC understands that traditional approaches to insurance and risk management are increasingly ineffective and that creative, technical solutions will lead their clients towards a new risk transfer reality.
NARDAC leverages decades of experience in engineering, risk consulting, underwriting, and broking to create nuanced solutions and strategies for their clients. NARDAC seeks to establish a new benchmark for innovative service, disrupting a traditionally transactional business model.
NARDAC is a part of Amwins – a leading global specialist insurance distributor.