Insurance against climate change

A number of things have to come together if offshore wind energy is going to approach its full potential and make a major contribution to addressing the twin challenges posed by the growing demand for electricity and global climate change. For the most part the technical and regulatory challenges are what grab the headlines.

In reality a number of other factors that are equally important in the total scheme of things. One question that's been lingering out there is whether or not commercial offshore wind projects (as opposed to government-subsidized pilot projects) will be insurable. The most technically-advanced turbines will never make it into the water without insurance.

The insurance industry has decided that climate change is real. This is bad news for the thousands of homeowners living in coastal communities whose carriers have canceled their insurance because of the risk posed by predicted storms of increased intensity resulting from global warming.

The good news is that apparently some major insurers have (even if every so cautiously) concluded that one of the most promising solutions to climate change is real as well. (GW)

Navigators Launches Offshore Wind Turbine Insurance

Business Wire
April 14, 2007

The Navigators Group, Inc. (NASDAQ:NAVG) today announced the expansion of its range of insurance products for the energy industry to include Offshore Wind Turbine products.

Stephen Coward, Managing Director of Navigators Underwriting Agency Ltd., stated, “In response to the commitment made by many governments to develop sources of renewable energy and growing international investment in the construction and operation of wind turbine generators in coastal waters, Navigators has developed a product for this new and expanding market segment. Navigators will use its combined in-house engineering and energy underwriting expertise to handle these risks, which may range from single units to large-scale windfarms. Navigators has built up considerable expertise in the insurance of construction and operational risks associated with land-based wind turbines around the world, and will combine this knowledge with our long-established marine and offshore energy experience in providing this additional service to the market.”

Products offered for the Offshore Wind Turbine segment include project cargo, contractor’s all risks, delay in start up, operational material damage, business interruption and third party liability. Coverage is underwritten by either Navigators Insurance Company or Lloyd’s Syndicate 1221.

The Navigators Group, Inc. is an international insurance holding company with insurance company operations, underwriting management companies and operations at Lloyd's. Headquartered in New York City, Navigators has offices in major insurance centers in the United States, the United Kingdom and Belgium.

This press release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Whenever used in this release, the words “estimate,” “expect,” “believe” or similar expressions are intended to identify such forward-looking statements. We cannot assure that results that we anticipate will be achieved, since results may differ materially because of known and unknown risks and uncertainties that we face. Please refer to Navigators’ most recent Form 10-K and its other filings with the Securities and Exchange Commission for a description of Navigators’ business and the important factors that may affect that business. Navigators undertakes no obligation to publicly update or revise any forward-looking statement.