The London insurance market’s role in supporting the global transition to clean and resilient energy is becoming more apparent, according to the latest insights from the London Market Group (LMG).
The report notes that insurance is central to enabling innovation, attracting capital, and maintaining long-term project stability as the energy sector evolves.
According to LMG, the London Market’s scale and concentration of expertise position it as a key partner for large and complex energy projects. Market participants expect premiums from environmentally focused insurance products to triple within five years, reflecting the rapid growth in climate-aligned investments.
The report highlights that new energy technologies face risks such as intellectual property (IP) theft and the cost of defending patents. IP insurance is cited as a tool that allows developers to protect proprietary technology and pursue claims.
Securing financing for clean-energy projects remains a challenge due to long payback periods, credit uncertainty, and political risks. LMG notes that insurers have introduced credit and political risk products to help banks and investors fund emerging technologies with greater confidence.
These include credit risk insurance enabling nearly US$1.5 billion in funding for renewable and storage projects, as well as political risk solutions that support blended finance structures. Carbon-delivery insurance has also been used to unlock a major afforestation loan package tied to a Microsoft credit purchase agreement.
The London Market is also developing tools to address complex climate-related risks. OAK Global’s climate innovation strategy and Lloyd’s capacity have supported over US$1.5 billion in resilience- and transition-related risks, helping projects secure long-term financing.
Caroline Wagstaff (pictured above), chief executive officer of the London Market Group, said: “In an increasingly volatile risk environment, energy security is now at the heart of national resilience and economic prosperity. The London Market stands as a critical partner, able to unlock investment, foster innovation, and provide the financial safeguards that make ambitious projects possible.”
As new energy infrastructure is constructed, insurers provide coverage for property damage, delays, third-party liability, and machinery breakdown. LMG points to Allianz and partners supporting Norway’s Northern Lights carbon capture and storage (CCS) project by covering construction risks.
In the UK, a consortium of insurers has developed a comprehensive CCS risk-transfer solution, including protection against CO₂ leakage and regulatory issues.
The energy transition is also prompting changes in how insurance relationships are structured. The Lloyd’s Market Association (LMA) has advocated for brokers to move beyond the traditional annual policy renewal model, which it argues is not well suited to the long timelines and evolving risks of decarbonisation projects.
Instead, the LMA supports a shift toward multi-year strategic engagement, where brokers, insurers, and clients collaborate on long-term risk planning and innovation. To facilitate this, the LMA has introduced a standard set of ESG-related questions for brokers to use, aiming to improve data quality and consistency across the market.
Operational risks for energy projects include business interruption, liability, cyber threats, and technology underperformance. Tailored insurance coverage helps maintain operational stability and investor confidence. Examples cited in the report include insurance for Taiwanese offshore wind farms, performance insurance for US battery storage systems, and products addressing liability across interconnected CCS value chains.
Insurance also plays a role in the responsible dismantling and repurposing of energy assets, including nuclear decommissioning. Nuclear Risk Insurers offer multi-decade protection for reactors worldwide, supporting new nuclear developments such as the Barakah plant in the UAE.
