Insurers in Africa are moving beyond traditional, reactive models to adopt technology-driven solutions to manage the complex risks of renewable energy projects.
According to Santam Specialist Solutions, tools such as AI, sensors and advanced analytics now allow insurers to continuously monitor assets, predict potential failures, and reduce risks ― making solar, wind and battery projects more attractive to investors.
Renewable energy projects face risks that traditional insurance struggles to cover. Solar panels can be damaged by hail or storms, wind turbines can experience mechanical breakdowns and grid-scale batteries carry the risk of fires or explosions. Developers in emerging markets also deal with infrastructure gaps, extreme weather variability, limited emergency response and regulatory uncertainty, all of which make projects harder or more expensive to insure.
Mershalene Maharaj, underwriting governance specialist at Santam Specialist Solutions, says digital tools are helping insurers tackle these challenges. “Green energy introduces new risks, while technology gives us the ability to monitor performance in real time, predict potential failures and reduce the likelihood of catastrophic losses,” she said.
These digital solutions include Internet of Things (IoT) sensors, which collect data from solar panels, wind turbines and batteries to detect early signs of stress; AI and data analytics, which identify patterns and predict failures before they happen; and blockchain, which securely tracks data and automates certain insurance processes. Together, these technologies allow insurers to move from reactive claim settlements to proactive risk management.
Green energy introduces new risks, while technology gives us the ability to monitor performance in real time, predict potential failures and reduce the likelihood of catastrophic losses.
— Mershalene Maharaj, underwriting governance specialist at Santam Specialist Solutions
Santam said the market opportunity is significant. Renewable energy insurance represents less than 30% of the fossil fuel market, yet the Swiss Re Institute estimates global premiums for renewables could reach $237bn (R3.76-trillion) by 2035 compared with $22bn in oil, gas, and coal insurance in 2022.
“The future of energy insurance will be defined by technology-enabled risk insights and closer stakeholder partnerships,” Maharaj said. “As renewable infrastructure becomes more complex and climate risks intensify, [insurance technology] gives us the tools to support resilience, protect capital and enable the energy transition in a sustainable way.”
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