Episode 10 - Part one
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Welcome to Risk Matters, the insurance podcast brought to you by DWF and your
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global guide to the latest trends and issues in the insurance and reinsurance industry.
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Join us as we explore topical issues, emerging technologies and the innovative
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strategies that are shaping the global future of insurance.
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Welcome to Risk Matters, the insurance podcast from DWF. I am Franco D'Andrea,
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a partner in DWF's global risk team.
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As listeners will know, this is our second podcast focusing on energy insurance.
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Last time we recorded an energy insurance podcast in the spring of 2024.
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We felt then that we were living in a turbulent time, but I don't think it's
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controversial to say that 2025 and the opening of 2026, have raised the levels
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of turbulence to a new level.
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But in the words of Francis Bacon, the original Francis Bacon,
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he that will not apply new remedies must expect new evils, for time is the greatest innovator.
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And where better to find new remedies and new innovations than in insurance?
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And with that, I'd like to introduce today's guests for the podcast.
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Ahad Khalid, who is the global product leader for Power Allianz Commercial. Welcome, Ahad.
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Thank you, Franco. Okay. And Miles Sunley, the global head of natural resources
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claims at Allianz Commercial. Welcome, Miles. Thank you, Frank.
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I should say that I found that Francis Bacon quote in my preferred old-fashioned
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way by looking it up in a hard copy Oxford dictionary of quotations,
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which in my view is a small win for humanity.
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But on that subject alone, we've seen significant growth in AI since our last
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episode, which in itself is driving a new and prolonged energy demand.
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Whilst energy was front page news in 2024, that has only increased in the interim period.
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And with that in mind, one thing we noticed in our previous episode was that
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whilst we had lots of people tuning in who were part of the energy insurance
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market, we also had a number of listeners who were part of the wider energy
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market or worked in the wider energy market.
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And so to which we felt we'd kick off this episode with a bit more information
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about what it is and where insurance fits in within that process.
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So with that in mind, I'd like to start off, Ahad, by asking you a little bit
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about Allianz and a bit about your role within Allianz. Sure.
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Well, thank you, Franco.
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For the listeners, Ahad Khaled, I'm the global product leader at Allianz,
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and my role focuses on power and renewables.
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Allianz is a massive conglomerate, financial services conglomerate that has
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various different entities. One of them is Allianz Commercial.
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Myles and I work in that and are part of that.
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And within Allianz Commercial, we have different product towers,
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one of them being Natural Resources that is headed up by my boss, Anthony Vassalo.
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Under Natural Resources, we have four different subproducts,
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one of them being Power and Onshore Renewables.
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I look after that globally as the product leader. Thank you. And Miles?
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Yes, I am the global head of natural resources claims for Allianz Commercial.
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So my role is to oversee the handling of natural resources claims,
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both from a technical perspective and from an outcomes perspective,
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one might say, to make sure we are going about things the best way we can for our clients.
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That involves working with Ahad on the power account. It also involves all sorts
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of insurancy type things like reserving and procedures processes etc,
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but i think in a nutshell i am responsible for our natural resources claims
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offering we're going to come come back to some of those uh points but i had
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i know um you've had some time working in the middle east,
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and i know that's a topic that we wanted to touch on at least from the outset
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which is in particular the middle east and what we what's known as in insurance as the uh,
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catastrophic or cat losses particularly natural cat losses um,
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there's certainly been,
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an indication that over the in recent years there have been increased cat losses
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in the Middle East is that fair and do you think that reflects what we knew
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about the Middle East beforehand,
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That's a really good question. And Middle East is on everyone's mind right now,
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based on what we see and hear in the news and also in the world of renewables.
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I would like to give you a little bit of background about the Middle Eastern
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renewable energy industry.
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Up until 2000, so we go all the way back to 2010.
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In 2010, the amount of installed capacity that was there in the Middle East,
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for renewable energy was one gigawatts.
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Now, for the listeners who are not familiar with this terminology,
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one gigawatt is a thousand megawatts.
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Now, what is a megawatt? One megawatt can power 150 households for one day,
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right? So that if you do the math, you can extrapolate it and see exactly what one gigawatt meant.
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Now, mind you, the Middle East consists of, depending on how you actually define
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Middle East, it consists of more than 15 countries.
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So in 2010, they were at one gigawatt.
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Today, if you look at any statistic, it's very difficult to measure because
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everyone uses different endpoints, but the Middle East is roughly installed
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capacity today. It's operating at 30 gigawatts.
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So exponential increase in the amount of renewables in a part of the world where
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back in 2010, the word renewables just,
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wasn't feasible because the cost of drilling, the cost of producing one barrel
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of oil in the Middle East is the lowest in the world. So why would you then go towards renewables?
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But the leadership in the Middle Eastern countries made a conscious decision
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just based on the global dynamics that energy transition is the way to go.
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And today they are one of the fastest growing renewables markets in the world.
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So their annual, as per statistics online, based on IRENA data,
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IEA data, they are growing at an annual growth rate of 24%.
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In solar, wind, and battery energy storage. These are the three particular areas
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where they are occurring significantly.
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So there are a lot of reasons why that is happening, but one of the main things,
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and Miles alluded to it earlier, is energy transition. They have embraced the
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energy transition wholly.
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So that's the background, the history of where Middle East is.
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Now, we all know that the Middle East geographically, majority of the terrain
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is desert-based. There's a lot of sand there, but then there's some parts of
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the Middle East where there's some mountainous terrain as well.
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And historically, not a lot has existed in those areas from a commercial building standpoint.
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So what's happening now is contractors, manufacturers, builders are going into
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places where things never existed before and are building these sites because
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the governments are allowing them to they're getting subsidies to do that,
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And lo and behold, they are encountering natural catastrophes.
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Our data, as per our Allianz Risk Consulting colleagues, and I'd like to give
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a shout out to some of our colleagues, Michael Brook.
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Rohinton Irani, who have shared this data with us,
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which shows that from 2010 up until 2050, predicted data shows that the baseline
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natural catastrophe activity has not changed and is not going to change significantly.
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So why are we seeing more renewables losses then?
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Well, we're seeing more losses because this is something we call the Texas phenomena.
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And the Texas phenomena essentially is we are now building things in places
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where nothing really existed.
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So now we are capturing that data into our systems and saying,
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oh, this is now a Nat Cat zone.
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This is the primary reason why we see the increase in the number of losses.
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To give you an estimate, in 2024 alone, natural catastrophe losses globally were at $145 billion.
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10% of that was coming from the Middle East.
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So it's very difficult to say that this is a changing environment.
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It is in one way, but the weather pattern, as per our data and the analysis
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it shows, hasn't changed. Does that mean that there was no data points to begin with?
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Not that we were concentrating on. They were there, the,
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meteorological societies of each of these countries in the Middle East,
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particularly focusing on the Gulf had captured that but we were not just whether we call it pure,
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ignorance or the fact that we just did not relate activities to that region,
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we didn't concentrate on that.
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There is one whenever we thought of Middle East we did think of one natural
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catastrophe and that was sandstorms for the obvious reason that we're building
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in the desert but we'd never thought of flood.
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So in 2024 2024, nearing 2025, the biggest natural catastrophe loss in the Middle
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East was because of flood.
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Now, rain in the desert, you know, it doesn't take much to guess that,
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but it does happen. Yeah.
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And so looking ahead then to other locations where there might be a lack of
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data sets, at least in the initial phase, is it,
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hence my earlier question was, if there is an opportunity to,
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let's say we try and replicate the growth that happened in the Middle East in a different location.
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Does having the data sets from the Middle East now and the lessons that have
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been learned from the Middle East do you think that will help say your parametric
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team or other parametric teams be able to work out where that might be going?
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Absolutely and I think that's exactly what our teams are doing they are taking,
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the data that we learn losses are an opportunity to learn,
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from what we shouldn't do going forward that has been the mantra of insurance
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all the way back to 300 years.
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And our teams now, with the help of AI, are using that data to consult with
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clients and saying, okay, this is what we've seen.
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If you build in areas where recent meteorological data and past meteorological
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data has not been analyzed properly, it's there, but it's not.
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And this is where we should alternatively build.
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The challenge with that, Franco, is that governments, and particularly regulators,
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need to provide the incentive to build there.
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And unless that happens, there's an inflection point where we see financiers,
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lenders, and insurance companies are not agreeing because the state is not providing those guarantees. Yes.
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And on that, you mentioned very clearly that the value in understanding from
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a loss scenario, what can then be brought into the underwriting scenarios at a later date.
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Miles, discussing cat losses, we know you're an expert in sometimes in infinitesimally
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small fiber optic cables and the like.
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In some respects you might say well is there any crossover a large claim involving
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something microscopic and a large cat loss from your perspective managing a
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claim like that or what are the differences?
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I'm tempted to say there are none, but there will be some. I think ultimately,
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the cat loss, you are working on a larger pallet.
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It is more obvious what happened. The cause is clear to see often,
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whereas the smaller more, let's say, a subsea loss, a cable, for example.
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The what went on with the cable is a far more complex question and harder to pin down.
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So that is a key difference. But in terms of addressing the claim,
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it still comes down to the same approach that one has of working your way through
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it with the client and the adjusters.
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So in that regard, it doesn't really change anything. I think what we do see,
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to try and develop this out a little further, for example, the NatCat events.
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If you imagine an installation is engineered to be able to withstand a certain
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degree of rain and hail, etc., that isn't necessarily true when it's half built.
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So we often see problems whereby trenches are flooded by a passing rainstorm
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that would otherwise have been subject to the drainage that's been put in, etc.
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So, like I said, the actual cause of it is a lot more obvious.
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The problems can be more widespread because it hits the the technology the project
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on a construction claim at its worst really um hopefully when things are built and installed,
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they should be able to withstand more of that but also um it's easier to replace,
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components than it is to start again yeah that's that's the issue although the
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remote locations do to present further challenges.
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I wanted to come back to the remote location, but while we're here,
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we've discussed already some of the vast quantity of data that there is in relation
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to both on the claims side, but also on the underwriting side as well.
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And I'd just like to ask, Ahead, if I start with you about.
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When you've got the data or you're trying to gather the data,
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is underwriting something new like that?
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Is it a scientific approach? Is it an art form?
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Where does it fit between science and art?
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That's a brilliant question. And I think that's one that's been asked at universities
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throughout my career now, whether underwriting is a science or an art.
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And I think sometimes the safest way to say is neither.
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So um no it is it is definitely a mixture of both um because underwriting for
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the longest time franco uh when we if we go all the way back to edward lloyd's um right,
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um we we see that it all developed uh underwriting or underwriting risks marine
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risk predominantly developed because of a need yeah all right a need that was there at the time,
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and throughout history the insurance market has evolved and seen that every
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time there is a risk that needs to be solved, underwriting evolves.
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It has never remained the same. Science operates on known factors,
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and without quoting Donald Rumsfeld, known unknowns as well.
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But at the same time, art evolves. Art takes into account perspective,
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takes into account time.
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So that's why it is a mixture of both. Underwriters today definitely don't operate,
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in the same way that underwriters did back when I started my career in 2007.
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We were very manual-based underwriters. I mean, you would probably know this, Franco and Miles.
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We were still using FACS back then, right? I'm not quite that old. Yeah.
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So FACS was still available, whereas underwriters today are using LLM models, right?
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They are using AI to determine how do we underwrite and take a risk onto a book.
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So it has changed. It has evolved.
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Very difficult to point in either direction.
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But I would say that the best underwriting decision comes from respect and acknowledgement
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of both the science and art. Yeah.
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And it's a judgment call, I suppose. Amal, I'd love to ask you the same question.
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Dealing with a very large loss, you're leading it.
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Where does that fit between science and art for you?
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Yeah, it's a good question. I think the answer is when claims handling is done properly, it is both.
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I think one, as a claims adjuster, needs to understand exactly what the problem
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is, what technology are we looking at, what has gone wrong,
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and how all that happens so that we can then step back and look at the policy,
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which is also the science element.
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One needs to analyse that, of course you would know, analysing the contract.
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That's an art form but it's words on a page and how does one fit with the other
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is very much the technical side of things but then we have to remember we are dealing with,
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clients in a real world with a real business with a real problem and a balance
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sheet and profit loss account that it affects,
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We have to find our way through it. We put ourselves forward as an organization
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to say, we are here for that moment. Well, that moment is now here.
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How are we delivering? So that is where the art comes in.
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There is really, there's a need to understand the threshold required for an
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insurance claim versus, for example, the threshold of knowledge of exactly,
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what happened in terms of, you
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know, obviously, I'm drawn towards the engineering and technology side.
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I can get into that yeah for a long time but i i recognize that there is a level
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of detail that becomes superfluous and that's that's the perfect balance between
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the art and the science i think,
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one of the reasons i was really interested in the question was because uh when
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i've got two daughters one wants to be a singer the other wants to be an artist
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and i said you could do both in the insurance industry.
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Yes yes but miles you mentioned earlier about the about remote locations i'd
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really like to explore that a little bit further because we've all seen i think,
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there was a particular video going around linkedin a couple of years ago about a um,
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a wind turbine blade being taken up a mountain on the back of a,
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making some what look like impossible turns going up up a mountain so that is
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a phenomenal feat of engineering of skill to get these things into the right location um,
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but my question is what happens then and what what what does that mean for both
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the under on the underwriting side and on on the claim side when these claims do arise,
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miles would could you start start off on that one yeah of course um i think,
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it causes tremendous problems when,
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a project is being constructed the logistics of how to get all the components
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there are well thought out yeah they're thought out long in advance transportation
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methods um are thought through roads are constructed,
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schedules are drawn up um even the example of the blade on the impossible journey
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that requires a particular vehicle with a particular rotatable rear access He's
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a driver with a particular skill set.
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Precisely. And clearing the roads and obstructions and et cetera.
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So all these things are done long in advance. They don't start construction
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until that's all figured out.
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When there's a loss, none of that applies anymore.
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So to a certain extent, it's getting back to square one, as we talked about
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earlier. It's easier to do something from the very beginning in this instance
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because you can plan it all versus trying to do half a job later to repair is very difficult.
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So getting equipment and components to the location for the repair becomes costly
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and challenging, and that affects the insurance claim. Labor is another concern.
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If you have a large project, you can plan ahead and people can arrive and work and then leave.
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But to do a smaller job, partial, even if it's a large repair,
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a partial project, that presents challenges in terms of assembling the labor force that you need.
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So that becomes a problem. All of these things can be fixed and resolved,
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but they all cost money, and that is a problem.
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So a further issue i think we need to remember is that i mentioned the construction
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road just to pick one example,
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if that is affected by an atcat event and is washed away yeah
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what do we do then there are a lot of claims particularly for mountainous hydro
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claims where the first port of call
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is to fix the access roads which can often lead us with leave us with the question
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as to whether that falls under the claim or not yeah um which is perhaps you
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know it's a wordings issue
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but it certainly we all recognize well without that there isn't any repair yeah,
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um otherwise we're talking about fleets of helicopters and back to expense again
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i'm just to pick an extreme example,
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so the locations have a key uh fact an influence rather on the losses,
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just in terms of it's it may well be there's a good resource there but it's
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an awkward place to get to if you need to change out something or or fix anything and etc.
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And i had on the underwriting side then is Is that something that is at the forefront of your mind?
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Very much so. I'd like to paraphrase a quote from one of my favorite movies, Top Gun.
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We've all seen it. Absolutely. And the quote that I'd like to make is that,
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in the insurance, we're in the business of writing risks that are balance sheets, I can't cash.
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If you've seen the movie, you know where that paraphrase occurs.
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So I think there are two examples that I'd like to quote here,
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publicly available examples that people who are listening to or watching this can Google.
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One is the Gansu Wind Farm in the Gobi Desert between China and Mongolia.
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This is a 20 gigawatt wind farm, onshore wind farm, that is spread across the desert.
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There's nothing like this out there in terms of size, scale,
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and anybody who has ever watched either one of David Attenborough's,
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shows or Top Gear knows that the Gobi Desert is not really a place a very friendly
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place that you like to get lost in.
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So building something of the size and scale that you wouldn't even see in the
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offshore world on land presents its own challenges.
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How do you underwrite your way out of it?
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So that presents the underwriters with new questions.
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Again, quoting another movie.
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Where we always talk about contractor experience, right? or contractor training or availability.
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But training is good, but nothing beats experience, right? You cannot beat that.
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So finding contractors who have experience in building in remote desert locations
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with mountains and all sort of terrain, it's not very easy.
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So we assess based on those challenges, and then we also look at how do you
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get spare parts into these places?
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Because the number one challenge we have in renewables, particularly because
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they're very catastrophe driven and prone,
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Where do you get spares from, right? How do you get blades in?
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We just talked about this example about putting a blade up through a mountain.
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Now, what if that blade does collapse?
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What are you going to do then? Would we have the same availability?
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So those sort of questions go into our underwriting process.
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And then we decide how we should mitigate that risks because they can open up
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Pandora's box if things go wrong.
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And we have not anticipated it or have not assessed it properly.
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And we've spoke about things going up the mountain, but what when they need to come down.
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And I think we're focusing this discussion much more on renewables,
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something which we all have experience in, but there is not yet much experience
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in disposal or decommissioning per se.
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And I'd like to get your collective views on decommissioning in particular,
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given that we know there are some studies already about decommissioning of say
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wind farms that have not even been constructed yet. So fantastic foresight to look ahead.
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I'm just keen to know from an insurance perspective where does that fit?
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Usually you'd have the construction stage, the operational stage.
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To be thinking about decommissioning already,
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Does that require new products or does that require a new way of engagement with your clients?
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Well, thank you. That's a very good topic, Franco. And there are already topics
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around or products around this that have been alluded to in the market.
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One of them is CAR or car in reverse. All right.
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That's been talked about a lot in the market right now, which is essentially
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decommissioning construction product.
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It's not new, but it is new for the renewables world.
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When we talk about decommissioning, it is very important for us to differentiate,
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between the different renewables because they all have different decommissioning risks.
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For example, on wind, when we talk about wind decommissioning,
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pretty much all the components in there, particularly the electrical components,
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are recyclable, but the blades are not.
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And the disposal of blades is where the biggest challenge occurs because we're
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talking about blades that are meters long, right?
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Some of these renewables, wind farms that you've probably seen,
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they are as big as the CN Tower in Canada.
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So what do you do with those blades?
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A number of countries, particularly Denmark, have come up with some very good
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examples of what to do with blades. They've used that to create bus shelters.
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The EU is coming up with laws now around what we should be doing with regards
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to recycling these blades or making alternative uses out of it.
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But then there are other countries in the world where you would just dig a big
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hole and you put the blades in there.
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It's not environmentally friendly. It definitely does not assist any of the
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ESG goals that we're trying to achieve.
346
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And then you go to solar, all right?
347
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Solar is another one where similar things happen, but the recyclability of solar
348
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panels is much higher than wind.
349
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Solar usage, et cetera, is also very, very conducive to a renewable environment.
350
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Batteries, I think, is the one where you can make the most use of recyclable
351
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materials. However, we haven't seen many of those cases sort of taking place
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because the world of battery energy storage is not as old as wind or solar.
353
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So there's a different risk parameter for each of these different technologies.
354
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And currently, the only legislation that is out there that I'm aware of,
355
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at least, is the EU that is working on it to try and ensure that we have a.
356
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Very systemic and a healthy environment to try and put these things to use,
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better use after their end of life, rather than just digging a big hole in the
358
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ground and then putting it in there.
359
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Because that's often one of the big counter-arguments to renewables that you see.
360
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Is about what happens post first in the constructions phase but what happens
361
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post Miles from your perspective is this,
362
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Does this feed into claims now, or is it a future concern?
363
00:26:40,137 --> 00:26:43,395
Both. I think it'll become a greater concern as time goes by.
364
00:26:43,993 --> 00:26:51,617
But at this stage, certainly how we dispose of damaged components is a concern.
365
00:26:51,997 --> 00:26:53,438
It obviously is a claims cost.
366
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It isn't, to be honest, a huge claims cost, but it's certainly there.
367
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It's sort of what I refer to as a potential nuisance factor,
368
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and I don't wish to belittle it, but the reason I call it that is because it's
369
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one of those questions that often comes up in a claim and you say,
370
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well, this is a fundamental about whether we pay this cost or not.
371
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And it's not by any means the largest head of the claim had a claim in there, but it certainly,
372
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is a, hang on, it's a real drop anchor moment, which is unhelpful because it
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then potentially just becomes a stumbling block for the wider conversation on
374
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the more important parts.
375
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So it is one of those issues which is probably has a greater influence than,
376
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one might initially realise.
377
00:27:34,838 --> 00:27:38,791
I say it will become a greater problem later because.
378
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The older a component gets, the less chance there is of any reuse,
379
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etc., and the harder it is to dispose of, generally speaking.
380
00:27:48,561 --> 00:27:53,467
But that may well be counteracted by, as I had mentioned, the legislation now
381
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where disposal has to be included or doesn't have to be.
382
00:27:56,961 --> 00:28:03,257
There is encouragement through legislation to include disposal and recycling in the actual design.
383
00:28:03,257 --> 00:28:08,267
And there are people, companies, Siemens are looking at it, one of their entities,
384
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I might have done them a disservice there, but they are looking at a fully disposable
385
00:28:12,247 --> 00:28:17,301
or recyclable turbine blade by dissolving it in acetic acid, essentially.
386
00:28:18,828 --> 00:28:23,247
But the EU waste directive that I had mentioned is hugely important.
387
00:28:23,247 --> 00:28:30,935
And it applies across the whole of any material in the EU, essentially sets up a pyramid of,
388
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reduce use in the first place, but reuse, recycle, and dispose is actually the very last option.
389
00:28:39,528 --> 00:28:43,127
So in terms of decommissioning, if we look at oil and gas as the parallel,
390
00:28:44,623 --> 00:28:50,863
staggeringly, something like about 90% of an offshore oil and gas platform will be recycled.
391
00:28:51,643 --> 00:28:54,073
It takes a lot of time and effort to break all these materials down,
392
00:28:54,073 --> 00:28:56,367
and there are economics involved, etc., but they do do it.
393
00:28:56,797 --> 00:28:59,343
So when you think of the size of these things, that's really not very much stuff
394
00:28:59,343 --> 00:29:00,391
that's going into the ground.
395
00:29:01,986 --> 00:29:08,946
Most turbine blades, when they are recycled, get up to about 80% to 90% already.
396
00:29:09,966 --> 00:29:14,153
Solar panels, the same, depending on whether they are thin film or silicon.
397
00:29:14,734 --> 00:29:20,526
But they are recyclable. The problem with it is it's cheaper to buy a new one
398
00:29:20,526 --> 00:29:21,916
and throw the old one in the ground.
399
00:29:21,916 --> 00:29:25,416
And that is not necessarily limited to renewable technology.
400
00:29:25,416 --> 00:29:28,036
I think that's true of any consumer product. Or most things these days.
401
00:29:28,036 --> 00:29:31,606
Exactly. So it is generally, the renewables industry, I think,
402
00:29:31,606 --> 00:29:37,326
is part of that wider, certainly the EU efforts to steer people away from that,
403
00:29:37,326 --> 00:29:38,870
to steer the world away from that.
404
00:29:39,946 --> 00:29:44,030
So there will be a period, I think, when we are dealing with the old technologies,
405
00:29:44,350 --> 00:29:50,230
the older blades, for example, particularly in terms of what we do with them.
406
00:29:50,619 --> 00:29:53,336
But then we'll get over that hump, and I think in years to come we'll be dealing
407
00:29:53,336 --> 00:29:55,658
with those which can be readily recycled.
408
00:29:56,198 --> 00:29:58,066
So we've mentioned the EU directive
409
00:29:58,066 --> 00:30:00,325
a lot. There are probably people thinking, but we're not in the EU.
410
00:30:00,836 --> 00:30:07,686
We aren't. But we haven't yet replaced all the laws. So the EU Waste Directive
411
00:30:07,686 --> 00:30:13,102
of 2008, I believe, is still current on our books in the UK, on our legislation.
412
00:30:13,398 --> 00:30:18,126
There is a newer one they passed in 2025, which Reduce, Reuse,
413
00:30:18,126 --> 00:30:20,770
Recycle is now labelled something else, but the concept is the same.
414
00:30:21,084 --> 00:30:27,555
That doesn't apply to us. But in general, we are still very much in sync with the rest of the EU.
415
00:30:28,153 --> 00:30:31,160
And given that most of the developers, certainly for offshore wind,
416
00:30:31,549 --> 00:30:36,236
are European-based, I think we can expect to see those new technologies being
417
00:30:36,236 --> 00:30:39,658
used in British waters. Yeah.
418
00:30:40,326 --> 00:30:45,022
One thing that's fascinating about this is the engagement that there already is from insurers.
419
00:30:45,353 --> 00:30:48,203
Because I suppose one way to look at it would be to say, well,
420
00:30:48,720 --> 00:30:51,526
we're going to come on to talk about annual renewal processes and that sort of thing.
421
00:30:53,259 --> 00:30:56,810
In one respect, if the insurance market is seen as being reactive to the client,
422
00:30:56,810 --> 00:31:01,130
purely reactive to the client need, then why are we considering decommissioning
423
00:31:01,130 --> 00:31:03,810
now when that's something, it's a future, it's a tomorrow problem,
424
00:31:03,810 --> 00:31:06,222
save for the claims examples you mentioned, Myles.
425
00:31:06,599 --> 00:31:09,150
But I think it's really interesting that the amount of engagement there is now
426
00:31:09,150 --> 00:31:13,020
from the industry about decommissioning and the fact that we're talking about
427
00:31:13,020 --> 00:31:15,127
it, I think is a helpful perspective.
428
00:31:16,712 --> 00:31:19,500
Yeah, absolutely. You mentioned new products, etc.
429
00:31:19,790 --> 00:31:23,260
Etc decommissioning is something obviously close to my heart having spent a
430
00:31:23,260 --> 00:31:28,410
bit of time looking at it but um i had mentioned the reverse well car policies etc,
431
00:31:29,121 --> 00:31:32,420
they are needed there is certainly for offshore wind of which we have a lot
432
00:31:32,420 --> 00:31:38,200
in the uk there is a requirement to remove from the seabed the continental shelf anything you put in,
433
00:31:38,914 --> 00:31:45,822
um we are not yet at a full uh fully developed industry focusing specifically on,
434
00:31:47,010 --> 00:31:50,275
wind technology, we are for offshore oil and gas.
435
00:31:51,879 --> 00:31:55,199
So a lot of the technologies exist already and methods and approaches,
436
00:31:55,199 --> 00:31:56,254
but they will need adapting.
437
00:31:57,359 --> 00:32:01,542
It's easy to cut monopiles and platform legs using waterjet cutting.
438
00:32:01,844 --> 00:32:05,929
Slightly harder to do that same concept, but slightly harder with an offshore
439
00:32:05,929 --> 00:32:07,585
wind monopile because of the size.
440
00:32:08,584 --> 00:32:12,659
But it just requires somebody to have an economy of scale where they'll develop it.
441
00:32:13,146 --> 00:32:18,059
So there is going to be, in time, a lot of work that needs doing.
442
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Whether we may even repower and put bigger turbines on some of these foundations
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possibly, but a lot of them I think will have to come out.
444
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We don't have a product for it. In the oil and gas world, it's less pressing,
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because there is more money available within the oil and gas companies to pay
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for this, and they anticipate it. They put the money aside, there's tax breaks, etc.
447
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The economics of offshore wind, I am told repeatedly by clients,
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and that's not to belittle it.
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I do know it's there. The economics are far more narrow, tighter.
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So I don't know if they are as able to make these provisions as the oil and
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gas world does. So in which case, there may be an appetite for an insurance product.
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Because the one thing about decommissioning is when you can cost it,
453
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you can plan it, you can schedule everything, like a construction project,
454
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but it has more that can go wrong.
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If after 25 30 years the particular component you are looking at to remove,
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isn't in the condition you thought it was going to be because no one's looked
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at it for 25 or 30 years you are in a fundamentally different ballgame,
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there are classic examples again oil and gas of companies that have struggled
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and heaved away at casings,
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in oil wells that were just nowhere near the condition they thought they would
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be in and the cost goes up i mean this is aside from dropping things and having
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to pick things up and weather and all of these other things,
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the actual state of the technology, it can be a fundamental difference.
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So I think in an industry that is looking at tighter margins,
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there may well be an appetite to look at.
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How whether they can protect against that with insurance. This is a very good
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point that Miles has just raised, and I'd like to just emphasize on this.
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The project life cycle of a renewables project versus an oil and gas,
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traditional oil and gas project, what Miles and I come from that background,
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is very different. In the renewables world, we're talking about 25 to 30 years for wind and solar.
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In the oil and gas world, much higher. so very different life cycles very different
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problems which is why we're talking about this now because the first wind farms
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that were built in the 90s are now approaching their end of life,
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thank you for listening to risk matters the dwf insurance podcast we hope you
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join us again soon for future podcasts in our series.
Episode 10 - Part two
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Welcome to Risk Matters, the insurance podcast brought to you by DWF and your
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global guide to the latest trends and issues in the insurance and reinsurance industry.
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Join us as we explore topical issues, emerging technologies and the innovative
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strategies that are shaping the global future of insurance.
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I think that brings us neatly on to then the investment value chain and where
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insurers fit within that.
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Because it seems that often, now obviously being a lawyer working on renewables
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insurance claims means that we see things at the end of the claim circumstance.
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But it seems that there is this entire investment chain that occurs even before
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the underwriting has taken place.
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I'm curious to know where insurers fit within that chain and should they essentially,
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appear at a much earlier stage.
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We are infamously the forgotten stepchild in the value chain, as I like to say.
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But the way, well, it'll be easy, I think if I can explain for our listeners,
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and frankly, you know this as well, what is this value chain that we're talking about, right?
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So whenever there is a need for a new project or there is a demand for a new
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renewables investment coming in from somewhere,
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you have financiers, lenders, private equity rushing and contacting the government,
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the state to say, okay, fine, there's an opportunity here.
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Contractors that come in, there are energy companies that get together,
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and they all speak to each other without insurers being present.
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And so what happens is you have the lenders in one room, you have the lenders'
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advisors, you have the lenders' insurance advisors, you have the regulators.
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And the state, all in one room deciding where they want to put their money and,
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where can the state help to provide incentives for this development to take
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place because this is directly linked to jobs.
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This is directly linked to buying raw materials from the country or contacting
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local contractors. So in net-net, there is a country state level benefit.
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By the time the front-end engineering design, which we also called feed,
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is completed and all sorts of project consultancy work is undertaken,
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the lenders have a good idea of how much they should be lending.
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Majority of these projects are lent on a syndication basis, exactly the same
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way we work in Lloyd's or in the subscription market where we share the risks
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between different insurance companies. Banks do the same.
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But they're designed. They know how much they want to lend. They know exactly
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what breaks they're going to get from the state.
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But they have one condition, that everything should be backed by insurance.
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And you're not in the room at that stage. And we're not in the room at that stage.
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So by the time that they have decided all of this, this then comes to what we
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call a project financial close.
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Once a project is financially closed or is closing, we are then asked or invited
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to participate in the tender stages of a new build construction.
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I'm talking about construction here because that's where things get focused.
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We are then involved and invited to say, okay, this is what the project's going
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to look like. This is the design.
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This is who is funding it. This is the management structure, et cetera, et cetera.
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And you just need to insure it.
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More often than not, and I'm speaking on behalf of the market over here,
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we don't have much room to maneuver because the lenders have already listed
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their list of conditions.
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And so the insurance then has to comply with the lender's requirements.
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And we often see that in lender's clauses. Absolutely. Dependent to policies.
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Absolutely. You would see that on your side in the legal world,
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that that's where things start getting very stressed.
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And so this is why we don't have a fixed product. Our products are very bespoke,
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depending on what project we are looking at, which country we're looking at.
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And we try to make them more flexible depending on the situation.
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So in this value chain, we are the last component. And if you were to picture
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building a Lego castle, we would be the last block that completes the Lego castle.
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The flag. Exactly. We'd be the flag. We'd be the flag. So you can take that as a sign of pride.
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But at the same time, I think the conversation can be much more productive if
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we're involved in earlier stages because we would be able to not only provide
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better insurance solutions, maybe even cost benefits,
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to the lenders or to the insured interest parties, but we would be able to design
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the product catering to their needs rather than playing catch-up.
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Because right now we are playing catch-up to every single major infrastructure
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project that hits our desk after all parties have spoken.
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I think I was really curious from a legal, pure wording, black letter, what the wording says.
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And often I think it seems to me that.
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You'd need to, you would improve the product if you understood what the bargain needed to be.
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100%. That's a classic law school lesson is, what is the bargain your parties are trying to achieve?
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100%. That seems to be quite a fundamental point. I certainly,
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before being more involved in renewables claims, I hadn't appreciated the late
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stage at which insurers were involved in that process. This is very, very true.
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My wife works in leverage finance for a big investment bank.
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And more often than not, her team lends to private equities who are looking
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to acquire different businesses.
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And every time they are looking to issue the lending requirements,
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insurance is right at the end of the section, which they don't really pay much attention to.
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Because that's part of the lender's insurance consultants to sort out.
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And so I totally agree with you.
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If we were part of that discussion, if we were in the room, then the product
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can be way more tailored to the specific needs. And in fact,
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we might even come up with some innovative solutions for unidentified risks.
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And what would that look like, hypothetically? Would that obviously have your
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underwriter, Miles, you're a claims professional. How does that...
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Would it be you? Are there others in insurance companies that would be more
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appropriate to be involved in those early discussions?
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We at Allianz have ARC, Allianz Risk Consulting, our colleagues who do a very
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good job of talking to insureds about the engineering behind their projects
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to understand both the construction and operational stages.
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And that helps I think I had to to shape the the cover that we offer and informs that conversation with,
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with the uh with the broker and the client I know other organizations have engineers
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involved doing the same thing as well um the question is I suppose getting back
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to our heads earlier point at what stage,
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does that engagement happen yes you know so we we are doing something to try
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and close that loop and as claims,
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we are promoting, I'm promoting a dialogue between ARC and the claims team because
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things do go wrong so we need to close that knowledge loop really between what
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they see at the front end and what we see at our end,
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so we can all be better informed.
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So there's certainly a lot there but I think there's a question about how,
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how engaged or when, rather, we are engaged. I think I understand that clients
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don't want us in at the very beginning, but perhaps there's something to be
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said, Arhat, for that happening sooner.
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100%. And Miles, like you, the two colleagues of ours I'd like to talk about,
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because I've been in the room with them during very early stages of a project lifecycle.
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Gordon Lee, who heads up our ARC, Allianz Risk Consulting Natural Resources
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Division, and Dr. Wei, who is part of that division, but is a wind expert.
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And I've seen them in the room talking about things that could go wrong in the
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renewables world with clients who have not even thought about these particular risks.
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And they have acknowledged that those sessions help them make different investment
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decisions in the future.
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And now these were sheer chance that we had those sessions.
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And I've seen the value that they created, but it doesn't need to be left on chance.
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We can build this as part of the value chain. We can build this as part of,
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okay, like Miles said, we don't probably need to be involved when they're doing
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the front-end engineering design, but somewhere in the middle.
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If we are involved before financial close,
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then we can identify, for example, is there a need for alternative risk products?
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Is there a need for sustainability?
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We have a very, very well-known market-leading sustainability team.
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Two members who have contributed a lot to some of our solutions.
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One is Funke and then is Elena Biasi.
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They both specialize in coming up with innovative solutions for sustainable clients.
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Yeah. So why can't we have people like that in the room when we are in the middle
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or just before financial close so as to identify, right, maybe we need to come up with a product.
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That is a little bit more akin to the bespoke need of the client.
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I know there's certainly a lot of engagement from risk engineers in London Market
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Association groups and the like.
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And it seems to me that the level of experience and knowledge and expertise is outstanding.
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And how that could not assist in terms of developing a new product or being
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very close to clients seeking to develop these sort of projects could not be
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anything but positive, I think. Absolutely. Absolutely.
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Absolutely. That brings us on to, we've seen some industry press recently,
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specifically in relation to renewables, about challenges that,
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perceived challenges that the annual renewal process provides to cutting edge
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renewables or other projects.
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I'm just quite curious, both of you being very familiar with and have always
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worked with annual renewals, seems to me there are benefits to that process.
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And I'm curious to get your views on that as to whether that is something that
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does hold back the development of cutting-edge technology in renewables and
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in other energy sectors.
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I'll take it from an underwriting perspective, what we do.
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You'll have to split it, and I'll try and split it for the audience, between clients.
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When we're talking about major clients,
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the big European energy clients like ONG, for example, Libidrola, for example,
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most of these clients have global programs that span across countries,
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hundreds and billions of dollars of assets in there, all publicly listed companies,
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so the information is available online.
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It is very cumbersome to renew those programs on a yearly basis.
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That is a totally known fact. And what the market, what the insurance market
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does, and we're part of that as well, we provide what is called a long-term agreement.
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That is in shortened form, an LTA.
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So an LTA, what it does is it provides multi-year cover so long as certain conditions are met.
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And that provides clients with certainty that they have multi-year coverage.
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That coverage can go up to 24 months, sometimes 36 months.
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We're now seeing some clients looking at five-year LTAs as well.
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Because again, if you've got a product, if you've got assets that are homogenous
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to a certain degree, then do we really need to look at it on a yearly basis? No.
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So provided things are constant to a certain degree, and those parameters are
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defined in each of those contracts individually,
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there is a very, very good benefit in having these long-term agreements in place.
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So that's where I totally agree with you.
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When it comes to projects that are technologically complex, when we're talking
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about, let's move away from the renewables world and go into conventional power.
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When we're talking about highly complex gas turbines, all right,
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that are generating 600 megawatts of power through one machine,
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and these machines have millions of components on them.
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There is a very good benefit in reviewing those contracts year on year because
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the nature of the machine is changing, right?
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We're dealing with something that is way beyond, you know, some of them are
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as big as airplanes, if you really want to look at them.
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So there is benefit in looking at those risks on an annual basis and the technological
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complexities that it provides.
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I don't think that looking at it on an annual basis would be cumbersome to technological innovation.
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Because the only thing that we are doing is ensuring the fact that these risks
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get the proper coverage so that at the end of the day, all of us want to be in a situation when,
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a loss happens, the client is served 100% because that's what we're selling. Yeah.
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But do you think that applies to cutting-edge technology like modular nuclear,
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so SMRs, small modular reactors, and the like?
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So do you think that sort of approach, at least in the early stages,
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that annual renewal process should not in itself be something that holds up
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the development of those projects, those products? No, absolutely.
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You're right. I mean, it should not...
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It's a fascinating topic, right? The nuclear world. Now, the first SMR,
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there are two currently that are being built globally. One is in Canada.
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There's one over here in the UK. Actually, there are two in the UK.
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There's one in the US as well. We all know that the UK one, which has been done
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by Rolls-Royce as they are leading this technology, they confirmed that that's
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not going to be in operation until 2032.
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Too. Whereas the one in Canada that's been done by Ontario Power Generation,
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they claim that between 2028 and 2029, that will become operational.
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So we will have to see when those actually come to the market,
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how the policies respond.
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My best guess is that when they do become operational, those risks will be managed
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by the nuclear pools because of the fission nature.
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Things get very, very colorful when we talk about fusion, because there is a
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massive, massive discussion going on in the market right now with the extreme
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power needs of data centers, energy security.
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Fusion is becoming more and more a hot topic.
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And if you allow me two minutes to just explain what is the difference between fusion and fission.
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Fission, the nuclear process, which is also the same thing that happens in atomic
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bombs, is when you have two atoms, deuterium and tritium, coming together and producing energy.
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This is layman speak, very, very common knowledge. So apologies if I'm butchering
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the science here. Miles will pick you up.
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Miles is going to pick me up on this. It would take too long.
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And that's fission that's been proven that works currently in nuclear power,
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right? So all the power plants that you see globally, the nuclear ones,
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they operate on fission.
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Fusion, which is the process that takes place in the sun, that's when you have,
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the same atoms, deuterium and tritium, moving away from each other.
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And the energy that they generate is exactly the same process that takes place,
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in the sun. Why is fusion interesting?
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Because the amount of fuel that you would need to generate electricity from
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fusion is mind-boggling. And if I can illustrate that with an example. So...
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Most of our listeners, if you've got kids in the UK, you would be familiar with
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Calpol as the medication, right?
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So let's use Calpol as an example. Are the paracetamol-based products?
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Are the paracetamol-based products as well, yeah.
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So we'll use Calpol as an example. Now, everybody knows about the purple stick, right?
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That purple stick, when you have a toddler, you probably give around 2.5 ml.
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In fusion, you need one ml of deuterium to produce enough power to power 50 households in the UK.
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That's how much fuel you need. Just put that into perspective.
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It is a rabbit hole that goes so deep that even Morpheus would struggle to explain.
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But that is fascinating. Because we're talking about energy that can be,
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produced at exponential levels and power that can be produced at exponential
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levels without requiring much fuel or resources and clean, in a clean manner.
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So, again, insurance is a far-off thought, but it is something that is now being
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asked in the market and what do we need to do.
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But it is difficult to say that annual projects or annual policies will hamper
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this innovation because these products are not there in the market yet.
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The experience that we have from the current products in the market shows that,
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we don't always have to issue annual policies. There are benefits to doing that, like we've discussed.
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But we do have long-term solutions.
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But where do you even, for something completely brand new for that,
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but I think also AMRs, SMRs as well, given that they are based on existing nuclear
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technologies, where do you even begin to...
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Investigate whether we can, as Allianz or whichever company you work for,
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how do you begin to investigate this is a product we can, this is something we can get behind?
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Are you talking to Miles about similar claim scenarios you might see in other industries?
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How do you, I'm just quite curious to know, how do you go from zero to here's
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an insurance policy that we can provide to you to.
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Cover you for the risks that your finance parties, your governmental regulatory requirements need?
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How do you start that? We have no clue.
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No, jokes aside, I think that you're absolutely right. What we do.
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We can use SMR, AMR, and Fusion as an example, because these are the hot topics right now.
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What have we done? We have engaged with a number of stakeholders.
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Mal's sitting here in the room claims teams.
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We've engaged with regulators. We've engaged not only with financial regulators,
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but also energy regulators to try and understand what is this technology and
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what are the inherent hazards and risks that it possesses.
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Because again, going back to the Top Gun quote, we want to be taking these risks
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on our balance sheet, and we need to be able to pay for them.
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So we engage with all these stakeholders at a very, very advanced level.
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Across different teams. Then we also engage with risk engineering.
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Our biggest asset that we like to claim in Allianz is our risk engineering knowledge and expertise.
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We have 55 risk engineers globally in Allianz Risk Consulting,
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each of them focusing on various products out there and various components of an energy lifecycle.
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For example, we've got two gentlemen in the ARC world who are focused just on cabling.
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So they go on in a minute detail on each of the components within the energy
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world. There's a stakeholder you've missed there, which is lawyers.
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Yes, I have missed lawyers.
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And the reason, to bring Miles in on this, because the reason I raise that is
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because when we're talking about crossover and learning.
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From things we may have done in the past or certainly utilizing knowledge that
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may already exist in the market,
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I was curious to see that with nuclear liability regimes in particular,
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it remains to be seen in the UK if we will follow a similar approach to liability
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regimes that there is in more traditional nuclear for SMRs.
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There's a government consultation that has recently closed on that.
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But what's curious is the calculation for the limits of liability cap for any
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operator is based on SDRs.
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And I thought, I remember using SDRs before, and of course that is something
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that colleagues in the maritime space are very, very familiar using in terms
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of third-party liability, working out the ultimate liability for a ship if there's
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a pollution event, and so on.
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So I thought it was striking that there is, even in those scenarios,
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being comfortable with using terms like that, there already exists in the marketplace,
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in a place you would not normally think to link, existing knowledge.
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I don't know if there's any Miles you found any other crossovers Coming from
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a marine background Into now focusing more on the energy side Well Benny Is
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the answer I think ultimately As I said earlier the.
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The energy industry, or insurance market rather, was focused on offshore,
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and that came out of the marine industry.
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I'm tempted to use a quote of my own, and I think it was Muddy Waters,
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that the Blues had a baby, and they called it rock and roll.
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There we are. There we are.
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So, yes, the energy market, certainly the offshore energy market,
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grew out of marine insurance.
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That thinking in the marine world shaped the very policies that were used for offshore energy.
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Um they were seen as marine policies until uh essentially the mar 91 form was
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done away within the market reform etc,
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so there became the concept of a,
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an energy policy i don't know if that stands up legally but that's certainly
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what people hold in their heads in the market so that then we now move on to renewables,
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we have wordings that are being shaped for renewables but they are wordings
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that inherit the offshore energy concepts.
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So they will have many of those focuses or features.
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One of the areas that I've been very active in at the moment is floating offshore wind.
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I am writing or have written a wording for floating offshore wind,
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which is being considered by the market, which deals with that very point.
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So we have a wind turbine.
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But it is floating. What happens if it slips its moorings?
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The moorings break, rather than, to use a more precise term,
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or something, a vessel collides with it when that's happened.
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We are very much into the maritime arena there.
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And knowing how we deal with that from the marine world has allowed me to basically
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come up with the clauses that are required for that particular wording.
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There are plenty of other examples.
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Things like ctl which is an age-old maritime concept marine law concept and
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marine insurance concept,
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that exists in onshore policies as well so understanding exactly how that applies
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in the ins and outs and the the problems around insured value and things like
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that that feed into that issue pop up even now in in something that's,
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nowhere near the sea so i think it turns out there's really only you know a
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number of ways that one can go about insuring things anyway
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You often reach those solutions that already existed before if they aren't inherently
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organically included anyway.
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So I think knowledge of other insurance classes is very helpful when looking
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at new classes in particular because, you know, why reinvent the wheel is the
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essential concept, I think. Okay, thank you.
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I'm keen also to get your views on any particularly interesting jurisdictional
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developments or any jurisdictions that are ones to watch for the future,
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in particular with renewables.
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I had. Could I start with you on that one? Sure. From a, I think the ones that
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we, it's a very, very wide net, right? If you were to focus on every country
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in the world, and I think there's so many interesting opportunities.
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The audience might not necessarily be.
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The ones that I'm very keen on, and I think the audience will find interesting,
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is we'll start with Turkey. Yeah.
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So Turkey has popped up on the renewable scene very, very aggressively.
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Up until, say, 10 years ago, Turkey was very famous for being one of the biggest
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coal-producing power countries in the world.
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Today, Turkey is the fifth biggest producer of renewable energy in Europe,
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11th globally, across all renewable energy spectra.
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In fact, they are the biggest manufacturer of solar PV panels that are sold
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in Europe, particularly in Eastern Europe.
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So much so that they are, from my knowledge, the only country or the only country's
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solar panels that the insurance market is willing to provide performance guarantee
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insurance on. Interesting. Okay. It is fascinating.
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It is an area that I've been to Istanbul, myself last year to meet with our
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colleagues there and the rest of the market, and I was blown away by how far
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ahead they've come and the plans they've got for renewable energy.
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So they've embraced it wholly.
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You wouldn't associate that. No, that's not sort of out there as a known fact. It definitely doesn't.
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The second one, which is another outlier, is Pakistan.
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A lot of listeners would know, Pakistan is a country in South Asia with 250
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million people and is a growing country, right, with a very big young population.
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The fun fact is that Pakistan is the fifth largest user and purchaser of solar PV panels in the world.
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And particularly the ones that are coming out from China. China's biggest customers of.
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Solar PV panels, number three is Pakistan.
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So they have powered their economies completely based on renewables and are
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now heading in the retail solar world because Pakistan has always suffered from,
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electrical instability due to shortage of power being produced,
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and renewables is solving that issue.
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So that's another one that users should be very, very optimistic about.
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And the third one is one that I recently visited, was the Nordic countries.
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And in the Nordic countries, the most interesting area that I've found out was
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battery energy storage.
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In from 2020 to 2025, the amount of battery energy storage installations that
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have been installed onto the grid in the Nordic countries and has grown by seven times, x7.
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That's the kind of growth you've not seen anywhere, particularly on Bess.
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And the primary reason for that is because they're producing way more electricity
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than they need. They're not that populated. What do you do with all of that.
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You store it for the times when you will have volatility in the grid systems.
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So these are three parts of the world, because we always talk about the immense
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opportunity that's coming out of the US, the immense opportunity that's coming
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to China or other parts of the world.
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But I just wanted to shed some light on these three countries. That's very helpful.
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Interesting, you mentioned the US there, and I wonder, miles offshore wind in
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the US obviously it's facing some difficulties at the moment is there anything
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in your view any promising developments on the horizon,
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It is a challenging environment, and I would say that offshore wind is being
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constructed despite that challenging
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environment. We have some very large projects that are underway.
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The political landscape is what it is. Governments have different views on different things.
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So we are where we are for the moment. I think certainly looking ahead or just
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purely from what could be an interesting development, California is very keen on offshore wind,
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floating offshore wind, because the coastline falls away quite dramatically.
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So they have some leases available.
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I think they are at the moment, for want of a better phrase,
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let's just say suspended or on ice or whatever.
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But they are certainly identified and available.
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That would be an interesting development because i think the scale that is possible
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and the energy requirements of california are exactly what floating offshore
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wind needs to really get going yeah we know it works we have we've been way beyond
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pilot schemes and the rest of it we have another one in japan that's started up,
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um the resource is greater offshore in the where we require floating wind and
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i think it really it just requires a little push to get past the tipping point,
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and I'm quite excited or interested in California because I think the scale
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of it and the demand there would be,
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would be just that push. So that's one to watch, I think.
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And there are further developments or areas available in North America around
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New England and into Canada, around the East Coast, Newfoundland, that sort of thing.
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And I think also there's other exciting parts of the world for renewables.
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South Africa is the big question. Now, the grid in South Africa,
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unfortunately, is perhaps struggling. They're struggling with conventional power.
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The problem being that also the age-old problem for renewables is that they
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are in the renewable sources or the sources of energy are in remote areas.
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You need a long transmission network to get them to the end user.
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Conventional power networks are engineered in the exact opposite way because,
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the end user is a long way from a centralised power station in coal or gas.
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In the old world so i think south africa has a tremendous potential for wind solar um,
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unfortunately there isn't the grid there and the expense of developing that
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is a major challenge but that's an interesting one australia is is coming on strong um.
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Not so much offshore wind mainly solar at the moment um it is,
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uh the ideal location has a lot of solar resource and not many people wanting
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that space yeah so but then that gets us back into the remote location of course
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the issue we spoke over earlier so I think,
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in a sort of anecdotal way I say to people that just about everybody that we're
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in the world has some form of renewable resource,
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so there are very few places that are completely bereft yeah I think and with
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that in mind we've touched on we haven't labored the point about about political
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situation in certain jurisdictions and.
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If you were to speak personally, would you, and you would have one decision
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that you could make, Miles, if I could start with you, please.
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One decision, if you were Prime Minister for the day, we'll keep it to energy
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policy, if you don't mind.
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Yes, of course. But what practically do you think, based on your years of experience,
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what do you think would be beneficial to, a beneficial change to make?
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We have a very good platform for renewable energy.
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Offshore wind plenty of transferable skills i think i would push in that direction
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there has been a recent report um from the cbi yep they commissioned um and
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that talks about uh the offshore wind industry um,
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if you include supply chains related businesses um it would create 1.1 million jobs,
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1.5 billion in gross value added as a measure of GDP.
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Now, that's 4% of our UK economic output. I think those figures,
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all reports say different things, but let's take that one as an example.
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And let's say the CBI are a fairly neutral organization. So it is they who are presenting this.
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I think those figures, that's quite powerful for me. Thank you.
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Ahad? Well, thank you, Franco, for allowing me to plug in my election campaign.
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But no, it's a very, very good point. And Miles, thank you for sharing that
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because this is coming up a lot now.
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And I guess the major issue we've got is that people don't understand the way
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energy works. So I'd go slightly different on this on my side because Miles
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has done a very good job in covering that aspect.
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For me energy is very very much linked or energy policy is very much linked
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to the future and the current of any country or the future um aspects economic aspects of any country.
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I would like to design a policy, an energy policy, that would benefit the youth
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group, which is the 16 to 28-year-old group,
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that can further contribute in a meaningful way to the country by lowering the
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energy cost burden that they are currently facing in today's world.
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We have seen this going on from Russia, Ukraine back in 2022, all the way up until now.
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Are we, it's particularly the youth, people who can afford to write this crisis
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out are continuing to do so, but there's a big question mark on how long.
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However, the youth can't afford to do so. And there's only, we're facing an
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inflection point right now where things are looking very, very gloomy for this age group.
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And if you want a viable future, a viable economic future for your country,
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you need to be able to support this age group, which is going to take you into
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the next AI generation or whichever way we're headed,
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I would focus on an energy policy that caters to this, brings down that cost
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that the youth is facing.
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That is the primary, I see that as the primary concern. Well,
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thank you very much, Ahad and Miles, for your insights today.
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And thank you to our listeners for your attention. So looking ahead to the next
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two years, clearly innovation and new remedies.
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But it seems let's not forget to utilize the experience and know-how that we've
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already built up in the industry.
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And also let's not underestimate the beauty of referencing a hard copy book.
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And with that, thank you very much for listening. Thank you, Ahad.
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Thank you, Franco and Myles. I'd just like to close off with the quote from
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the father of modern management and Peter Drucker, who says that the only way,
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to predict the future is to create it.
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Thank you, Myles. Thank you very much. I think I shall end by saying, hey, hey.
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Thank you for listening to Risk Matters, the DWF insurance podcast.
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00:36:00,346 --> 00:36:03,387
We hope you join us again soon for future podcasts in our series.
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