Pre-disaster insurance market is growing: Napiorkowski

MOMENTUM is building for insurance as a driver of climate finance, with technology performance insurance gaining ground as a pre-disaster solution, according to Ariel Green’s managing director, Jan Napiorkowski.

Ariel Green, a division of re/insurer Ariel Re, provides investment-grade technology performance insurance (TPI) to ensure clean energy projects secure financing at competitive rates to facilitate their construction and derisk their operation.

This role has received a boost, Napiorkowski says in an interview with Insurance Day, from the fourth report of the Independent High-Level Expert Group on Climate Finance, which was published last November. The report — Delivering an integrated climate finance agenda in support of the Baku to Belém Roadmap to 1.3T — is full of references to insurance.

“The fourth report is a fantastic next stage in the evolution of climate finance because it shows that insurance is a critical element,” Napiorkowski says.

“And it doesn’t associate insurers only with risk transfer or post-disaster relief but also acknowledges it as a form of pre-disaster contingent capital funding,” he adds.

Ariel Green’s mission, therefore, is to increase awareness of new insurance products that support climate finance by “spreading the word” about TPIs. “TPI is pre-disaster contingent capital that enables the funding of technologies designed to mitigate climate change,” Napiorkowski says.

Supply creates demand

Ariel Green’s TPI deploys capital to the clean energy industry through customised long-term and non-cancellable risk management solutions, and supports energy storage, waste to energy, fuel cell, electrolysers or solar projects by backstopping supplier warranties or guaranteeing project production levels. Ariel Green says it brings Ariel Re’s re/insurance and Lloyd’s underwriting expertise and collaborative approach to developing insurance products that enable clean energy projects to “secure financing, get built and begin operations”.

‘Many financial institutions are getting into renewable energy projects, but most of them still don’t know of the existence of technology performance insurance’

Napiorkowski says the TPI market is growing thanks to the somewhat unusual situation of “supply creating demand” and Ariel Green has been able to grow its consortium members to 11, by adding Tokio Marine HCC and GIC Syndicate from January 1. Ariel Green has received “many more inquiries”, he adds, since Munich Re stepped out of the TPI market (for bioconversion and waste-to-energy projects) last year. 

The absence of the German re/insurer is a blow to TPI competition, Napiorkowski admits, because brokers are “more comfortable when there are multiple markets”, but Ariel Green has nevertheless been able to increase the total notional risk limit of the consortium from $150m to $222m in the past 12 months.

That increase is not from having new members, he adds, but reflects the “increase in appetite” from the consortium. “Having a solid panel of 11 markets is very good for diluting risk because we have a very uncorrelated book of different types of policies for different underlying technologies,” Napiorkowski says. The consortium is there for the long term, he stresses, and able to shoulder losses that no single company would want to try and bear alone.

TPI and clean energy

Ariel Re caters to the full gamut of investors in renewable energy projects, from banks to private equity companies, who understand that the growth in clean energy technologies relies on derisking assets, Napiorkowski says.

One of these is Clairvest Group, the Canadian private equity management firm. Ariel Re insures the contractual performance guarantees of NovaSource Power Services, which Clairvest acquired with NovaSource in 2020 from SunPower Corporation.

At the end of last year, Ariel Green announced it had provided insurance coverage for Elite Solar, for its solar module performance warranty for up to 30 years.

Ariel Green’s TPI provides financial protection to buyers even in the unlikely event of a manufacturer default — which means unexpected underperformance or defects are still covered over the lifetime of the equipment, even after a supplier bankruptcy.

He explains: “Financial institutions know that equipment suppliers with long-term performance guarantees must build up significant reserves on their balance sheets to be able to fulfil their obligations under their warranties.

“Auditors require them to build up those reserves and insurance is a very efficient way of releasing some of the reserves so that there is cash for operations. They’re paying the insurer a fraction of their reserves, but in return they’re getting a policy limit that is bigger than their reserves in the event of a product recall or product defect.”

In addition to balance sheet relief, TPI enables a credit enhancement of the manufacturer’s warranty. TPI is not a credit insurance policy, Napiorkowski stresses, and does not directly insure against manufacturer insolvency. However, because the coverage is tied to the equipment achieving specified performance parameters — regardless of whether the manufacturer remains in operation — it can indirectly mitigate insolvency risk by preserving the ability to recover losses and maintain the value of the underlying warranty obligations.

TPI does not cover physical damage to equipment, such as hail landing on solar panels, he continues, and is instead focused on a project’s ability to generate electricity from renewable energy sources. Equipment manufacturers are constantly working on weather resilience, he says, such as trackers that make solar panels tilt vertically to avoid the path of hailstones. TPI does cover business interruption, but not as a consequence of physical damage.

“When we insure a solar project, we recognise that equipment failures over a 30-year operating life are inevitable. The purpose of TPI coverage is to ensure the project can repair or replace underperforming components and continue delivering its guaranteed output, rather than face prolonged shutdowns,” Napiorkowski says.

Politically agnostic

Ariel Green said that partnering with trusted solar manufacturers like Elite Solar aligns with its mission to expand its solar module coverage in the US. With climate policy in the US facing pushback and uncertainty under the current administration, TPI can provide long-term stability to project developers and owners that will outlast any single administration.

“We’re completely agnostic about politics, but there was an urgency to proceed with projects and secure tax credits before the One Big Beautiful Bill Act,” Napiorkowski says.

Signed in July 2025, the bill is a major legislative package affecting 2026 taxes and spending. Although it does not favour fully renewable energy technology, there is some support for “semi-renewable” types, Napiorkowski adds. These include, for example, fuel cells and electrolysers.

The bill has encouraged domestic US manufacturing, he continues. “We’ve closed two policies that cover US solar manufacturers, which we hadn’t seen in over a decade because all the manufacturing was happening in Asia, not the US,” he adds.

Conversely, tariffs on imported products have led foreign manufacturers to look for — and find — other markets. “I’m not saying this is a good thing for the domestic US market, because pricing will be much higher there and we have to see how the quality plays out over time,” he says.

Asia remains the centre of renewable energy technology — China and India are the two biggest for solar and battery storage, he says — while European investment in their products has “picked up significantly”.

Ariel Green has been “active” in 30 countries and provided coverage in 15 of them. Given the long-term nature of TPI coverage, no company can predict government policy changes, Napiorkowski stresses.

He explains: “For example, we’ve been supporting the South Korean fuel cell market for a good eight years, but investments decreased last year following 18 months of political instability there. This is slowly turning around and in Q4, and now in Q1, there has been a pickup again in funding these projects.”

On the global stage, however, the link between insurance and renewable energy is growing stronger. The UN climate talks in Azerbaijan in 2024 — COP29 — was the “breakthrough” cop for re/insurers, Napiorkowski says, and COP30 in Brazil last year proved that insurance is moving “systematically upstream into the investment process”.

He concludes: “Many financial institutions are getting into renewable energy projects, but most of them still don’t know of the existence of TPI, and so we need to create more awareness that bankability and insurability go hand in hand, which together will help drive further investment into clean energy.”