Claims during the project life-cycle Claims can occur at any phase of the project life-cycle, however, the data shows claims tend to occur during the mobilisation, transportation and construction phases of the project as there is a heightened risk during construction activities. As Figure 4 shows, approximately two thirds of claims occur during the construction phase of wind and solar projects. These claims are driven by all perils associated with the marine and inland transit of equipment to site and the construction of the project, testing & commissioning, balance of plant and grid connection activities. The split of claims between construction and operational phases is reflected in insurers’ allocation of premium rating between these stages - construction phase activities attracting the highest premium rating over the project life-cycle. Figure 4: Number of loss split between construction and operational phases*
Internal and external claims perils GCube also analyses claims split between Internal (Machinery / Equipment failures) and External (Contractor / Natural Catastrophe) Perils. Figure 5 illustrates how Internal and External Perils impact wind and solar projects differently. The higher weighting of claims arising from External Perils on solar projects is reflective of their location in more flood prone, hail and/ or wind exposed locations. As a result of this, information requirements relating to asset location and project design specification have increased so that insurers can ensure that terms and conditions reflect the risk accordingly. Conversely, wind projects incur a more balanced spread of claims from Internal and External perils which aligns to the increased exposure to “moving parts” associated with wind turbine equipment driving more Internal claims activity. The evolution of turbine size, especially in Australia, is having a direct impact on this data point and prompting insurers to review Defects Exclusions and Serial Loss Clause coverages.
Figure 5: Internal and external perils driving claims (AUD amount incurred)*
0% 20% 40% 60% 80% 100%
34%
72%
Solar
Wind
External perils Contractor error Flood Transit Lightning Vermin
Internal perils Mechanical breakdown Electrical failure Equipment fire Defective design
Operational
Construction
* Source: GCube
5
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