Introduction
Australia’s renewable energy sector continues to evolve against a backdrop of shifting insurance dynamics, natural catastrophe exposure and growing capital discipline. In our latest Power & Energy Market Update, we provide strategic insights into the key forces shaping insurance outcomes for renewable and energy infrastructure projects across Australia.
While broader insurance markets have shown signs of softening after several years of hard market conditions, renewable energy risks remain nuanced. Insurers are increasing their appetite in some areas, yet underwriting scrutiny continues to intensify where natural catastrophe exposure and emerging technologies are concerned.
Key themes explored in this update
Market softening and capital resilience: after a prolonged hard market cycle, insurers are benefiting from improved underwriting profitability and investment returns, creating a more favourable environment for buyers. However, discipline remains firmly in place.
Natural catastrophe risk remains front of mind: despite improved global loss levels in 2025, the frequency and severity of catastrophe events continue to challenge underwriting assumptions and portfolio management strategies.
Renewable sector appetite is improving selectively: overall capacity for renewable projects is increasing as insurers deepen their understanding of technological and environmental risks. That said, outcomes continue to vary significantly depending on project quality, location and risk mitigation measures.
Technology-specific dynamics are diverging:
Solar risks remain highly case-specific, with natural catastrophe exposure a key differentiator.
Battery Energy Storage Systems (BESS) are seeing improving insurer confidence as the sector matures.
Onshore wind is stabilising after several challenging years.
Emerging technologies such as green hydrogen continue to be assessed conservatively on a case-by-case basis.
What this means for developers and investors
The current environment presents genuine opportunity, but only for well-prepared risks. Projects supported by strong design, robust weather monitoring, credible OEM partners and disciplined risk management are best positioned to benefit from improving market conditions and increased competition among insurers.
Looking ahead, we expect broadly favourable conditions to continue through 2026, provided no significant market-moving events occur. A well-structured insurance strategy will remain critical to achieving optimal outcomes.
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The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. The contents of this publication are not intended as a legal commentary or advice and should not be relied on in that way. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action based on the content in this publication.
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