New Zealand's renewable energy sector continues to evolve against a backdrop of shifting insurance dynamics, natural catastrophe exposure and a more disciplined underwriting approach. 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 New Zealand.
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 technology-specific risks are concerned.
Key themes explored in this update
Market softening and capital resilience
After a prolonged hard market cycle spanning five to seven years, the past 12–15 months have shown clear signs of softening. Insurers are now benefiting from improved underwriting profitability, stronger investment returns and a more disciplined approach creating a more favourable environment for insurance buyers. Solvency, liquidity and profitability positions among most global insurers remain strong overall, with the outlook remaining stable into 2026.
Natural catastrophe risk remains front of mind
Despite improved global insured catastrophe loss levels in 2025 (estimated at USD 108 billion, a 24% reduction from 2024), the frequency and severity of catastrophe events continue to challenge underwriting assumptions. For New Zealand specifically, insurers remain alert to flood, earthquake, volcanic, and secondary-peril exposures, all of which have direct implications for renewable energy assets across the country.
Renewable sector appetite is improving - selectively
Overall capacity for renewable projects is increasing as insurers deepen their understanding of technological and environmental risks, look to grow their green footprint and support the energy transition. That said, outcomes continue to vary significantly depending on project type, location, and the strength of risk mitigation measures in place.
Technology-specific dynamics are diverging:
The New Zealand market report provides a detailed analysis across the following renewable technologies:
Hydro – Conditions have improved for established operators between 2022–2025, with returning capacity driving competition.
Geothermal – Operational plants in proven fields such as the Taupō Volcanic Zone are broadly well-supported.
Solar- Solar risks remain highly case-specific, with natural catastrophe exposure a key differentiator.
Battery Energy Storage Systems (BESS) – Insurer confidence is growing as the sector matures
Onshore wind – Stabilising after several challenging years driven by weather events, mechanical breakdown losses, inflation and supply chain delays.
Emerging technologies – Green hydrogen, waste to energy, biofuels and similar technologies continue to be assessed conservatively on a case-by-case basis.
What this means for developers and investors
The current environment presents a 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 the next 12–18 months, provided no significant market-moving events occur. A well-structured insurance marketing 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. 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 on the basis of the content in this publication.