The Utilities Industry: Power Coverage

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The use of underwriting products to indemnify the utilities industry from key risks is developing rapidly. It currently includes coverage for Forced Outage, which protects the provider from spot market risk and the related income loss, and the development of Weather Risk contracts to provide longer term income stability against abnormal weather seasons.

Risk Solutions International has a highly developed understanding of the utilities industry in Australia and globally. It has created underwriting solutions for power providers across Australia, helping them manage the unique risks which occur in this industry.

Forced Outage

Forced Outage contracts protect the utilities provider in the case of an inability to deliver, which occurs either through an inability to physically supply or through the requirement to deliver under contract where short term spikes in demand arise. Forced Outage contracts are usually short term.

Forced Outage covers may also be arranged for retailers which have exposure to disruption of supply under contract and are seeking to transfer the credit exposure of the generator.

Risk Solutions International is a market leader in developing underwriting solutions for the utilities sector and has placed Forced Outage contracts for power generators across Australia. It is currently negotiating Forced Outage coverage which recognises the long term deductibles required under traditional Business Interruption covers.

Weather Risk Contracts

Weather underwriting contracts smooth revenue by covering the loss of income resulting from mild seasons or the need to address abnormal demands. The contracts may be short term or can extend over several seasons to compensate for abnormalities of one season. Contracts are relevant to both the generating and retail sectors and may be sculpted to match unique risk profiles.

Risk Solutions International has been instrumental in developing Weather Risk contracts for the Australian power industry.

Risk Solutions International sources capital for Forced Outage and Weather Risk in Australia, Europe and the United States.
Only underwriters with a S&P rating of A or internationally accepted equivalent are used.