Electric Energy Insurance Market Report 2025

The electric energy insurance market size has grown strongly in recent years. It will grow from $3.42 billion in 2024 to $3.7 billion in 2025 at a compound annual growth rate (CAGR) of 8.1%. The growth during the historic period can be attributed to an increasing reliance on stable power infrastructure, a rising frequency of equipment failures, growing demand for operational risk mitigation, heightened regulatory focus on energy reliability, and increased investments in energy generation and transmission assets.

The electric energy insurance market size is expected to see strong growth in the next few years. It will grow to $4.97 billion in 2029 at a compound annual growth rate (CAGR) of 7.7%. In the forecast period, growth is expected to be driven by rising demand for grid resilience solutions, greater complexity in energy supply chains, expanded adoption of smart grid technologies, stricter regulatory compliance requirements, and increased awareness of financial risk protection in energy operations. Key trends anticipated include advancements in data-driven risk assessment models, innovations in climate risk underwriting tools, integration of real-time monitoring technologies, progress in predictive analytics for loss prevention, and the use of blockchain for claims transparency.

The growing adoption of renewable energy projects is expected to drive the expansion of the electric energy insurance market. Renewable energy projects involve infrastructure and installations that generate electricity or energy from naturally replenished resources. This growth is fueled by government mandates as many countries implement clean energy targets to address climate change. Electric energy insurance supports these projects by covering operational risks, ensuring financial stability throughout their lifecycles. It reduces revenue uncertainty by protecting against equipment failures and grid disruptions, thereby increasing investor confidence and project viability. For example, according to the International Energy Agency (IEA), a France-based intergovernmental organization, renewable energy capacity additions increased by 50% in 2023, reaching 507 gigawatts compared to 338 gigawatts in 2022. Consequently, the rising uptake of renewable energy projects is boosting the electric energy insurance market.

Leading companies in the electric energy insurance market are focusing on developing advanced solutions such as parametric insurance platforms to improve risk assessment accuracy, speed up claims processing, and provide more customized coverage options. Parametric insurance platforms are digital systems that offer insurance payouts based on predefined triggers - like specific weather events or energy output - allowing fast, automated payments without traditional loss evaluations. For instance, in October 2023, Adaptive Holdings Inc., a US-based climate resiliency firm, launched GridProtect, an AI-powered parametric insurance platform. This platform delivers immediate financial support to businesses affected by power outages caused by climate risks. Utilizing AI and climate data, it offers quick, trigger-based payouts, addressing gaps in conventional insurance models. This innovation aims to strengthen business resilience by minimizing downtime and financial impacts during climate-related power disruptions.

In November 2024, Strategic Risk Solutions Inc., an independent insurance company based in the US, partnered with Paratus Holdings Limited to broaden specialty insurance offerings in the energy sector. This collaboration focuses on enhancing electric energy insurance solutions through innovative risk management and captive insurance strategies. Paratus Holdings Limited is a UK-based specialty insurer specializing in electric energy insurance solutions.

Major players in the electric energy insurance market are Berkshire Hathaway Inc., Allianz SE, AXA S.A., Assicurazioni Generali S.p.A., Munich Reinsurance Company, Liberty Mutual Insurance Company, Tokio Marine HCC, Swiss Reinsurance Company Ltd, Zurich Insurance Group Ltd, Chubb Limited, Sompo International Holdings Ltd, The Travelers Companies Inc., Mapfre S.A., Marsh LLC, QBE Insurance Group, Arch Insurance Group Ltd, Arthur J. Gallagher & Co., Aspen Insurance Holdings Limited, Uib Insurance Brokers (India) Private Limited, and Everen Limited.

North America was the largest region in the electric energy insurance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in electric energy insurance report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the electric energy insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s recommendations and conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.

Electric energy insurance is a specialized form of coverage designed to protect companies engaged in the generation, transmission, and distribution of electric power from financial losses arising from operational risks. This insurance helps ensure financial security and business continuity for organizations involved in electrical operations.

The primary types of electric energy insurance include offshore energy insurance and onshore energy insurance. Offshore energy insurance covers risks and damages related to energy operations and infrastructure located at sea, such as oil rigs and offshore wind farms. This insurance encompasses various coverage types, including property damage, business interruption, liability, equipment breakdown, and cyber coverage. Policies are distributed through multiple channels, such as direct sales, brokers or agents, and online platforms. The insurance applies to transmission and distribution systems, generation facilities, and energy storage systems, serving key end users across residential, commercial, industrial, and utility sectors.

The electric energy insurance market research report is one of a series of new reports that provides electric energy insurance market statistics, including the electric energy insurance industry global market size, regional shares, competitors with the electric energy insurance market share, detailed electric energy insurance market segments, market trends, and opportunities, and any further data you may need to thrive in the electric energy insurance industry. This electric energy insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The electric energy insurance market includes revenues earned by entities through coverage for liability protection for grid failures, insurance against natural disasters affecting power infrastructure, cyber risk insurance for digital energy systems, and business interruption coverage due to power outages or system failures. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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