Posted on 09 Feb 2011
Munich Re is insuring the guarantees which Fuhrländer, a German builder of wind power plants, is giving its customers. This is the world's first insurance of this kind and part of a range of innovative covers that Munich Re is using to underwrite risks in the renewable energies sector. By doing this, Munich Re is facilitating business for both vendors and investors and paving the way for future technologies to enter the market.
The manufacturer Fuhrländer gives buyers of its up to 2.5-Megawatt wind turbines a technical guarantee of five years in conjunction with corresponding service contracts. Munich Re is covering these guarantees and assuming the associated financial risk. This makes it easier for the manufacturer to conduct business and allows it to focus its resources on expanding its position in a market that is still growing at above-average rates throughout the world. At the same time, such insurance is attractive for buyers and investors, as it enables Fuhrländer to offer its customers greater security, planability and creditworthiness at banks.
"This investment security underscores the reliability of our technology and is a token of our true customer orientation", declared Joachim Fuhrländer, chairman of the board of management of the international Fuhrländer Group. Before the agreement was signed, Munich Re engineers had conducted an indepth review of the development, manufacturing and logistics processes.
Thomas Blunck, member of Munich Re’s Board of Management: "We are very pleased that, in Fuhrländer, we have been able to win the first customer for innovative covers of this type in the windenergy sector. Munich Re is thus again the pioneering force in the market, after having also been the first to offer performance guarantee covers for photovoltaic products." In order to realise this non-cancellable cover, Munich Re brought in one of its specialty primary insurers.
In recent years, the company has built up considerable expertise in the renewable energies sector. With this know-how, Munich Re is able to write special renewable-energy risks and thus, in many cases, to play a crucial role in making investment in future technologies possible. The new covers fit perfectly into the course chosen by the company, which has declared climate change to be a strategic issue. "We see climate change not just as risk in the form of increasingly frequent and severe natural catastrophes, but also as a great opportunity, as it will lead to a changeover of our power sector to renewable energies", said Blunck. "This is as area where the insurance industry can make a substantial contribution."