Energy Transition Accelerates, Reshaping Risk and Capacity

Swiss Re's report, Market perspectives: exploring the state of play in the energy transition, examines how the accelerating global energy transition is reshaping renewable energy markets and the (re)insurance landscape.  The report outlines investment trends, capacity growth, premium projections, evolving insurance structures, and claims developments linked to renewable and low-carbon technologies. 

The report states that the global energy transition continues to draw sustained investment into green infrastructure and technologies, while the traditional oil and gas sector undergoes structural change. According to Swiss Re, this shift presents both opportunities and complex challenges for (re)insurers, who must combine capital provision with technical underwriting expertise, risk knowledge, and an understanding of exposure and accumulation dynamics. 

Capacity and premium projections highlight significant growth through 2030. Per the report, renewable energy capacity is projected to increase from 4.4 terawatts (TW) in 2024 to 8.5 TW by 2030, reflecting an 11 percent compound annual growth rate globally. According to Swiss Re Institute estimates cited in the report, renewable energy could generate up to $26 billion in premiums in underwriting year 2030, with wind contributing approximately $9 billion and solar installations expected to account for 55 percent of total renewable installations by 2030. 

Regional dynamics vary considerably. According to the report, Europe and Asia-Pacific are expected to represent the largest shares of projected premiums by 2030, at 31 percent and 28 percent respectively, followed by North America at 26 percent. Europe's projected premiums could reach up to $8.3 billion, driven primarily by wind, while North America is expected to contribute up to $6.9 billion, largely from the United States. Asia-Pacific premiums are projected at up to $7.4 billion, with China accounting for a significant portion of regional totals. 

Selected growth markets also feature prominently. Per Swiss Re, China aims to reduce CO₂ emissions per unit of gross domestic product by more than 65 percent by 2030 and increase the share of non-fossil fuels in its energy mix to 25 percent. India's renewable energy capacity has expanded significantly in recent years, with solar representing the majority of new capacity additions, and public policy targets supporting further non-fossil capacity growth. 

Investment flows underpin these projections. According to the report, global investments in the energy transition, mitigation, and adaptation are projected to exceed $80 trillion by 2040, based on Swiss Re projections drawing on International Energy Agency data. A subset focused specifically on renewable electricity generation attracted $2.2 trillion in 2024 and is expected to attract a cumulative $36 trillion by 2040. 

As renewable portfolios mature, insurance structures are expected to evolve. Swiss Re said that greater technology standardization, predictable outputs, and accumulated asset values will make the market increasingly suitable for standalone treaty-based structures, while facultative capacity will remain relevant for larger or less proven risks. The report notes that the construction share of renewable portfolios is expected to decrease over time, potentially stabilizing at 5–10 percent as more assets move into operational phases. 

The report also introduces a heat map framework to illustrate how exposures are distributed across "cold," "medium," and "hot" risk zones. According to Swiss Re, these categories reflect differences in technological maturity, claims experience, geographic volatility, and accumulation potential. Continuous reassessment is described as critical as the risk landscape shifts over time. 

From a claims perspective, the report highlights both cross-asset vulnerabilities and technology-specific drivers. Per the report, wind assets are exposed to mechanical breakdowns and component failures, solar installations face fire- and storm-related losses, and battery energy storage systems are associated with thermal runaway and containment issues. Design, execution, operational practices, and human factors are also identified as contributors to loss experience. 

The report concludes that renewable energy cannot be treated as a fully standardized risk class. According to Swiss Re, sustainable portfolio development will depend on close coordination between underwriting and claims functions, supported by ongoing data analysis and technical expertise as the energy transition continues to reshape global insurance markets.