Aon forecasts energy-transition premiums to top $9bn by 2030 as it launches insurer framework

Aon has launched a Low-Carbon Transition Framework for Insurers, designed to help re/insurers capture accelerating premium growth in the sustainable energy sector, where global premiums are expected to exceed $9bn by 2030.

The framework offers a seven-step structure focused on strategy, evaluation, innovation and talent.

Aon said it provides a practical pathway for profitable growth by aligning underwriting appetite with emerging technologies, embedding transition-risk management, and using analytics to benchmark portfolio performance.

The  re/insurance broking firm said the re/insurance industry can play a central role in enabling the low-carbon transition by providing capital support that increases the viability of clean-energy projects.

The broker’s research projects strong premium growth rates across multiple parts of the energy-transition market:

Battery energy storage systems are forecast to generate more than $1bn in gross written premium by 2027, with around 25 per cent compound annual growth driven by demand for embedded insurance and cyber protection.

Hydrogen-related risks represent a $5bn opportunity by 2027, with at least 10% CAGR across the value chain, from prototype technologies to advanced leak-detection systems.

Renewable power generation could see premiums increase by nearly $3bn globally between 2024 and 2030.

Aon said talent and product innovation would be central to unlocking these opportunities.

Its power, utility and renewables team is developing non-traditional solutions such as parametric weather products and forced-outage cover to support project feasibility and resilience.

The firm pointed to proprietary tools – including its Global Power Premiums data and Transition Performance Index – that allow re/insurers to monitor loss ratios, claims trends and market shifts to maintain technical pricing discipline.

Wouter Bosschaart, global climate and net-zero transition leader for re/insurers at Aon, said the framework would support insurers’ strategic decision-making.

“With energy-transition premiums set to surge, Aon’s Low-Carbon Transition Framework empowers re/insurers to make better business decisions and seize opportunities around this growth,” he said.

Aon said it would continue to expand its climate risk advisory capabilities and climate innovation hub to help clients navigate increasingly complex and interconnected energy-transition risks.

“As the industry develops new products and services that align with this rapidly evolving sector, it will help to drive climate resilience for governments, businesses and communities while delivering enduring value for stakeholders,” Bosschaart added.