Management Consulting

A leading renewable energy provider in the Philippines faced significant risks due to its extensive network of physical infrastructure and distribution systems, particularly concerning the impact of catastrophic weather events on its operations. The Philippines experiences an average of 20 storms and typhoons annually, which can lead to millions in losses and disrupt essential public utilities, such as electricity services. The local insurance market offered limited coverage options for the energy transition and distribution sector, prompting the client to seek a more effective risk management solution. To address these challenges, Aon developed a tailored parametric insurance solution specifically designed to mitigate windstorm risks. This involved modeling past catastrophic weather events over a two-year period to create a bespoke windstorm model. The model quantified potential infrastructure and property losses at various pre-agreed levels of maximum sustained wind values, categorized on a scale from one to five based on historical pricing. This approach allowed Aon to establish an appropriate cost for potential damages to the client's network. The parametric solution provided a significant advantage by enabling quicker and more transparent claim settlements. In December 2021, the program was activated following Typhoon Rai, resulting in a claim payment made within 30 days, and notably, within just 10 days of the program's finalization. This swift response not only helped the client recover from the immediate impacts of the storm but also reinforced the importance of adaptive strategies in building resilience against climate change-induced risks.