Growing investment in green energy presents opportunities and complex challenges for insurers and reinsurers, Swiss Re says.

The industry giant estimates renewable energy could generate premium of up to $US26 billion ($40 billion) by 2030.

Many green energy technologies remain unproven at scale, and markets are experimenting with a range of solutions, according to a report from Swiss Re’s Energy Centre of Competence.

“Risks such as natural catastrophe exposure and serial losses, for example, must be factored in from the outset. Geopolitical changes and supply chains also shape this market – from project approval and financing to the production and cost of components.”

Renewable technology has its own claim drivers, such as mechanical breakdown and component failure in wind power; fire and storm exposure in solar; and thermal runaway and containment issues in battery energy storage systems.

It notes Australia is becoming a global hub for solar energy and battery storage systems, and the latter has recorded fire losses linked to design flaws and inadequate thermal management.

In wind and solar, claims are increasingly tied to extreme weather.

Find the report here.