The renewable energy insurance market is softening, with most placements oversubscribed and competition driving down rates, according to a Willis report.

“Against a backdrop of strong sector performance, many insurers are looking to diversify their portfolio by broadening their participation in renewable energy,” the broker’s Energy Market Review says.

“The headline trend for renewable energy property damage insurance market: softening.”

However, strong engineering insights are key to securing optimal renewal terms, and underwriters are sensitive to the sector’s limited loss history and fast-changing technology.

Natural catastrophe exposure and equipment complexity are trends to watch, and insurers are examining recovery timelines, contingency planning and alignment of procurement, contracts and insurance structures.

In Australia, insurers remain “supportive but highly selective”, Willis says.

Exposure to hail, wind, bushfire and flood is a key price driver, as are claims from equipment failure and design defects.

Willis renewable energy Pacific leader John Rae says underwriters are sensitive to project location and technology type and are exercising caution despite the soft conditions.

“Challenges related to transmission infrastructure, supply chains and the integration of variable renewable energy are becoming increasingly prominent,” he said.

“Insurer appetite remains present. However, capacity deployment and pricing are increasingly influenced by factors such as project location, technology type and overall risk quality.

“The 2026 renewable energy insurance market is competitive for high-quality risks but remains challenging for more complex exposures.”

In late 2025, renewables supplied more than half of Australia’s electricity market over a full quarter for the first time, driven by rooftop solar, wind and more battery storage.

But Willis says large-scale project investment remains uneven due to rising construction and financing costs, grid constraints and planning delays.

“This is not a simple buyers’ market. Beneath easing rates lies a technically demanding underwriting environment. Insurers remain highly sensitive to evolving risk exposures, particularly natural catastrophes, asset scale and increasing technological complexity,” the review says.

“The next phase of underwriting competition will be defined less by price alone and more by the quality of information, analytics and long-term risk management strategies ... Success will increasingly depend on execution: managing complexity, anticipating systemic risks, and aligning engineering, finance and insurance strategies.”

See the report here.