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8 February 2011 | Reinsurance
First guarantee insurance for wind power plants
Munich Re is insuring the guarantees which Fuhrländer, a German builder of wind-power plants, is giving its customers. This is the world's first insurance of this kind and part of a range of innovative covers that Munich Re is using to underwrite risks in the renewable energies sector. By doing this, Munich Re is facilitating business for both vendors and investors and paving the way for future technologies to enter the market.
The manufacturer Fuhrländer gives buyers of its up to 2.5-Megawatt wind turbines a technical guarantee of five years in conjunction with corresponding service contracts. Munich Re is covering these guarantees and assuming the associated financial risk. This makes it easier for the manufacturer to conduct business and allows it to focus its resources on expanding its position in a market that is still growing at above-average rates throughout the world. At the same time, such insurance is attractive for buyers and investors, as it enables Fuhrländer to offer its customers greater security, planability and creditworthiness at banks.
"This investment security underscores the reliability of our technology and is a token of our true customer orientation", declared Joachim Fuhrländer, chairman of the board of management of the international Fuhrländer Group. Before the agreement was signed, Munich Re engineers had conducted an indepth review of the development, manufacturing and logistics processes.
Thomas Blunck, member of Munich Re’s Board of Management: "We are very pleased that, in Fuhrländer, we have been able to win the first customer for innovative covers of this type in the windenergy sector. Munich Re is thus again the pioneering force in the market, after having also been the first to offer performance guarantee covers for photovoltaic products." In order to realise this non-cancellable cover, Munich Re brought in one of its specialty primary insurers.
In recent years, the company has built up considerable expertise in the renewable energies sector. With this know-how, Munich Re is able to write special renewable-energy risks and thus, in many cases, to play a crucial role in making investment in future technologies possible. The new covers fit perfectly into the course chosen by the company, which has declared climate change to be a strategic issue. "We see climate change not just as risk in the form of increasingly frequent and severe natural catastrophes, but also as a great opportunity, as it will lead to a changeover of our power sector to renewable energies", said Blunck. "This is as area where the insurance industry can make a substantial contribution."
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Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2009, the Group – which pursues an integrated business model consisting of insurance and reinsurance – achieved a profit of €2.56bn on premium income of around €41bn. It operates in all lines of insurance, with around 47,000 employees throughout the world. With premium income of around €25bn from reinsurance alone, it is one of the world's leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. The primary insurance operations are mainly concentrated in the ERGO Insurance Group. With premium income of over €17bn, ERGO is one of the largest insurance groups in Germany and Europe. 40 million clients in over 30 countries place their trust in the services and security it provides. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments amounting to €182bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
With 30 years of experience in the wind-energy sector, Fuhrländer AG is a pioneer of renewable energies. Its 700 employees plan and build wind farms all over the world, from North America to South Africa to Asia. To complement its two German production plants in Liebenscheid and Waigandshain, the company is currently building plants in China, Vietnam, the USA and the Ukraine. With its flexible corporate structure, Fuhrländer has played a major role in opening the markets in many countries to the use of wind energy – currently in Vietnam and in various countries of eastern Europe.
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This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.
Munich, 8 February 2011
Aktiengesellschaft in München
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