Your insurance company just made a bet on hydrogen, battery storage, and solar farms. Aon announced a framework that could reshape how insurers approach the clean energy boom—and potentially lower costs for renewable projects you depend on.
The stakes? $9 billion in premiums by 2030.
On November 17, 2025, Aon plc launched its Low-Carbon Transition Framework for Insurers, a seven-step process designed to help reinsurers capture explosive growth in energy transition insurance. While most coverage focuses on auto and health insurance, this framework targets the infrastructure powering your electric grid, charging stations, and renewable energy sources.
$9B Market Emerges: What Energy Transition Insurance Covers
Energy transition insurance protects projects that didn’t exist a decade ago. Think massive battery storage facilities, green hydrogen plants, offshore wind farms, and solar installations replacing coal power.
These projects face unique risks:
- Technology failure in unproven systems like hydrogen fuel cells or next-generation batteries that could cost millions.
- Regulatory shifts. Policy changes can strand investments overnight.
- Supply chain disruptions for specialized components (lithium, rare earth minerals, turbine parts).
- Performance guarantees where solar or wind output falls short of projections, triggering claims.
Global premiums for these specialized policies will exceed $9 billion by 2030, according to Aon’s projections. That’s not a small niche—it’s a market larger than many regional property insurance sectors.
How Aon’s Framework Changes the Insurance Game
Most insurers lack the technical expertise to underwrite a floating offshore wind farm or assess failure rates for experimental battery chemistry. Aon’s framework solves this through four pillars:
| Framework Component | What It Does |
|---|---|
| Strategy Alignment | Matches insurer appetite with emerging tech (hydrogen vs. solar vs. wind) |
| Risk Evaluation | Embeds transition risk into enterprise-wide decision-making |
| Innovation Support | Develops new products for technologies like carbon capture or grid storage |
| Talent Development | Trains underwriters on clean energy tech and climate science |
Wouter Bosschaart, Aon’s global climate and net-zero transition leader for reinsurers, explained: “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.”
The framework uses performance analytics to benchmark portfolios against competitors. An insurer covering only mature solar tech might miss out on higher-margin opportunities in green hydrogen or floating wind, where competition remains limited.
Why This Affects Your Energy Bills and Climate Goals
Insurance availability directly impacts project financing. A wind farm developer can’t secure construction loans without coverage for turbine failure, weather damage, or performance shortfalls.
When insurers refuse to cover experimental technologies, projects stall. This framework aims to increase insurer participation, which could:
- Lower borrowing costs for renewable projects (insurance = bankability = cheaper loans).
- Accelerate deployment of clean energy by making more projects financially viable.
- Reduce consumer energy costs as renewable capacity expands and competes with fossil fuels.
- Create market competition among insurers, potentially driving down premium costs for developers (savings passed to ratepayers).
Bosschaart noted the ripple effect: “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.”
Real-World Example: Battery Storage Insurance
California requires massive battery storage to balance solar generation with evening demand. But lithium-ion battery fires have triggered $50 million+ losses at individual facilities.
Insurers without energy storage expertise either refuse coverage or charge premiums so high projects become uneconomical. Aon’s framework helps insurers assess these risks accurately—potentially unlocking billions in storage projects that stabilize your electric grid during heat waves.
Who Benefits Most from Energy Transition Insurance Growth
Three groups stand to gain:
Reinsurers and primary insurers who adopt data-driven underwriting for clean energy capture market share in a sector growing faster than traditional property/casualty lines. Bosschaart emphasized: “(Re)insurers that adopt data-driven insights will be best-positioned to capture market share and deliver sustainable, profitable growth through the energy transition.”
Project developers and energy companies get access to affordable coverage that makes renewable projects financially viable, especially for experimental technologies like hydrogen or carbon capture.
Consumers and communities benefit from lower energy costs as renewable capacity expands, plus improved climate resilience through faster transition away from fossil fuels.
The Missing Piece: Talent and Technical Expertise
Insurance traditionally relies on decades of claims data. A 100-year-old building? Easy to price. A green hydrogen plant using experimental electrolyzers? No historical loss data exists.
Aon’s framework addresses this gap through talent development—training underwriters in:
- Climate science and weather pattern shifts affecting renewable output
- Engineering fundamentals for wind turbines, solar panels, battery chemistry
- Policy and regulatory trends (renewable energy credits, carbon pricing, grid interconnection rules)
- Supply chain vulnerabilities for critical minerals and components
Without this expertise, insurers either avoid the sector entirely or misprice risks—both bad outcomes. One leads to project cancellations, the other to unexpected losses that drive premium spikes.
What Happens Next: Timeline for Insurer Adoption
Aon released the framework immediately on November 17, 2025. Insurers can adopt it now, but meaningful market impact depends on implementation speed.
Key factors to watch:
2026-2027: Early adopters build technical teams and launch new energy transition products. Expect specialty insurers (those already covering renewables) to move first.
2027-2029: Mainstream commercial insurers enter the market as loss data accumulates and pricing models improve. Competition should drive premium costs down.
2030: The $9 billion premium target becomes reality—but only if insurers commit resources now.
Delays could bottleneck the clean energy transition. Project developers need coverage commitments 2-3 years before construction starts to secure financing.
Frequently Asked Questions
What is Aon’s Low-Carbon Transition Framework?
It’s a seven-step process helping insurers and reinsurers develop products for clean energy projects like hydrogen plants, battery storage, and renewables. The framework focuses on strategy, risk evaluation, innovation, and talent development to help insurers capture the $9 billion+ energy transition insurance market by 2030.
How does this framework affect my energy costs?
Insurance availability determines which renewable projects get built. More insurer participation means more clean energy projects receive financing, increasing supply and potentially lowering your electricity rates as renewable capacity competes with fossil fuels. Projects without insurance don’t get funding, period.
Why do renewable energy projects need specialized insurance?
Traditional property insurance doesn’t cover risks unique to clean energy: technology failures in experimental systems, regulatory changes, supply chain issues for rare components, and performance guarantees where output falls short. A battery fire or turbine blade failure can trigger $50 million+ losses—requiring specialized underwriting expertise.
Which clean energy technologies will insurers cover under this framework?
The framework targets hydrogen production, battery energy storage, offshore and onshore wind farms, utility-scale solar installations, carbon capture systems, and grid infrastructure supporting renewables. It helps insurers assess risks for both mature technologies (solar panels) and experimental ones (green hydrogen electrolyzers).
When will I see benefits from increased energy transition insurance?
Timeline depends on insurer adoption speed. Early adopters (2026-2027) will launch new products first. Mainstream insurers enter 2027-2029 as data improves. By 2030, increased competition should lower insurance costs for projects, accelerating renewable deployment and potentially reducing consumer energy costs within 3-5 years.
Bottom Line: Insurance as Climate Infrastructure
Aon’s framework treats insurance as critical infrastructure for the energy transition—not just financial protection, but an enabler of clean energy deployment.
The $9 billion premium projection signals massive opportunity, but also responsibility. Insurers who develop expertise now will profit from the transition. Those who delay may miss out on the fastest-growing segment in commercial insurance.
For consumers, the stakes are practical: Will renewable energy projects get the insurance backing needed to secure financing? If yes, your electricity increasingly comes from cheaper, cleaner sources. If no, fossil fuel dependence persists longer than necessary.
The framework launched. Now watch which insurers commit resources to energy transition expertise—they’re betting on your clean energy future.