Initiatives to Reduce Environmental Burden and Services for the Offshore Wind Power Sector

Efforts to Reduce the Environmental Impact throughout the Value Chain

From FY2021, we announced a greenhouse gas emission reduction policy, which aims to achieve net zero by 2050. We are working toward a goal of 60% reduction in 2030 (compared to 2017) by promoting measures such as switching to renewable energy as a source of over 70% of electricity used by the Group.
We committed to Science Based Targets (SBT), a global initiative that supports achieving the Paris Agreement’s 1.5°C goal. We also participated in financial SBT expert advisory group and are involved in creating a framework as the only Japanese insurance group. We are also actively engaged in constructive dialogue with investees and business partners on the theme of ESG, and are working to reduce the environmental impact throughout the value chain.

"ONE SOMPO WIND Service" for offshore wind power operators

Since July 2020, Sompo Japan and SOMPO Risk Management have been selling "ONE SOMPO WIND Service" to offshore wind power operators, which provide risk assessment from construction work through business operation and comprehensive insurance covering risks.
By promoting the spread of offshore wind power projects with very little carbon dioxide emissions, we will contribute to the realization of sustainable society.

[Risk Assessment]
SOMPO risk management has developed a risk assessment model in collaboration with the University of Tokyo to assess the inherent risks of offshore wind power in Japan. This risk assessment model combines the latest research results from the University of Tokyo and data collected by research institutes in Japan and overseas with risk analysis technology developed as an insurance company, thus enabling risk assessment specific to offshore wind power in Japan, which has been difficult to evaluate.

[Comprehensive Insurance]
Sompo Japan comprehensively compensates for the risks surrounding domestic offshore wind power operators.
This insurance covers the risks associated with the construction of offshore wind power generation facilities and the operation of the business after completion, and compensates for the repair costs of facilities due to accidents or breakdowns during construction or operation of the business.

["ONE SOMPO WIND Service" illusut]

[Future plan]
We will continue to develop and provide products and services with the aim of providing the highest quality services that contribute to safety, security and health to stakeholders involved in the offshore wind power business.

Insurance Products that Promote Renewable Energy

With Japan’s Renewable Electric Energy Feed-In-Tariff system starting to operate in July 2012, and a growing number of companies and other entities have been participating in renewable energy projects. For entrants into the renewable energy electricity market, we offer insurance to cover emergencies as well as risk analysis services for the project facilities’ site environments.

●Fire Insurance for Wind Power Companies: Special Clause Covers Costs to Prevent Recurrence of Accidents

Sompo Japan offers fire insurance for wind power companies with a rider that covers costs for actions to prevent accidents from recurring. For wind power companies, if accidents occur, the losses can tend to be expensive, and similar accidents are likely to recur. Thus, it is important for the management of wind power companies to identify the causes of an accident, and take measures to prevent recurrence. To address these issues, Sompo Risk Management is supporting the stable management of wind power companies by developing this rider, which incorporates our accident recurrence prevention knowhow, to provide insurance and risk management services.

●Property and Casualty Insurance for Offshore Wind Power Companies

For offshore wind power projects, insurance coverage was arranged separately for the construction process and project operations after completion. But from the perspective of preventing gaps in insurance coverage and improving the efficiency of project management, many businesses were asking for unified insurance. In response, Sompo Japan now offers insurance in the event of the occurrence of damage to offshore wind power facilities due to unforeseen or sudden accidents during facility construction and operations.

●Risk Diagnosis Services for Renewable Energy

Since September 2012, Sompo Risk Management has been offering risk diagnosis services for renewable energy. These services make use of knowledge accumulated through our risk analysis services relating to natural disasters such as earthquakes, flooding, and lightning strikes, as well as the development of risk maps. The services aim for a stable electricity supply from renewable energy, which has a low environmental impact, and involve analysis and diagnosis of site risks for renewable energy facilities such as photovoltaic and wind power electricity generation facilities.

●Wind Power Generation Business Risk Assessment Service

Sompo Risk Management analyzes and grades various risks during the operation of both land-based and offshore wind power operations at the phase of development, construction and operation. These services are aimed at reducing the potential risks of projects by encouraging the operators to take steps to reduce risks based on assessments, thereby reducing the amount of risk exposure before starting the projects.

●Risk Assessment Model for Wind Power Facilities

Sompo Risk Managemen has developed a risk assessment model dedicated for wind power facilities. Identifying the risk of electrical or mechanical breakdowns and accidents due to natural disasters and other factors using the risk assessment model enables us to quantitatively ascertain the risk of wind power projects and calculate the appropriate insurance premiums. They will further develop their services that use the risk assessment model and contribute to the spread of wind power, and support the formulation of business plans.

●Financial Impact Analysis Service for Wind Power Projects

Sompo Risk Management offers a service for wind power projects that evaluates the probability of losses occurring due to accidents from natural disasters and typical breakdowns, as well as losses due to a halt of operations when a breakdown or accident occurs, and then quantitatively evaluates the impacts of identified risks on the cash flows of business plans.

●Second Opinion Service for Wind Power Companies

Sompo Japan and Sompo Risk Management started offering a second opinion service in November 2016 for wind power companies that have purchased a fire insurance policy from Sompo Japan. Through this service, they offer advice on how to handle various types of trouble that could occur in operations and maintenance. When consulted on wind power operations and maintenance, Sompo Risk Management compiles advice from wind power maintenance companies, experienced engineers and experts, and then provides it to the client.

●Insurance Due Diligence Service for Wind Power Companies

Sompo Risk Management offers insurance design support services, with comprehensive risk assessment in consideration of the risk reduction effect by preventive maintenance efforts on operation and maintenance (O & M) of wind power companies, before arranging insurance for wind power facilities.

First in the industry to provide compensation for loss of personal power consumption in the event of a solar power generation system accident.

To promote the spread of energy-saving and renewable energy homes aimed at creating a carbon-free society, we became the first in the industry to start offering indemnity for loss of personal power consumption in the event of accidental damage to solar power generation systems.

The feed-in tariff for solar power generation has been declining year by year, and there is a growing trend for customers to consume the electricity they generate for their own homes instead of selling it (“personal consumption”). In addition, the recent sharp rise in electricity prices has also led to a surge in electricity costs that customers must pay when their home solar power generation system is damaged by accident and is unable to generate electricity for personal consumption.
Meanwhile, in August 2018, in order to promote the spread of next-generation energy-efficient homes such as smart houses and ZEH^* (Net Zero Energy House), Sompo Japan Insurance Inc. became the first to launch the IoT Home Expense Electricity Sales and Cyber Risk Rider to indemnify expenses incurred from the manifestation of cyber risks and loss of electricity sales income in the event of accidental damage to solar power generation systems. However, the policy only covered the customer's loss of electricity sales income in the event of damage to the home solar power generation system, thus failing to provide sufficient indemnity to customers who had switched from electricity sales to personal consumption.

In light of this situation, we expanded the indemnity coverage of this rider to include the electricity costs incurred due to the customer's inability to generate electricity for personal consumption. As a result, customers are now eligible for indemnity whether they sell electricity or use it for personal consumption.

• Houses designed to achieve a net zero annual primary energy consumption by achieving substantial energy savings while maintaining the quality of the indoor environment, and by introducing renewable energy sources.