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Andy Cox, Head of Energy Transition
Published 30 October 2023
Hi Andy. Thank you for joining us for this executive interview and a warm welcome to Howden as the organisation joins the Energy Council network! Can you tell our members a little bit about your role and the energy business at Howden?
We’re looking forward to the collaboration, thank you.
Howden is a global insurance group with a strong track record in the energy sector. I’m not an insurance professional but I am convinced by the critical role of the industry in driving the energy transition.
By way of background, I was a KPMG partner for 17 years and have spent over 30 years advising clients in the energy sector. I bring this experience to Howden, where our team works closely with clients to understand the changing risk landscape as they seek to decarbonise. Our focus is on shaping innovative solutions to drive risk transfer and lower the cost of capital.
As Head of Energy Transition within the Climate Risk & Resilience (CRR) team I work closely with my colleagues in the wider energy sector and those in Capital Markets, but with a focus on solutions that target financing pre-final investment decision approval.
The CRR team at Howden aims to embed Climate Risk and Resilience expertise across the insurance value chain, by providing end-to-end climate de risking advisory services, including data and analytics and by using our deep insurance and financial markets expertise to develop innovative risk transfer products. We are proud to be at the forefront of the insurance industry, collaborating with both private and public sector to do more in this space.
How does Howden view the sector at this moment in time and how are you working with industry to innovate and support transition plans?
I see an enormous opportunity ahead for the insurance industry. This is the time for insurance to raise its profile. Insurance is not just about mopping up after climate disasters, it has a meaningful role across the energy transition.
By way of example, we are the first insurance broker member of the Global CCS Institute and we are working on a number of projects to help accelerate the deployment of carbon capture and storage. Last year Howden launched the world’s first insurance product for the Voluntary Carbon Market (VCM). It is designed to give buyers and sellers of high-quality, verified carbon credits greater certainty. This should contribute to growing the VCM to $50bn by 2030 (the number suggested by McKinsey).
Sometimes the role of insurance in advancing the transition and indeed in the energy industry in general is misunderstood and perhaps under appreciated – how does Howden engage strategically with clients here?
This is something we’re passionate about – insurance as a force for good. Without insurance there is no transition. We work with clients to deploy insurance tools to help speed and scale the flow of capital, for example offtaker credit risk insurance in the renewable energy market. But we also provide the advisory piece. We can advise on the current and future legal risks related to climate change as well as the physical risks to business, including those to supply chains. With the transition, if not handled carefully, companies can face the legal consequences of decisions that they take as well as the reputational harm.
As an experienced energy leader what continues to excite you about operating in the industry and what do you see our next phase of growth looking like?
I’m excited by the challenge at the intersection of energy, climate and capital, and now I’m under the insurance spell, the critical role of insurance in all of this. We are witnessing the greatest reallocation of capital in history. With that come new and challenging risks, to which insurance offers the solutions to unlock the necessary capital flows.
At the World Energy Capital Assembly 2023, Howden are hosting a roundtable entitled, ‘Financing the Energy Transition: Pulling Levers to Support the Energy Transition and Lower the Cost of Capital', looking at the role insurance can play in identifying risks around climate technologies and how the strategic use of the insurance markets can help investors and financiers share the risk and in turn, lower the cost of capital.
Howden is a leading global insurance group with employee ownership at its heart. Founded in 1994, it operates in 50 countries across Europe, Africa, Asia, the Middle East, Latin America, the USA, Australia and New Zealand, employing 15,000 people and handling $35bn of premium on behalf of clients.
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