Tokio Marine GX warns of growing insurance “protection gap” threatening green transition

Tokio Marine GX (TMGX), a specialist insurer evolving from renewables underwriter GCube Insurance, has issued a stark warning about a growing “protection gap” in the insurance market that threatens the success of the global green transition.

Drawing on more than 25 years of underwriting experience and data, the firm’s latest market insights report highlights how climate-related losses, supply chain disruptions, and emerging technologies are reshaping the energy transition in ways that traditional insurance products are struggling to address.

The report, It’s Not Easy Writing Green: How can insurers step up to support a resilient green transition?, outlines how the shift to cleaner energy has become a more complex and interconnected challenge.

Tokio Marine GX notes that climate risks are now appearing in regions previously considered low-risk, supply chains remain fragile, and power grids are under increasing pressure as new capacity comes online.

At the same time, the development of larger renewable projects, co-location models, and emerging technologies such as hydrogen and carbon capture introduces new exposures that require specialist understanding. While these developments are positive for the energy transition, Tokio Marine GX emphasises that insurers must adapt to ensure projects receive coverage that reflects the full scope of their risks.

Without this expertise, the mismatch between the needs of those driving the green transition and the products currently available—what Tokio Marine GX terms the “protection gap”—continues to widen.

Fraser McLachlan, Chairman of Tokio Marine GX, commented: “The green transition is one of the defining undertakings of our time, and insurance has a central role to play in helping it succeed. But it is not enough to simply provide capacity. What is needed is the expertise and experience, insurance product innovation and global collaboration to ensure that risk is shared fairly and that projects have the resilience to move forward. Closing the protection gap is how our industry can make a real difference.”

Tokio Marine GX identifies several areas where insurers must step up to strengthen their support. Greater investment in data and analytics is crucial for building a reliable understanding of risk as green technologies expand into new and existing markets.

Open collaboration across insurers, brokers, and lenders can improve transparency and make risk management more effective, while targeted product innovation is needed to address coverage gaps in areas such as tax credit exposures and carbon capture projects.

Oliver Litterick, Head of Renewables at Tokio Marine GX, added: “In the global clean energy market, we’re seeing a perfect storm of challenges, from geopolitical shifts to climate volatility and supply chain fragility. If insurers want to be effective stewards of the green transition, they need to move beyond reactive coverage and build long-term capacity strategies that reflect the complexity of today’s risks. That’s what sustainable support looks like.”

By combining these approaches, Tokio Marine GX argues that the insurance market can reduce volatility and create the stable conditions essential for the green transition.

The company is expanding its product offerings beyond renewables into multiple sectors of the energy transition and has committed up to $500 million in capacity for single risks.