Munich Re insuring battery performance; stationary first, EVs in second phase
Date: Mar 12, 2019
Munich Re is the world’s first insurer to offer a product that covers battery performance. The product allows manufacturers in the booming battery market to offer long-term performance guarantees—whose value is backed by the insurance coverage.
The new coverage allows battery manufacturers to insure their customer warranties. For example, if the repair or replacement costs of defective or weak battery modules exceed a predetermined amount, the insurance then covers the rest. Manufacturers can thus unburden their balance sheets.
It will also become easier to obtain project financing, because the maximum costs for any warranties are capped by the insurance cover. This constitutes a distinguishing feature for investors. The product makes it significantly easier for manufacturers to ramp up deployment of battery capacities, thus making renewable energy more dependable and widely available.
The coverage can optionally be expanded to protect selected investment projects directly, so that the insurance will pay even if the manufacturer who issued the warranty files for insolvency within the warranty period.
