Aon Benfield announced that it has successfully completed an “insurance placement as part of a UK government energy initiative to install smart meter systems nationwide by 2020 with AIG.
The placement was made on “behalf of global smart meter solution provider EDMI,” said the announcement. It “provides extended warranty cover for around 10 million communications hubs to be installed in homes and small businesses in Scotland and northern England over the next five years.
“The communications hubs are an integral requirement of the smart meter system, allowing the real-time transmission of energy usage data from homes and businesses to energy companies.
“The AIG cover offers the15-year extended warranty protection demanded by the UK government for the devices. The placement proved challenging given that insurers generally limit extended warranty covers to five years.
Kurt Cripps, relationship manager within Aon Benfield’s ReSolutions team, said: “In developing innovative and non-standard insurance covers such as this, Aon Benfield’s strong market relationships and broad access to global insurance and reinsurance capital are hugely important to ensuring a successful transaction. Following an extensive analysis of potential carriers, we identified AIG as being the best-match capacity provider for this customized product.”
Dave Smith, Vice President of Personal Lines within AIG’s Property Casualty division, pointed out that the insurer has a “history of supporting product innovation, and so we were excited to participate in this nationwide initiative and offer EDMI levels of insurance cover that are far broader than the standard market offering. We hope that this product will encourage further innovation in the marketplace.”
The UK government aims for all UK homes and small businesses to be utilizing smart meters by 2020. The initiative demands that energy suppliers will be responsible for replacing over 53 million gas and electricity meters, involving visits to 30 million homes and small businesses.
David Stroud, EDMI Europe Executive Director, noted that the coverage through Aon Benfield and AIG brings the company “one step closer to delivering on the UK government’s plans to have smart meters installed nationwide over the next five years.
“These smart meters are designed to bring significant energy savings to residents and businesses and so we are pleased to have the insurance cover in place that will allow us to begin the manufacturing and distribution of these devices, which will eventually be present in 10 million homes.”
According to forecasts, by 2030 the installation of smart meters will have cost the government £10.9 billion [$17 billion] but will provide £17.1 billion [$26.773 billion] in benefits, resulting in a £6.2 billion [$9.7 billion] net benefit for UK consumers.
Source: Aon Benfield
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