The UK power and utilities industry is currently entering a difficult phase in its history. Risk management is more important than ever before.

The UK power market continues to be volatile, characterised by new market entrants, price volatility, high customer churn and poor profitability in some segments. Opportunities to acquire overseas utilities are growing but such decisions raise the commercial stakes for managers.

Operational failures have the potential to affect millions of people and in the context of a more competitive marketplace, are likely to be more punished by regulators, consumers and other stakeholders.

Many of the wider issues about dwindling reserves, environmental targets, the UK’s energy policy and the role of nuclear and alternative power sources are still in the process of being resolved.

Marsh prides itself on understanding the unique risk management needs associated with the electricity, coal, gas, nuclear, water and green energy industries.

Our knowledge, expertise and strong insurance market relationships are reflected by the fact that, in the UK, we are responsible for placing over 50% of all power premium in the insurance market.

In addition, the power and utilities team are familiar with issues that impact the provision of insurance including new technology, regulatory constraints and environmental and economic considerations. We utilise this knowledge in the design and placement of insurance programmes.

Some of our key services include:

• risk engineering – we provide an assessment of the physical damage and resulting business interruption risks in relation to the operation of a power station, and the establishment of Estimated Maximum Loss (EML) scenarios to assist the client in developing their risk management strategy
• insurance market review – we understand that underwriters’ perceptions of power risks are impacted by broader trends such as global deregulation and the introduction of new technologies
• mergers & acquisitions – our team can work with Marsh’s specialist Private Equity and Mergers & Acquisitions (PEMA) Services Team who focus on the development of risk consulting solutions and products for M&A. Services include human capital, strategy, competition and risk and transaction due diligence to identify deal risk issues such as uninsured or underinsured exposures, contingencies, tax liability and hedging of financial exposures
• broking team – we focus on the programme design and placement of operational property insurance and reinsurance coverages into the specialist power and general insurance market in London and overseas.