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Orenda Brokers
Insights
In a changing world:
Risks, threats and assurances
Institutions and individuals today face a wide variety of risks. As our world changes, so do the risks. Insurance and reinsurance services, which aim to secure against all these challenges, are constantly evolving and diversifying.
In the News section, we provide you with the latest developments, analyses, and expert opinions in the field of insurance and reinsurance.
Sustainability and Insurance
A New Approach to Financial Management of Climate Risks
Publication Date: August 2025
In the 21st century, sustainability has become not only an environmental responsibility but also an economic and social imperative. Threats such as climate change, biodiversity loss, increased natural disasters, and resource depletion create both operational and financial risks for individuals, companies, and governments. In this context, the insurance sector plays a critical role in promoting sustainability and managing climate risks (Surminski & Oramas-Dorta, 2014).
Sustainability offers a holistic framework encompassing environmental, social, and governance (ESG) factors. Within this framework, insurers not only provide coverage for climate-related risks but also become active agents in environmental transformation by directing their investments toward sustainable projects (Clark, Reed, & Sunderland, 2008). The increasing incidence of losses from disasters such as floods, droughts, wildfires, and storms, particularly in non-life insurance, necessitates the development of more resilient, predictive, and climate-responsive insurance models.
The relationship between sustainability and insurance is a two-way interaction. On one hand, the insurance sector strengthens society's resilience to climate risks by pricing risks and restructuring policies based on sustainability. On the other hand, sustainability-focused policies encourage insurers to build portfolios compatible with a low-carbon economy (UNEP FI, 2021). For example, some insurers have begun excluding fossil fuel producers from their coverage and have developed specialized products for green energy projects.
However, there are structural obstacles to sustainable insurance practices. First, the long-term and uncertain nature of climate risks may not be compatible with traditional actuarial calculations (Viegas et al., 2020). Furthermore, low insurance penetration in developing countries increases societies' vulnerability to climate change impacts. Therefore, sustainability-based insurance requires multifaceted strategies that include not only product development but also education, awareness, and policy support.
Consequently, the insurance sector is one of the fundamental mechanisms providing the financial infrastructure for sustainability. By covering natural disaster risks, adopting ESG-based investment policies, and designing climate-resilient products, insurers contribute to both climate change adaptation and the stability of the economic system. In the future, the integration of artificial intelligence and climate modeling tools into insurance practices is expected to develop more effective and equitable sustainability solutions .
References (APA 7):
Clark, G.L., Reed, D., & Sunderland, J. (2008). Building the ESG into pension funds: Investing responsibly in the 21st century. Environment and Planning A, 40(6), 1276–1298. https://doi.org/10.1068/a39208
Surminski, S., & Oramas-Dorta, D. (2014). Flood insurance schemes and climate adaptation in developing countries. International Journal of Disaster Risk Reduction, 7, 154–164. https://doi.org/10.1016/j.ijdrr.2013.10.005
UNEP Finance Initiative (UNEP FI). (2021). Principles for Sustainable Insurance: Annual Report 2021. https://www.unepfi.org/psi/
Viegas, J., Gouldson, A., & Sullivan, R. (2020). The role of the insurance industry in promoting sustainability and climate adaptation. Climate Policy, 20(10), 1275–1291. https://doi.org/10.1080/14693062.2020.1739670
Cybersecurity and Insurance
A New Paradigm in Managing Digital Risks
Publication Date: August 2025
With the acceleration of digitalization today, cybersecurity has gained critical importance across a wide spectrum, from individuals to global corporations. The diversification of threats targeting digital infrastructures has rendered traditional security approaches inadequate and has also triggered a transformation in the insurance industry. Now, not only physical risks but also digital risks are covered by insurance, and the concept of " cybersecurity and insurance " has come to the fore (Wang & Jones, 2021).
While cybersecurity aims to protect information systems, networks, and digital data from malicious attacks, cyber insurance aims to provide coverage for the financial and reputational losses these attacks may cause (Marotta et al., 2017). In particular, organizations must protect themselves against service disruptions such as ransomware, data breaches, and DDoS attacks not only with software-based security measures but also with financial protections.
The insurability of cybersecurity has presented several technical and legal challenges. First, quantitatively assessing digital risks is inherently difficult. Actuarial calculations, which form the basis of insurance, are based on historical data; however, cyberattacks are often dynamic, unpredictable, and constantly changing (Biener, Eling, & Wirfs, 2015). Consequently, uncertainty surrounding the scope, limits, and exclusions of cyber insurance policies can arise for both insurers and insureds.
Another important aspect is regulation. Regulations such as the European Union's General Data Protection Regulation (GDPR) and Turkey's Personal Data Protection Law (KVKK) impose severe sanctions on organizations in the event of a data breach . In this context, cyber insurance is considered not only a financial safeguard but also a compliance tool (Romanosky et al., 2019). Thanks to such policies, organizations can manage not only their financial losses but also their legal liabilities.
The relationship between cybersecurity and insurance requires a proactive risk management approach. Insurance companies not only provide coverage against risks; they also offer risk assessments, preventative solutions, and crisis management support to their clients (Eling & Schnell, 2016). Therefore, cyber insurance products differentiate themselves from traditional insurance products by emerging as "service packages."
As a result, cybersecurity and insurance have become strategic imperatives in the complex risk environment of the digital age . Institutions seeking to secure their digital assets must consider not only the technology itself but also the financial implications of these technologies. In the future, the integration of technologies such as artificial intelligence and big data analytics into the insurance sector is expected to lead to the development of more flexible, predictive, and personalized cyber insurance models.
References (APA 7):
Biener, C., Eling, M., & Wirfs, J. H. (2015). Insurability of cyber risk: An empirical analysis. The Geneva Papers on Risk and Insurance - Issues and Practice, 40(1), 131–158. https://doi.org/10.1057/gpp.2014.14
Eling, M., & Schnell, W. (2016). What do we know about cyber risk and cyber risk insurance? Journal of Risk Finance, 17(5), 474–491. https://doi.org/10.1108/JRF-09-2016-0131
Marotta, A., Martinelli, F., Nanni, S., Orlando, A., & Yautsiukhin, A. (2017). Cyber-insurance survey. Computer Science Review, 24, 35–61. https://doi.org/10.1016/j.cosrev.2017.01.001
Romanosky, S., Ablon, L., Kuehn, A., & Jones, T. (2019). Content analysis of cyber insurance policies: How do carriers write policies and price cyber risk? Journal of Cybersecurity, 5(1), 1–20. https://doi.org/10.1093/cybsec/tyz002
Wang, T., & Jones, C. (2021). Cybersecurity and the evolving role of insurance. Risk Management and Insurance Review, 24(2), 113–135.
Renewable Energy and Insurance
Financial Assurance for Energy Transformation
Publication Date: August 2025
The transformation of the global energy system has made the transition from fossil fuels to renewable energy sources a necessity. This transformation is strategically important not only for environmental sustainability but also for economic and social stability. The proliferation of renewable energy sources such as solar, wind, biomass, and geothermal has created new risk profiles and increased the need to secure investments in these areas (IRENA, 2020). In this context, the insurance sector plays a critical role in supporting the sustainable growth of renewable energy projects.
Unlike traditional energy infrastructures, renewable energy systems are more sensitive to environmental variables. For example, wind turbines are vulnerable to storms, lightning strikes, and icy conditions, while solar panels are subject to risks such as hail, fire, and extreme temperatures. These specific risks necessitate tailored insurance products (Elliott et al., 2019). As a result, insurers are developing multi-layered policies covering engineering, transportation, business interruption, and liability.
Insurance not only transfers risk but also facilitates growth in the renewable energy sector by increasing investor confidence. Banks and financial institutions often require insurance coverage before providing loans for energy projects (UNEP FI, 2021). In this respect, insurance acts as a " credit facilitator " for green investments and has become a cornerstone of financial sustainability.
The renewable energy market also offers significant growth potential for insurers. By 2050, a significant portion of global energy production is expected to come from renewable sources (IEA, 2021). This presents new opportunities for the insurance sector in terms of technical expertise and actuarial skills. Technologies such as climate modeling , AI-based risk assessment, and drone-assisted damage analysis are increasing the efficiency of insurance processes.
However, some structural challenges should not be overlooked. In developing countries, challenges such as project financing, regulatory uncertainty, and low insurance penetration can slow renewable energy investment. Public-private partnerships, reinsurance mechanisms, and climate-sensitive insurance products can help overcome these obstacles.
Ultimately, the relationship between renewable energy and insurance represents a strategic partnership on the path to a low-carbon future. By developing products that support the energy transition, insurers contribute to both environmental sustainability and long-term economic stability. In the future, the insurance sector is expected to play an even more leading role in this transformation through innovative solutions.
References (APA 7):
Elliott, R., Llorente, M., & Thomas, S. (2019). Insurance and the renewable energy sector: Opportunities and challenges. Renewable Energy Focus, 30, 10–18. https://doi.org/10.1016/j.ref.2019.01.002
International Energy Agency (IEA). (2021). World Energy Outlook 2021. https://www.iea.org/reports/world-energy-outlook-2021
International Renewable Energy Agency (IRENA). (2020). Global Renewables Outlook: Energy Transformation 2050. https://www.irena.org/publications
UNEP Finance Initiative (UNEP FI). (2021). Insuring the Energy Transition: How insurers can help drive clean energy investment. https://www.unepfi.org/
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