Interstate Fire & Casualty Company (IFCC), a subsidiary of Allianz Global Corporate & Specialty SE (AGCS), has entered into a multi-year contingent business interruption insurance agreement with Just Energy Group Inc.
Just Energy Group, a consumer company that specialises in electricity and natural gas commodities, energy efficient solutions and renewable energy options, has strengthened its risk management capability with a new insurance solutions from a division of global insurer and reinsurer Allianz.
The multi-year contingent BI insurance solution provides Just Energy Group with up to $25 million of limit per event, $50 million per year, and $225 million of limit over an eighty month period. The insurance provides protection against a range of risks, including loss of income due to natural catastrophes, sabotage, terrorism including cyber-attack, increased cost of supply from damage to supply and distribution infrastructure, interruption due to damage to customer property, losses in excess of the company’s weather derivative program recoveries, and any unforeseen or unplanned weather related losses.
According to an announcement of the insurance arrangement, the protection is intended to mitigate Just Energy’s impacts from natural catastrophe events, such as hurricane Harvey, among other things.
The insurance protection is effective August 1st, 2018, and the initial premium is $9.5 million per annum, which is adjustable dependent on loss experience.
The new insurance solution is a fairly innovative way for Just Energy to manage its exposures, and the fact the premium can be adjusted dependent on loss experience will be beneficial to the firm’s risk management processes moving forward.
“Securing this unique product further demonstrates Just Energy’s commitment to minimizing performance risk and increasing the level of stability and predictability in our future results. We have structured the coverage period to match closely with our five-year embedded gross margin and it is intended to remove a layer of uncertainty around our ability to realize the full value of that significant asset.
“The Insurance is another example of our commitment to mitigate volatility to the business and we are proud to have a world class insurance company such as IFCC support us in mitigating this risk,” said Pat McCullough, President and Chief Executive Officer (CEO) of Just Energy Group.