In this # Sun 100 interview Isaac McLean.Head of Property at kWh analysisHe speaks with Josh JenningsHead of Inland Marine and Property at Aspen Insurance.
Josh Jennings has always been a visionary in the insurance industry. He started his career at a young age and honed his skills in inland marine underwriting at Nationwide and Hartford. Today, as Aspen Insurance’s Head of Inland Marine, Josh continues to lead the way in pioneering reliable renewable energy asset capacity through his partnership with kWh Analytics. With his innovative approach and exceptional leadership, Josh is changing the landscape of the insurance industry just as Galileo improved our understanding of the universe. Galileo’s early discoveries, recognizing the sun as the center of our solar system, changed people’s view of space, just as Josh Carriers wrote about renewable energy.
The road to property
Isaac McLean: So, Josh, you have a background in renewables, but also in inland marine and insurance. Can you talk us through your career as head of domestic and property at Aspen Insurance and how you got to where you are now?
Josh Jennings: Everyone has a unique background going into insurance. For me, it started when I was in college. My parents owned a national insurance agency, and while I was at the University of Akron, I attended classes two days a week and worked three days a week as a junior commercial producer at the agency. My parents are both major agents, so I’ve had a front row seat to the small business I love, the highs and lows. It was an incredible experience that gave me an introduction to insurance. The personal relationships I built and the feeling I got from making people feel safe through insurance kept me engaged from day one.
After school, I left the family business and moved to Hartford as an underwriter for the Inland Marine in Cleveland. I wasn’t sure about writing at the time because it seemed like crunching numbers at a desk all day. However, I quickly learned that the role focused on relationship building, problem solving and collaborating with various agents and brokers. I gave it a shot and really enjoyed it, benefiting from some early success.
About a year after I joined The Hartford, management moved me to Chicago, and I was thrilled to be working in a big city. I was early in my career, eager to establish my brand, my own market following and reputation. So, I built a book of business and progressed through various leadership roles. Not long after that, my first introduction to the renewable energy space occurred when the business began providing disaster coverage for builders of utility solar sites from the ground up. This cover line was relatively new to the market and felt like something that would last a long time. As the energy industry began to transition to providing more renewable products, I was interested in this type of coverage from an appropriate perspective and believed there was a future in it.
Seeing the parallels
McLean: If the Inland Sea is the basis of your work, how has this shaped your perspective on renewables? Are there any key differences or crossovers?
Jennings: There is a crossover. Along with the interior marine coating, there is the art of underwriting. Not every label is cookie-cutter, and the same can be said of renewables. Technology is constantly evolving and new applications are coming to us from different parts of the country. For example, at Aspen, we are seeing applications from several battery power storage facilities. As the fastest growing and natural opportunity for insurance to be proactive, creative and find solutions in that space.
McLean: What are some of the biggest challenges you see in the solar insurance market?
Jennings: The biggest challenges are the increasing severity and frequency of our weather as the number of renewables on the market increases. By that, I don’t just mean named hurricanes, but rogue hurricanes as well. Cat capacity is shrinking from an industry perspective, so the market needs to be consistent in price and risk, and value for risk. For the market to be sustainable long-term, I think managing aggregation and limiting deployment is critical, and the industry needs to be a constant supporter in this space. We need to remove the peaks and valleys of the performance results of the renewable space to avoid exits and additional limitations.
McLean: Yes, I agree. That is definitely a challenge we can tackle together. With hurricanes and some recent hurricane activity, do you see impacts on rates and terms?
Jennings: Yes, there will be a ripple effect from a named hurricane and the value of that potential is increasing. I think the cat, in general, is very sensitive, so depending on where the markets are going, you’re going to see some price increases across the board. I think there could be some pushback with severe crosswinds. I see owners and insurers taking on more risk with higher retentions and deductibles. It’s an important move to put value where it needs to be.
McLean: Yes, I agree. I think for some of the smaller industries, Hurricane Ian wasn’t a major loss driver for our industry, and we’re seeing an impact on our rates and terms as a result, but the broader insurance industry has really been impacted — the pool of pooled capital that supports all those risks and exposures has been impacted. Solar is not immune to broader market volatility.
Jennings: I think we need better communication between insurers, solar manufacturers and solar installers. For example, we need to understand how the panels react in different weather conditions, what are the active controls and what are they. [the solar manufacturers] They are working to deploy and differentiate themselves. Having a clear understanding of how the insured’s unique product is manufactured and installed is essential to limiting pricing and determining changes and overlap with peers in the market.
McLean: Yes, it’s a craft in insurance. Being able to differentiate between those manufacturers and the different hardware configurations we see.
Jennings: For example, with kWh, you have access to information that no one else has, so you’re not taking a broad brush across an industry; You are analyzing the insurance individually and paying the risk accordingly.
Lessons learned from writing Sunshine
McLean: Aspen writes some broad and utility-sized solar panels. Do you have a lesson to share from your business book today?
Jennings: I would say, from a utility-scale perspective, with residential applications, we write them similarly, but they’re still different. Residential property worth billions of dollars is distributed with great risk. So, what you’re writing about, from a portfolio and aggregate management perspective, and developing an understanding of exposures to potentially significant events or black swan-type events and making sure we’re not overly exposed to one area, from individual utility-type solar, you’re typically location-based, where the project is. They know it’s there, they can write it, they know the details, they know the panels, they know the construction, the exposure of Nat Cat. Part of the challenge for some utility-scale solar products is where they are manufactured, which is often in rural areas. I think some cat modeling has been very off in the last 10+ years; It was a bit too harsh based on what it should have been. The industry has seen some inaccurate, inconsistent results based on cat prices and how snow and storms perform in rural areas and other weather-related factors. The modeling session is evolving and subsequently becoming more conservative. Panel design and manufacturing is being prepared to withstand more incidents than ever before.
McLean: We have a lot of data, and the industry has fine-tuned our cat models on buildings, but sunlight works differently, especially for some of the different hazards that you mentioned, like severe storms. We are fixing them with our property units and learning them a bit, but unfortunately, the industry has suffered in the last 5 years.
Words of wisdom
McLeanWhat advice do you have for professionals looking to get started in insurance?
Jennings: Insurance is not typically promoted as a career option in colleges, which is disappointing because that is the time in a student’s life to explore different career paths. Society does not function without insurance and there are many different career opportunities in insurance. We have positions that allow someone to be creative, analytical, meet new people, travel, manage different projects, solve problems, work independently or as part of a team – basically for everyone! Had I chosen a different career path, I had the great opportunity to visit some amazing places in the world that I probably wouldn’t have seen.
Having mentors early in my career helped set me up for success. I had some great mentors in the business that I leaned on and used as a sounding board. You have to put yourself out there and develop those relationships. I am now at a point where I can give back and give to others which is very rewarding. I tell people not to forget who helped you and send the elevator back to help the next generation. Finally, I advise young professionals to take control of their careers. No one will do it for them. Be patient, but not too patient. Things take time, but these individuals must be proactive.
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