Munich Re Insures Performance Guarantees of PV Manufacturer Yingli
Munich Re is reinsuring performance guarantees that Chinese photovoltaic manufacturer Yingli Green Energy gives to its customers for multi-crystalline modules. The advantage for the manufacturer is that the cover by Munich Re enables it to manage the long-term, technical guarantee risk on its balance sheet.
The insurance solution covers the long-term technology performance risk of Yingli’s photovoltaic modules under an agreement with Yingli Green Energy‘s Cayman Islands-based holding company. In the event of an unexpectedly large performance loss below guaranteed performance specification, Munich Re indemnifies Yingli for its performance warranty obligations. Yingli grants customers worldwide a performance guarantee of up to 25 years. The agreement covers Yingli against the risk of its multi-crystalline modules failing to achieve, during the first ten years, a power output of at least 91.2%, and in the following fifteen years a power output of no less than 80.7% of the nominal power output specified on the module’s original product label.
Besides this, Munich Re offers customers of Yingli the complementing Option Cover insurance. This innovative solution covers the risk borne by operators that solar module output falls below the guaranteed level, but the manufacturer can no longer be held liable under its warranties due to insolvency. Without such insurance, banks may provide necessary funding at less favourable terms. Thus, the performance guarantee cover together with the Option Cover constitutes a major milestone in the implementation of photovoltaic projects, offering critical financial protection. Prior to the agreement being signed, Munich Re had conducted an in-depth review of Yingli’s product quality control and manufacturing processes. In implementing this insurance solution, Munich Re has involved one of its specialty primary insurers.
”Our state-of-the-art manufacturing lines and choice of suppliers have conveyed trust and reliability to banks, investors and rating agencies. Our partnership with Munich Re serves as another powerful edge for differentiation in a competitive market environment”, commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.
Thomas Blunck, member of Munich Re’s Board of Management, said: “We are delighted to have concluded this contract to support Yingli in their forward-looking global growth plan. With our expertise, we can assume very special renewable energy risks and help provide greater investment security. We see considerable growth potential in risk transfer solutions for renewable energy.”
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. Munich Re creates value for clients, shareholders and staff alike. In the financial year 2011, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €0.71bn on premium income of around €50bn. It operates in all lines of insurance, with around 47,000 employees throughout the world. With premium income of around €27bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the major insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2011, ERGO posted premium income of €20bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments amounting to €202bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.
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